public interest disclosure and bounties - working copy presentation on 06092014

Public Interest Disclosure &Bounties

in the context of information as a shield, a sword and Achilles heel in the fight against economic crimeRobert Vella-BaldacchinoDeputy General Manager, Malta Stock Exchange- a presentation at the International Symposium on Economic CrimeJesus College, University of Cambridge6 September 2014

26 September 2014 Robert Vella-Baldacchino

Agenda for the presentation

Information, business or personal data …

Disclosure of informationFreedom of Information Protection of the Whistleblower High profile disclosuresReview of disclosure benefitsConcluding thoughts

Robert Vella-Baldacchino 3

Information and business or personal data … modern society lives on information data

flows Freedom of information legislation ensures

a system of open democratic government through the general right to access official information from public bodies/authorities (or also non-public bodies carrying out public functions)

But private personal or business information is typically covered by data protection, and professional confidentiality requirements

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Freedom of information (‘FoI’) A person has a right to access documents held by

public authorities if he/she is a Maltese (or EU/other third state entering into a Treaty with the EU) citizen who has been a Maltese resident for a minimum period of 5 years

Not required to justify or to give any reasons for a FoI request, and any beliefs of public authorities as to the reasons for seeking such access are irrelevant

A reply to an FoI request has to be forthcoming soonest but no later than 20 business days from receipt (unless extended to up to another 40 business days where appropriate)

FoI request may be denied6 September 2014


FoI request may be denied if :-(a) it deals with an exempt document;(b) there is good reason for withholding the document

requested; (c) the public authority does not pronounce itself on the

existence or otherwise of the document requested (as allowed under the law);

(d) the document requested is publicly available or will be published within three months;

(e) the document requested cannot be found; (f) the resources required to (i) identify, locate or collate a

document; (ii) examine a document or consult any person or body in relation to its possible disclosure; or (iii) make a copy, or an edited copy, of a document, would substantially and unreasonably divert the public authority resources from its other operations, and the applicant has not redefined his request to make it more easily addressed by the authority;

(g) the document requested is not held by the public authority; or

(h) the request is frivolous or vexatious or information requested is trivial.

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Public interest as the litmus test for disclosure

FoI legislation provides that a document may also be withheld if, among other reasons, the public interest that is served by non-disclosure outweighs the public interest in disclosure (s.35[2] FoI Act)

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Whistleblower protection

Structured system of facilitating pro-active protected disclosures of any improper practice

Whistleblower dilemma: fairness – v – loyaltyheroism – v - betrayal

6 September 2014 Robert Vella-Baldacchino 7

Origins of whistleblower protection Whistleblower protection law was enacted for the first

time in the United States on July 30, 1778 by Congress. This development came about after an incident in 1777, when Richard Marven and Samuel Shaw blew the whistle and suffered severe retaliation by Esek Hopkins, the commander-in-chief of the Continental Navy. The Congress declared that the United States would defend the two whistleblowers against a libel suit filed against them by Hopkins. The Continental Congress also declared it the duty of "all persons in the service of the United States, as well as all other the inhabitants thereof" to inform the Continental Congress or proper authorities of "misconduct, frauds or misdemeaners committed by any officers in the service of these states, which may come to their knowledge." 6 September 2014 Robert Vella-Baldacchino 8

US Whistleblower bounty and protection 75 years after the ratification of the US

Constitution, as the Civil War rended the United States, Congress enacted one of the first laws that protected whistleblowers, the 1863 US False Claims Act (revised in 1986), which tried to combat fraud by military suppliers.

The Act encouraged whistleblowers by promising them a bounty consisting of a percentage of the money recovered or damages won by the government and protected them from wrongful dismissal.


Whistleblower protection in Malta The Protection of the Whistleblower

Act passed into law in Malta on 16 July 2013

Improper practice Internal disclosure & external

disclosure Employer & employee provisions Whistleblower policy and

whistleblower reporting officer6 September 2014 Robert Vella-Baldacchino 10

High profile disclosures stirring controversy:- (i) Julian Assange


Julian Paul Assange, co-founder and editor-in-chief of WikiLeaks website, currently granted political asylum by Ecuador and taking refuge at the Ecuadorean Embassy in London pending extradition to Sweden where he is needed for investigation in alleged assault and sexual offences

Assange WikiLeaks posted large amounts of material

exposing government/corporate wrongdoing between 2006 and 2009.

