On August 11, Stephen M. Kohn delivered a highly informative presentation to a group of European anti-corruption advocates at the Meridian House as part of the U.S. State Department’s International Visitor Leadership Program (IVLP). The IVLP initiative has worked for over sixty years to promote transparency and accountability in foreign governments and organizations.
The program, organized by the Meridian International Center, has the goal of fostering partnerships between foreign professionals and their American counterparts. Kohn collaborated with IVLP to inform and connect with global advocates and further the protections and potential rewards for non-domestic whistleblowers.
Participants of the conference traveled from countries including Armenia, Bolivia, Bosnia, Herzegovina, Bulgaria, Croatia, Czech Republic, Italy, Latvia, Lithuania, Romania, the Netherlands, Serbia and Ukraine. A majority of these countries face high levels of corruption according to Transparency International’s 2022 Corruption Perceptions Index. In the absence of thorough and impactful anti-corruption legislation, these nations are confronted with further corruption.
Kohn, a founding partner at Kohn, Kohn and Colapinto LLP, has represented whistleblowers from around the world and is a leading expert on transnational anti-corruption laws. With over thirty years of experience, Kohn is an expert in this field, winning some of the largest sanctions in history on behalf of whistleblowers. He has dedicated his career to advancing the rights of whistleblowers both domestically and abroad.
During his content-rich presentation, Kohn outlined how foreign countries and anti-corruption organizations can utilize U.S. laws as tools to combat corruption within their own country. Kohn focused primarily on two transformational anti-corruption tools, the Foreign Corrupt Practices Act (FCPA) and the Dodd-Frank Whistleblower Program.
The Foreign Corrupt Practices Act (FCPA) which Kohn said is “as of today, the most impactful and important transnational anti-corruption law in history,” makes it illegal for a publicly traded company to offer or pay money to any foreign official in exchange for obtaining business. The law provides for whistleblowers to receive a monetary award of ten to thirty percent of the total funds recovered by the government following a successful enforcement action resulting from the whistleblower disclosure.
The FCPA is extremely powerful because it allows an individual to file a report anonymously and confidentially with the United States Securities and Exchange Commission (SEC), effectively protecting whistleblowers from retaliation. Furthermore, the law has broad transnational application. To date, over sixty-five thousand people worldwide have participated in anonymous SEC filings through the program.
“Whistleblowers play an instrumental role in the most successful international foreign bribery prosecutions, and no one knows who they are. They have not been fired. And they’re multimillionaires” said Kohn. He cited the recent decision of the SEC to bestow a collective sum of $104 million in rewards upon seven foreign whistleblowers who assisted in an investigation. The award is the fourth largest in the SEC’s whistleblower program’s history.
The efficacy of the law lies in its capacity to incentivize whistleblowers to disclose crimes within a non-democratic culture. Whistleblowers who may be disillusioned by the lack of avenues for accountability in their own countries can find one such avenue in the United States’s transnational whistleblower laws, like the FCPA.
“There have been successful prosecutions in totalitarian countries like Russia, China, VietNam, South Africa, countries that do not come close to the Democratic infrastructure you have in your home countries.” Whistleblower laws like these lay the groundwork for future anti-corruption laws and set in motion a shift in public perception and cultural attitude towards whistleblowers.
Presenting a chart that illustrated the millions of dollars that have been collected from FCPA cases in Bulgaria, Croatia, Czech Republic, Italy, Serbia, Romania, the Netherlands, and Ukraine, Kohn emphasized that this law is already being utilized in the IVLP participants’ countries. The largest public case from the region resulted in a sanction of five hundred and nineteen million dollars.
Another tool at the disposal of foreign whistleblowers is the Dodd-Frank Whistleblower Program, which prohibits violations of U.S. securities laws. It requires that government agencies pay a whistleblower who reports original information a reward between ten and thirty percent of the sanction collected.
Foreign whistleblowers from over one hundred and forty countries have filed confidentially with Dodd Frank. Importantly, whistleblowers who report misconduct, whether or not they are not U.S. citizens, are safeguarded from employer retaliation. Foreign whistleblowers from countries represented in the conference have increasingly participated in the Dodd Frank Whistleblower Program since its establishment in 2010. In just thirteen years, whistleblowers from the 13 European countries represented at the conference have filed two hundred and fifty three tips.
Kohn concluded by describing the impact of the recently enacted whistleblower provision of the Anti-Money Laundering Act Whistleblower Law (AML) under the Bank Secrecy Act. The AML has revolutionized the rules that regulate money laundering violations by using the Dodd-Frank whistleblower program as a blueprint for whistleblowing on money-laundering crimes. The AML framework works to thwart the concealment of beneficial ownership and foreign bribery and permits whistleblowers in this sector to receive financial awards.
For regions where corruption is so widespread, the AML could have transformative effects. Kohn added that given the law’s recent introduction, the Department of Treasury has yet to finalize their rules for the law. “We are in the process of writing regulations for [the AML] now. It is absolutely imperative that people involved in international anti-corruption in foreign countries speak out about how those regulations should be written.”
During the Q&A segment, one conference member from the Netherlands inquired about where to start intercepting bribery within her own organization. Kohn explained that the first step to maximize the power of these U.S. laws is to obtain a U.S. lawyer to be an intermediary between the government agency and the whistleblower themselves. This allows the whistleblower to remain anonymous and confidential and serves to give their allegations merit.
According to Kohn, after successfully filing with a government agency, “the company never knows you’ve taken action. And in fact, under the law, they cannot be told that a whistleblower has stepped forward.”
Kohn’s address underscored that transnational whistleblower laws are always a tool for international whistleblowers, regardless of their own country’s legislation or lack thereof. Kohn concluded, “These laws demonstrate the way your countries should move and what type of laws should be pushed for but that may be a while off. In the interim, they’re here.”