U.S. Senators Sheldon Whitehouse (D-RI) and James Risch (R-ID) and Representatives Joe Wilson (R-SC) and Dean Phillips (D-MN) announced their introduction of the bipartisan “Sanctions Evasion Whistleblower Rewards Act” on June 21. In Senator Whitehouse’s press release, the representatives touted the bill as “legislation that would protect national security by offering rewards for information leading to the arrest or conviction of sanctions evaders.” Leading whistleblower advocates cast doubt on the impact of the legislation due to its language and construction.
The bill would amend the State Department Basic Authorities Act of 1956, and more specifically the “Rewards for Justice” program within the Act that was passed in 1984. The Rewards for Justice program was originally passed as part of the Act to Combat International Terrorism which created reward incentives for people providing the U.S. government with knowledge of terrorist acts or crimes. The program has since been updated to authorize rewards for sharing knowledge with the government about crimes relating to foreign interference in U.S. elections, malicious cyber activity, and North Korea. Should the Sanctions Evasion Whistleblower Rewards Act pass, sanction evasion would be added to that short list of eligible crimes.
According to the Rewards for Justice website, the U.S. government, through the State Department, has “paid in excess of $200 million to more than 100 people who provided actionable information that brought terrorists to justice, disrupted terrorist attacks or financing, or disrupted financial mechanisms of those engaged in illegal activities to support the North Korean regime.”
The Rewards for Justice program faces inherent challenges of remaining highly confidential and focusing on a narrow list of desired information. Nevertheless, the structure of the program is missing key elements that have been identified over the past thirty years as the best practices for whistleblower reward laws. Whereas the whistleblower provision of the Dodd-Frank Act guarantees the whistleblower between ten and thirty percent of the penalties that they help the government recover, the Rewards for Justice program guarantees nothing, even if the relator gave the government original information leading to a key enforcement action. Under Rewards for Justice all discretion is left to the Secretary of State.
Whistleblower advocates believe that there is space for improvement in the national security sector. According to Stephen M. Kohn, Chair of the Board of the National Whistleblower Center and author of Rules for Whistleblowers, “Congress should enact a State Department administered law that follows the highly successful criteria of Dodd-Frank. That is, one with anonymous and confidential reporting and mandatory rewards in the ten to thirty percent range. Voluntary and discretionary programs have universally failed to incentivize whistleblowers to step forward and have had a minimum or negligent effect on deterring crime. Congress knows how to get this right, and the State Department badly needs a Dodd-Frank style whistleblower law to fight corruption.”
Adding “evasion of sanctions” to the existing eligible criteria of the Rewards for Justice program may have a positive impact on incentivizing whistleblowers who know information about money being laundered out of Russia. Anyone in such a position, however, might also look to Congress’ recently passed Anti-Money Laundering Whistleblower Improvement Act, which guarantees the whistleblower a minimum of 10% of the evaded sanctions they help the U.S. Government uncover. For Congress to really strengthen the State Department’s ability to enforce crimes around the globe, they will likely find success the same way other whistleblower programs have: by setting award minimums, eliminating award caps, and guaranteeing confidentiality.