Whistleblower Protection Reform Act of 2019

Mr. Speaker, I am honored to present this legislation, but I am more honored to acknowledge something that is exceedingly important.

The chairwoman of the committee, the Honorable Maxine Waters, has, under her leadership in this Congress, produced many pieces of bipartisan legislation. This is but a continuation of her legislative record. I want to commend her for her efforts, and I would also like to salute Mr. McHenry and the persons who are across the aisle for their efforts, as well, in producing bipartisan legislation.

I thank Mr. Barr for his assistance and his help. He is the Oversight ranking member, and he and I will be working together on many pieces of legislation.

I am honored today to say that this piece of legislation was born as a result of honorable intentions metamorphosing into unintended consequences, honorable intentions.

When we passed Dodd-Frank in 2010, we sought to add additional protections for whistleblowers above and beyond what was accorded in Sarbanes-Oxley. In so doing, with the best of intentions, we found that this legislation was taken before the Supreme Court of the United States of America, and the Supreme Court concluded--and I don't quarrel with their conclusion, but the Supreme Court concluded that the legislation would apply only if the person who was a whistleblower took the concern to the SEC first.

I don't quarrel with what the Supreme Court ruled. This is why we have this piece of legislation to correct the best of intentions that metamorphosed into unintended consequences.

Let's talk for just a moment about whistleblowers.

It is exceedingly important to do this because I want people to know that whistleblowers are extraordinary people in the sense only of they do extraordinary things. They are really ordinary people, but they do extraordinary things.

These are the people who are willing to put their livelihoods on the line. These are the people who are willing to take that step that many of us would not take because, when you take that step as a whistleblower, you will sometimes stand alone. But they understand that it is better to stand alone than never to stand at all, and in so doing, they are protecting us: consumers, members of the public.

So I commend the whistleblowers of the world who take these extraordinary steps.

But we also want to do more than commend them. We want to protect them. This legislation will protect those who are willing to step forward, those who will see something and say something, something that we encourage people to do.

You can't encourage people to see something and say something and then allow them to do this without the protections that we should properly accord them and that we intended to accord them under Dodd- Frank. So I am honored today to have this piece of legislation that will give whistleblowers the protection that we intended and will also send a message that the companies that they work for can have the

opportunity to take corrective action before the SEC is informed.

Many of these companies want to do the right thing, and if given the opportunity, they will--not all, many. I think we ought to give them an opportunity to do the right thing; and to do so, we would want whistleblowers to report internally before they take this to an external source such as the SEC.

Mr. Speaker, this legislation is bipartisan. I am honored to tell you that, among the persons who are the cosponsors, we have the Honorable Carolyn Maloney; the Honorable Representative Gerald Connolly; the Honorable Gregory Meeks; the Honorable Joyce Beatty, who is here in this room with us currently; and the Honorable Vicente Gonzalez, all of whom support it, along with the Honorable Emanuel Cleaver.

I would also add, it is endorsed by the National Whistleblower Center, endorsed by the North American Securities Administrators Association, endorsed by Public Citizen, endorsed by the Government Accountability Project, endorsed by the Project On Government Oversight, and endorsed by the Securities Industry and Financial Markets Association.

It is another example of how, under the leadership of the Honorable Maxine Waters, we continue to produce bipartisan legislation. I am honored, Mr. Speaker, to have this honorable chairwoman presiding today.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2515) to amend the Securities and Exchange Act of 1934 to amend the definition of whistleblower, as amended.

Mr. Speaker, I yield myself such time as I may consume.

I thank Representative Green, the chairman of the Subcommittee on Oversight and Investigations, for working with the gentleman from Michigan (Mr. Huizenga) to craft this timely piece of legislation to ensure that all whistleblowers reporting suspected securities law violations are protected from retaliation by their employers.

In the Dodd-Frank Act, Congress provided the Securities and Exchange Commission the authority to reward whistleblowers who voluntarily provide the SEC with original information that leads to a successful enforcement action with monetary sanctions exceeding $1 million.

Realizing that these whistleblowers may be deterred by their employers, Congress also required the SEC to issue regulations to protect them from retaliatory efforts, such as firing or demotion; but in 2018, the Supreme Court held that whistleblowers who report alleged misconduct internally but not to the SEC are not protected by the antiretaliation provisions of Dodd-Frank. This is not what Congress intended. Indeed, requiring whistleblowers to race to the SEC in order to be protected discourages them from reporting their suspicions to their superiors.

The U.S. Chamber of Commerce highlighted the importance of internal reporting in its 2010 letter to the SEC, stating: ``The experience of the many companies with robust internal reporting programs, as well as the empirical evidence, demonstrate that all stakeholders benefit when those with knowledge of potential securities law violations report internally, thus enabling management to promptly investigate and take remedial action.''

By clarifying that whistleblowers who only report alleged misconduct to the employers are also protected by the antiretaliation provisions in the Dodd-Frank Act, this bill would encourage employees to communicate potential securities law violations to their employers without fear of being fired before they are able to report to the SEC.

