The best way to encourage people to blow the whistle on waste and corruption was to pay them part of the money they helped to save, according to ANU legal experts, Prof Tom Faunce and research associate Tim Vines (pictured), a CLA member. They explained how it works in this Canberra Times article.
Whistleblowers deserve more carrots and less stick
By TOM FAUNCE and TIM VINES*
With the recent trial of former Commonwealth public servant Tjanara Goreng-Goreng on four counts of divulging confidential information, attention has once again focused on the often critical role of whistleblowers in exposing corruption and malpractice in government and private agencies.
Whistleblower support bodies have been calling for greater incentives to be accorded public servants and individuals in private corporations who come forward with evidence of fraud in an increasingly privatised health-care sector.
Currently a House of Representatives committee, chaired by Mark Dreyfus, QC, is investigating legislative reforms to protect past and present Commonwealth public servants who make a protected public interest disclosure.
The committee’s investigation is timely. Griffith University’s recently completed study into whistleblowing practices in Australia, found that fewer than 2 per cent of public interest disclosures made by government employees ”received organisational support”. Moreover, a quarter of those surveyed reported subsequent retaliatory action and mistreatment by their employers. ‘Whistling While They Work‘, found that fewer than 2 per cent of public interest disclosures made by government employees ”received organisational support”. Moreover, a quarter of those surveyed reported subsequent retaliatory action and mistreatment by their employers.
The Commonwealth’s reaction in pursuing them as a ”leak” is all too common in a professional culture where whistleblowers are usually viewed as disloyal employees with an anarchic sense of institutional values dobbing in their workmates.
Recent public disclosures by health professionals at four Australian Health facilities – Campbelltown, Camden and King Edward Memorial hospitals as well as the Canberra Hospital – have led to Government inquiries revealing dangerous clinical errors, substandard patient care and poor institutional culture.
Even here, physical harassment and intimidation along with criminal and civil lawsuits, unnecessarily adverse performance reviews, demotions and sackings are routine consequences of whistleblowing.
Yet, increasing attention must be given to creating mechanisms to prevent fraud upon the public purse. This even as the national debate continues about other important health-care topics, including: massive government subsidies for private health insurance and medical indemnity organisations; and the way private hospitals use Medicare payments to maintain revenue streams.
No doubt we should feel grateful that whistleblowers, motivated by virtue and a spirit of public service. are willing to risk their mental and physical wellbeing and job security to expose practices of wasteful government expenditure, corporate malfeasance and fraud. But isn’t there also a responsibility on legislators to do the virtuous thing by whistleblowers and give them practical and support and encouragement?
One recent option placed before the House of Representatives inquiry into whistleblowing protections in the Australian public service was the provision of bonuses, higher superannuation increments and tax deductions, even promotions, to those whose efforts to expose malpractice or are substantiated and lead to proven public benefit.
For this goal to be achieved, however, legislation would need to be in place that gives whistleblowers an anonymous channel of communication to an organisation outside the actual workplace concerned, for example, to the Commonwealth Ombudsman.
In the US, one successful strategy for encouraging whistleblowers to reveal information from the private sector that demonstrated fraud upon the Government in the United States is the ”qui tam” legislation.
Qui tam is an abbreviated form of a Latin maxim that means ”He who sues on behalf of the government sues on behalf of himself.”
Introduced by President Abraham Lincoln during the American Civil War to stamp out overcharging by private suppliers to the Union Army, the False Claims Act was amended in the 1980s to enable a private citizen to file an action on behalf of the Government alleging fraud by a private body and claim a percentage of any damages recovered by the Government (in the order of 15 per cent to 25 per cent).
Since 1986 ”qui tam” suits have recovered $US8.4billion for the Federal Government, with whistleblowers receiving more than $US1billion.
Although qui tam actions against pharmaceutical companies represent only 4 per cent of total claims, they constitute 40 per cent of total moneys recovered by government.
If an item of fraud has not already been made public, any citizen acting through a lawyer may bring an action in the US Federal Court, even if he or she has only indirect evidence of an abuse of public money.
This claim remains sealed (not disclosed to the defendant) until the Department of Justice has investigated and decided whether it wishes to pursue the claim.
If a fraud has already been made public, citizens can still file a ”qui tam” claim if they have new, direct evidence to support it.
Claims can also proceed even if the Department of Justice decides not to join. They can also be brought under state legislation, creating healthy competition between government sectors concerned to recover public money of which the rightful owners have been defrauded.
Areas in the US where ”qui tam” claims have provided a critical incentive to the recovery of government funds include:
- Improper Medicare billing (for services not provided, unnecessary services, or those where that entailed overcharging.
- Marketing a pharmaceutical outside safety guidelines or in ways that breach legal standards designed to protect the wellbeing of patients.
- Kickbacks to doctors to prescribe drugs.
- Misuse of government research funds.
Creating a ”qui tam” system to encourage private-sector whistleblowers should be a policy priority in Australia if fiscal integrity in public health-care expenditure is to be maintained.
Associate Professor Tom Faunce and research associate Tim Vines are at the College of Law, Australian National University.
* Tim Vines is a CLA member.
This article first appeared in the Canberra Times on 24 September 2008.