Whistleblowers who report on and expose illegal acts in their workplaces are invaluable to fighting corruption. In Israel, as I stressed in a previous post, the recognition of the importance of whistleblowers has led to the adoption of several (unsatisfactory) legal instruments which are designed to encourage whistleblowers to step forward. These instruments are mainly about rewarding or protecting those employees who have dared to report on illegalities despite the personal and professional risks associated with their coming forward. An important example of such a positive instrument is Israel’s Protection of Workers (Exposure of Offenses and of Harm to Integrity or to Proper Administration) Law, which establishes a whistleblower-friendly mechanism for seeking damages from employers who engage in unlawful retaliation .
But some argue that positive incentives are insufficient. In 2019, the Israel Democracy Institute (IDI), one of the country’s leading research institutes, published a policy paper in which the authors (Professor Mordechai Kremnitzer and Yazid Ershied) argued that negative incentives—that is, the threat of sanctions for those who fail to report corruption in their workplaces—should also be employed. More specifically, the authors propose that Israel’s disciplinary law include a provision that requires any public employee who, in his or her official capacity, has formed a “substantial suspicion” that an act of corruption has taken place to report on it “as soon as possible” to a newly established governmental unit which would address corruption in the public sector. The authors claim that adoption of such a mandatory reporting requirement, if backed by the credible threat of sanctions, would increase the number of reports by public officials who observe corruption. (The sanctions recommended by the authors would be disciplinary rather than criminal, as criminal sanctions in their view would be disproportionate and consequently ineffective.)
The IDI paper is the most thorough and impressive piece written on proposals to adopt a mandatory reporting requirement on corruption in Israel. But while the authors list some good reasons for adopting such a requirement, they fail to consider how their proposal would interact with the phenomenon of “delayed reporting.” Employees are often reluctant to report suspected corruption right away, but eventually become willing to report it. In other words, for entirely understandable reasons, it often takes whistleblowers some time and contemplation before they are finally ready to report on illegalities. When one takes this fact into account, it becomes apparent that the IDI paper’s proposed mandatory reporting requirement might prove counterproductive, for two reasons:
- First, the threat of disciplinary sanctions may actually deter many potential whistleblowers from ever stepping forward, rather than encouraging them to report earlier. Consider a potential whistleblower who has observed wrongdoing but is reluctant to come forward right away; she needs time to work up the courage to report. Would the threat of disciplinary sanctions for failing to report “as soon as possible” induce this whistleblower to report earlier? Probably not. If she doesn’t report at all, the odds that the authorities will find out about the wrongdoing, or her failure to report it, are very low. What the threat would do, though, is discourage this potential whistleblower from reporting at all after she has delayed for too long. After all, an employee who reports wrongdoing, but only after a delay, would open herself up to disciplinary sanctions for failing to report more promptly, whereas if she keeps quiet, she is unlikely ever to be found out. Given that potential whistleblowers already face so many disincentives to reporting, the law should welcome whistleblowers at any point, rather than threatening them with punishment if they report later than would have been ideal.
- Second, the risk of disciplinary sanctions may also deter employees with potentially relevant evidence from cooperating with law enforcement authorities once a corruption investigation is underway. Imagine the police questioning employees of a department they believe was tainted with corruption. If a mandatory reporting requirement is adopted, employees who have information about corruption that occurred in their department would face two options when questioned by police: First, the employees could falsely state that they knew nothing about illegalities in their workplace. Second, they could cooperate, telling the investigators what they knew or suspected. We would hope that employees would choose the second option. But if admitting to police that they knew about possible corruption and didn’t report it would expose employees to the possibility of disciplinary sanctions under the mandatory reporting law, many employees might rationally choose to feign ignorance, especially since the risk of being caught and punished for lying is usually quite low. Once again, the difficulties associated with detecting employees who knew about corruption but remained silent render a mandatory reporting requirement counterproductive.
If adopting a mandatory reporting requirement carries significant risks, what else can be done to encourage public employees to report on corruption? The answer, I believe, lies in strengthening the positive incentives for whistleblowers, which are currently very limited in Israel (and in many other countries). Encouraging, protecting, and rewarding whistleblowers, rather than threatening to punish those who don’t report right away, is likely to be the more effective anticorruption strategy.