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Leading Expert Calls for Dedicated Whistleblower Office – CPA

One of Ireland’s leading experts in Governance and Anti-Corruption has called for the establishment of a US-style Office of the Whistleblower to increase Ireland’s effectiveness in combatting corruption at all levels in society.

Delivering CPA Ireland’s Annual Business Lecture today, Dr Elaine Byrne said that the Securities and Exchange Commission (SEC) in the United States consider whistleblowers to be one of the most powerful weapons in the law enforcement arsenal. In return for information leading to economic fines, whistleblowers get a “bounty payment” which is a percentage of the overall settlement made, as a consequence of their information.

“The impact of whistleblower reward laws in the United States can be seen in the fact that whistleblower information now accounts for about 80 per cent of all US civil fraud prosecutions, according to the Republican Senator, Chuck Grassley”, she said. “Significant protection to the whistleblower is also provided – their anonymity is guaranteed and their identity is never revealed, unless they self-identify. The scheme has proved to be particularly successful in the pharmaceutical and financial sectors,” she said.

Ms. Byrne said that under US law, Irish employees of American multi-nationals based in Ireland can receive a monetary reward for reporting fraud offences within their workplace. “51 Irish citizens have provided information to the Office of the Whistleblower under the Foreign Corrupt Practices Act 1977 between 2011 and 2015 and 20 Irish citizens claimed rewards in 2015 according to the last SEC annual report. We will never know if their claims were successful, but what it does show is that a combination of strong protection mechanisms and financial incentives can encourage the reporting of corrupt or illegal practices”, she said.

The establishment of an Office of the Whistleblower, similar to the impact of the Criminal Assets Bureau (CAB) 20 years ago, could be a game changer not only for Ireland but for other jurisdictions across Europe, she suggested.

Dr Byrne also questioned Ireland’s culture of ‘Public Inquiry’ into allegations of wrongdoing or corruption. “A demand for a public inquiry is the instinctive response when claims of wrongdoing are made, but by their nature, they become politicised because they are established by the government of the day. A culture of criminal prosecution would be more effective in tackling wrongdoing and public inquiries should be a tool of last resort”, she said.
To this end, she said that Government should consider establishing a specialist body within the Garda Bureau of Fraud Investigation (GBFI) to investigate and prosecute corruption. “Complex corruption inquiries are better served by a standing investigatory unit which can access civil and criminal expertise drawn from Revenue, CAB, Central Bank, GBFI, the Competition and Consumer Protection Commission and ODCE This must be properly resourced with access to forensic accountants, digital technology experts and lawyers with commercial expertise in market transactions”.
Ms. Nano Brennan, President of CPA Ireland spoke about the opportunity that exists for Ireland to lead the way in this regard; “We operate in an increasingly complex and interconnected world that requires strong collaboration and commitment from the private, public and regulatory communities to fight corruption. To be relevant, it is essential that corporate governance rules and regulations are adapted to the reality in which they will be implemented.

“CPA Ireland members operate in over 43 countries worldwide so we have extensive experience of circumstances in which an accountant may, for ethical reasons, need to adopt a whistle-blower position. This can be more difficult for some accountants than for others because in many countries whistle-blower protections are weak or even non – existent.

“The opportunity exists for Ireland to, not only address corruption in our own domain, but to promote governance procedures that establish Ireland as a world leader in the fight against corruption. CPA Ireland itself has been very successful in winning capacity building contracts to develop the accountancy profession in countries like Rwanda, Mozambique and Nigeria. These projects aim to enhance the quality, consistency, and transparency of public sector financial reporting in these nations”.

“Dr Byrne’s proposal for the establishment of an Office of the Whistleblower deserves consideration particularly when one considers how media reports of recent weeks here in Ireland demonstrate that, even in those countries where provisions are made for disclosure, the subsequent treatment of the facts and the individuals involved, leaves a lot to be desired.”