On December 7, the U.S. Senate unanimously voted by voice to pass the bipartisan Anti-Money Laundering (AML) Whistleblower Improvement Act. The bill offers reforms to the AML Whistleblower Program which whistleblower advocates have called for since the program was established in January 2021. The bill also expands the program to cover whistleblowers disclosing sanctions violations.
“The whistleblower programs I’ve helped create have seen roaring success, with the False Claims Act saving taxpayers $70 billion, the SEC whistleblower program saving over $4.8 billion and the IRS whistleblower program saving over $6 billion,” said Senator Chuck Grassley(R-IA), one of the cosponsors of the bill. “I’m optimistic that our new program encouraging individuals to come forward for suspected sanctions violations will be successful as well. Given the expansive sanctions we’ve implemented on Russia as they wage an unjust war in Ukraine, our legislation is urgently needed to hold bad actors accountable.”
The two reforms found in the AML Whistleblower Improvement Act are modeled off provisions of the Dodd-Frank Act, which established the highly successful SEC and CFTC whistleblower programs. One provision specifies that under the AML Whistleblower Program, qualified whistleblowers will receive awards of “not less than 10 percent” of the sanctions collected in the relevant enforcement action. Currently there is no statutory minimum for AML whistleblower awards, meaning that awards are purely discretionary.
Secondly, the bill establishes a fund to pay AML whistleblower awards. Like the SEC’s whistleblower fund, it is entirely financed by sanctions collected in whistleblower-assisted cases. This means that whistleblower awards are not reliant on the Congressional appropriations process and do not cost the taxpayers any money.
“Not including a minimum payment and not establishing a fund to ensure that payments can be made to courageous whistleblowers acts as a disincentive for whistleblower reporting and undermines the Congressional intent behind the AML law,” a letter sent by whistleblower advocacy groups to Congress states. “Without these two vital provisions, the ability to leverage whistleblowers to help fight money laundering will face a crucial setback.”
“This bill is urgently needed to stop Russian money laundering and the criminal abuse of the banking systems,” said leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Money laundering is at the heart of corruption, as those who take bribes, sell drugs and set up illegal foreign accounts need to hide how they obtained their funds.”
Action Needed to Support the Bill’s Passage
The House of Representatives is prepared to pass the AML Whistleblower Improvement Act. But Representative Rosa DeLauro (D-CT), Chair of the House Appropriations Committee, needs to support a vote on the bill in the House in order for the bill to be passed.
The National Whistleblower Center is calling on whistleblower supporters to contact Representative DeLauro and urge her to support the AML Whistleblower Improvement Act.
Representative DeLauro’s office can be reached at (202) 225-3661 and the House Committee on Appropriations at (202) 225-2771.