According to several bills floating in the U.S. Senate, auto employees soon may have two options when regulators prove they've hidden safety defects: Jail time in Federal prison, or a big, fat Federal payout for whistle-blowing.
The choice seems rather obvious to Senators John Thune (R-SD) and Bill Nelson (D-FL), who recently co-authored a bill that would reward whistleblowers in the auto industry who pass juicy, incriminating details to the Transportation Secretary. According to a news release from the two senators, "employees or contractors of motor vehicle manufacturers, part suppliers, and dealerships" are eligible to receive up to 30 percent of whatever penalties the Transportation or Justice Department levies on an automaker or supplier, so long as they're over $1 million. Compared to an August bill by Sen. Claire McCaskill (D-MO) that would criminalize auto defects and imprison executives for life, the Thune-Nelson bill has a rather upbeat ring to it.
The so-called Thune-Nelson's legislation—the sixth this year proposing to toughen auto safety regulations and oversight—would place automakers and suppliers on extra high alert, given that they're already subject to the same corporate whistleblower laws administered by the Internal Revenue Service and Securities and Exchange Commission. While the bill's final text hasn't posted to the Library of Congress, it likely is modeled after those current laws and shields whistleblowers from retaliation, according to Eric Young, a Philadelphia lawyer who won the first IRS payout to a whistleblower in 2011 and whose firm specializes in whistleblower cases under the False Claims Act.
Leakers who share information with the IRS, SEC, and the Commodities Futures Trading Commission typically are never identified in proceedings and attorneys can submit anonymous reports to the SEC and CFTC, according to Young. None of the agencies require the whistleblower to tell an employer before tattling, and provisions in the Dodd-Frank Act of 2010 support anti-retaliation lawsuits that guarantee whistleblowers lost wages if they're fired or demoted.
"Recent laws providing for confidentiality to whistleblowers and a legal remedy against retaliation have made it possible for employees to turn in their company without losing their jobs," Young told us. "Unfortunately, too many whistleblowers still face retaliation once their employer knows who turned them in to the U.S. Government."
Thune and Nelson, pictured above during a recent Takata airbag hearing, are members of the Senate Committee on Commerce, Science and Transportation that has torn new ones for General Motors, Honda, Takata, and the National Highway Traffic Safety Administration throughout this year.
"It took years for problems with faulty ignitions and defective airbags to fully come to light," Nelson said. "If ever there was a time to encourage industry insiders to speak out, it is right now."
It's also a great time for the politicians to carve new names for themselves. Thune, currently the committee's ranking member, will soon take over Jay Rockefeller (D-WV) as chairman and Nelson will pick up Thune's spot.
Lots of money is at stake, too. The SEC and CFTC pay whistleblowers 10 to 30 percent of penalties that are at least $1 million, while the IRS sets the bar at $2 million and pays between 15 and 30 percent. Under the broader False Claims Act that targets fraud, the Justice Department paid $435 million to whistleblowers last year, all of whom were responsible for reclaiming nearly $3 billion of the $5.7 billion in owed to the U.S. government. If other auto safety bills pass that would allow NHTSA to fine automakers hundreds of millions of dollars, the payouts against a company like Honda—which allegedly hid more than 1700 injuries and deaths from federal reports for a decade—could be hefty, indeed.
While most companies have internal departments that handle reports of financial and ethical abuse, we know of only two automakers who are actively rooting out safety problems from their rank-and-file employees. At the behest of the FBI and other federal agencies, Toyota is running a whistleblower tip line for at least the next three years after it paid a $1.2 billion settlement to avoid criminal fraud charges for its unintended acceleration problems. General Motors, in the wake of its ignition switch defects that led to at least 35 deaths, created a "Speak Up for Safety" campaign to pat employees on the back for defying their superiors.
- Senate Wants to Send Automaker Employees to Prison—for Up to Life—for Vehicle Defects
- Inside NHTSA: What Happened With GM Recalls Could Easily Happen Again
- Massive Takata Airbag Recall: Everything You Need to Know
Automakers can only thank themselves for spurring such legislation. They've known NHTSA to be an inexperienced, overburdened mess for years. If the bill works as advertised, they just might stop ignoring critical problems or attempt to halfheartedly solve them knowing that while NHTSA might be asleep at the wheel, the companies' employees are not. Whether that's because those workers fear jail time or want a slice of the penalty pie, well, that's up to Congress to decide.
from Car and Driver Blog http://ift.tt/nSHy27
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