Recently, DOJ officials announced a new upcoming whistleblower program (see here and here for prior posts).
This post ponders a few questions about how the whistleblower program will actually work in connection with Foreign Corrupt Practices Act and Foreign Extortion Prevention Act enforcement actions – two areas in which DOJ officials have said they are “especially interested” in receiving information about.
In pertinent part, Deputy Attorney General Lisa Monaco stated:
“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.
Over the next several months, we’ll fill out the particulars […] But we’ve already established some basic guardrails. For example, we’d offer payments:
- 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.
[…]
While we’ll always accept information about violations of any federal law, we’re especially interested in information about:
Criminal abuses of the U.S. financial system; Foreign corruption cases outside the jurisdiction of the SEC, including FCPA violations by non-issuers and violations of the recently enacted Foreign Extortion Prevention Act; and Domestic corruption cases, especially involving illegal corporate payments to government officials.
Likewise, Acting Assistant Attorney General Nicole Argentieri stated:
“[W]e believe that we can make the greatest impact by offering financial incentives to disclose misconduct in areas where no such incentives currently exist. 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.”
Argentieri added:
“In addition, both the SEC and CFTC whistleblower programs limit rewards to cases in which the agency orders sanctions of $1 million or more. We expect to also establish some sort of monetary threshold, as a way of focusing our resources on the most significant cases. We look forward to receiving input about what the proper threshold should be.”
As indicated above, one of the “basic guardrails” for the DOJ to offer payments to a whistleblower is that “only after all victims have been properly compensated.”
What is interesting with this “guardrail” is that the U.S. government – in previous legal settings – has acknowledged that “there really is no obvious universe of individual victims from an FCPA violation.” (See here for the prior post).
Also relevant is that the DOJ maintains a Victim Notification Program and is “committed to ensuring that victims of federal crime are treated with dignity, fairness and respect throughout their involvement in the federal criminal justice system, and that they receive the rights and services to which they are entitled under federal law.”
According to the DOJ:
“One of the ways that the Criminal Division achieves this goal is through the Victim Notification System (VNS), which provides free automated electronic and written notification to victims of federal crime regarding the status of their cases. The Criminal Division works with the United States Attorney’s Offices in implementing VNS and addressing the needs of crime victims during the prosecution stage of the federal court process. In a small number of criminal cases prosecuted by the Criminal Division in Washington, D.C. it will not be possible or practical to use VNS; those cases will be listed under Pending Criminal Division Cases …”.
The Pending Criminal Division Cases on the DOJ’s website lists approximately 100 enforcement actions.
However, no FCPA enforcement actions are listed.
(Technically, the Deutsche Bank enforcement action is listed but the page states: On January 8, 2021, Deutsche Bank Aktiengesellshaft (Deutsche Bank), a multinational financial services company headquartered in Frankfurt, Germany, entered into a deferred prosecution agreement (DPA) with the Department of Justice and agreed to pay more than $120 million to resolve the government’s investigation into violations of the Foreign Corrupt Practices Act (FCPA) and a separate investigation into a commodities scheme. The information contained on this webpage is solely regarding the commodities aspect of the case.)
The DOJ also maintains a Closed Criminal Division Cases page on its website which lists approximately 125 enforcement actions.
However, no FCPA enforcement actions are listed.
As indicated above, the DOJ is also “especially interested in information about … foreign corruption cases outside of the jurisdiction of the SEC” including “violations of the recently enacted Foreign Extortion Prevention Act.”
Unlike FCPA enforcement which largely targets business entities who often roll over and play dead for reasons of risk aversion when the target of FCPA scrutiny, FEPA generally targets individuals who demand or receive “bribes.” Jurisdictional issues aside regarding FEPA enforcement, how many FEPA enforcement actions will actually result in “sanctions of $1 million or more” (the monetary threshold that the DOJ has identified – at least at this point)?
