In comments submitted to the European Commission, Phillips & Cohen partner and whistleblower attorney Erika Kelton called for a whistleblower program that provides protection, anonymity and financial rewards to whistleblowers in all European Union countries.
“Thirty years of experience with whistleblower programs in the U.S. has shown that all of society benefits when whistleblowers are protected,” Kelton wrote.
Her comments were made in response to a call for public input on how the European Commission should approach implementing new rules governing whistleblower protection across all member states.
As it stands now, whistleblower protection laws are fragmented in Europe. A 2013 report from Transparency International found that of the 23 EU countries, 16 had partial legal protections for whistleblowers. The other seven had “very limited or no legal framework.”
“The U.S. whistleblower reward programs have been enormously successful in helping expose fraud and corruption,” Kelton wrote. “Tens of billions of dollars otherwise lost to improper businesses practices have been recovered as a direct result of whistleblower information and assistance. The importance and impact of whistleblower matters, however, goes far beyond the large sums recovered: They protect patients, safeguard our military, and bring transparency and integrity to business practices that touch everything from advance weapons systems to employee retirement funds.”
A key reason for that success, she noted, is whistleblower rewards. The evidence “convincingly shows that most whistleblowers with significant evidence of wrongdoing need the incentive of a nondiscretionary award that is commensurate with the value of the information they provide and the amounts recovered by law enforcement as a result,” she said.
Kelton has represented whistleblowers in several record-breaking whistleblower cases. She won for an anonymous international whistleblower client the largest SEC whistleblower award to date, totaling more than $32 million. She also represented whistleblowers in the two largest healthcare fraud cases, which were against GlaxoSmithKline ($3 billion settlement) and Pfizer ($2.3 billion settlement).
While the European Commission deliberates how it can implement EU-wide whistleblower laws, the European Parliament has been taking its own steps to push for better whistleblower protection.
In February, the European Parliament voted 607-16 to approve a resolution that called for the European Commission to propose an “effective and comprehensive European whistle-blower protection programme.” The European Parliament’s committee on legal affairs followed this with a draft report in July that also lays out a framework for how an EU-level body could oversee these whistleblower protections.
The 2014 LuxLeaks scandal – which involved the release of hundreds of corporate tax rulings for hundreds of companies looking to avoid taxes by funneling business through Luxembourg – along with the Panama Papers have rekindled the EU’s renewed interest into how whistleblowers are treated, which varies depending on the country. For example, the main whistleblower in the LuxLeaks case, Antoine Delatour, received the European Citizen Award in 2015 in Brussels for his role in exposing the corporate tax information. But just months later, he was sentenced to jail in Luxembourg for the very same whistleblowing.
Whistleblowers from other countries may participate in the US whistleblower reward programs, but the US has to have jurisdiction in the matter. (An experienced whistleblower attorney can help determine this.) The US Securities and Exchange Commission whistleblower reward program, in particular, attracts a great number of whistleblowers from other countries.
To read Kelton’s entire submission, see EU Whistleblower Protection Comments.