The Role of Financial Rewards for Whistleblowers in the Fight Against Economic Crime
December 2024
Research Paper 31
Briefing Note 32
Eliza Lockhart, RUSI
SOC ACE Project: The Role of Financial Rewards for Whistleblowers in the Fight Against Economic Crime
PUBLICATION SUMMARY
This research reviews the evidence from Canada and the US on the use of reward programmes for whistleblowers who report incidents of economic crime and evaluates it against concerns raised in two countries that are debating the implementation of such a scheme, Australia and the UK. In doing so this paper identifies the key impacts of whistleblowers reward programmes as increasing actionable information provided to law enforcement; creating an economic crime deterrent effect; strengthening private sector compliance; and enabling whistleblowers to access specialised legal counsel.
However, the research analyses how these positive outcomes are contingent on appropriate safeguards being integrated into the design of reward programme to account for context-specific cultural attitudes and mitigate possible unintended consequences, such as attracting frivolous or malicious reports, creating a conflict of interest with existing legal duties, or compromising the integrity of the regulator.
Moreover, the research identifies that it is crucial to implementation of a whistleblower reward programme that policymakers understand it to be a mechanism primarily designed to achieve the regulatory goals of economic crime detection and deterrence. Therefore, to operate effectively as a strategy to compact illicit finance, rewards must form part of a comprehensive framework to ensure all whistleblowers are adequately compensated and protected.
The paper concludes four observations for policymakers considering the implementation of whistleblower rewards in the fight against economic crime:
Observation One: Rewards achieve certain goals, but not in isolation
Observation Two: Consult to customise
Observation Three: Prioritise the message, not the messenger
Observation Four: Ongoing progress, not immediate perfection