The Department of Justice (DOJ) recently unveiled the Corporate Whistleblower Awards Pilot Program (CWA) to bolster corporate enforcement efforts. Although the program has only been operational for a few weeks, it has already started receiving promising tips. This initiative reflects a strategic effort by the DOJ to harness financial incentives in the fight against white-collar crime, offering new opportunities for whistleblowers and reshaping the landscape of corporate compliance.
In her recent speech at the Society of Corporate Compliance and Ethics 23rd Annual Compliance & Ethics Institute. Principal Deputy Assistant Attorney General Nicole M. Argentieri spoke about the CWA and reviewed its early developments. (A copy of her remarks can be found here.) There was also updated information on the DOJ approach to whistleblowers and anti-retaliation found in the 2024 Update to the Evaluation of Corporate Compliance Programs (2024 ECCP). This new language found in the 2024 ECCP will be the subject of a separate blog post.
Why Whistleblower Programs Matter
Argentieri noted that whistleblower programs have a proven track record of success. Programs at other agencies, such as the Securities and Exchange Commission (SEC), have led to thousands of tips and hundreds of millions of dollars in awards and have been instrumental in holding wrongdoers accountable. However, these existing programs do not cover the full spectrum of white-collar and corporate crime that the DOJ prosecutes. The CWA was designed to fill these critical gaps.
The CWA targets four priority areas not currently covered by other whistleblower programs: abuses of the financial system by financial institutions and insiders, foreign corruption and bribery schemes, domestic corruption, and health care schemes targeting private insurers. Importantly, the program is not limited to these categories. If a whistleblower has information about misconduct outside of these areas, the DOJ is still interested in hearing from them.
Encouraging Internal Reporting and Enhancing Corporate Compliance
Interestingly, Argentieri believes one of the CWA’s most innovative aspects is its focus on encouraging internal reporting. Whistleblowers who first report internally within their companies will be eligible for an award if they report to the DOJ within 120 days of their internal report. Furthermore, making an internal report before coming forward to the DOJ is a factor that will increase the potential whistleblower award.
This approach serves a dual purpose. It incentivizes employees to utilize internal reporting mechanisms, reinforcing the importance of strong internal compliance programs. At the same time, it creates a powerful incentive for companies to take internal reports seriously and to act swiftly in response to potential misconduct.
For companies, the stakes are high. The DOJ has clarified that the CWA will alter the calculus when considering whether to make a voluntary self-disclosure. Alongside the whistleblower program, the DOJ amended its Corporate Enforcement and Voluntary Self-Disclosure Policy (CEP). Under this amendment, if a company receives an internal whistleblower report and then reports the misconduct to the DOJ within 120 days—before the DOJ reaches out to the company—it will be eligible for the greatest benefit under the CEP: a presumption of a declination provided the company fully cooperates and remediates. This is a significant departure from the usual approach, as it allows a company to qualify for a declination even if the whistleblower comes to the DOJ first.
Protecting Whistleblowers: A Priority for the DOJ
The DOJ’s whistleblower program is about receiving tips and protecting those who come forward. The DOJ is fully committed to safeguarding whistleblowers’ identities to the fullest extent allowable under the law. Moreover, the DOJ will closely monitor any actions against whistleblowers who report misconduct internally. Compliance departments play a crucial role in this process by implementing robust anti-retaliation policies and training employees on these protections.
Under the 2024 ECCP, the DOJ will scrutinize a company’s commitment to whistleblower protection and the promotion of a “speak-up” culture. Companies retaliating against whistleblowers risk losing credit for cooperation and remediation and could face severe consequences, including sentencing enhancements and even prosecution for obstruction of justice.
Early Successes and Corporate Lessons
Argentieri said the CWA is already off to a strong start, with over 100 tips received in just a few weeks. If these whistleblowers also report internally, as the program incentivizes, companies must take their reports seriously and consider coming forward to the DOJ.
Turning to recent corporate resolutions, the DOJ’s approach to recognizing and rewarding cooperation and remediation is instructive. A prime example is the recent declination granted to Boston Consulting Group (BCG) under the CEP. BCG’s timely and voluntary self-disclosure of a potential FCPA violation and its complete and proactive cooperation led to the DOJ’s decision to decline prosecution. BCG’s remediation efforts were particularly noteworthy, including the termination of personnel involved in the misconduct and the imposition of compensation-based penalties, such as requiring certain partners to forfeit their equity and withholding bonuses.
On the other hand, SAP, mentioned earlier, earned a 40% reduction in its criminal penalty—near the maximum reduction available for companies that do not voluntarily self-disclose. SAP’s proactive cooperation began shortly after news reports surfaced, and its swift remediation, including disciplining responsible employees and enhancing its compliance program, was critical in earning this reduction.
In contrast, Trafigura received only a 10% reduction for cooperation and remediation. The company’s delayed preservation and production of evidence and a posture during resolution negotiations that caused significant delays limited its cooperation credit. Moreover, Trafigura’s remediation efforts were mixed, as it was slow to discipline certain employees, further diminishing its potential credit.
The Takeaways for Compliance Officers
The lessons from these cases and the CWA are clear for compliance professionals. First, fostering a strong internal reporting culture is crucial. Companies encouraging internal whistleblowing and acting swiftly on these reports are better positioned to benefit from DOJ policies like the CEP. Second, the importance of proactive and thorough cooperation must be considered. Companies that fully cooperate and remediate—going above and beyond in their efforts—stand to receive significant benefits in any DOJ investigation.
Finally, the CWA emphasizes the need for robust whistleblower protections. Compliance departments must implement, actively promote, and enforce policies that protect whistleblowers from retaliation. The DOJ is watching closely, and companies that fail to protect their whistleblowers will face serious consequences.
A New Era of Corporate Accountability
The launch of the Corporate Whistleblower Awards Pilot Program marks a new era in corporate accountability. By leveraging financial incentives and protecting those who come forward, the DOJ is creating a powerful tool for combating white-collar crime. For companies, the message is clear: invest in strong compliance programs, encourage internal reporting, and act decisively on misconduct. Doing so aligns with ethical business practices and positions the company to achieve the most favorable outcomes in any DOJ investigation. As the CWA continues to gain traction, compliance professionals will play a critical role in guiding their organizations through this evolving landscape, ensuring they remain on the right side of the law and public trust.
