WHISTLE BLOWER PROTECTION ACT IN THE US & INDIA

A BRIEF REVIEW

A "whistleblower" discloses information he or she reasonably believes evidences:

• A violation of any law, rule

• An abuse of authority or regulation

• A substantial and specific danger

• Gross mismanagement to public health

• A gross waste of funds

• A substantial and specific danger to public safety.

A Look back at the dates where it all began -:

1963

John Paul Vann, an American colonel, reported to his superiors (and, later, the media) that
American policy and tactics during the Vietnam War were seriously flawed. He was asked to
resign his commission.
1969

Vietnam veteran Ron Ridenhour, an ex-Army helicopter gunner, writes a letter to Congress and
the Pentagon describing events at My Lai during the Vietnam War, including the torture, sexual
abuse, mutilation and mass murder of hundreds of unarmed civilians.

1971

Daniel Ellsberg, a former US military analyst and government contractor, discloses a classified
government study about the Vietnam War later known as the Pentagon Papers. Ellsberg’s act
proved several administrations had directly lied to Congress and the public about their intentions
and actions in Vietnam. This led to protests, contributed to the resignation of Nixon, and
emboldened the media when the Supreme Court decided against prior restraint in New York
Times Co. v. United States.

NSA intelligence analyst Perry Fellwock exposed secret surveillance practices in an interview

with Ramparts magazine under the pseudonym Winslow Peck. Legislation was passed in 1973 to
stop the NSA from spying, but later ignored.

1996

David Franklin files a whistleblower lawsuit against Warner-Lambert exposing illegal

promotion of the drug Neurontin. The ensuing investigation uncovers illegal industry-wide
practices and results in a $430 million penalty to resolve criminal and civil charges.

Senior nuclear engineer George Galatis reported safety problems at the Millstone 1 Nuclear

Power Plant relating to reactor refueling procedures. Galatis eventually took his concerns to the
NRC only to find they had known about the unsafe procedures for years.

1998

Marc Hodler was an International Olympic Committee (IOC) member who blew the whistle on
the Winter Olympic bid scandal for the 2002 Salt Lake City games. Accusations included
members taking bribes from the Salt Lake Organizing Committee during the bidding process.
Ultimately, several IOC members were expelled and the IOC adopted new rules.
2002

Department of Justice Ethics Advisor Jesselyn Radack warned FBI agents who sought to
interrogate “American Taliban” John Walker Lindh without his legal counsel present.

Cynthia Cooper is an American accountant who formerly served as the VP of Internal Audit at
WorldCom. She and her team of auditors worked together to investigate and unearth $3.8 billion
in fraud at WorldCom, the largest incident of accounting fraud in U.S. history at the time.

Coleen Rowley of the F.B.I. outlined the agency’s slow response time to reports of suspicious
activity before the 9/11 attacks. She jointly held the TIME Person of the Year award in 2002
with Sherron Watkins and Cynthia Cooper.

2010

Samy Kamkar is a computer hacker who exposed the illicit global mobile phone tracking of all
users, regardless of GPS or Location Services settings, on the Apple iPhone, Google Android
and Microsoft Windows Phone mobile devices, and their transmission of GPS and Wi-Fi
information to their parent companies.

Immediately following the BP Deepwater Horizon disaster in April 2010, Wilma Subra found

evidence of serious health risks for clean-up workers and Gulf Coast residents from crude oil,
aerosol forms of oil, and dispersant used on the spill.

2011

Peter Van Buren, a veteran Foreign Service Officer at the State Department authored the
book We Meant Well, which exposed massive fraud while serving as the leader of two Provincial
Reconstruction Teams in Iraq from 2009-10. It detailed how the U.S. wasted more than $44
billion in reconstruction efforts. In September 2012, he was forced to retire.

2012

Larry Alt and Pete Forcelli, agents at the Bureau of Alcohol, Tobacco, Firearms & Explosives
(ATF), helped expose issues surrounding the Operation Fast and Furious scandal, the program
that resulted in federally-monitored guns ending up in the hands of Mexican drug cartels.
  Why It is not fully operational in India ? or why it lacks at certain prospects of its
administrative functions ?

Here are some of the few examples of whistleblowers below -:

Whistleblowers at Infosys have flagged alleged corporate malpractices at the Indian IT giant,
accusing executives in its top echelons of flouting norms and misreporting numbers. Indian
Parliament passed the Whistleblower Protection Act in 2014, but it is yet to be operationalised.
Further, an amendment introduced to the Act was criticised on the grounds that it dilutes
protections to whistleblowers. But while the Act doesn’t cover corporate whistleblowers, India
Inc has followed regulatory norms to put in place mechanisms to enable whistleblower
complaints.

