Business Ethics magazine is reporting on the anticipation of corporate lawyers for more work in defending corruption cases. In an article yesterday, Michael Connor writes about a whistleblower reward provision in the current draft of the financial reform bill. The bill would guarantee a reward of up to 30% for whistleblowers who provide original information about violations to the Securities and Exchange Commission (SEC). This reward program will be similar to the provisions of the False Claims Act (FCA) which brings billions of dollars back to the U.S. treasury every year through disclosures made by whistleblowers. (See page 9 of the linked report.) Connor says that if the financial reform bill passes with the current whistleblower provision, it would lead to increased detection of violations of the Foreign Corrupt Practices Act (FCPA) which provides penalties for U.S. companies that engage in bribery. Connor cites reports by corporate defense firms Morgan Lewis and Latham & Watkins indicating that the nature of enforcement is likely to change with the whistleblower reward. Instead of raising disclosures internally, whistleblowers will be more likely to file disclosures with the SEC in hopes of securing a reward for the first to disclose original information. Company managers are then more likely to learn about the allegation from the SEC rather than from a company hotline. The whistleblower could actually be competing with company management to see who can make the first disclosure and reap the statutory reward. One way company managers could keep whistleblowers reporting internally would be to demonstrate that company management will not tolerate any retaliation against whistleblowers. It would be nice of companies had such an incentive.