This one change, standing alone, decimated the AML whistleblower law. But it gets worse.
The AML Act eliminated a right to a minimum reward.
Even if Congress voted appropriations to pay awards, the U.S. government is under no obligation to pay any whistleblowers compensation for their information.
All other successful whistleblower qui tam laws, including the Dodd-Frank Act, requires the U.S. to pay a minimum award to whistleblowers who otherwise fully qualify, as a matter of law, for an award. Thus, if a whistleblower follows all of the laws and procedures necessary to obtain a reward and is not disqualified from obtaining a reward due to misconduct, the Dodd-Frank Act mandates that the SEC pay the whistleblower an award of at least 10% of the monies actually obtained from the wrongdoer.
Under the Dodd-Frank Act the government will always collect between 70% and 90% of all funds obtained in a whistleblower case. The whistleblower will be guaranteed at least 10%. In this way, a whistleblower knows that if they do the right thing in reporting criminal activity, they will be entitled to some form of compensation.
It is this guarantee that incentives the vast majority of corporate fraud whistleblowers to step forward.
The Senate version of the AML whistleblower law contained this minimum award provision. The proposal unanimously approved by the Senate that an award to a whistleblower could not be “less than 10 percent, in total, of what has been collected of the monetary sanctions … [or] more than 30 percent.” The language precisely mirrors the Dodd-Frank Act.
However, the final version of the AML Act cut this provision, and replaced it with the vague authority of the secretary of Treasury to pay whistleblowers not “more than 30 percent.”
Furthermore, the law states that setting the award amount was within the secretary of Treasury’s complete discretion, and as long as the secretary issued an award of one penny or more, the whistleblower would be completely blocked from any judicial appeal. The statutes reads: “Any determination made under this section, including whether, to whom, or in what amount to make awards, shall be in the discretion of the Secretary [of Treasury].”
Any attorney advising a client about their rights under the new AML whistleblower law would be ethically bound to warn that client of its ineffectiveness. The prospective whistleblower would have to be told that even if they lost their job, lost their career and faced direct threats to their safety, the U.S. would be under no obligation whatsoever to pay the whistleblower anything more than a token amount of compensation.
Furthermore, the whistleblower would have to be warned that any payment whatsoever — even an award of one red cent — would also be predicated on an explicit appropriation by Congress of monies to pay awards, a result that is highly unlikely.
Finally, the prospective whistleblower would have to be warned that if they were denied an award, they could not realistically hold the U.S. accountable for fulfilling the promise implied in the AML law.