The Biden/Harris administration officially begins on January 20, 2021. Over the next four years, the administration will have the opportunity to work with Congress to enhance whistleblower protection for both private and public employees. While the administration has not made public comments about their plans regarding whistleblower legislation, both Biden and Harris have histories with whistleblowing that are worth examining.
Biden as Vice President
Biden on Corporate Whistleblowers:
As Vice President, President Joe Biden, contributed to the creation of perhaps the greatest pro-whistleblower achievement in past decades: the whistleblower provisions in the Dodd-Frank Act. The Dodd-Frank act is the most important and sweeping financial reform law since the Great Depression, and was crafted in response to the 2008 financial collapse. Enacted in 2010, the Act completely overhauled financial regulatory practices in all aspects of the economy and sought to re-regulate the financial sector following decades of deregulation.
When crafting the legislation, the Obama/Biden administration and Congress recognized the importance of whistleblowers in fighting corporate fraud. Whistleblower attorneys played a key role in writing legislation that incentivizes and protects whistleblowers. The Dodd-Frank Act contains eight separate sections that created or enhanced corporate whistleblower rights, including: a mandate entitling qualified whistleblowers to a monetary award, a confidentiality provision that allows for anonymous filings, and a strong anti-retaliation law that allows whistleblowers to file retaliation cases in U.S. District Court and obtain double back wages. Additionally, the Act required the establishment of the U.S. Securities and Exchange Commission (SEC) Whistleblower Program and the Commodity Futures Trading Commission (CFTC) Whistleblower Program. Interestingly, during the fourth Democratic primary debate on October 15, 2019, Biden stated that he “got votes” for Senator Elizabeth Warren’s (D-MA) Consumer Financial Protection Bureau (CFPB) idea. The CFPB was later passed in 2010 as part of the Dodd-Frank Act; however, there was controversy surrounding Biden’s statement at the debate and if he was really involved in procuring votes for the CFPB.
The SEC and CFTC whistleblower programs, both apparently supported by President Biden, have proven to be highly successful in the past decade. To date, the SEC has collected over $2 billion in sanctions from whistleblower cases, returned well over $750 million to harmed investors, and has granted approximately $719 million in whistleblower awards to 112 individuals. Likewise CFTC whistleblowers have disclosed frauds resulting in almost $1 billion in sanctions and, in turn, the CFTC has issued 25 orders granting a total of more than $120 million in whistleblower awards. Earlier in 2020, then-SEC Chairman Jay Clayton reflected on the success of the SEC Whistleblower Program. He said: “Over the past ten years, the whistleblower program has been a critical component of the Commission’s efforts to detect wrongdoing and protect investors and the marketplace, particularly where fraud is well-hidden or difficult to detect.”
In addition to the provisions outlining the SEC and CFTC Whistleblower Programs, the Dodd-Frank Act included amendments to the whistleblower provisions of the Sarbanes-Oxley Act (SOX Act). Originally passed in 2002, the SOX Act contains anti-retaliation protections for whistleblowers who disclose violations of the Act. Prior to Dodd-Frank, these whistleblower protections were undermined by a series of court rulings which severely limited the law’s scope. The Dodd-Frank amendments enhanced the SOX Act by explicitly granting protected whistleblowers the right to a jury trial, prohibiting mandatory arbitration, extending the statute of limitations from 90 days to 180 days, and expanding the types of covered employers to include corporate rating organizations and subsidiaries of publicly held companies.
The 2009 amendments to the False Claims Act were also essential reforms made during the while President Biden served as Vice President. The amendments strengthened the False Claims Act in a variety of ways, affording whistleblowers new protections and increasing opportunities to report fraud. The Fraud Enforcement and Recovery Act (FERA) expanded the definition of what a false claim could be, making it harder for corporations to get off the hook for making false or misleading statements.
Despite the achievements of the Dodd-Frank Act and the FERA amendment to the False Claims Act, issues still remain for corporate whistleblowers as the Biden/Harris administration takes office. In 2019, Senator Charles Grassley (R-IA), a longtime champion of pro-whistleblower legislation, introduced the Whistleblower Programs Improvement Act. The bill seeks to fix issues that persist in the SEC and CFTC Whistleblower Programs. For example, the bill extends anti-retaliation protections to corporate whistleblowers who report misconduct internally. Meanwhile, a Marist poll recently published by Whistleblower News Network reveals that 82% of American adults believe that Congress should prioritize stronger protections for corporate whistleblowers.
Biden on Government Whistleblowers:
As a Senator from Delaware, President Biden voted to pass the Whistleblower Protection Act of 1989. However, while he was Vice President, the Obama/Biden administration’s approach to whistleblower protections for federal employees was less promising than their work on corporate whistleblower protections. For example, the Whistleblower Protection Enhancement Act, introduced by former Senator Daniel Akaka of Hawaii, was passed in 2012. The act clarified definitions in existing whistleblower laws and strengthened protections for certain groups of federal employees. However, this act “failed to provide federal employees the right to have their cases heard in U.S. District Court, and it failed to include effective protections for national security/intelligence whistleblowers,” according to attorney Stephen M. Kohn of whistleblower law firm Kohn, Kohn and Colapinto.
