Earlier in 2024, DOJ’s Criminal Division announced a new Corporate Whistleblower Awards Pilot Program granting whistleblower awards to individuals who provide information in four priority areas. Other components of DOJ, including United States Attorneys’ Offices that prosecute allegations of significant corporate malfeasance, have similarly created whistleblower programs designed to encourage individuals to report corporate misconduct. Although other federal agencies already have whistleblower programs, DOJ’s new initiative expands federal government incentives to individual whistleblowers to take complaints straight to the government.
This new whistleblower pilot program is distinct from, though interrelated with, DOJ’s longstanding policies designed to reward self-disclosure by corporations (as opposed to individuals). Under current DOJ-wide policy, “[t]o be eligible for any cooperation credit, corporations must disclose to the Department all relevant, non-privileged facts about individual misconduct . . . swiftly and without delay.” Over the last several years, DOJ has updated and expanded its corporate Voluntary Self-Disclosure policies, requiring every component to promulgate and publicize such policies. Every policy must adhere to the following core principles:
Under the new individual whistleblower pilot program, DOJ will provide whistleblowers who did not participate in criminal conduct with financial awards for reporting corporate misconduct in four priority areas:
The program awards individuals who provide “original information” (as defined by the policy) that leads to more than $1 million in criminal or civil forfeiture in connection with a successful prosecution. Whistleblowers are not eligible if they “meaningfully participated” in criminal activity, if they fall into certain categories of individuals, or if the information that they report is not “original” under the policy.
The program places a premium on corporate compliance programs, internal company reporting, and voluntary self-disclosures. Whistleblowers may receive increased awards if they participate in and cooperate with the company’s internal compliance systems or internal reporting channel. Additionally, whistleblowers may receive decreased awards if they interfere with the company’s internal compliance and reporting system by preventing or delaying detection of the misconduct, providing false information, or withholding material information.
Companies that receive internal whistleblower reports may still obtain credit for self-disclosure under DOJ’s corporate Voluntary Self-Disclosure policies even if a company whistleblower also reported to DOJ where the company (1) self-discloses the allegations to DOJ within 120 days of receiving the whistleblower’s internal report (and before DOJ reaches out to the company); and (2) meets the other requirements for voluntary self-disclosure.
This new DOJ program operates in addition to multiple existing financial reward programs, including programs operated by the Securities and Exchange Commission, the Commodity Futures Trading Commission, the IRS, and the Financial Crimes Enforcement Network, and it covers subject matters beyond those in existing programs.
In addition to this financial reward program, major DOJ components have this year separately adopted non-financial voluntary self-disclosure programs for individuals that include those who have participated in criminal misconduct. These mirror in many ways the programs for corporations discussed above and are designed to encourage individuals aware of and/or who have participated in corporate criminal misconduct to report this conduct in exchange for immunity from prosecution. These include programs announced in 2024 by United States Attorneys’ Offices in many districts that handle significant corporate investigations, including in San Francisco and Silicon Valley (Northern District of California), Los Angeles (Central District of California), New York (Southern District of New York and Eastern District of New York), and New Jersey (District of New Jersey), and by DOJ’s Criminal Division.
Although each program differs in its coverage, they generally offer principles by which individuals, even those involved in criminal misconduct, will receive immunity via non-prosecution agreements if they voluntarily report corporate misconduct to the government before the government finds out about it. The subject matter areas covered by these programs are very broad. For example, the Northern District of California program extends to (1) “criminal conduct undertaken by or through public or private entities or organizations . . . involving fraud or corporate control failures; intellectual property theft and related violations; or affecting market integrity” and (2) “criminal conduct involving state or local bribery or fraud relating to federal, state, or local funds.”
Principal Deputy Assistant Attorney General Nicole M. Argentieri’s remarks last week provided an important window into how DOJ sees the interrelationship between the individual whistleblower and corporate voluntary self-disclosure policies—as two sides of the same coin. As Argentieri explained:
We understand that when companies are deciding whether to make a voluntary self-disclosure, they assess not only the benefits of self-reporting under our policies, but also the risk that the department will learn about the misconduct from other sources. The department is upping the ante in that calculus by increasing the incentives for others to come forward. We know from our own experience—and from the experiences of our regulatory partners—that whistleblowers are key to uncovering corporate crime.
DOJ’s message to companies is clear: Uncover and report your own corporate wrongdoing to DOJ before DOJ finds out about it, and with these new programs, DOJ is increasing the likelihood that it will find out about corporate wrongdoing through other channels if companies do not uncover it and self-report.
Reiterating that message on Tuesday, Argentieri referenced the new whistleblower program again while talking about DOJ’s recently updated Evaluation of Corporate Compliance Programs guidance during the 23rd Annual Compliance & Ethics Institute.
DOJ’s new programs offer multiple additional channels for employees to take complaints to the government. This presents challenges to companies, even those with robust internal compliance programs with effective channels for reporting potential misconduct. These policies increase the risk that companies will have to respond to DOJ inquiries into allegations, including non-meritorious allegations or those that have already been handled appropriately internally.
Companies without strong compliance programs are particularly likely to face challenges. In many instances, DOJ investigations begin when whistleblowers do not feel that they have adequate internal channels in which they can report what they believe to be wrongdoing. Companies without strong compliance programs may be more likely to be surprised by DOJ investigations into such conduct.
All corporations, and especially those whose activities implicate the four priority areas, should take the time to review their existing compliance programs, and especially their internal reporting channels and procedures. DOJ’s policies expressly reward corporations with effective compliance programs and the individual employees who utilize them. The best way to get out in front of a whistleblower taking a complaint to DOJ (or another federal agency) is to encourage that person to report it internally first, and then to investigate the facts and take appropriate action, including possible voluntary self-disclosure.