Cartels are being busted. More and more every year. But they are not going away. For every conspiracy the government cracks down on, we can be sure there are several more that carry on unnoticed and unscathed. A broad-based whistleblower program could be the most promising solution to fill this antitrust enforcement gap. But it has to include financial incentives to compensate whistleblowers for the hurdles they face in standing up against fraud and misconduct.
The False Claims Act is the foundation of the U.S. whistleblower system, and by far the most widely used statute by whistleblowers to report corporate fraud and misconduct. The law allows private citizens, known as relators, to bring a lawsuit on the government’s behalf, rewarding them with a significant portion of the government’s recovery (between 15% and 30%). In 2017 alone, the Justice Department announced that it obtained more than $3.4 billion in settlements and judgements from cases brought by whistleblowers under the False Claims Act. Since the False Claims Act was amended in 1986, the Department of Justice has recovered over $56 billion. Aside from the empirical evidence from the FCA and Dodd-Frank programs that financial incentives work, there also is a strong policy rationale for their use. They help compensate whistleblowers for what can be a difficult ordeal with a real risk of retaliation, alienation, and even blacklisting.
What do you think? Should Congress provide financial bounties to antitrust whistleblowers?
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