 NHAI scam paved way or whistleblowers law

In 2003, Satyendra Dubey, a project engineer with National Highways Authority of India,
exposed corruption in the Golden Quadrilateral project in Bihar. He was shot dead in November
2003 in Gaya. Three persons were given life term in 2010 for the murder.

 ICICI loan scam exposed by shareholder

Arvind Gupta, a shareholder activist, exposed the alleged loan fraud and quid pro quo between
the bank’s then CEO Chanda Kochhar and her family and the Videocon group. Kochhar stepped
down following the allegations and CBI has now opened a probe into the matter.
  How it can legislate the law to get it more stringent in its action?/ More approach to the
law ?

With US reference-

 Dodd-Frank Act came into force, whistleblowers could use the False Claims Act by filing
a lawsuit against a company violating the law. If the lawsuit was successfully argued in
court or settled by the company, the whistleblower could collect 15-30% of the fine
amount, depending on if the government participated in the process or not. There are
many US legal firms that now specialise in whistleblower lawsuits and help the
informants fight the cases.

In India -

 Sebi mandates provisions for whistleblowers

Audit and consulting firm Deloitte says the Companies Act, 2013, and Sebi have made it
mandatory for certain classes of companies to set up mechanisms to receive whistleblower
complaints. It added that whistleblowers are the best source of information on malpractices in
any organisation — public or private.

Some of the Indian corporates have acknowledged that bribery and corruption are prevalent in
business activities, according to a survey by consultancy firm EY.

As many as 50 corporates from India participated in the survey, of which 20 respondents said
there is widespread bribery and corruption in business.
However, the percentage of respondents in India acknowledging existence of these malpractices
has come down from 70 per cent in 2012 to 40 per cent in the latest survey report.

 How it can be more effective like US ?

The National Whistleblower Center (NWC) is the leading nonprofit working with
whistleblowers around the world to fight corruption and protect people and the environment. For
over 30 years, NWC has educated whistleblowers about their rights under U.S. law and won
policies to protect them from retaliation and reward them for delivering criminal and civil
penalties against wrongdoers. 

NWC partners with the National Whistleblower Legal Defense and Education Fund (NWLDEF),
a public interest law firm, to help connect whistleblowers with qualified attorneys and secure
legal victories.

 RULE 1- Creating off a not for profit organization for the whistleblowers for fighting
against tyranny and corruption for proetecting the environment.
 Prohibited Retaliation Against Corporate Whistleblowers

The whistleblower protection provision of the Sarbanes-Oxley Act prohibits a broad range of

retaliatory adverse employment actions, including discharging, demoting, suspending,
threatening, harassing, or in any other manner discriminating against a whistleblower.  Recently
a federal court of appeals held that merely outing or disclosing the identity of a whistleblower is
actionable retaliation under SOX.
Also, India has also adopted the policy of SEBI regulations in determining the Whistleblower
policy act .
The Securities and Exchange Board of India („SEBI‟) vide its circular dated August 26, 2003
has amended the Principles of Corporate Governance incorporated in the standard Listing
Agreement. The amended principle makes it mandatory for all the companies to have a whistle
blowing policy of its own. Any irregularity prevailing in the organization can be exposed by the
employees or they can bring it to the notice of management. The management can think of
having a proper redressal system to minimise the damages caused to the organization. While the
government still has to bring out a comprehensive whistle-blower policy, SEBI has included
these guidelines for companies in an amendment to Clause 49 of the listing agreement in August
2003. As per these guidelines, any employee wanting to report any kind of fraud or malpractice
in the organization where he works can now have access to company‟s Audit committee (3). The
company will then pass on this information to all the employees working in the organization. It
further informs employees that it is their right and privilege to be vigilant. The company also
vows to protect such an employee from any kind of harassment or termination. This will be
mentioned in the company‟s Corporate Governance report.
 RULE 2- an act like Sarbanes oaxley can help the companies in terming
auditing/accountability of the funds procured in the financial year
 RULE 3- by creating an Union for The people from corruption. Unions may provide
additional legal protection that may be unavailable without unionization. Employers are
obligated to inform employees about assistance programs associated with workplace
injuries or illness, and union representatives are obligated to follow up on this
information. Employers are required to allow the local union representative to attend
meetings. The employer cannot interfere with support provided by the union
representative.