Key Takeaways:

• DOJ’s clear focus on anticorruption efforts and incentivizing case referrals continues with the announcement that the department will be rolling out a new whistleblowing program with references to the program’s applicability to the Foreign Corrupt Practices Act and Foreign Extortion Prevention Act.
• This announcement builds on the recent enactment of the Foreign Extortion Prevention Act, which criminalizes the demand side of bribery and is expected to lead to increased anticorruption enforcement exposure for all companies and individuals, both domestic and abroad.
• Trifecta - Companies now need to be concerned with referrals to DOJ from three sources: foreign officials who get caught, foreign and domestic companies that identify them for cooperation credit, and employees or agents who make a report to the DOJ for a financial reward (whistleblowers).

Building on the recent passage of the Foreign Extortion Prevention Act (FEPA), at the American Bar Association’s 2024 National Institute on White Collar Crime conference in San Francisco earlier this month (2024 ABA Conference), Deputy Attorney General Lisa Monaco announced plans for a new whistleblowing initiative, specifically noting the applicability to efforts by the Department of Justice (DOJ) to fight foreign corruption. Under the program, individuals who provide DOJ with “original, nonpublic, truthful information” about major corporate wrongdoing may be eligible for a cut of any forfeiture proceeds. Employees from finance departments and sales forces in markets around the globe, as well as disgruntled agents and distributors, now have a direct pipeline to DOJ in seeking multimillion-dollar paydays.

The timing of this announcement is notable given FEPA’s recent enactment in December 2023 and the department’s specific references to how this program will aid in its anticorruption efforts. Monaco stated that DOJ will be especially interested in foreign and domestic corruption payments, particularly those to public officials. This is conduct specifically addressed by FEPA, which criminalizes the demand side of bribery by expressly prohibiting the solicitation and acceptance of bribes by foreign government officials and obviously implicates Foreign Corrupt Practices Act (FCPA) enforcement. FEPA expanded the U.S. government’s ability to prosecute foreign corruption, acting as a complement to the decades-old FCPA.

FEPA’s enactment itself increased corruption risks and exposure for U.S. and international companies under both FEPA and FCPA. Adding foreign officials as potential targets gives the government more opportunities develop cooperators who are able to provide information against companies that are offering or paying bribes to officials. FEPA additionally expands the definition of foreign official to include not just those working on behalf of a foreign government in an official capacity but also those working in an unofficial capacity. Moreover, the likelihood of U.S. prosecutors bringing conspiracy and aiding and abetting charges against companies and individuals under FEPA is enhanced by the law’s placement in the domestic bribery statute instead of in Title 15 with the FCPA, further expanding the group of those exposed to potential liability.

As also announced at the 2024 ABA Conference, the Justice Department has implemented a structure for enforcement of FEPA and that like the FCPA, the DOJ Fraud Section will also be responsible for supervising all FEPA investigations and prosecutions. In making this announcement DOJ signaled its intent to investigate aggressively foreign officials for FEPA violations by emphasizing that the DOJ FCPA Unit and Kleptocracy Initiative in MLARS are “very experienced at handling these sensitive matters, having investigated and prosecuted foreign bribery cases spanning the globe, criminal misconduct by foreign officials, and asset forfeiture matters involving money stolen from foreign governments by corrupt officials.”

The whistleblower program being rolled out adds another tool to DOJ’s arsenal and creates even greater potential exposure for U.S. companies and individuals with respect to foreign and domestic corruption. Whistleblower incentive programs have had much success, including the Security and Exchange Commission’s (SEC) whistleblower program, which awarded $600 million and received 18,000 tips in the past fiscal year alone. Although this new DOJ whistleblower program currently does not have mandatory payout requirements and is structurally different than the SEC’s statutorily created whistleblower program, Companies should expect DOJ’s program to have similar success in generating more investigations by DOJ of suspected misconduct.

Between FEPA and the recently announced DOJ whistleblower program, the department has increased its capabilities to generate potential cases in a short time span and has made clear that anticorruption continues to be a major focus. Companies should expect a sharp increase in the number of FEPA and FCPA investigations opened up, aided by increased prosecutorial capabilities and incentives for company employees to come forward with information. With these clear warnings, companies should act now to ensure the adequacy of their anticorruption compliance programs, particularly in light of changes in the legal landscape brought about by FEPA’s enactment. These programs need to identify and catch any issues before DOJ gets a call from someone else. DOJ has made it clear that the lines are open!

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