A newly published paper by leading whistleblower attorney and author Stephen M. Kohn studies the impact of modernized whistleblower award laws on the detection and prosecution of white-collar crime, and why these laws have proven to be so effective. The paper, "Why Whistleblowing Works: A New Look at the Economic Theory of Crime," looks at whistleblowing as a rational economic activity, whereas most discussions of whistleblowing focus on its moral or ethical dimensions.
In the paper, Kohn traces the origins of modern whistleblower laws from the original understanding of white-collar crime formulated by the famous criminologist Professor Edwin Southerland, and integrates that analysis with the economic theory of crime developed by the Nobel Prize winning economist Professor Gary Becker. Kohn then outlines the history of the most successful anti-fraud laws and how they have relied upon incentivizing whistleblowers, thereby making whistleblower disclosures a rational economic activity.
He explains how by understanding that the award laws transform whistleblowing into a rational economic activity, the laws help solve the unique issues of detection identified by both Professors Southerland and Becker. According to Kohn, by making the act of whistleblowing a rational economic activity, the number of persons willing to risk their careers to report white-collar crime radically increases, as does the acceptance of whistleblowing by society and employees alike. This results in a radical increase in law enforcement's ability to detect, prosecute, and deter white collar crime. Consequently, he explains how the empirical data demonstrates, consistent with Professor Becker's economic theory of crime, how whistleblower award laws such as Dodd-Frank and the False Claims Act trigger an increase in the deterrence and an overall reduction in white-collar crime.
Later in the paper, Kohn argues that this conception of whistleblowing as a rational economic activity supports efforts by Congress and other democratic to pass whistleblower award laws consistent with the modernized False Claims and Dodd-Frank Acts.
Kohn, a founding partner of the whistleblower defense firm Kohn, Kohn & Colapinto, is an Adjunct Professor of Law at Northeastern University and the Chairman of the Board of Directors of the National Whistleblower Center. He is widely recognized as a leading expert on whistleblowing. He has represented whistleblowers since the 1980s, worked alongside Congress and federal agencies to develop whistleblower legislation and regulations, and is the most published author on whistleblower law. Forbes recently recognized Kohn as one of America's Top 200 Lawyers of 2024. Previously, he was recognized as one of the top 50 plaintiffs lawyers in the United States.
Read the full working paper on the Social Science Research Network (SSRN).
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