[author: Matt Kelly]
Congress gave compliance professionals quite the gift on New Year’s Day: a new whistleblower awards program that will allow compliance officers an easier path to seek such awards yourselves, regardless of whether you raise those misconduct concerns internally.
The awards program is part of the Anti-Money Laundering Act (AMLA), which Congress voted into law on Jan. 1. In many respects, the AMLA awards program (defined in Section 6314 of the law) is like all the other whistleblower awards programs compliance officers have encountered over the years. It allows whistleblowers to apply for awards if their tips lead to enforcement actions and monetary penalties; those awards can be up to 30 percent of the total settlement. Whistleblowers who make tips can also file whistleblower retaliation lawsuits if they believe they’ve been punished for speaking up.
OK, none of that is surprising. Then we get to Section 6314’s definition of whistleblowers:
The term “whistleblower” means any individual who provides, or two or more individuals acting jointly who provide, information relating to a violation of this subchapter ... to the employer of the individual or individuals, including as part of the job duties of the individual or individuals, or to the [Treasury] Secretary or the Attorney General.
There’s no exclusion in that paragraph for compliance officers or internal auditors. There’s no sentence directing the Treasury Department to devise further rules implementing the program that could lead to an exclusion for compliance officers or internal auditors.
That’s worth noting because the whistleblower awards program established by the Dodd-Frank Act of 2010 did include language directing the SEC to devise further rules, which is how the SEC program ended up not giving compliance and audit professionals discretion to seek whistleblower awards immediately. You first need to raise concerns internally, because investigating misconduct is part of your job; only if those concerns are ignored can you then go to the SEC.
Read: SEC Makes 2020 A Record Year for Whistleblowers. What Does It Mean for Compliance?
The AMLA program, which offers awards for possible money-laundering violations under the Bank Secrecy Act, doesn’t specify any such restrictions. As the statute reads, anyone can submit a misconduct allegation that they encounter while on the job — including those folks who investigate such allegations as part of their jobs.
Does That Create a Conflict of Interest?
You can see where some people, particularly those in the corporate legal department, would say so. AMLA’s whistleblower program creates a financial incentive for compliance officers to take their misconduct concerns outside the company. That’s dissonant from the idea that compliance officers are supposed to put the company’s ethical conduct first. Cynics would say you’re not putting ethics first if your first action is to call an agent at the Financial Crimes Enforcement Network.
There is, however, another way to view this situation.
When someone submits a tip to the AMLA whistleblower program, they also gains the ability to claim anti-retaliation protections under the law. That includes the right to file an anti-retaliation lawsuit against the offending company in court.
When compliance officers try to bring misconduct to light internally, yet they can’t quickly or easily shield themselves with some form of anti-retaliation protection — that creates risk, simply for doing your job.
Gaining the ability to claim that protection right away is an important thing for compliance officers. The plain truth is that retaliation against compliance officers happens. It’s a persistent menace. When compliance officers try to bring misconduct to light internally, yet they can’t quickly or easily shield themselves with some form of anti-retaliation protection — that creates risk, simply for doing your job.
On a practical level, it’s also hard to imagine that many compliance officers actually want to seek whistleblower awards. They know that receiving an award is a long, uncertain process, and the money you get might not be all that much. Moreover, compliance officers are employees like everyone else, and research shows that most employees want to speak up and help their companies do the right thing. The most common reason they don’t speak up is because they’re worried about (you guessed it!) — retaliation.
Read: Three Common Mistakes That Hurt Whistleblower Hotline Performance
So if AMLA’s whistleblower awards program gives compliance officers a way to keep those anti-retaliation protections in your back pocket, while you continue with what you really want to do — which is to help the company strengthen its ethical behavior — that’s something to welcome, rather than fear.
One Last Caveat
Aside from the program’s relevance for compliance and internal audit executives, we can’t forget that the whistleblower program is available to everyone else, too. So as always, compliance officers still need to stress to executive management the importance of internal reporting programs and anti-retaliation practices.
More and more often, when management gets a report of misconduct, senior executives won’t know whether the reporter has already told his or her story to regulators. Management won’t know whether that person has already qualified for anti-retaliation protections under the law. If the whistleblower is cooperating with regulators, your company might already have lost the ability to disclose new misconduct voluntarily (because it won’t be new to the regulators) and claim cooperation credit.
So despite the intriguing possibilities in the new AMLA whistleblower program, perhaps business leaders are still where they’ve been all along: looking at the need for stronger internal reporting programs and durable speak-up cultures, because ignoring those things is just asking for trouble.
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View original article at Risk & Compliance Matters