Both the Organisation for Economic Co-operation and Development (OECD) and the U.S. Strategy on Countering Corruption recognize that the news media plays a vital role in the detection of bribery and other acts of corruption and has recommended that countries welcome the efforts of the media in fighting corruption. At the same time, the OECD has praised the United States’ Dodd-Frank Act whistleblower award programs as strong models for incentivizing and rewarding whistleblowers who report corruption.

Currently, however, U.S. whistleblower award programs unfairly disqualify whistleblowers who make their disclosures to the news media. The agencies overseeing these programs need to take heed of U.S. Strategy and the OECD recommendations and reform their whistleblower program rules to allow whistleblowers to report to the media. A successful whistleblower program should not punish and disqualify whistleblowers for reporting their information in whatever ways feel most accessible reporting their information to the news media which is often the best way to alert authorities on corrupt activities.

OECD Recommendations

In its Phase 4 Two-Year Follow-Up Report on the United States, the OECD reported the U.S. Department of Justice’s Foreign Corrupt Practices Act (FCPA) data on detection sources which resulted in sanctions or other dispositions against legal persons since October 2020. The OECD audit breaks down the detection sources as follows: 10% from self-reports; 40% from whistleblowers; 20% from media reports; 20% from civil or foreign authority referrals; and 10% from other law enforcement activity.

Agencies must consider this empirical data when implementing their whistleblower program – whistleblowers are the most effective tool in detecting fraud and misconduct and the media is a vital source of whistleblower information.

In 2021, the OECD amended its Recommendation of the Council for Further Combating Bribery of Foreign Public Officials in International Business Transactions. This Recommendation further asserts the importance of embracing the news media as an ally in the fight against corruption.

The Recommendation begins by “WELCOMING the efforts of companies, business organisations and trade unions, non-governmental organisations, and the media to contribute to the fight against bribery of foreign public officials.”

It then “RECOMMENDS that member countries encourage law enforcement authorities to proactively gather information from diverse sources to increase detection of foreign bribery and enhance investigations, such as the media, reporting persons, public agencies, including those referred to under Section XXI, foreign investigative authorities and the private sector.”

The OECD is clear that alongside whistleblowers, the news media and investigative journalists are key players against corruption. Whistleblowers are often the source of information to the news media, and thus whistleblowers who disclose corruption to the news media must be fully covered.

U.S. Strategy on Countering Corruption

The OECD’s findings and recommendations support mandates laid out in the United States Strategy on Countering Corruption, published by the White House in 2021. The Strategy puts forward a “whole-of-government” approach for countering corruption that repeatedly calls on U.S. agencies to “stand in solidarity” with “whistleblowers” and other “anti-corruption activists.”

In addition to standing in solidarity with whistleblowers, the Strategy repeatedly stresses the importance of U.S. agencies working closely with media and investigative journalists.

For example, the Strategy states that “Departments and agencies will work to support, and better make use of analysis conducted by external partners, including academia, the private sector, civil society, and media.”

It later states that “The United States will boost its ongoing efforts to support, defend, and protect investigative journalists and other civil society and media actors on the front lines of the fight against corruption.”

Overall, the Strategy is clear in its mandates that U.S. agencies need to work alongside both whistleblowers and the media in the fight against corruption worldwide. Given that whistleblowers and the media work closely together, agencies should operate in ways that support this partnership.

U.S. Whistleblower Rules on Reporting to the Media

Under the major U.S. whistleblower award laws, whistleblowers can qualify for an award if they voluntarily provide original information that leads to a successful enforcement action. Furthermore, both the Dodd-Frank Act (which established the SEC and CFTC whistleblower programs) and the AML Act of 2020 (which established the AML Whistleblower Program) explicitly recognizes that “original information” can be filed with the news media.

However, current whistleblower program rules defining a voluntary disclosure do not explicitly include whistleblowers disclosures to external partners, academia, the private sector, civil society, and the media that cooperate with the United States, in instances where the whistleblower does not make these disclosures directly to the relevant agency.

The current Dodd-Frank regulations, published by the SEC and CFTC, do not provide coverage when whistleblowers report to “private sector actors” (other than internal corporate compliance programs that often are engaged in covering up violations or whose disclosures trigger retaliation against the internal whistleblowers). Whistleblowers who report directly to foreign law enforcement agencies, the news media, or even the U.S. Department of Justice can be disqualified from obtaining a reward based on several regulations.

The Department of Treasury and FinCEN are currently drafting regulations for the AML Whistleblower Program and are in danger of following the SEC’s lead.

Procedures must be established that create a reasonable pathway for a whistleblower who discloses information to the news media to become fully qualified under the reward law, whether the investigation is triggered due to disclosures by the news media, with no direct contact with the whistleblower, or the whistleblower source is eventually contacted or subpoenaed by the U.S. government.

Regulations must ensure that voluntary reports to civil society organizations or the news media are “voluntary” disclosures under the regulations. If the U.S. government learns of the whistleblower disclosures through information provided by civil society, NGOs, or the news media, the whistleblower who provided the “original information” to these entities is fully credited and is eligible for rewards.

Conclusion

The SEC regulations were made ten years before the Countering Corruption Strategy. They must immediately be reformed -- the strategy declares as official policy that the United States of America stands in solidarity with whistleblowers and investigative journalists who challenge corrupt power structures and face threats and harassment and will take the outlined measures to protect their freedom of expression, fully recognizing the essential role that investigative journalists play in alerting authorities to misconduct.

It is troubling that the regulations of such an important agency under the most important whistleblower laws are inconsistent with the well-reasoned policies of the entire U.S. government.

While the OECD has praised the U.S.'s Dodd-Frank system, it has also made recommendations in recognition of the fact that international whistleblowers are not aware of the technical filing procedures contained in the current SEC regulations and make their disclosures through a wide-variety of channels.

Among the most common and most crucial of these channels is the news media. It is critical that the SEC, CFTC and FinCEN devise their whistleblower program rules to not unfairly disqualify an otherwise fully qualified whistleblower because they made their disclosure to the media instead of directly to the agency.