On July 6, President Biden signed into law emergency legislation to fund the Commodity Futures Trading Commission (CFTC) Whistleblower Program. The bill, an amended version of the CFTC Fund Management Act, unanimously passed in the Senate in May and passed in the House in June. The Act saves the highly successful whistleblower program from financial collapse.
Whistleblower advocates and members of Congress worked together to pass the legislation once the financial crisis at the CFTC Whistleblower Program became apparent last Congressional session. According to leading whistleblower attorney Stephen M. Kohn, founding partner of qui tam firm Kohn, Kohn & Colapinto, the program fell into a crisis because of its own success. Since 2014, the program has awarded approximately $123 million to whistleblowers, and enforcement actions associated with those awards have resulted in more than $1 billion in sanctions. However, due to a cap on the fund used to finance the program, the recent growth and success of the program has depleted its funds.
On February 24, Senators Charles Grassley (R-IA), Maggie Hassan (D-NH), Joni Ernst (R-IA), and Tammy Baldwin (D-WI) introduced the CFTC Fund Management Act in order to save the whistleblower program from financial collapse. “The CFTC whistleblower program has become far more successful than Congress imagined when we set it up back in 2010. We can’t allow this program to become a victim of its own success,” said Grassley in a press release on the bill.
On April 30, several whistleblower advocacy groups led by the National Whistleblower Center (NWC) sent a letter to the U.S. Senate Committee on Agriculture, Nutrition and Forestry urging the members to support the passage of the CFTC Fund Management Act. The letter noted that the whistleblower program’s fund is so depleted that “the CFTC has started delaying the processing of whistleblower cases due to a lack of funds and the CFTC Office of the Whistleblower might be forced to furlough staff.”
The amended version of the CFTC Fund Management Act Biden signed into law addresses the financial crisis by creating a fund specifically for the operations of the CFTC Office of the Whistleblower. This new fund is separate from the fund used to pay whistleblower awards. This ensures the Office can continue to operate even if large awards deplete the award fund.
“President Biden’s swift action on the CFTC Fund Management Act demonstrates the power of bipartisan collaboration and the value of whistleblowers and their advocates,” said Siri Nelson, Executive Director of NWC. “Whistleblower Network News’ 2020 Marist poll showed that whistleblower protections are important to voters and NWC has supported this bill since it was initially introduced last session. I am so happy that both Congress and the President listened to the will of the people and saved this fantastic program from becoming, as Senator Grassley described it, ‘a victim of its own success.’”
“NWC would like to thank Senators Chuck Grassley, Maggie Hassan, Joni Ernst, Tammy Baldwin, and Susan Collins for their relentless commitment to this bill and the CFTC program,” added Nelson. Senators Grassley and Ernst will both be speaking at NWC’s National Whistleblower Day 2021 event. The virtual event is a celebration of whistleblowers featuring panels and speeches by policymakers, whistleblower experts, whistleblowers, and their advocates. Gary Gensler, Chair of the U.S. Securities and Exchange Commission (SEC), will be delivering keynote remarks.