When can lawyers get paid to blow the whistle on their bosses?

When (in 2014) I first reported former Vanguard Group tax lawyer David Danon's whistleblower complaints alleging the nation's top mutual fund company "operated as an illegal tax shelter for nearly forty years," I heard from lawyers, in two groups:

- Tax lawyers said Danon sounded like he knew the law pretty well, and worried, for Vanguard's sake.
- Some corporate lawyers told me it seemed to them as if Danon deserved professional death for ratting out his boss, in what they assumed was his defiance of attorney-clilent privilege and legal ethics rules, to get a whistleblower's fee.

Indeed, a New York judge ruled last year, accepting Vanguard's arguments against a case he filed there, that Danon wasn't entitled to collect whistleblower fees in New York, because, as an ex-company lawyer, he had more or less poisoned the well. (He has since collected whistleblower fees from Texas; his complaints to the IRS, SEC, California and other jurisdictions aren't yet resolved, so far as I can tell.)

And now Dennis J. Ventry, a tax and policy law professor at the University of Californaa at Davis law school who is also a member of the Internal Revenue Service Advisory Council and its Office of Professional Responsibilty, has written a densely footnoted 66-page UC Davis Law Review article arguing that the New York court was wrong and Danon's actions are properly protected, both by state law, and by ethics rules, which encourage lawyers to protest illegal conduct and reporting it to the authorities, if the client won't do the right thing.

Ventry, like the New York court, stopped short of ruling on the facts. His paper is titled Stiches for Snitches: Lawyers as Whistleblowers. You can read it here.