Earlier this month, the United States Attorney’s Office for the Southern District of New York announced a Whistleblower Pilot Program as a tool to “enhance” their enforcement efforts. The program offers non-prosecution agreements in exchange for voluntary self-disclosure of criminal conduct by participants in non-violent offenses. Individuals considering blowing the whistle may be better served elsewhere, given the Department of Justice’s (DOJ) poor record on whistleblower issues and the protective provisions offered in whistleblower award programs.
Through the program, individuals who self-disclose and cooperate should be able to enter into a non-prosecution agreement, specifically when the government “was not previously aware of the criminal conduct that is the subject of the disclosure.” SDNY believes that in clarifying the requirements and the benefits of self-disclosure, individuals will be incentivized to provide “actionable and timely information.” Notably, the DOJ will not be offering awards to whistleblowers, which is an incentive for self-reporting in other programs.
Leading whistleblower law experts urge potential whistleblowers to proceed with extreme caution. “Our experience with DOJ has been mixed,” says whistleblower attorney Stephen M. Kohn, who has represented whistleblowers for decades. “Many DOJ agents and prosecutors understand whistleblowers and their importance,” Kohn said. “They do a great job working closely with whistleblowers as valuable informants. But others do not.”
Outside of representing the United States in False Claims Act cases, the DOJ has no whistleblower office, program, or mode to accept confidential and anonymous whistleblower tips, violating the Anti-Money Laundering Whistleblower Improvement Act.
Contradicting the promises and effectiveness of this new “Whistleblower Program,” the DOJ has a record of indicting and aggressively prosecuting highly qualified whistleblowers, even those who have been recognized by other federal agencies for their contributions combatting corruption and crime. Such behavior has occurred in New York’s Southern District, where the program is being launched.
Kohn warns, “Until DOJ has an agency-wide whistleblower program that implements the laws and policies behind the numerous whistleblower laws, communications with the DOJ must be approached with caution, given their history.”
Whistleblower advocates advise potential whistleblowers in search of reporting avenues to instead consider filing claims under the anonymous and confidential whistleblower programs run by the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and FinCEN. While not anonymous, the Internal Revenue Service (IRS) whistleblower program offers strict confidentiality to whistleblowers.
These transnational programs cover individuals who voluntarily report original information, including whistleblowers who have taken part in the illegal conduct they report. Many whistleblowers remain employed where the illegal activity took place while reporting back to the appropriate agency as the investigation develops.
These offices have welcomed and worked with whistleblowers, offering financial rewards for the role their information plays in an enforcement action. Under the SEC Whistleblower Program, for example, if tips lead to a successful enforcement action, the whistleblower can receive 10-30% of the collected monies. The SEC program has created clear protections and financial incentives for reporting foreign corruption and securities fraud.
“When possible, whistleblowers should file claims within established whistleblower programs that provide protection and compensation when a tip is investigated. It is advisable to seek confidential informant status for the whistleblower and, if necessary, negotiate a non-prosecution agreement,” Kohn concluded.
