Compliance Today (August 2024)
By the time you read this, a new U.S. Department of Justice (DOJ) pilot program providing financial rewards to whistleblowers may already be underway. As I write this in late May, DOJ is in the midst of what is called a 90-day “sprint” towards developing all the parameters of the program announced by Deputy Attorney General Lisa Monaco on March 7.[1]
This pilot program, which will launch later this year, will be separate from the Voluntary Self Disclosure for Individuals pilot that began in April, which is designed for individuals with criminal exposure to come forward with the potential incentive of a non-prosecution agreement.
Here’s what we know and how compliance professionals should receive it. The goal of this program is to fill in the gaps, not to overlap or conflict with existing government programs involving financial incentives for reporting suspected violations of the law, including qui tam reporting. So, the full scope of laws the program applies is currently being evaluated. However, some examples where it could apply are Foreign Corrupt Practices Act violations by entities that are not publicly traded companies (meaning, outside the jurisdiction of the U.S. Securities and Exchange Commission), domestic corruption cases, and certain abuses of the U.S. financial system. Since many compliance issues in the healthcare sector are covered within other reporting channels, the extent of its applicability to healthcare entities remains to be seen. But, for offenses covered under this pilot program, whistleblowers will be eligible to receive a financial reward from recovered proceeds after any victims are compensated.
My biggest concern—which is not clear from DOJ’s initial announcements—is whether DOJ’s system will require whistleblowers to report their concerns internally first to the compliance program. DOJ’s Evaluation of Corporate Compliance Programs guidance emphasizes the importance of an internal reporting system that results in internal investigations into suspected wrongdoing, ultimately leading up to the possibility of the organization self-reporting its violations to the government.[2] The potential for a financial reward from DOJ—without allowing the compliance program to have the first chance to investigate—runs counter to the logic in DOJ’s program evaluation guidance and could undermine much of what compliance professionals are trying to do. So, hopefully, this issue will be addressed when the details of the pilot program are unveiled.
Regardless of what the final details are, there is a significant implication for compliance professionals. As self-disclosure and whistleblower reporting channels expand, providing people with even more options for reporting, the pressures on our internal systems increase. From intake and anti-retaliation measures up through investigating, disciplinary actions, and remediation of controls, building trust in our entire reporting cycle has never been more important.
1 U.S. Department of Justice, Office of Public Affairs, “Deputy Attorney General Lisa Monaco Delivers Keynote Remarks at the American Bar Association’s 39th National Institute on White Collar Crime,” speech, March 7, 2024, https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-monaco-delivers-keynote-remarks-american-bar-associations.
2 U.S. Department of Justice, Criminal Division, Evaluation of Corporate Compliance Programs, updated March 2023, https://www.justice.gov/criminal/criminal-fraud/page/file/937501/dl.
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