On July 26, Senator Chuck Grassley (R-IA), Senator Maggie Hassan (D-NH), and Representative Zach Nunn (R-IA) introduced the CFTC Whistleblower Fund Improvement Act. The bill is heralded by whistleblower advocates as a necessary fix to the funding crisis facing the Commodity Futures Trading Commission (CFTC) Whistleblower Program.
The CFTC Whistleblower Program offers monetary awards and anti-retaliation protections to individuals who voluntarily provide the agency with information on commodities fraud. Since the program was established in 2010, whistleblower tips have allowed the CFTC to recover over $1 billion from fraudsters. The program has in turn paid out over $330 million in whistleblower awards.
The program’s success has caused issues, however. The fund used to finance the program, the Consumer Protection Fund, 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 Fund’s cap, which was instituted with the founding of the program in 2010, does not sufficiently accommodate the exponential growth of the program. Whistleblower advocates have thus called on Congress to pass legislation addressing the CFTC’s funding crisis.
In March, Rostin Behnam, Chairman of the CFTC, testified before the U.S. Senate Committee on Agriculture, Nutrition, & Forestry. During his testimony, Behnam expressed his belief that the Fund needs a “long-term fix.”
The CFTC Whistleblower Fund Improvement Act provides a long-term fix by increasing the cap on the Fund from $100 million to $300 million. It also permanently established a separate fund for financing the program’s operations. This separate fund was established in 2021 with the passage of the emergency CFTC Fund Management Act which saved the program from financial collapse. Under that law, however, the fund will expire in 2024.
“This is an urgently needed fix,” says leading whistleblower attorney Stephen M. Kohn of Kohn, Kohn & Colapinto. “Fraud in commodity markets hurts every American consumer. Prices increase and fraudsters get rich.
“The commodities whistleblower law has been remarkably successful, triggering the most successful commodity fraud investigations in history,” continues Kohn, who also serves as the Chairman of the Board of the National Whistleblower Center (NWC). “Without this reform whistleblowers will not obtain the compensation they are promised, and the ability of the CFTC to enforce the law will be crippled.”
“The CFTC whistleblower program should not be a victim of its own success. Without congressional action, the whistleblower reward fund could drain faster than it replenishes,” said Senator Grassley. “Our bill would ensure the CFTC whistleblower office continues to promote accountability by making a stopgap fix permanent and strengthening the law that established it in the first place – and at zero cost to the taxpayer.”
“The CFTC relies on whistleblowers to identify fraud, and this information is absolutely critical to protecting consumers,” said Representative Nunn. “Right now, though, the CFTC’s whistleblower program is ironically being hamstrung because it’s been too successful. Our bipartisan bill will make important changes to support whistleblowers without costing taxpayers a dime.”
“When whistleblowers bravely step forward, they are risking their careers in order to prevent wrongdoing and save taxpayer dollars,” said Senator Hassan. “It is vital that this fund for whistleblowers remains available in the future to continue saving billions of dollars. I am glad that Senator Grassley and I were able to temporarily continue this program for the past two years, and I urge my colleagues to support this bill that will make this fund permanent.”
Alongside Senator Ron Wyden (D-OR), Senator Grassley introduced a Resolution designating July 30, 2023 as National Whistleblower Appreciation Day. The Senate unanimously approved the Resolution on July 13. Senator Grassley will be giving live remarks at the National Whistleblower Center’s National Whistleblower Day celebration.