[Congressional Record Volume 165, Number 166 (Monday, October 21, 2019)]
[Senate]
[Pages S5907-S5908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             WHISTLEBLOWER PROGRAMS IMPROVEMENT ACT OF 2019

  Mr. GRASSLEY. Mr. President, on another subject, I recently 
introduced the Whistleblower Programs Improvement Act of 2019, a 
bipartisan bill, and I have the support of the bipartisan 
whistleblowers caucus.
  This legislation strengthens whistleblower protection for 
whistleblowers working in a variety of key sectors, including our 
securities and commodities industries and the foreign service.
  There has been a lot of talk about government whistleblowers lately 
that is very appropriate. It is important to remember that many of our 
whistleblower laws are there to protect just ordinary average Americans 
who don't work in government at all. Many of the groups helped by this 
bill work in private industry. In some cases, they are investors or 
businesspeople who have been on the receiving end of financial fraud.
  In other cases, they are employees, like stockbrokers, traders, 
investment advisers, administrative professionals, and other support 
staff, who see activities in the course of their work that they know 
are outright wrong, and these good people decide to speak out. Speaking 
out, many times, causes you to eventually seek whistleblower 
protection.
  Among these brave whistleblowers are people like the three employees 
at Merrill Lynch who had evidence that between 2009 and 2015 their 
company was misusing customer cash. Now, just think how lucky these 
savers were who were helped by whistleblowers willing to come out and 
say a wrong has been committed.
  They did it this way: The whistleblowers told the Security and 
Exchange Commission what they knew. In doing so, they provided 
information critical to an investigation of the company's practices. 
That investigation uncovered multiple violations of Federal rules.
  Among other things, the Securities and Exchange Commission found the 
company was not depositing cash in reserve accounts as law required. 
Instead, the company was using tricky accounting maneuvers to free up 
billions of dollars per week and then using that money to finance its 
own trading practices. In the process, it is quite obvious the company 
was putting its customers' cash at risk.
  The Securities and Exchange Commission said: ``Had Merrill Lynch 
failed in the midst of these trades, the firm's customers would have 
been exposed to a massive shortfall in the reserve account.''
  The information provided by whistleblowers led to a successful 
enforcement action, which involved an admission of wrongdoing by the 
company and a $415 million settlement.
  Now, getting back to the importance of whistleblowers. If these 
whistleblowers hadn't stepped forward, then, who knows, those shady 
accounting practices might still be going on this

[[Page S5908]]

