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Groups Urge Lawmakers to Ensure Public Access to Whistleblower Disclosures on Financial Fraud

May 11, 2010 

 

Numerous organizations, including the coalition Americans for Financial Reform, are calling on the Senate to pass an amendment introduced by Senator Patrick Leahy (D-VT) that would ensure the public's access to whistleblower disclosures on financial fraud.

Tucked inside the financial regulatory bill introduced by Senate Banking Committee Chairman Christopher Dodd (D-CT) are sections designed to reward and protect whistleblowers who provide information on financial fraud to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Unfortunately, these sections would bar the public from accessing information provided by the whistleblower if the regulators decide not to act on it. They would also prevent the whistleblower from accessing the information in order to establish a retaliation claim.

As the groups pointed out in a letter sent today to Sen. Dodd, these provisions would prevent the public from holding the government accountable if it fails to act on whistleblower tips due to "inept bureaucracy, fraud, collusion, or worse."

The provisions are also unnecessary, as the Freedom Of Information Act (FOIA) already protects the privacy of individuals who provide the government with information in enforcement proceedings, and prohibits the disclosure of non-public records in ongoing enforcement investigations. These FOIA exemptions have stood the test of time, enabling agencies to balance privacy and confidentiality with the public's right to know.

Sen. Leahy's amendment would simply bring the Dodd bill in alignment with existing FOIA laws by removing the unnecessary restrictions on transparency.

"An effective financial regulatory system must be able to protect whistleblowers while still allowing for public transparency and accountability," said POGO Executive Director Danielle Brian. "Sen. Leahy's amendment would achieve this important balance, and should be added to the regulatory reform legislation without delay."

The letter to Sen. Dodd was signed by POGO, Citizens for Responsibility and Ethics in Washington (CREW), Government Accountability Project (GAP), OpenTheGovernment.org, Public Citizen, Progressive States Network, Common Cause, National Community Reinvestment Coalition, Consumer Action, OMB Watch, National Fair Housing Alliance, and Americans for Financial Reform.


Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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