rewards for whistleblowers make sense Someone somewhere in the world is currentlyenjoying the considerable spoils of being a corporate whistleblower for the United States of America. Last month, the US Securities and Exchange Commission paid out its biggest reward to date to a whistleblower - a person, living abroad, who helped it uncover a particularly hard-to-detect fraud. The payout? $US30 million. It was just the latest such "bounty" paid by a US regulator. Hundreds of people in the US and overseas have been awarded big money after helping US government agencies detect wrongdoing - most famously through the Lincoln-era False Claims Act, which tackles fraud against the state. Depending on the agency involved and the type of crime uncovered, whistleblowers receive up to 30 per cent of money recouped for US taxpayers, through penalties and legal settlements. It is the sort of treatment that corporate whistleblowers in Australia can only dream about. In notable Australian cases, whistleblowing has been greeted with hostility and even dismissal - not to mention complete inaction from the regulator. And there's no compensatory nest egg at the end of the ordeal. For evidence, look no further than the testimony given by the Securency whistleblower in 2012. He was victimised and forced from his job, his warnings ignored. Or the story of Jeff Morris, who blew the whistle on the CBA financial planning scandal only to wait 16 months for the Australian Securities and Investments Commission to act. Whistleblower protections for public servants were strengthened last year. Private sector workers, however, are "protected" by much less rigorous laws that a host of groups and experts, and ASIC itself, say need reforming. The issue has become urgent in light of the budget cuts inflicted on ASIC. Two years ago, the International Monetary Fund warned about ASIC's funding levels; to bluntly paraphrase, it said ASIC was struggling to do its job with the resources that it was being given. The situation has since only become worse. Even ASIC itself has admitted that the imminent cuts, of $120 million over four years, will impede its operations, especially in surveillance. That the cuts were announced so soon after a series of scandals in the financial advice sector makes them even more incomprehensible. One consequence, according to ASIC chairman Greg Medcraft, is that ASIC will need to rely more on whistleblowers. Fair enough. As the SEC has demonstrated, whistleblowers can be powerful sources of information. Usually, certainly in this reporter's experience, they are motivated by a strong sense of right and wrong, and mounting frustration that those breaking the rules and hurting other people are getting away with it. But right now, in Australia, we ask far too much of them. We ask them to risk their livelihoods and their careers. We ask them to endure stress and uncertainty. We ask them to pay a potentially huge personal and financial cost for the greater good. If we want more whistleblowers in the private sector, we must treat them better. ASIC says it is already doing this, spurred on by last year's damning Senate committee report into its performance. Medcraft says the agency now has dedicated whistleblower liaison officers, and ASIC has also committed to a devoted Office of the Whistleblower, a recommendation of the Senate report. It's a start, but nowhere near enough. No one is suggesting $30 million rewards - but surely no one should end up dramatically worse off as a result of exposing wrongdoing. A thorough review and reform of our corporate whistleblower laws is required. And Morris, for one, believes that "a total clean-out of the current regime at ASIC" is needed before any whistleblower should place their trust in it. Little has been said, either from ASIC or the government, about another recommendation of the Senate report: that options for reward-based incentives for whistleblowers be considered. The government's response to the committee barely acknowledged the idea. Yet it was echoed last month by Ian Hanger, QC, in his report of the pink batts royal commission. He called for the Law Reform Commission to examine the merits of False Claims Act-type laws in Australia, to combat fraud against the state. One issue, raised by Medcraft, is that the penalties in place in Australia for some white-collar crimes, compared to the US, are relatively small. Any whistleblower reward would therefore be correspondingly smaller. The solution, as Morris sees it, is to introduce a "much stiffer" penalty regime for corporate crime, with compensation to be paid for whistleblowers out of the money recouped from the guilty company. This would clean up the problem overnight. Meanwhile, despite the outcry, it seems unlikely the government will back down on the ASIC budget cuts. There are far more unpopular budget measures that it is pushing on with in the face of public backlash. A "user-pays model" for ASIC - whereby the regulator is funded through industry levies rather than by the Commonwealth - has been touted as a solution, including by Medcraft. The concept is steadily gaining a sense of inevitability about it. There are issues with the idea, but it is a pragmatic answer to an ongoing problem: how to keep ASIC properly and predictably funded. Whether or not it happens, let's consider a pragmatic solution to our whistleblower problem. It's time to look not just at protecting whistleblowers but also at compensating them. And even, perhaps, at rewarding them.