When Sarbanes-Oxley - or the Accounting Reform and Investor Protection Act - was passed in 2002, it was intended to prevent massive financial debacles such as Enron and WorldCom.
But it's playing out in important ways that have to do neither with the core of the act (accounting and governance reforms), nor with the large-scale fraud originally envisioned.
Among the act's provisions are whistle-blower protections for corporate employees. Recently, a federal judge ruled that Sarbanes-Oxley extends to companies big and small.
As it turns out, small whistles can make big noises.
The first test of Sarbanes-Oxley whistle-blower protections comes in a lawsuit involving a company nowhere near the size of an Enron. It focuses on a bank in tiny Floyd, Va.
Last year, a former chief financial officer of the bank alleged accounting fraud and possible insider-trading among the bank's 600 shareholders. He was fired. He sued, under Sarbanes-Oxley, and the judge ruled in his favor. He was reinstated, though the bank plans to appeal.
Sarbanes-Oxley gave corporate whistle-blowers rights that government workers have been seeking for decades. For instance, individuals like the one in Virginia have access to jury trials in federal court.
Unfortunately, the 1989 Whistleblower Protection Act, which applies to federal workers, is full of loopholes, and a bill to close them has been stuck in Congress for over two years.
Those who challenge abuses of power both in and out of government deserve protection. Regardless of the size of the problem, the principles remain the same - creating safe and effective ways to get information out about public harm.
Congress should create Sarbanes-Oxley-like whistle-blower protections for government workers.