DOJ launches corporate whistleblower awards program
The Justice Department on Thursday unveiled a corporate whistleblower pilot program targeting foreign corruption and financial fraud that authorities said could yield billions of dollars in forfeitures each year. (Image from Shutterstock)
The Justice Department on Thursday unveiled a corporate whistleblower pilot program targeting foreign corruption and financial fraud that authorities said could yield billions of dollars in forfeitures each year.
Deputy Attorney General Lisa O. Monaco said the initiative aims to replicate the success of other federal agencies whose whistleblower rewards programs have generated thousands of tips about alleged misconduct and leads on lucrative criminal cases.
Under the Justice Department’s initiative, tipsters who are first to provide information of corporate wrongdoing that leads to a successful prosecution or settlement could be eligible for up to 30 percent of the first $100 million in company forfeitures and 5 percent on additional proceeds up to $500 million.
Whistleblowers must provide information that leads to forfeitures of at least $1 million to be eligible for a payout and must not have participated in the misconduct, officials said.
Monaco said the program aims to build on the department’s focus on curbing white-collar crime and bolstering incentives for corporate leaders to voluntarily self-report misconduct or face stiffer legal penalties if they fail to do so.
Companies that disclose wrongdoing to the Justice Department within 120 days of discovering the misconduct and cooperate with federal investigators will be granted more leniency, authorities said.
Deputy Attorney General Lisa O. Monaco announced the new program on Thursday. (Photo by Jabin Botsford/The Washington Post)“We think this changes the calculus,” Monaco said on a conference call with reporters. “Company leadership must grapple with the increased possibility that if they don’t self-disclose, an individual whistleblower might beat them to the punch.”
The department is modeling the program on similar ones in other federal agencies, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, officials said.
The SEC received 18,000 tips in fiscal 2023, up nearly 50 percent from a year earlier, and paid a record $600 million to 68 whistleblowers. The CFTC received 1,530 tips and paid seven whistleblowers a total of $16 million last year.
Although the Justice Department has for many years paid whistleblowers under the False Claims Act, that law is limited to civil cases involving abuse of the government’s vast federal contracting system.
The department’s initiative will target enforcement areas that are not covered by other whistleblower programs. Among them are companies outside the SEC’s jurisdiction, as well as fraud involving private health insurance and bribery of public officials, authorities said.
“We are sending a message to individuals who know about corporate misconduct,” said Nicole Argentieri, acting assistant attorney general in the department’s criminal division. “Our tip line is open. If you see something, say something.”
Stephen M. Kohn, a prominent whistleblower attorney who participated in a briefing of the whistleblower rights community by department officials on Thursday, said he was disappointed in the rollout.
Kohn said the whistleblower awards should be mandatory rather than discretionary. He said potential whistleblowers, who risk retribution from employers, might be hesitant to come forward because the department has not included a full confidentiality guarantee.
“The program, by not having mandatory controls, opens the whistleblower up to identification or to not getting an award, and that’s what will discourage people in the long run,” he said.
Justice officials said the department lacks the statutory authority to make the awards mandatory. They said they are using the same confidentiality and anonymity standards as the SEC and other agencies.
