Timing Whistleblowing

<p><span>Whistleblower programs (WBPs) expose hidden corporate wrongdoing. They do so by offering retaliation protection and financial bounties to those who bring original information to law enforcement about unseen, and often complex, misconduct. Under a standard account, whistleblowing serves the public interest by increasing the ex post detection of illegal activity and the ex ante risk of its exposure. That standard view—which centers whistleblowing on <i>detecting </i>wrongdoing—is incomplete, however. To present a fuller view, this Article introduces a complementary model that focuses on whistleblowing as <i>preventing</i> wrongdoing. Working together, these models show that a WBP can do more than enable detection at the late moment when misconduct is afoot. It can also prompt action against wrongdoing that has yet begun.</span></p> <p><span>This prevention/detection distinction exposes potential conflicts between public and corporate interests versus those of whistleblowers and prosecutors. The former interests favor early whistleblowing that intervenes against inchoate wrongdoing. Whistleblowers and prosecutors, however, have financial, personal, and political incentives more consistent with late whistleblowing. Given those incentives, whistleblowers might strategically delay reporting, whereas prosecutors might be weakly motivated to police against such delays. Current policy fosters this conflict by embracing the detection model alone. As a consequence, it privileges the interests of whistleblowers and prosecutors over those of the public and firms. But, the Article urges, an updated approach to WBP design that embraces both prevention and detection could reconcile early and late whistleblowing. Closer alignment between the interests of the public, firms, whistleblowers, and prosecutors would follow such a reconciliation.</span></p>