The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” The purpose of this blog series is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Fact Number 21:

The Securities and Exchange Commission (SEC), after engaging in the most comprehensive government review of whistleblower reward programs ever undertaken, rejected many of the same proposals now being rehashed by the Chamber.  In 2010-11 the SEC solicited thoughtful and well documented comments related to structuring a rewards program for securities-fraud whistleblowers. 

The Commissioners personally met with all the relevant stakeholders, including representatives from the Chamber of Commerce. The final rule, based on hundreds of detailed comments, including numerous comments from the Chamber of Commerce and its close allies, provides no support whatsoever for any of the Chamber’s FCA-gutting recommendations.

In its report, the Chamber mischaracterized the SEC’s final rules.  The Chamber correctly noted that the SEC endorsed a number of rules promoting “regulatory incentives to encourage employees to report possible violations . . . to the company.”   However, the Chamber failed to point out that the SEC provided this encouragement without placing any limits on the right of an employee to report concerns directly to the government.

Many of the Chamber’s recommendations are predicated on placing mandatory restrictions on the right of employees to report fraud to the government. The Chamber failed to point out that the SEC completely rejected these very same proposals, and with good reason.

It is well established that employees are the single most important source for detecting fraud.

Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.