In stark contrast to 2008, many on Wall Street moved their money away from President Barack Obama and lent heavy support to former Massachusetts Gov. Mitt Romney this past election. For the financial industry, however, the results of the Massachusetts’ Senate race -- in which Elizabeth Warren beat incumbent Scott Brown -- may be cause for much greater concern.
Warren, a former Harvard Law professor who will serve on the powerful banking committee in the Senate, has long been a policy advocate for financial reform; her work led to the conception and establishment of the federal Consumer Protection Bureau as part of Dodd-Frank.
Already a folk hero of sorts on the Left for reclaiming the late Ted Kennedy’s seat, Warren has spoken out vociferously about the system being “rigged.” Esquire Magazine said she is “going to raise hell” in Congress, and the Wall Street Journal called her banking’s “worst nightmare.”
When Warren takes the oath of office in January, however, she will have an opportunity to do more than simply heap red meat on the Left’s base, which would like nothing more than to see a sacrificial bank executive behind bars. Instead, she has an opportunity to play a central role in the kind of real bipartisan reform that has too often failed Congress.
To do so, she will need a partner on the other side of the aisle. I recommend Republican Iowa Senator Charles Grassley -- which would create a Washington odd couple even more bizarre than James Carville and Mary Matalin.
For all of the talk about Republicans being the Party of Big Business, it is Grassley who is Congress’s undisputed watchdog when it comes to fighting private sector fraud. He authored the 1986 amendments to the False Claims Act, which allow whistleblowers who report fraud against the government to keep a portion of recoveries. The False Claim Act and other whistleblower laws are responsible for billions of dollars of recoveries by the U.S. government on an annual basis, including last year’s multi-billion dollar UBS fine for promoting illegal tax shelters.
As a multi-time successful whistleblower who identified fraud that was being disguised through various healthcare M&A transactions, I can attest to the fact that reporting fraud -- even when one knows it is the right thing to do and even when it has the potential to make a whistleblower rich -- is an extremely taxing experience, both emotionally and mentally.
Far fewer people would have the strength to go through the process without feeling like they had at least one real ally in Washington. That ally has always been Grassley. For too long, however, few in Congress have taken the same kind of inspired stand alongside him.
Warren can and should look to change that if she wants to make a real difference, and not just a rhetorical one. It is safe to say that Warren and Grassley disagree on many things, from what tax rates should be to the ideal level of entitlement spending. But they both might agree there has been too little real accountability in finance for years of excess and recklessness, and they can both agree that fraud should be pursued vigorously and those who expose it protected.
Coming from Massachusetts, Warren is particularly well equipped to work on these issues as well, since she is in close proximity to the leading federal district in pursuing fraud under the False Claims Act.
The U.S. Attorneys in Boston, who I have had the pleasure of dealing with in one of my own successful whistleblower cases, are among the best in the nation. In 2011, that office recovered $3 billion dollars for the treasury in one case alone against Glaxo Smith Kline, which was misrepresenting the safety of off-label drugs.
Many people will continue to argue about what the results of this year’s election mean, and what kind of policies it means most Americans want. Either way, one issue on which all Americans should agree is that fraud should be pursued zealously and with the same sense of bipartisan purpose no matter who the perpetrator.
The liberal senator from Massachusetts and the conservative senator from Iowa are the perfect no-nonsense team to deliver that message and to restore some integrity to our embattled economy.
Adam Resnick is an author and whistleblower.