At an April 20 conference on the future of Romanian whistleblowing law, experts discussed the most pressing issues facing the country as it moves towards a December 2021 European Union (EU) Directive deadline to overhaul its whistleblower laws. The 18th edition of the Tax, Law & Lobby Conference, organized by Business Review and sponsored by WNN, resulted in highly productive conversation and featured several high-profile whistleblower figures such as U.S. Senator Chuck Grassley (R-IA), UBS whistleblower Bradley Birkenfeld, and a host of high-ranking Romanian government officials.
The proposed Romanian bill recently left a public comment phase where citizens could voice their opinions; it is now on track to become law in December 2021. Not only does the bill meet the EU Directive conditions; it goes above and beyond by incorporating all the recommendations made by the National Whistleblower Center (NWC).
Below are some of the highlights of the conference.
Reputation of Whistleblowers and Reward Systems
A recurring theme throughout the conference was the question of how to raise the public reputation of whistleblowers in Romania. Some panelists worried that paying rewards to whistleblowers could damage the reputation of whistleblowers and increase existing stigma against whistleblowers in Romania.
The issue of stigma against whistleblowers is often wrapped up in the fear that reward systems for whistleblowers will increase the number of malicious reports. Critics of reward systems worry that false reporting by would-be whistleblowers will further damage public reputation of whistleblowers if some of them are exposed as making false disclosures, just to claim rewards. While some panelists supported this theory, many international whistleblower experts rebutted it.
Giancarlo Spagnolo, Professor of Economics at the SITE-Stockholm School of Economics and University of Rome II, presented evidence that calmed fears of increased malicious reporting. He reminded the conference that when foundational whistleblower laws were passed in the U.S. in the 1980’s, there was no such influx. Spagnolo claimed that much of the fear of increases in malicious whistleblower reporting comes from “scared regulators” who worry about increased rates of whistleblower reports. Mark Worth, Executive Director of Whistleblowing International, asserted that in the U.S., there has never been a case of a malicious whistleblower receiving a reward. Worth has written extensively to promote whistleblower reward systems internationally.
New Ideas for Implementation
During the conference, panelists also submitted ideas about how to implement the many changes that the bill would make to current Romanian whistleblower systems. One panelist suggested creating a cryptocurrency that whistleblowers could be paid in, strengthening anonymity and reducing the chance that whistleblower identities could be tracked through award payments. The panelist acknowledged that it would be unlikely for such a currency to be set up by the December 2021 deadline when the EU Directive will be put in place, so for the time being, Bitcoin could be an effective payment substitute.
Another panelist suggested creating an IT tool that would streamline the whistleblower reporting process within corporations. Denisa Simion, Manager of Forensic and Integrity Services at Ernst & Young, hoped that implementing such a tool would help facilitate communication of internal complaints inside of companies. She argued that because the bill requires companies of over 50 employees to have internal reporting channels, an IT tool tool could be extremely useful in expediting whistleblower reports. While other panelists agreed, they noted that an increased emphasis on “a human touch” might encourage whistleblowers to step forward.
Positive Effects of a Strong Whistleblower Program
Whistleblower advocates laid out the wide-reaching positive effects of a strong whistleblower program. Birkenfeld suggested that whistleblowers are one of the strongest and most cost-effective forms of law enforcement, even when you take into account the money that is spent on whistleblower rewards. Spagnolo agreed, and added that whistleblowing in the U.S. has had a provable and significant deterrent effect on corporate and government crime.
Stephen M. Kohn, Chairman of the Board of NWC, pointed out that an often overlooked benefit of a strong whistleblower program is that it will strengthen competitive business. He explained that “[t]he main beneficiaries of whistleblower reward laws are corporations. A corporation that does not pay bribes to get business is at a radical, competitive disadvantage to a corrupt outfit.” Kohn noted that the groups in Romania that stand to gain the most from strong whistleblower laws are honest businesses.
Takeaways from the Conference
The conference made it clear that though whistleblowing experts seek substantive improvements to the Romanian bill, it is clear that Romania is at the forefront of whistleblower reform in the EU. By following many of the recommendations suggested by international whistleblowing experts, Romania has advanced a bill that will provide a framework for future Romanian whistleblower law improvements, and can perhaps serve as a framework for the other 26 member states of the EU.