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James Tillen and Daniel Patrick Wendt Discuss DOJ Pilot Whistleblower Program in Anti-Corruption Report

"The DOJ Announces Intention to Launch Whistleblower Program: What Will It Look Like?"

Anti-Corruption Report

James Tillen and Daniel Patrick Wendt discuss how a new U.S. Department of Justice (DOJ) pilot whistleblower program will work at the governmental level in the first article of a two-part series by the Anti-Corruption Report. The DOJ is intending to cast a wide net and encourage whistleblowing relating to any non-issuer, whether U.S. or foreign, according to Tillen. "Foreign companies may raise more jurisdictional challenges, but the DOJ will want the opportunity to investigate any U.S. nexus." The DOJ is not seeking congressional approval for new powers, as the program is merely a use of its existing statutory powers. Principal Deputy Assistant Attorney General Nicole Argentieri explained that Title 28 of the U.S. Code authorizes the Attorney General (AG) to pay awards for "information or assistance leading to civil or criminal forfeitures." Notably, however, the U.S. Code section in question restricts awards to "the lesser of $500,000 or one-fourth of the amount realized by the United States from the property forfeited," Tillen noted. It specifies that any higher amount would require personal approval by the AG and written notice to certain congressional committee members. Tillen identified this as a direct quote from 28 U.S.C. § 524 (c)(1)(C). "Therefore, the payouts for whistleblowers will be substantially less than the payouts available under the SEC's program, both because of these limitations and because the starting point is only the forfeiture amount and not the total award," Tillen warned. However, the DOJ has secured significant forfeiture amounts recently, so awards could still be significant. Based on the number of reports the SEC receives – over 18,000 in fiscal year 2023 – and the possibility the DOJ could receive comparable numbers, having a dedicated team will likely be necessary to manage the program, Tillen said. "It is also important to have a centralized team to ensure consistency in determining eligibility, amount of payouts, and other aspects of the program."

Wendt observed that the primary target for the new DOJ pilot program is likely private companies based in the U.S, "especially with private ownership for large, multinational enterprises." However, it seems realistic that the program will also target companies based outside the U.S. "This may also increase the opportunities for the DOJ to cooperate with other enforcement agencies across the globe, another DOJ priority." While the Money Laundering and Asset Recovery Section (MLARS) is a different part of DOJ's Criminal Division from the Foreign Corrupt Practices Act (FCPA) Unit, there is increasing coordination between the two on several fronts, Wendt observed. For example, attorneys from the FCPA Unit have been appearing in the DOJ's money laundering prosecutions, where the underlying conduct is related to bribery but, technically, an FCPA count is not included. "This coordination makes sense given the overlap between international bribery and money laundering."