"I'm not a lawyer, but I don't see any room for interpretation here. Our intent was plain, to protect corporate whistleblowers, period," Grassley said. "This bothers me. We need people who know about wrongdoing to come forward. If they don't, corporate crooks will get away with their crimes. The average workers who lose their jobs and retirement savings will pay the price."
Grassley said he wants every employee, from the youngest mail clerk to the most senior executive, of every publicly traded company to have whistleblower protection. "That's whether they come to me, to a House member or to a Senate committee," Grassley said. "The President has been giving strong speeches, and he expressed full support of whistleblowers to me before he was even elected. That makes me think that someone at the White House isn't speaking for him. I hope the White House will rethink its interpretation of this law and show it isn't going soft on corporate fraud before the ink is even dry on this new law."
Grassley, a senior member of the Judiciary Committee, and Sen. Patrick Leahy, Judciary Committee chairman, were co-authors of the provisions. Today, they sent a letter to the White House expressing their concerns. Earlier this month, Grassley and Leahy secured provisions in the Corporate and Auditing Accountability, Responsibility and Transparency Act of 2002 that make federal whistleblower protections available to employees of publicly traded companies for the first time ever. No such protections existed under current law. The new protections are modeled after whistleblower protections Grassley has championed for airline employees. The President signed the corporate accountability act into law on Tuesday.
The text of the senators' letter follows.
July 31, 2002
The Honorable George W. Bush
President of the United States
The White House
1600 Pennsylvania Avenue NW
Washington, D.C. 20500
Dear Mr. President:
As coauthors of the recent corporate whistleblower provision in the Corporate and Criminal Fraud Accountability Act, section 806 of the Sarbanes-Oxley Act, we are writing to express our shared concern about interpretive statements made by the White House staff only hours after you signed the Act into law.
According to media reports, the White House views this bipartisan provision, which was approved unanimously both by the Judiciary Committee and the full Senate, as protecting employees only if they report fraud to Congress "in the course of an investigation." This narrow interpretation is at odds with the plain language of the statute and risks chilling corporate whistleblowers who wish to report securities fraud to Members of Congress.
The provision in question, codified at 18 U.S.C. § 1514A, states that it applies to disclosures of fraud whenever "the information or assistance is provided to or the investigation is conducted by? any Member of Congress or any committee of Congress." (emphasis added). By its plain terms, there is no limitation either to ongoing investigations of Congress or to matters within the jurisdiction of any Congressional Committee.
The reason for this is obvious. Few whistleblowers know, nor should they be expected to know, the jurisdiction of the various Committees of Congress or the matters currently under investigation. The most common situation, and one that the recent Administration's statement excludes from protection, is a citizen reporting misconduct to his or her own Representative or Senator, regardless of their committee assignments. Such disclosures are clearly covered by the terms of the statute.
We request that you review and reconsider the Administration's interpretation of section 806 of the Sarbanes-Oxley Act. It embodies a flawed interpretation of the clearly worded statute and threatens to create unnecessary confusion and to discourage whistleblowers such as Sherron Watkins and Coleen Rowley from reporting corporate fraud to Congress.
Sincerely,
| Patrick Leahy Chairman, Judiciary Committee |
Chuck Grassley United States Senator |