The Department of Justice (DOJ) signaled it will soon join the list of government agencies to have implemented a whistleblower rewards program, putting further pressure on companies to have in place an effective compliance and hotline reporting system.
Deputy Attorney General (DAG) Lisa Monaco announced on March 7 at the American Bar Association’s 39th National Institute on White-Collar Crime that the DOJ will develop and implement a whistleblower rewards pilot program within the next 90 days, with a formal start date of later this year.
In her remarks, DAG Monaco highlighted the success of the Securities and Exchange Commission’s and the Commodities Futures Trading Commission’s whistleblower programs, which have “received thousands of tips, paid out many hundreds of millions of dollars, and disgorged billions in ill-gotten gains from corporate bad actors,” she said.
However, the limited scope of those whistleblower programs – and those of the Internal Revenue Service (IRS) and the Financial Crimes Enforcement Network (FinCEN) – means they “only cover misconduct within their agencies’ jurisdictions” and “don’t address the full range of corporate and financial misconduct that the Department prosecutes,” DAG Monaco noted.
The DOJ’s whistleblower rewards program intends to fill those gaps. “In other words, 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 Acting Assistant Attorney General (AAG) Nicole Argentieri in separate remarks the following day.
The guardrails of the DOJ Whistleblower Rewards Program
DAG Monaco shared that the program will have in place “basic guardrails,” which establish that individuals will be eligible for a whistleblower reward:
- Only after all victims have been properly compensated;
- Only to those who submit truthful information not already known to the government;
- Only to those not involved in the criminal activity itself; and
- Only in cases where there isn’t an existing financial disclosure incentive, including qui tam or another federal whistleblower program.
DAG Monaco said the agency is “especially interested” in receiving information about criminal abuses of the U.S. financial system; foreign corruption cases outside the SEC’s jurisdiction, including FCPA violations by non-issuers; and domestic corruption cases, “especially involving illegal corporate payments to government officials.”
“The premise is simple: If an individual helps DOJ discover significant corporate or financial misconduct – otherwise unknown to us – then the individual could qualify to receive a portion of the resulting forfeiture,” DAG Monaco explained.
DAG Monaco said the agency is “especially interested” in receiving information about criminal abuses of the U.S. financial system; foreign corruption cases outside the SEC’s jurisdiction, including FCPA violations by non-issuers; and domestic corruption cases, “especially involving illegal corporate payments to government officials.”
Three core elements of a whistleblowing hotline system
With the implementation of the DOJ’s new whistleblower rewards program, now is an opportune time for companies to review the effectiveness of their compliance and hotline reporting system. NAVEX recommends that an effective whistleblowing hotline system include the following three core elements:
An easy-to-use whistleblowing hotline channel. Making a report is nerve-wracking in its own right, so a hotline channel should not make the process more complicated than it needs to be. This means having a hotline that allows for secure and anonymous reports; enables individuals to report in their native language; and further enables individuals to make a report from any device.
Communication about the whistleblowing hotline channel. Employees should not only be made aware of the company’s whistleblowing hotline channel and its importance but also be educated – through a whistleblower policy and ongoing training – on what to report and not report; where to make a report; how to make a report; to whom to report; and how investigation and escalation procedures work.
A whistleblowing case management tool. Underpinning a truly effective whistleblowing hotline channel is a whistleblowing hotline solution that not only collects and processes whistleblower reports but also allows for reports to be archived and deleted, as necessary, to ensure compliance with various data privacy and data security regulations. At the same time, the solution should enable the business to have monitoring control to prevent any unauthorized individual from accessing the data.
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