very day instead of having been stopped--stopped cold. Investors might 
still be facing the same unnecessary risks.
  Now, there are plenty of examples from the commodities industry as 
well--people like Edward Siedle, a whistleblower who informed the 
Commodity Futures Trading Commission that JPMorgan Chase was failing to 
disclose conflicts of interest with some of its clients. Because Mr. 
Siedle decided to speak out about what he knew, the government 
collected hundreds of millions of dollars in settlements.
  Whistleblowers like Mr. Siedle and the employees at Merrill Lynch 
deserve our gratitude, and they deserve our support. They help the 
Security and Exchange Commission and the Commodity Futures Trading 
Commission to do their job, and they help to promote transparency. With 
transparency comes accountability--in this case, for our financial 
system.
  I will tell you something else they deserve. They deserve assurance 
that when they put their jobs and their reputation on the line, they 
will not be fired just for trying to do the right thing.
  They deserve to know that if the government recovers money because of 
their disclosures, they will be able to get a decision on their award 
application in a timely fashion. Currently, whistleblowers don't have 
these assurances.
  Last year, despite strong objections that I raised in a brief to the 
Supreme Court in the case of Digital Realty v. Somers, the Court ruled 
that a whistleblower who reports violations of our Nation's securities 
laws is protected from retaliation not all the time but only when he or 
she discloses the wrongdoing directly to the SEC.
  Because of this ruling, if a whistleblower in the securities industry 
reports a concern to a supervisor at their place of work without also 
going to the SEC, they can be fired without any recourse; in other 
words, fired for the so-called crime they did, and what did they do? 
They did nothing more than what you might call the crime of committing 
truth. They have no legal protection or means of getting their job 
back.
  That is not what Congress intended when it created the current 
Security and Exchange Commission Whistleblower Program, and that was 
done back in 2010. It is not what I intended when I voted for that 
whistleblower protection.
  That law was supposed to protect whistleblowers who report 
wrongdoing. It was supposed to prevent them from being fired without 
just cause.
  This decision has far-reaching implications that potentially affect 
others beyond those working in the securities industry.
  Because the commodities whistleblower program was established through 
the same public law as the Security and Exchange Commission program, 
that program incorporates many of the same provisions, including 
similar language to that which the Supreme Court ruled on during the 
Digital Realty case.
  That means whistleblowers in yet another program face the prospects 
of having anti-retaliation provisions Congress put in place a decade 
ago suddenly yanked away from them. That is unacceptable to me. It is a 
scenario that should be unacceptable to every Member of this body who 
cares about keeping our financial system very strong, protecting the 
investor.
  My bill prevents the Supreme Court ruling from becoming the status 
quo. It makes it clear that whistleblowers who report concerns about 
possible violations of our Federal securities and commodities laws are 
fully protected, whether they take their concerns to the Security and 
Exchange Commission or to the Commodity Futures Trading Commission, or 
to anyone else in their company who they reasonably believe has the 
ability to address their concerns. That is what companies should want. 
They should want it anyway, to keep their public respectability.
  It is also a commonsense goal that we ought to be seeking, and it is 
common sense.
  When an employee tells his or her company about a concern, it gives 
the company a chance to investigate and address the concerns, and, if 
necessary, to self-report any problems to the Federal regulators.
  Companies that come clean and self-report almost always receive 
reduced penalties. That is an outcome that is better for the company, 
and it is obviously better for the investors.
  On another matter, my bill addresses concern for securities and 
commodities whistleblowers. I said before that if the government 
recovers money as a result of a whistleblower's disclosure, the 
whistleblower deserves at least an initial decision concerning their 
award application and to do it in a timely fashion. Unfortunately, my 
office has heard of far too many cases where whistleblowers have had to 
wait years to get a decision from the Securities and Exchange 
Commission after they apply for an award, and you apply for the award 
after you make the case for the government. Waiting that long is 
unacceptable. A year should be more than enough time for regulators to 
reach an initial determination regarding an award application.
  My bill makes the 1-year standard law for both the Securities and 
Exchange Commission and the Commodity Futures Trading Commission 
whistleblowers. If the agency takes longer than a year to reach an 
initial decision, the whistleblower office must notify the chairman and 
the whistleblower of the cause for the delay.
  Recently, I had the chance to sit down with Securities and Exchange 
Commission Chairman Clayton to discuss these changes. My staff worked 
closely with the Securities and Exchange Commission and the Commodity 
Futures Trading Commission to craft the language. Now I urge all of my 
colleagues to support change, as well.
  In addition to these changes, my bill irons out other differences 
between the Securities and Exchange Commission and the Commodity 
Futures Trading Commission whistleblower programs and ensures that 
whistleblowers reporting to both of these bodies have access to the 
same judicial remedies.
  It also enables the Commodity Futures Trading Commission to hold more 
in the consumer protection fund. That is the fund used to pay out its 
awards to the whistleblower, and it allows the Commodity Futures 
Trading Commission to use money from the fund to teach stakeholders 
about the opportunities that are available to them through the 
whistleblower program.
  Finally, my bill addresses a critical gap in protections provided to 
Foreign Service employees through the Whistleblower Protection Act. Due 
to a drafting error in the law, the Office of Special Counsel has 
stated that it doesn't have the authority to investigate instances of 
possible retaliation against Foreign Service workers when the 
retaliation comes in the form of a poor performance evaluation. That is 
an important task of the Office of Special Counsel and an important 
protection that Congress has afforded to other government 
whistleblowers. The Foreign Service office's people should have that as 
well. My bill closes that gap and makes it clear that Foreign Service 
workers should receive those same protections.
  In closing, this bill contains commonsense changes. It reinforces and 
extends protections that Congress already granted in the past and 
ensures that whistleblowers working in different industries who make 
similar kinds of disclosures are equally treated and equally protected 
under the law. It also tells the Supreme Court of the United States: 
You didn't get it right. That is something I am certain we can all get 
behind--straightening out the Supreme Court when they don't follow 
congressional intent.
  The bipartisan coalition of support for this bill is a strong 
testament to that. I thank my original cosponsors, Senators Baldwin, 
Durbin, and Ernst, for their enthusiastic support of this legislation. 
When it comes before the Senate for a vote, I urge all of my colleagues 
to do the same.
  I yield the floor.

                          ____________________