I am not aware of any "malice" or "good faith" provision in the federal False Claims Act or in the Dodd-Frank SEC whistleblower statute. I don't recall any malice provision in IRC Section 7623(b), in the Sarbanes-Oxley Act, or in any state false claims act. Under Dodd-Frank regs, however, there are inducements to encourage WBs to report internally, first.

You can quickly scan the statutes for most of these WB genres at http://taf.org/ (click on Resources by Topic).

Sarbanes-Oxley Act WB provisions are at http://www.whistleblowers.gov/acts/sox_amended.html.

That said, a malicious attitude on the part of a whistleblower can definitely put a damper on the enthusiasm of regulators and prosecutors because, as has been suggested, malice undermines the WB's credibility as a witness. Otherwise, the statutes and prosecutors I deal with don't care about a whistleblower's motives for blowing the whistle -- unless the whistleblower is also a perpetrator of the wrongdoing.

I would be interested in knowing which WB regimes do reference malice.

Kurt S. Schulzke, JD, CPA, CFE 
Associate Professor of Accounting & Business Law 
Director - Law, Ethics & Regulation 
Corporate Governance Center 
Kennesaw State University 
+ 1770-423-6379 (O) 
+ 1404-861-5729 (C) 
http://coles.kennesaw.edu/centers/corporate-governance/ 
My research: http://ssrn.com/author=804023 




----- Original Message -----
From: "Peter Bowal" <[log in to unmask]>
To: [log in to unmask]
Sent: Monday, March 18, 2013 6:05:11 PM
Subject: malice and whistleblowing




Colleagues: 



I’m reflecting on the concept of malice and how it relates to whistleblowing law. Whistleblowing legislation and corporate whistleblowing policies typically disqualify reports made with “malice” or “bad faith” (in affirmative language, they are required to be in “good faith”). Without this threshold, whistleblowers’ report of wrongdoing may not be investigated, the whistleblower may not be protected from reprisal and a bad faith report might lead to discipline against the whistleblower. 



The rationale for this malice rule is rarely articulated. Malice appears to be a popular screening mechanism. Reports of wrongdoing contaminated by malice are assumed to be factually unreliable and less worthy of investigation than reports that are made in good faith. Apart from assessment and investigation of reports, the malice rule further screens out reports that are potentially damaging to individuals and organizations. 



I’d be interested in your critical perspectives on the malice rule. What do we know about malice? What is malice exactly? How much malice is required to disqualify a report, or is an all-or-nothing approach in effect by default? What is the process, if any, for preliminary determination of malice or good faith when a report is received? 



If one personally seeks justice, is that malice? If so, are individual and personal victims of wrongdoing ever permitted to blow the whistle? 



Malice is rarely defined and not easily ascertainable or discernible in most whistleblowing scenarios. But in practice, it may serve as a proxy for disqualifying otherwise legitimate reports of wrongdoing. Even the premise that good faith reports are more factually reliable than reports tainted with some malice might be questionable. 



I guess I’m looking for arguments and theories to discard the malice rule in whistleblowing. 



I very much appreciate any ideas you wish to share. Thank you. 



Cheers, 
Peter Bowal 

University of Calgary