I recently read this story about a whistleblower that will be paid $30 million in connection with information they delivered about an ongoing fraud. $30,000,000. In comparison, Peyton Manning, QB of the Denver Broncos, will receive $15 million in guaranteed salary for 2014. Is it fair that someone, a bonafide tattletale, should be compensated more for one instance of disclosure than one of the greatest NFL quarterbacks of all time? (I'm not really a Broncos fan, but Peyton Manning is in the process of leading my fantasy football team to a third successful season in a row, so I'm his #1 fan right now).
Most enforcement agencies have whistleblower programs, like the IRS and SEC (Securities and Exchange Commission). They all work in similar manners - if a civilian gives the agency information that is constructive enough to lead to the uncovering of a significant fraud, the whistleblower can be entitled to compensation for their efforts.
This does not mean if you call the IRS and tell them you think your neighbor is cheating on their taxes, and they audit them and find $1,000 of unreported income, that the IRS will come to your door and hand you a fee. The whistleblower programs are directed a much larger, nationwide and international frauds.
For $30 million, is it worth being known as a tattletale? Having been involved with financial statement audits for almost ten years, I seem to think that whistleblower programs are essential in our communities and especially in governments and large businesses. During a financial statement audit, auditors perform a variety of procedures to detect material misstatements in the organization's financials. Management takes responsibility for putting in place controls and protocols to prevent and/or detect fraud.
In reality, rank and file employees take shortcuts and cut corners on a daily basis in order to get their job done. And, if there is collusion between 2 or more employees with access to key financial components, it will be hard to detect by any auditor or semi-present manager. However it might not be hard to detect by the shy, quiet employee in the corner that sees what's going on but is dismissed as a threat because of their lack of personality. In the end, that employee has more potential to stop the fraud than anyone else involved.
$30 million is a lot of money, and is being rewarded to someone that helped uncover a mutli-billion dollar fraud. It's a tough pill to swallow that a tattletale is being rewarded in that manner. But whistelblowers are a key component of all organizations' fraud prevention and detection program.