Deputy Assistant Attorney General Lisa O. Monaco gave the keynote speech at the recent ABA Annual White Collar Institute, and announced a new DOJ Program to incentivize individuals with knowledge of corporate financial crimes to come forward.  Video here; Print copy here. Currently, the DOJ is authorized to pay awards for information or assistance leading to civil or criminal forfeitures. But, DAGG Monaco said, “In the past, we’ve used this authority here and there — but never as part of a targeted program.” The targeted program is in the works:  Today [March 7, 2024], we’re launching a 90-day sprint to develop and implement a pilot program, with a formal start date later this year.”

There are numerous whistleblower programs already available but they are limited in scope.  The  SEC, IRS, CFTC and other agencies have had very successful whistleblower program but the incentives only apply to conduct within their jurisdiction.  And qui tam actions are limited to exposing fraud against government.  The new whistleblower program is intended to fill in the gaps.

While the program is in the developmental stage, there are a least four conditions that will apply.  A whistleblower monetary award will be available:

  • 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.

And the key condition is: “To be eligible for a reward, you have to tell us something we didn’t already know. You have to be the first in the door.”

Antitrust Division, Please Get a Seat at the Table

Deputy Attorney General Monaco noted a few areas in particular where the DOJ hoped the new whistleblower program could be applied:

  • Criminal abuses of the US financial system;
  • Foreign corruption cases outside the jurisdiction of the SEC;
  • Violations of the recently enacted Foreign Extortion Prevention Act, which targets foreign officials on the “demand” side of foreign bribery cases;
  •  Domestic corruption cases, especially involving illegal corporate payments to US government officials.

While the list was not meant to be exhaustive, it’s unfortunate that criminal antitrust violations were not mentioned.  The Sherman Act was passed in 1890 so it is the longest running criminal enforcement program that has “fallen through the cracks” of whistleblower programs.

Sherman Act enforcement is eligible to be addressed in the new whistleblower program.  DOJ’s statutory authority is tied to the department’s forfeiture program. Forfeiture is a remedy for antitrust violations. 15 U.S. Code § 6. For example, a 1992 case against Salomon Brothers Inc. was settled with a $27.8 million forfeiture penalty for charges it violated antitrust laws by coordinating the auction of U.S. Treasury notes. (here).

Establish an Office of Whistleblower or Special Counsel: Whistleblowers

Given the focus of the Biden administration on antitrust enforcement, the Antitrust Division should be exploring ways to implement the new whistleblower program to ramp up its criminal enforcement program. In his recent State of the Union speech, President Biden, referring to the newly formed Antitrust Division/FTC  [“Strike Force on Unfair and Illegal Pricing”], said, “We’re cracking down on corporations that engage in price gouging or deceptive pricing from food to health care to housing.”  Hopefully, part of that crackdown will be exploring ways the Antitrust Division can participate in the DOJ Pilot Whistleblower Program. 

There are opportunities and obstacles to establishing a program for cartel whistleblowers. 

Price fixing/bid rigging cartels generally have a large pool of potential whistleblowers but the pilot program will exclude “only those not involved in the criminal conduct itself.”  To attract cartel whistleblowers, that will need some clarification.  The scope of who is a conspirator in a  price fixing cartel is wide.  Anyone with knowledge of the agreement and then carries out an act in furtherance of the agreement is a coconspirator.  A salesperson who quotes a price to a customer, knowing his company is part of a cartel, is in theory a coconspirator.  But that level of employee would almost certainly be immunized by the Antitrust Division because of the extremely low level of potential culpability.  But even if this type of person is excluded from the whistleblower program, it would still behoove the Antitrust Division to create an “Office of the Whistleblower” or some other outreach to let people know they may be eligible for a monetary award for coming forward [if the Pilot Program includes antitrust].  At times, clerical staff or even customers may know of a cartel but the cost of coming forward have seemingly outweighed the benefits.  A monetary whistleblower award may change that calculus, at least in limited circumstances.  A Special Counsel for Whistleblowers may also encourage meritorious qui tam suits where the government is defrauded.  An Office of the Whistleblower may be a modest start without further development, but it would be a start. And exploring ways the Division can participate in the DOJ Pilot program would be a first concrete step. 

Even a modestly successful Pilot Program may lead to unleashing full power of whistleblower rewards for criminal antitrust violations with full statutory schemes like the ones the SEC, and other financial fraud agencies are benefiting from. A full range of potential rewards  is needed to offset the enormous time and expense a whistleblower may face in cooperating with the Antitrust Division in a cartel investigation.  (Not a knock on the Antitrust Division; just the reality of lengthy investigations in sometimes complex industries).  All the more reason to participate in the DOJ Pilot Whistleblower Program and see what the realities are in attracting cartel whistleblowers. 

For a look into the obstacles a potential criminal antitrust whistleblower faces see: 

A Practical Look at Why A Criminal Antitrust Whistleblower Statute is Needed: Cartel Capers, March 28, 2023

Below are a few other articles/posts I’ve written in support of a criminal antitrust whistleblower program:

It’s A Crime There Isn’t a Criminal Antitrust Whistleblower Statute, Cartel Capers, April 9, 2018

It’s Time for a Criminal Antitrust Whistleblower  Statute (Part 1), Cartel Capers, October 30, 2017

Thanks for reading.  bob@reconnollylaw.com