DOJ Whistleblower Rewards to Target Foreign Corruption Tips

An upcoming pilot to pay whistleblowers will be focused on encouraging international corruption tips, the Justice Department’s criminal chief said Friday.

“We believe that we can make the greatest impact by offering financial incentives to disclose misconduct in areas where no such incentives currently exist,” said Nicole Argentieri, the Criminal Division’s acting assistant attorney general at a legal conference. “For example, we anticipate that the program could prove especially useful in developing foreign corruption cases that are outside the jurisdiction of the SEC, including FCPA violations by non-issuers.”

Her remarks were intended to flesh out the parameters of a program announced Thursday by Deputy Attorney General Lisa Monaco with potentially significant ramifications for how federal prosecutors pursue white-collar crime and how corporate defense attorneys assess their exposure.

Under an initiative that’s still in development and is slated to take effect later this year, the department will be able to award non-culpable whistleblowers who deliver tips on financial misconduct, overseas bribery, and other corporate fraud. Their compensation will come out of any criminal or civil forfeiture that results from their information.

DOJ’s goal is to close the gaps from existing whistleblower incentives offered at the Securities and Exchange Commission, Commodity Futures Trading Commission, and other agencies.

Argentieri said her ability to detail the program was limited ahead of the department’s 90-day “policy sprint” to gather information and build out a policy, but she previewed an expected monetary threshold in the resulting forfeitures from the tips, below which an individual wouldn’t be eligible for the program. That will be designed to ensure the department is focusing resources on the most important cases.

DOJ’s money laundering and assets recovery section will play a lead role in designing the whistleblower guidelines, including program eligibility, along with US attorneys’ offices and the FBI, she said. That’s because the money laundering office already has experience administering an assets forfeiture program under which DOJ has statutory authority to pay people for tips.

“We will only provide rewards to whistleblowers who submit original, non-public, truthful information not already known to the department, and only when that information is provided voluntarily and not in response to any government inquiry, preexisting reporting obligation, or imminent threat of disclosure,” Argentieri added during a keynote speech at the American Bar Association white-collar crime conference.

In a further update to foreign bribery enforcement, Argentieri also shared how DOJ plans to give teeth to the recently-enacted Foreign Extortion Prevention Act, which criminalizes the act of overseas officials requesting bribes.

Enforcement will be led by the criminal fraud section, which will have primary jurisdiction while coordinating cases with US attorney’s offices, the same way the department investigates and prosecutes the Foreign Corrupt Practices Act, said Argentieri.

This update has been codified in the Justice Manual guidelines for prosecutors.