On May 28, the U.S. Senate unanimously passed legislation to fund the Commodity Futures Trading Commission (CFTC) Whistleblower Program. Over the past several months, whistleblower advocates repeatedly called for emergency Congressional action to fund the program as it is on the verge of collapsing due to the depletion of the program’s fund.
“This is a major victory for whistleblowers and a fantastic example of a creative fix to a pressing problem, said Siri Nelson, Executive Director of the National Whistleblower Center (NWC). “The separate fund created by this Act properly addresses the importance of issuing robust whistleblower awards and administering successful programs with highly qualified staff. The National Whistleblower Center and other whistleblower organizations have called for a solution throughout the past year. Now it is up to the House to do the right thing for whistleblowers and pass this bill.”
“A big win for whistleblowers,” said whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “It is now up to the House to do its job. The failure to properly fund the CFTC Whistleblower Office is simply unacceptable, as that Office has protected whistleblowers and generated billions in revenue for the taxpayers.”
Kohn, who is also the Chairman of the Board of Directors of NWC, has been working with Congressional staff for months trying to obtain this fix. He added “the Commodity Exchange Act’s whistleblower provision is among the most powerful tools available to police international corruption, especially in the oil and gas industries that trade in the commodity markets.”
The bill to fund the program was “hotlined,” meaning that it bypassed regular Senate procedures and was passed with the unanimous consent of all Senators. Senator Debbie Stabenow (D-MI) led the push to hotline the bill, with strong support from Senators Chuck Grassley (R-IA) and John Boozman (R-AK).
On April 30, NWC and other whistleblower advocacy groups sent a letter to Senators Stabenow and Boozman and other members of the U.S. Senate Committee on Agriculture, Nutrition and Forestry calling for immediate Congressional action to save the CFTC Whistleblower Program. The letter states that the whistleblower program “brings in billions of dollars for the United States and intervenes in large scale criminal activities in a manner that benefits the entire economy.” The letter requests that the Senators take immediate legislative action “to improve the already highly successful program and protect whistleblowers.”
According to Kohn and other whistleblower advocates, the CFTC Whistleblower Program is in a financial crisis due to its success. Established in 2010, the program has grown rapidly over the past several years. For example, in fiscal year 2020, the CFTC received over 1,000 formal whistleblower complaints, dwarfing the 58 complaints received in the program’s first full year. In fiscal year 2020, the program also set a record for the number of whistleblower award claims received.
The recent success of the program depleted the Consumer Protection Fund, which is entirely financed through sanctions paid by commodity fraudsters. The Fund has a strict cap on how many sanctions may be deposited into the fund at once. According to whistleblower advocates, the cap, which was instituted with the founding of the program in 2010, does not sufficiently accommodate the exponential growth of the program.
The bill now must be passed by the U.S. House of Representatives in order to become law. Whistleblower advocates are urging the House to prioritize the passage of the bill in order to save the CFTC Whistleblower Program. “We hope and expect that the House will quickly pass this bi-partisan emergency legislation. Whistleblowers are the key to detecting fraud in the multi-trillion dollar commodities markets, and the CFTC Whistleblower Office is at the center of these enforcement efforts,” said Nelson.
