When whistleblowing becomes a business

OPINION:

Exposing corruption is one of the highest forms of public service. Real whistleblowers, those who come forward at great personal and professional risk to reveal fraud, abuse or misconduct, deserve our gratitude. Their integrity strengthens accountability and helps safeguard taxpayer dollars.

Today, a troubling trend threatens to undermine that noble tradition. A growing class of “professional whistleblowers” has turned the pursuit of justice into a lucrative enterprise. Rather than protecting the public good, some have built careers and fortunes on a system designed for those acting out of conscience, not greed.

Some proudly call themselves “professional whistleblowers.” Over the years, these nefarious actors have filed hundreds of cases under the False Claims Act and other whistleblower statutes, seeking profit instead of corrective change. Some have even published books and given interviews boasting about the millions of dollars they have made from government settlements.

The False Claims Act has undoubtedly done immense good. Created during the Civil War to root out fraud by government contractors, it allows private citizens to file lawsuits on the government’s behalf and share in any recovery. When used responsibly, this law can protect taxpayers and bring bad actors to justice.

When individuals or law firms treat whistleblowing like a business model, filing case after case, hedging bets on settlements, and turning the process into an investment strategy, the result is a distortion of justice. What began as a moral calling has become, in some quarters, a get-rich-quick scheme.

The consequences reach far beyond individual profiteering. Speculative lawsuits brought by opportunistic whistleblowers can cripple legitimate businesses. These cases, often filed under seal, deny companies the chance to defend themselves in public while reputations are quietly destroyed behind closed doors. Many firms settle not because they are guilty but because the cost of litigation and the threat of public exposure are too great to risk.

This “whistleblower industrial complex” also clogs the courts, diverts investigative resources, and makes it harder for truly deserving cases to get the attention they deserve. Even worse, it breeds cynicism.

When the public hears of whistleblowers walking away with multimillion-dollar payouts, they question whether any whistleblower is motivated by truth rather than self-interest. That skepticism erodes support for genuine heroes who act out of conscience and patriotism.

Some of these professional whistleblowers have even breached confidentiality orders by publishing self-promotional books while their cases were ongoing — actions that would get ordinary citizens sanctioned or worse. Yet because they operate under the protection of whistleblower laws, they are rarely held to account. The result is a dangerous double standard that rewards self-enrichment over civic duty.

The Justice Department bears much of the responsibility for policing this abuse. Prosecutors must be more discerning about which whistleblower cases they choose to join. Simply rubber-stamping sealed complaints or allowing serial lawsuit filers to flood the system invites corruption and diminishes the credibility of the entire process. When the Justice Department partners with repeat profiteers rather than true public servants, it blurs the line between justice and opportunism. As the old saying goes, lie down with dogs and you’ll get fleas.

Reform is urgently needed. Congress and the Justice Department should take steps to restore balance to whistleblower law. That includes stricter evidentiary standards before the government intervenes in a case, caps on how many whistleblower lawsuits a single individual or entity can file and clearer penalties for those who breach court seals or seek personal publicity from active investigations. Transparency in whistleblower settlements is also essential. The public deserves to know when vast sums are awarded to individuals whose motives may not be entirely pure.

None of this should detract from the importance of whistleblowing itself. Brave men and women will always be willing to risk everything to expose corruption and wrongdoing. They must be protected, celebrated and supported, but protecting them also means protecting the integrity of the system that gives their courage meaning.

The goal of whistleblower law is not to create millionaires but to protect the public. When the pursuit of profit becomes the purpose, justice is the casualty.

If we truly want to preserve the power of whistleblowing as a tool for accountability, we must be willing to draw a clear line between those who act in the public interest and those who exploit the process for private gain. The difference is between courage and opportunism, truth-telling and profiteering.

Whistleblowers should be heroes, not hedge fund managers in disguise. The Justice Department and Congress must restore integrity to the system before the meaning of whistleblowing is lost entirely.

• Bob Carlstrom is executive director of the Prosperity for US Foundation.