WASHINGTON (MarketWatch) — Last October, representatives from Pfizer Inc., Tyco International Ltd., Citigroup Inc. and other major companies met with officials from the Securities and Exchange Commission to share their views on rules implementing the Dodd-Frank whistleblower law. Not surprisingly, they want the rules watered down.

What these companies have in common is that they each have been involved in a massive corporate scandal that victimized consumers or shareholders. Had a whistleblower come forward early, their wrongful conduct could have been averted.

Despite their checkered past, these corporations apparently have no shame in seeking to limit the government’s ability to catch future wrongdoers. Having this rogues’ gallery advise the SEC on policing corporate misdeeds is akin to Dillinger, Capone and Babyface Nelson meeting with J. Edgar Hoover to share their views on criminal law enforcement.

In practically every financial scandal that has rocked the corporate world, whistleblowers have been ignored or punished for their attempts to ward off catastrophe. Recognizing the critical role that whistleblowers can play in preventing harm before it reaches catastrophic proportions, Congress passed special whistleblower provisions in the Dodd-Frank law. Those new provisions include bounties for whistleblowers who provide valuable information to the SEC that leads to the recovery of sanctions against wrongdoers. The SEC has issued proposed regulations to implement the new law.

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It is those regulations that have set off a flurry of corporate lobbying. Claiming that they can police themselves and do not need whistleblowers reporting wrongdoing to the government, corporations are now lobbying hard to cut back on Dodd-Frank. In particular, they want the SEC to structure regulations that require whistleblowers to use internal corporate compliance programs first.

The essence of their argument is that big corporations can police themselves and provide adequate forums for employees to report wrongdoing. This position may be true, for say, a report of an employee who is stealing from the cash register of a big-box store. But this does not make sense where the company is following a corporate policy of stealing from consumers or cheating shareholders or investors. A corporation simply cannot police itself when its senior officials are the culprits.

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By definition, securities fraud requires intentional conduct at the most senior levels of a corporation. Therefore, a whistleblower who must use internal compliance procedures faces a hopeless task of relying on an internal process that in all likelihood was designed as an impediment to anyone reporting pervasive wrongdoing.

Pfizer PFE, +1.56% , Tyco TYC, and Citigroup C, +2.38% are poster children for the proposition that internal compliance cannot address pervasive fraud or fraud committed at the senior levels of a corporation.

As a result of wrongful conduct that was not halted by its internal compliance program, Citigroup recently settled fraud claims with the SEC for $75 million, and was bailed out by taxpayers to the tune of $45 billion. Its wrongful conduct diminished the value of the corporation between October 2007 and January 2009 by more than $225 billion. Tyco paid $3 billion to settle shareholder claims, and its former chief executive and chief financial officer are in prison. Tyco shareholders lost $130 billion in value during a six-month period in 2002.

In 2009, Pfizer paid the largest criminal fine ever — $2.3 billion — to settle claims of Medicare and Medicaid fraud with the federal and state governments. The pharmaceutical giant not only had a vaunted internal compliance program, but also was already subject to two federal government corporate integrity agreements, which were the result of past derelictions of law. Pfizer had twice managed to convince federal and state officials that internal compliance should be left to the company. The third time around, multiple whistleblowers had no choice but to go to federal officials with claims that the company had illegally marketed multiple drugs including at least one to children.

How strong were the whistleblowers’ claims against Pfizer? In a ruling against Pfizer in the case, U.S. District Court Judge Jed Rakoff noted that “to put it bluntly, the allegations of the Complaint evidence misconduct of such pervasiveness and magnitude, undertaken in the fact of the board’s own express formal undertakings to directly monitor and prevent such misconduct, that the inference of deliberate disregard by each and every member of the board is entirely reasonable.”

Undoubtedly, they had a hard time getting the company to right its wrongful conduct through internal procedures, especially where it was making $171 billion (during the period of alleged wrongdoing) from the drugs encompassed by the whistleblower claims. Pfizer was doing so well that just from 2007-2008 its CEO, Jeffrey Kindler, took home almost $28 million.

The lesson of these cases is clear. Where the highest officials in the corporation perpetrate the wrongdoing, internal compliance cannot work. From Enron to Pfizer, consumers, shareholders and the economy as a whole have suffered too much harm from promises of unworkable compliance programs. The SEC must stand up for whistleblowers and ignore the complaints of these egregious offenders.