On December 6, 2021, the Biden administration declared the fight against corruption a core U.S. national security interest. A part of the administration’s “Strategy on Countering Corruption” was the establishment of the “pilot Kleptocracy Asset Recovery Rewards Program,” which was designed to “enhance the U.S. Government’s ability to identify and recover stolen assets linked to foreign government corruption held at U.S. financial institutions.” This Program is especially important given that sanctions against Russian Oligarchs have been one of the main methods of support for Ukraine in their fight against the war of aggression by Russia. While it serves an important purpose, this Program is woefully inadequate as it is non-responsive, does not sufficiently guarantee whistleblowers anonymity and confidentiality, and has no guarantees of funding for whistleblower awards.

Our firm, Kohn, Kohn & Colapinto, LLP, has reached out to the Kleptocracy Asset Recovery Rewards Program for confirmation on how to file with the program, guarantees for anonymity and confidentiality of whistleblowers, clarification as to whom the information should be addressed, and what form the information would best be provided. A Kohn, Kohn & Colapinto LLP employee has reached out to the Kleptocracy Asset Recovery Rewards Program through the email, , and phone number, +1- 202-622-2050, provided on their webpage a total of six times since October 2022. There has been no response. These unanswered questions need to be addressed before we would ever consider filing with the program in order to guarantee the safety and security of our clients. This lack of response from the program also suggests understaffing, again undermining the confidence necessary to file incredibly sensitive information on Russian Oligarch assets.

Guarantees of anonymity and confidentiality are essential for the success of any whistleblower program. Anonymity and confidentiality are a fundamental protection for whistleblowers, who risk their safety by reporting violations to whistleblower programs. The law that established the Kleptocracy Asset Recovery Rewards Program provides NO guarantees of anonymity or confidentiality for whistleblowers, except by allowing the Secretary to determine if it is necessary when paying rewards. The web page for the Program provides the empty promise of strict confidentiality for the information received and the identity of the person who supplied it, but gives no statute or regulation on which to base this guarantee, beyond “[c]onsistent with applicable law,” of which there is none that is sufficient. Specific, enforceable, and codified guarantees are needed for this Program, and any whistleblower program, before whistleblowers will rightly feel safe enough to use them. Many of the whistleblowers who use this program will be in foreign nations and within the power circles that they are exposing, putting them directly at extreme risk for their whistleblowing.

The rewards in a whistleblower program must be reliable and consistent in order to serve as an incentive for whistleblowers. Whistleblowers have enough uncertainty, and whether or not there will be funding for their rewards should not add to this. Reliable funding for rewards is provided to other whistleblower programs through the use of a revolving fund, including in the SEC Whistleblower Program, CFTC Whistleblower Program, and the newly empowered AML Whistleblower Program. In these instances, the funds collected as sanctions go, in part, towards rewarding the whistleblower. No funds directly coming from taxpayers will ever end up in their pockets. The Kleptocracy Asset Recovery Rewards Program instead requires a Congressional appropriation for each whistleblower award. The requirement for a Congressional appropriation makes the possibility of an award a mere fantasy, as there has never been a specific Congressional appropriation for a whistleblower reward. The closest that Congress has ever come to a whistleblower award appropriation was in July 1778 during the time of the Continental Congress in order to pay whistleblowers’ attorney’s fees. The Program also provides no statutory minimum amount for rewards, only a statutory maximum amount, meaning the award can be as low as nothing if Congress is feeling thrifty. These issues create an award system that is an empty promise rather than a true incentive for whistleblowers.

In order for the Kleptocracy Asset Recovery Reward Program to become an effective and functional whistleblower program, and a tool that can make a true difference for those in Ukraine by targeting the assets of the corrupt aggressors, it must first resolve the issues described above. The Program must be responsive to inquiries. Whistleblowers must be statutorily guaranteed anonymity and confidentiality for their own safety. Rewards must be reliable and consistent rather than a mere possibility for whistleblowers putting their lives and safety at risk.