DOJ Unveils New Corporate Whistleblower Awards Pilot Program

On August 1, 2024, Principal Deputy Assistant Attorney General Nicole M. Argentieri announced the launch of the Department of Justice ("DOJ") Corporate Whistleblower Awards Pilot Program.[1] The announcement was the culmination of the previously announced DOJ "sprint" to develop a pilot program that would address gaps in existing whistleblower initiatives at other enforcement agencies.[2] It is the latest in a series of Biden administration DOJ efforts aimed at incentivizing prompt and thorough self-reporting.

Under the pilot program, individuals who alert DOJ to significant corporate misconduct could be awarded a portion of any resulting forfeiture over $1 million.[3] The program covers four areas of corporate crime, all of which Argentieri emphasized as priorities for DOJ's Criminal Division and none of which fall under existing whistleblower programs:

• Foreign corruption cases outside the jurisdiction of the Securities and Exchange Commission ("SEC"), with an emphasis on the Foreign Extortion Prevention Act;
• Crimes involving financial institutions, such as cases involving obstruction or defrauding of financial regulators;
• Domestic corruption cases, especially those involving corporate bribery of government officials; and
• Health care fraud involving private insurers.

Along with the launch of the whistleblower program, Argentieri announced an amendment to DOJ's Corporate Enforcement Program ("CEP") and Voluntary Self-Disclosure Program ("VSD"). In 2023, DOJ revised the CEP with an emphasis on voluntary self-disclosure and announced the VSD to further incentivize self-reporting and cooperation.[4] Under the VSD, companies that make qualifying voluntary self-disclosures of misconduct and satisfy the policy's other requirements (i.e., cooperation, remediation, and absence of aggravating factors) are eligible for significant lenience.

Under the newly announced amendment to these programs, companies that receive an internal whistleblower report and share the misconduct with DOJ within 120 days will be eligible for a presumption of criminal declination. Consistent with other VSD expectations, a company will only qualify for this treatment if they report the internal whistleblower report before DOJ contacts them, and if the company fully cooperates and remediates.

Some U.S. Attorney's Offices ("USAO") have announced similar programs in recent months. U.S. Attorneys Damian Williams in the Southern District of New York and Ismail Ramsey in the Northern District of California launched whistleblower initiatives for their respective offices, encouraging individuals to come forward with actionable information about non-violent crimes.[5] These USAO programs offer a non-monetary incentive for whistleblowing by participants in criminal activity: the possibility of a non-prosecution agreement. By contrast, the DOJ pilot program offers a financial award to whistleblowers who did not meaningfully participate in the reported criminal misconduct and reserves consideration of a non-prosecution agreement for individuals "who face criminal liability for their actions."[6]

Although DOJ's whistleblower program is new, it is a variation on a theme DOJ leadership has been sounding for years: incentivizing self-reporting by companies and corporate insiders. The SEC's longstanding whistleblower program has a demonstrated track record of driving results; in 2023, the SEC received a record number of whistleblower tips and issued a record amount in whistleblower awards.[7] With DOJ seeking to leverage similar financial incentives, companies should be attentive to their internal whistleblower procedures and proactive in preventing, detecting, and remediating potential misconduct.

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