Again, I thank Chairman Green and Mr. Huizenga for pushing this important bill, and I urge my colleagues to join me in supporting it.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. Green), the chairman of the Subcommittee on Oversight and Investigations and the sponsor of H.R. 2515.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, this is a very important measure that will increase corporate accountability and help those companies committed to ferreting out wrongdoing to take action without government involvement and protects those workers who help them to do so.

I commend the gentleman from Texas and the gentleman from Michigan for working in a bipartisan manner to bring this bill before the House.

Mr. Speaker, I urge my colleagues to join me in supporting this important piece of legislation, and I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I yield myself such time as I may consume.

I rise in support of H.R. 2515, the Whistleblower Protection Reform Act of 2019.

I would like to thank my colleagues, Congressman Green and Congressman Huizenga, for their work on this commonsense, bipartisan legislation.

Mr. Speaker, whistleblowers play a very important role in rooting out bad behavior that harms the market as well as mom-and-pop investors. Additionally, businesses have a self-interest in detecting and eliminating illegal activity as swiftly as possible within their organizations. To that end, clarifying the concept of encouraging employees to report alleged securities fraud activities to their employers without fear of retaliation just makes simple common sense.

Businesses typically strive to comply with the law, and they have incentives to do so from market pressures, but it is also because unlawful activity hurts the company itself and it hurts its investors, driving down the company's value, tarnishing the company's reputation, repelling business partners and customers, and damaging the overall marketplace. That is why, frankly, the vast majority of actors in the private sector do the right thing.

For these reasons, many companies have implemented strong internal reporting measures to detect and mitigate potential wrongdoing before harm spreads. But if internal whistleblowers who report potential securities law violations internally are not protected from retaliation, what good are these internal reporting systems that these companies have voluntarily established?

That notion might seem counterintuitive, but last year, in the Digital Realty Trust case, the Supreme Court held that the whistleblower antiretaliation protections of the Dodd-Frank Act do not extend to internal whistleblowers; only those who report to the SEC are protected from retaliation.

Now, this is not an error in the Supreme Court's judgment; it is simply a faithful interpretation of the flawed drafting of the Dodd- Frank law. This bill solves this problem by amending section 922 of Dodd-Frank to clarify that whistleblowers who report alleged misconduct internally with their employers but not to the SEC are protected by Dodd-Frank's antiretaliation provisions.

By clarifying that Dodd-Frank's antiretaliation protections also apply to internal whistleblowers, this bill addresses the Supreme Court's interpretation and aligns Dodd-Frank's whistleblower protections with other major whistleblower laws.

Again, I want to thank Congressman Green and Congressman Huizenga for this important bipartisan legislation, which I proudly support. I urge all of my colleagues to join me in supporting H.R. 2515.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time, and I am prepared to close.

Mr. Speaker, again, I would thank Congressman Green and Congressman Huizenga for their leadership on this extending of whistleblower protections, and I yield back the balance of my time.

General Leave

Mr. Speaker, I rise today in support of H.R. 2919, the Whistleblower Protection Reform Act of 2019.

Whistleblowers are an effective means of rooting out bad behavior that harms the market as well as investors.

In fact, Section 922 of Dodd-Frank amended the Securities and Exchange Act of 1934 to afford whistleblowers protection from retaliation by their employers for reporting suspected misconduct.

Additionally, Section 922 allows for the SEC to provide monetary awards to whistleblowers who provide ``original information'' resulting in monetary sanctions over $1 million.

However, in February 2018, the Supreme Court held in Digital Realty v. Somers that whistleblowers who report alleged misconduct internally to their employer, as opposed to the SEC, are not protected by Dodd- Frank's anti-retaliation provisions.

A whistleblower who reports directiy to their employee about alleged misconduct shouldn't risk being retaliated against. That's why this bipartisan bill has been carefully crafted to clarify the application of the anti-retaliation provisions to whistleblowers provided within the Dodd-Frank Act.

By further clarifying the anti-retaliation provisions of section 922 apply to those whistleblowers who report internally will encourage employees to report potential misconduct instead of automatically escalating the issue to the SEC.

Internal reporting may be more efficient and practical in some cases as employers have a chance to correct, self-report, or take other action.

Moreover, by clarifying the application of Dodd-Frank anti- retaliation protections to internal whistleblowers, the bill aligns with similar protections for internal whistleblowers within the Whistleblower Protection Act and Sarbanes-Oxley.

I'd like to thank my colleague, Mr. Green for working with me on the Whistleblower Protection Reform Act and I urge my colleagues to vote yes.

Speaker, I rise today to include in Record how I would have voted on H.R. 2515, H.R. 3050, and H.R. 2409. I was unable to vote yesterday because my scheduled flight was cancelled. Had I been present, I would have voted ``yea'' for each bill.