Criticised by Amnesty International and other human rights groups for failing to remove all identifying data from Afghanistan war logs disclosing Afghan informers by name, family, location and ideology, thus becoming targets of Taliban retaliation for acting as “US spies”.


(ii) Chelsea Elizabeth Manning (born Bradley Edward Manning)

US Army soldier convicted in July 2013 on 21 charges in total but acquitted of the most serious charge of aiding the enemy (which could possibly have resulted in a death sentence)


Manning Assigned in 2009 to an Army unit in Iraq as an

intelligence analyst, Manning had access to classified databases.

In early 2010, she leaked classified information to WikiLeaks (including videos of 2007 Baghdad airstrike, 2009 Afghanistan airstrike, 250,000 US diplomatic cables, 500,000 Army reports – Iraq & Afghanistan War logs and Guantánamo files) and got arrested.

Manning and WikiLeaks credited as catalysts for the Arab Spring that began in December 2010 when waves of protesters rose up against rulers across North Africa & Middle East in the wake of leaked cables exposing government corruption.6 September 2014 Robert Vella-Baldacchino 14

(iii) Edward Snowden

An American computer professional, former system administrator for the CIA and a counterintelligence trainer at the US DIA.


Snowden In June 2013, he disclosed thousands of classified

documents, acquired while working for NSA contractors, that revealed various NSA global surveillance programs with the cooperation of telecom companies and European governments, involving among others, electronic data mining, analytical tools, interception and recording of cell phone calls, bulk collection of webcam images, massive database with trillions of device-location records.

Snowden remains confined to a recently renewed residence stay in Russia with a view to avoiding possible prosecution in the US and possibly other affected States for disseminating classified documents


Bounty programs incentivising whistleblowing in the US As already mentioned, historically the US has ben on the

forefront of financially rewarding whistleblowers who have been instrumental in assisting law enforcement to successfully prosecute improper practices and/or illicit dealings …

Whistleblower awards can range from 10% to 30% of the money collected in a case, and are handed out in prosecutions that result in fines of more than $1 million

U.S. government's whistleblower programs, which make hundreds of rewards every year, include the Department of Justice's whistleblower program under the False Claims Act and three other reward programs run respectively by the IRS, the SEC, and the Commodity Futures Trading Commission


US whistleblower bounties regime In most rewards, more than one whistleblower may be

involved, perhaps six or seven blowers, so the money gets parsed out.

Of the roughly 100 rewards a year given out under the False Claims Act, 50 will be for $2 million or less. The amount of the reward varies case to case but is usually around 16% of the fines levied.

Upon winning an award and after divvying up the pot with fellow blowers, a whistleblower may end up with say, $320,000. Although still a respectable amount of money, it is estimated that half of that money will typically go to pay taxes and attorney bills!


Differences between the 4 US whistleblower bounties programsWhistleblower identification The CFTC program, created with the Dodd-

Frank Wall Street Reform and Consumer Protection Act of 2010, offers the most significant protection for a whistleblower wishing to remain anonymous. His identity will be disclosed only after he has qualified for a reward.

All the other programs require him to identify himself and since he will be identified, there is always a chance his employing company will find out. 6 September 2014 Robert Vella-Baldacchino 20

Locus standi in judicio for a US whistleblower ? Another big distinction: Under the IRS, SEC and CFTC

programs, the government decides if they want to pursue your claim. If they decide not, then the whistleblower’s attempt to get a reward ends as he does not have legal authority to pursue a claim on his own.

Under the US False Claims Act, however, even if the Justice Department turns you down, you can continue to pursue your claim in court as a private individual acting on behalf of the government. It is as if that Act empowers the average worker with the same authority as if he were the US government! On paper, it's the most powerful program of the four US whistleblower programs. In common law, a writ of qui tam allows a private individual who assists a prosecution to receive all or part of any penalty imposed. Its name is an abbreviation of the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur, literally meaning "[he] who sues in this matter for the king as well as for himself ..."


Concluding thoughts

In the context of a single market within the EU, should there not be an EU legislative initiative on a common minimum level playing field of whistleblower protection?

Reward/bounty incentives programme Whistleblower identity disclosure Growing role for whistleblowers in the

global fight against economic crime 6 September 2014 Robert Vella-Baldacchino 22

Robert Vella-Baldacchino 236 September 2014

Thank you for your attention.

public interest disclosure and bounties - working copy presentation on 06092014

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