In 2012, the Obama/Biden administration passed the Presidential Policy Directive/PPD-19. The Directive aimed to protect whistleblowers in U.S. intelligence communities, and while some people were happy with this step forward in whistleblower legislation, other whistleblower advocacy groups were concerned. The National Whistleblower Center published an article at the time that outlined their concerns regarding the Directive and urged Congress to “enact real legal protections for intelligence community whistleblowers.”
The Obama/Biden administration was also known for their novel usage of the Espionage Act of 1917 against whistleblowers in the intelligence community. While the Act was originally intended to be used against foreign agents operating on U.S. soil, the Obama administration used it as a tool for prosecuting whistleblowers and intelligence leakers. In a 2013 article for The Guardian about President Obama’s harmful persecution of whistleblowers in the intelligence community, whistleblower John Kiriakou wrote that: “President Obama has been unprecedented in his use of the Espionage Act to prosecute those whose whistleblowing he wants to curtail.” He argued that the Espionage Act had formed to “ruin the whistleblower personally, professionally, and financially. It is meant to send a message to anybody else considering speaking truth to power: challenge us and we will destroy you.” And, there is no record of, then, Vice President Biden critiquing this approach.
Other whistleblowers who were charged under the Espionage Act during the Obama/Biden administration include Chelsea Manning and Edward Snowden. This expanded use of the Espionage Act to prosecute and deter whistleblowers did not stop with the end of the Obama/Biden administration. The Trump/Pence administration picked up where their predecessors left off, threatening multiple whistleblowers with the Act. National Security Agency (NSA) whistleblower Reality Winner is currently serving a 63 month sentence in federal prison after pleading guilty to violations of the Espionage Act. No allegations were made against her that she was a foreign spy. There have been calls to pardon Winner and President Biden would send a clear message of support to the whistleblower community should he choose to do so. Additionally, Representative Tulsi Gabbard has introduced amendments to the Espionage Act which would allow a whistleblower’s intent to be considered when facing criminal charges under the Espionage Act. WNN will watch closely to see if President Biden will use his executive powers to reverse harm done to whistleblowers prosecuted under the Espionage Act during the Obama/Biden and Trump/Pence administrations.
Vice President Kamala Harris
Vice President Harris has a more favorable history in whistleblower issues than President Biden. While serving as the State of California’s Attorney General, Harris litigated “‘the largest recovery in the history of the [California] False Claims Act,’ collecting $241 million in sanctions against Quest Diagnostics,” according to an August article from The National Law Review. The False Claims Act was enacted in 1863 and aimed to prevent defense contractor fraud during the U.S. Civil War. The Act also included a provision for private citizens, or whistleblowers, “to file qui tam lawsuits against those who have defrauded the government,” according to a WNN article. The 2011 case found that Quest Diagnostics, which was the state’s largest provider of medical laboratory testing, was allegedly overcharging MediCal, California’s Medicaid program. The whistleblowers in this case received an award of over $69 million.
While acting as California’s Attorney General, Harris also initiated or settled the following qui tam whistleblower cases: a $23,585,849 settlement with McKesson Corporation, a $168.5 million settlement with K12 Inc., a $46 million settlement with GlaxoSmithKline, and a $52 million settlement with Abbott Laboratories.
Goals for the Next Administration
Given both President Biden and Vice President Harris’ histories with whistleblower legislation, what should the Biden-Harris administration prioritize as goals for protecting whistleblowers? Whistleblower attorney Stephen M. Kohn outlined three goals that the new administration should keep in mind.
- Learn from mistakes. This includes granting federal employees the right to go to federal court to protect their rights and ceasing to use the Espionage Act to attack whistleblowers.
- Build on the success of the Dodd-Frank Act. This could be passing bi-partisan bills that are pending in Congress. For example: the Senate Anti-Money Laundering bill, the House Anti-Trafficking Bill, the Senate Financial Products Whistleblower Bill, the Dodd-Frank correction act, the CFTC Fund Management Act, the House Protect Brave Whistleblowers Act, the Wildlife Conservation and Anti-Trafficking Act, and the False Claims Act amendments proposed by Senator Grassley.
- Finish the job. The Obama/Biden administration supported amending the Occupational Safety and Health Administration (OSHA) to provide occupational safety whistleblowers a private right of action. The Obama/Biden administration also supported amending the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) to include False Claims Act modeled whistleblower rights. These amendments were not adopted under the either Obama/Biden or Trump/Pence administrations. Yet, these modifications should be revisited by the Biden/Harris administration for reconsideration and adoption to finish the job of protecting whistleblowers which was started when President Biden was Vice President.
Whistleblower issues are bi-partisan, and the Biden/Harris administration would be wise to build on both the President and Vice President’s past experience with whistleblower issues to make important changes. The Biden administration is likely focused on building a two term Presidency, and focusing on an issue that voters overwhelmingly support would be a great way to build momentum.
Further reading:
2017 article about Obama’s usage of the Espionage Act from Freedom of the Press Found