DOJ Corporate Whistleblower Awards Pilot Program: An Overview
On August 1, 2024 the U.S. Department of Justice announced regulations for a new corporate whistleblower award program. Although the new corporate program can pay qualified whistleblowers an award, the program has numerous problems and shortcomings that will undermine its effectiveness.
Updated
August 3, 2024
On August 1, 2024 the U.S. Department of Justice announced regulations for a new corporate whistleblower award program.
Although the new corporate program can pay qualified whistleblowers an award, the program has numerous problems and shortcomings that will undermine its effectiveness. The most serious shortcoming is that the amount of awards is capped, and the Justice Department maintains the discretion to deny awards to fully qualified whistleblowers. DOJ can deny the payment of an award for any reason or no reason, and there is no judicial review if an otherwise meritorious claim is denied.
The DOJ Whistleblower Program will offer monetary awards to individuals who voluntarily provide the DOJ with original information about “significant corporate or financial misconduct” that is under the jurisdiction of the DOJ and not covered by other whistleblower award programs.
Kohn, Kohn, and Colapinto issued a release on August 1st explaining some of these defects.
What Types of Violations Does the DOJ Whistleblower Program Cover?
The DOJ Whistleblower Program will accept information on violations of federal laws under the jurisdiction of the DOJ and not covered under other whistleblower award programs. In particular, the program is meant to gather information about financial and corporate misconduct.
Specific areas which have been highlighted by the DOJ include:
- Criminal abuses of the U.S. financial system;
- Foreign corruption cases outside the jurisdiction of the SEC, including FCPA violations by non-issuers and violations of the recently enacted Foreign Extortion Prevention Act;
- Health care cases that fall outside of the scope of the False Claims Act; and
- Domestic corruption cases, especially involving illegal corporate payments to government officials.
Can I Blow the Whistle Anonymously Under the DOJ Whistleblower Program?
The DOJ program permits anonymous filing, but the Justice Department maintains broad discretion to waive anonymity when the department deems that is necessary.
Does the DOJ Whistleblower Program Provide Awards?
Yes, the DOJ Whistleblower Program will offer monetary awards to qualified whistleblowers. Under Title 28 of the U.S. Code, the Attorney General is authorized to pay awards for “information or assistance leading to civil or criminal forfeitures.”
However, all awards are paid at the discretion of the Justice Department, and there is no judicial review if an award is denied. In other words, fully qualified whistleblowers can be denied an award for any reason or no reason, and there is no appeal of such an abusive denial.
This is unlike other highly succesul award laws, such as the Dodd-Frank Act, that guarantee that qualified whistleblowers receive awards of 10-30% of the funds collected in the action connected with their disclosure.
How Do I Qualify for an Award Under the DOJ Whistleblower Program?
The DOJ has yet to announce specific eligibility requirements for whistleblowers. However, officials have outlined some preliminary requirements:
- Individuals must make their disclosure to the DOJ “voluntarily and not in response to any government inquiry, preexisting reporting obligation, or imminent threat of disclosure”
- The information provided must be “original, non-public, truthful” and not already known by the DOJ
- The information must contribute to the success of an enforcement action where sanctions or asset forfeitures of over $1 million are obtained.
- The misconduct must not be covered under an existing whistleblower award law
With few exceptions, whistleblowers who participated in misconduct will be excluded. This is in direct conflict with the provisions of Dodd-Frank, the False Claims Act, and the Anti-Money Laundering Whistleblower Enhancement Act, all of which permit participants in a fraud to obtain an award, provided that they are not convicted of a crime associated with the fraud they reported.
How Do I Blow the Whistle under the DOJ Whistleblower Program
The DOJ has established a Whistleblower Office, and award applications and claims must be filed with that office. Before contacting the DOJ, individuals should consult with an experienced whistleblower attorney to ensure that their disclosure is made to the proper authority in the safest manner possible.
Are There Better Alternatives to the New DOJ Program?
Given the fact that the new DOJ law is weak and highly problematic, whistleblowers need to determine whether their information should be filed under another law, such as the False Claims Act, Anti-Money Laundering Whistleblower Protection Act, Foreign Corrupt Practices Act, IRS whistleblower law, Dodd-Frank Act, the Securities and Exchange Act or the Commodity Exchange Act.
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