The DOJ's Whistleblower Pilot Program Adds Incentives for Robust Corporate Compliance Programs

• The information must be truthful, original and complete. A whistleblower's information must be something that the DOJ does not already know. The DOJ defines "original" information as information that is derived from the individual's independent knowledge or independent analysis of information in the individual's possession that is not derived from public sources. The DOJ also considers information original if it materially adds to information that the Department already has in its possession. Notably, while employees are not required to report internally through a company's internal compliance procedures first, those who choose to do so remain eligible to receive an award as long as they also report their information to the Department with 120 days of reporting it internally.
• The information must be given voluntarily. Whistleblowers must offer the information voluntarily. An individual's submission of information will be considered voluntary: i) if it occurs before any formal request, inquiry or demand is directed to the individual; ii) where the individual has no preexisting obligation to the disclose the information; and iii) in the absence of any government investigation or imminent disclosure to the government or the public.
• The individual must not be eligible for an award under another whistleblower program. Individuals can be ineligible for awards under the Whistleblower Pilot Program if they are eligible for an award under another U.S. government whistleblower, qui tam or similar program had they reported the same information.
• The individual must fully cooperate, and the tip must lead to a successful forfeiture. To be eligible for an award, the whistleblower must fully cooperate with the DOJ and the tip must lead to a successful civil or criminal forfeiture exceeding $1 million in net proceeds forfeited to the Department.
• The individual must have clean hands. A whistleblower is ineligible for an award under the Whistleblower Pilot Program if the individual had any meaningful culpability in the criminal activity or had a management role in overseeing the offices or personnel involved in the misconduct.

Regarding compensation, awards can be up to 30% of the first $100 million of a successful forfeiture and 5% of proceeds between $100 million and $500 million. A "successful forfeiture" is when the Department obtains a final order of forfeiture, a civil judgment of forfeiture or an administrative declaration related to assets obtained and those assets are deposited in the Assets Forfeiture Fund. All awards are issued at the sole discretion of the Department. In deciding the amount of the award, the Department considers various factors, including the significance of the information reported, the whistleblower's participation in internal compliance systems by reporting internally first and the whistleblower's cooperation with law enforcement. In the fact sheet published with the announcement of the Whistleblower Pilot Program, the DOJ also noted that if it learns that any person or entity takes any action to prevent a whistleblower from making a report, the DOJ could open a criminal investigation into obstruction of justice.

The Whistleblower Pilot Program is the latest of a series of new or updated policies announced by the DOJ within the past two years designed to encourage self-disclosure by both individuals and companies. In January 2023, the DOJ announced significant amendments to the Corporate Enforcement Policy, which increased incentives for companies to voluntarily self-disclose misconduct, fully cooperate, and timely and appropriately remediate by broadening the availability of a presumption of declination and reduction of financial penalties. In October 2023, the DOJ announced a Department-wide Mergers and Acquisitions Safe Harbor Policy, which provides a presumption of declination to acquiring companies that voluntarily disclose criminal misconduct discovered at the acquired entity within a safe harbor period, cooperate with an ensuing investigation, and engage in requisite, timely and appropriate remediation. Finally, earlier this year, the DOJ announced a pilot program on voluntary self-disclosure for individuals, under which culpable individuals who fully cooperate and voluntarily provide the Criminal Division with information on certain types of corporate and white-collar offenses may receive a non-prosecution agreement in exchange for their cooperation. Now non-culpable individuals who provide reports of certain corporate misconduct to the DOJ can qualify for substantial financial benefits. The corresponding amendment to the Corporate Enforcement Policy, which gives companies the opportunity to qualify for a presumption of declination so long as they report to the DOJ within 120 days after receiving an internal report and before the DOJ reaches out to them, provides another strong incentive for corporate self-disclosure.