The EU Campaign for Whistleblower Rewards: A New Idea for Old Europe

Maybe it’s because of its skepticism of free-market capitalism. Or its mistrust of anything and everything American. Or its moral compass and philosophical values shaped by more than 2,000 years of civilization.

Whatever the reasons, most European citizens and elected leaders long have been uncomfortable with the idea of paying monetary rewards to whistleblowers. People should report misconduct out of an unblemished sense of righteousness and civic duty – so Europeans say – not because they might profit from it. Paying people for doing the right thing would dilute the gesture and empty it of its selflessness, European ethics prescribe.

Now is the time for Europe to sacrifice an ounce of moral purity in exchange for a pound of societal betterment.

All 27 European Union countries must pass a comprehensive whistleblower protection law by December next year. This is required under new EU legislation – known as a Directive – approved last October. Though the Directive’s protection measures are quite strong, it doesn’t include whistleblower rewards. This is where a new campaign comes in.

Right now, four groups are working together to convince lawmakers in Europe to go beyond the Directive and include monetary rewards in their new national laws. The National Whistleblower Center, the law firm of Kohn, Kohn & Colapinto, Whistleblowing International and the European Center for Whistleblower Rights believe financial compensation will encourage more people to report misconduct and create more success in fighting corruption.

First on the campaign’s list are countries now in the midst of developing new laws: Czech Republic, Finland, Germany, Greece, Ireland, Netherlands, Sweden and – though no longer an EU member – the UK.

Compensating people for taking the risk to become a whistleblower might be exactly what’s needed to engender a citizen-based crime-fighting culture in Europe. Notwithstanding high-profile cases such as Lux Leaks and Bradley Birkenfeld, Europe is not a hotbed of whistleblowing. Far from it. Some countries do not officially recognize whistleblowers, many countries have only a few cases per year, reinstatement victories are few and far between, judges routinely rule against bona fide whistleblowers, and hardly any country has passed a whistleblower law that meets Europe’s own standards.

Offering rewards would boost these meager figures and improve this weak performance. This is the campaign’s goal – incentivizing whistleblowing by paying rewards, and then publicizing successful cases, making sure whistleblower laws meaningfully work for the people, holding criminals to account, and growing a whistleblower culture where almost none exists.

Rewards also would attract major financial benefits for European society. A 2019 EU study found that strong whistleblower protections could save €5.8 billion to €9.6 billion per year in the area of public procurement alone. This figure would skyrocket with the introduction of rewards, which significantly increased the number of whistleblower reports in South Korea and the US.

The irony is that Europe – and its political and business leaders – are just as corrupt as any other region in the world. Considering the scale and gravity of recent scandals, one could argue it is the most corrupt: money laundering at Danske Bank, the Volkswagen Dieselgate scam, rampant political corruption in Spain, and systemic bribery by Siemens and Novartis. And just this month, shocking and embarrassing details emerged about German digital payment conglomerate Wirecard, which admitted losing track of €2 billion shortly after publicly boasting its books were ship-shape.

As twinge-worthy as it may be for their sensibilities, Europeans can learn a lot from the US’ many highly successful, time-proven whistleblower reward laws, including the False Claims Act, Foreign Corrupt Practices Act, Act to Prevent Pollution from Ships, and the IRS and SEC whistleblower programs.

Through the campaign, Europeans will understand that successful whistleblowing can reward citizens as well as society. There is value on both ends of the equation.

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