While most legal conferences may not be newsworthy, the American Bar Association’s National Institute on White Collar Crime is an exception. Indeed, the federal government’s chief law enforcers seem to treat this particular conference like tech companies treat industry conventions or product launches: a one-stop press tour/coming-out party held to unveil their next big initiative or program in the presence of hundreds of eager and invested onlookers. In this case, though, the onlookers just happen to be members of the national white collar defense bar.
In recent years, the Department of Justice (DOJ) has often used this conference as a venue to announce new initiatives and pilot programs affecting white collar defendants and corporations. For example, at the last iteration of this conference—held last March in Miami—Deputy Attorney General Lisa Monaco announced a pilot program to incentivize corporate self-disclosure as well as claw backs for executive compensation. Since that conference and Monaco’s speech, discussion about the program has proliferated in the white collar world (including at this year’s conference), and we have seen several successful examples of corporate self-disclosure that evidence the program’s impact.
This year was no different. On March 8, 2024, at the ABA’s National Institute on White Collar Crime in San Francisco, Ms. Monaco announced a pilot program to financially reward – and thus incentivize – whistleblowers who alert prosecutors to unknown corporate misconduct by giving them a cut of the forfeiture money.
Compensating whistleblowers is not new to the federal government—there are already federal laws and policies that compensate whistleblowers in the SEC, CFTC, IRS, and FinCEN. But this is the first time that the DOJ will attempt to reward whistleblowers using money forfeited in criminal actions. Since the SEC already incentivizes whistleblowers to report on publicly traded companies, the DOJ’s new program is likely to affect private companies the most.
While this may net the DOJ more cases reported by whistleblowers, the benefits come at a cost. The government is required to disclose information that affects a witnesses’ credibility, such as plea agreements. In light of this new program, the government likely will be required to disclose whether the whistleblower witness is expecting a payout from the government, thus subjecting that witness to cross-examination.
Details about the pilot program are forthcoming. But there are numerous questions on the mind of every would-be whistleblower and his or her attorney: what is the forfeiture threshold required to qualify for the program? What percentage of the forfeiture money is at stake? How does the government calculate that percentage? And who gets to determine how much?
