Good question from Hal about the concern that fraud and misconduct were not being reported due to the economic vulnerability of those who observed it. This concern was one basis for the Qui Tam amendments to the US False Claims Act in 1986. These provisions-- inspired by perceived problems in the defense industry -- provide both Rewards and Protections to certain Whistleblowers who in effect "stand in the shoes of the government".
Rewards: The False Claims Act provides an incentive for reporting by granting successful Qui tam whistleblowers from 15 to 30 percent of any award or settlement amount (sharing in the government's recovery.) In addition, the statute provides for payment of their attorney's fees, making Qui tam actions a popular topic for the plaintiff's bar.
Protections:The False Claims Act also prohibits an employer from harassing or retaliating against an employee for attempting to uncover or report fraud on the federal government. If retaliation does occur, the whistleblower may be awarded "all relief necessary to make the employee whole," including reinstatement, back pay, two times the amount of back pay, litigation costs, and attorney fees.
Of the two elements of the federal law, confidence in the protections appears to be more important to major corporate whistleblowers than the potential financial rewards. However, data suggests that Medicare fraud reports and recoveries in particular have been driven in part by lower economic status whistleblowers such as data entry clerks with readily transferable job skills seeking financial reward.
Regardless, let there be no mistake that the best business processes for uncovering misconduct unambiguously exclude consideration of the motives of the whistleblower. Consider, for example, if pharmaceutical research data in fact has been faked to expedite FDA approval, does it matter that the fraud was disclosed by a spurned lover or jealous colleague? Silence about misconduct IS dangerous. Silence about scientific misconduct can kill. Motivation matters little when the misconduct is real.
