On August 1, 2024, Deputy Attorney General Lisa Monaco introduced the Department of Justice Criminal Division's Whistleblower Awards Pilot Program. Under the pilot program, if a whistleblower provides the Criminal Division with original and truthful information about corporate misconduct that results in a successful civil or criminal forfeiture, then the whistleblower may be eligible to receive an award consisting of a percentage of the forfeited assets.
Whistleblower Benefits
To be eligible, the whistleblower's information must relate to one of the following areas:
- Certain crimes involving financial institutions, such as money-laundering schemes;
- Foreign corruption involving misconduct by companies;
- Domestic corruption involving misconduct by companies; or
- Healthcare fraud schemes involving private insurance plans.
The information the whistleblower provides must be "original," meaning the Criminal Division cannot already know the information the whistleblower seeks to report. Deputy Attorney General Monaco explains that to be eligible for the most significant benefits, the whistleblower has to tell the Criminal Division "something [they] didn't already know" and the whistleblower "need[s] to be first in the door."
Taking Advantage of the Presumption of a Declination
The pilot program provides that companies that voluntarily self-report within 120 days of receiving an internal whistleblower report, and do so before the Criminal Division contacts the company about the misconduct, may be eligible for a presumption of a declination under the Criminal Division's corporate and voluntary self-disclosure policy. Deputy Attorney General Monaco has touted this pilot program as a "powerful" investigative tool that will uncover any misconduct a company does not voluntarily report and will "fill the gaps" in other whistleblower programs' reach and scope.
Implications for Company Policies and Procedures
As the Department of Justice continues to sharpen its arsenal of investigative tools to prosecute companies and individuals for misconduct, companies should continue to "invest in compliance and build a culture of responsible corporate citizenship" to prevent government intervention, Monaco said. To start, companies should consider reviewing their whistleblower policies and procedures:
Enhance Internal Reporting Mechanisms
Ensure that all internal reporting mechanisms are robust, user-friendly and well publicized to encourage employees to report any misconduct internally first.
Strengthen Protection Against Retaliation
Reinforce all anti-retaliation policies to protect whistleblowers from any form of retaliation and create a safe environment for them to come forward.
Improve Response Protocols
Develop clear and efficient procedures for promptly investigating and addressing whistleblower reports. This includes establishing a dedicated team or appointing a responsible officer to oversee whistleblower complaints.
Training and Awareness Programs
Conduct regular training sessions to educate employees about the importance of internal reporting, the protections available to them and the pilot program's features.
Document and Report
Maintain thorough documentation of all internal reports and the steps taken in response. Ensure that in the event any potential misconduct is reported to the Criminal Division, it is done so within the 120-day window to benefit from the presumption of declination.
Questions to Consider
In light of the pilot program, consider the following questions in order to assess the company's readiness and to make necessary adjustments:
Internal Reporting Systems
- Are current internal reporting mechanisms effective and easily accessible to all employees?
- How can the visibility and ease of the use of these mechanisms be improved upon?
Anti-Retaliation Policies
- Is there a robust anti-retaliation policy in place?
- How can a company ensure that whistleblowers feel protected and supported?
Response and Investigation Procedures
- Are the existing procedures for investigating whistleblower reports efficient and thorough?
- Who is responsible for overseeing these investigations, and do they have the necessary authority and resources?
Training and Communication
- How often are training sessions on whistleblower policies and protections held?
- Are employees aware of the pilot program and its implications?
Documentation and Reporting
- Is there a system in place to document all internal reports and the actions taken in response?
- If it decides to do so, is the company prepared to report potential misconduct to the Criminal Division within the 120-day window to benefit from the presumption of declination?
We encourage companies to review and update their policies and procedures in light of this new program to ensure compliance and maximize the benefits available.
For More Information
If you have any questions about this Alert, please contact Tarsha A. Phillibert, Eric R. Breslin, Kiana Givpoor, any of the attorneys in our White-Collar Criminal Defense, Corporate Investigations and Regulatory Compliance Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.