On March 7, 2024, Deputy Attorney General Lisa Monaco announced Department of Justice (DOJ) initiatives to incentivize whistleblowers with payouts from civil or criminal forfeitures and to integrate artificial intelligence (AI) into existing corporate enforcement programs and sentencing guidelines.1
Speaking at the American Bar Association's (ABA) 39th National Institute on White Collar Crime in San Francisco, Monaco also announced updates regarding DOJ's investment of resources into the most serious cases, and the addition of a provision to the DOJ Justice Manual codifying the Mergers &Acquisitions Safe Harbor Policy2 launched last October.
Pilot Whistleblower Rewards Program
Monaco addressed DOJ's newly announced whistleblower rewards program at the conference, previewing that it will use the Department's existing authority to pay awards for information or assistance leading to civil or criminal forfeitures3 to establish a targeted program to reward whistleblowing. Monaco said that over the next 90 days, DOJ will develop and implement the program, with a formal start date to be announced later this year.
Under the program, whistleblowers submitting truthful information not already known to the government are eligible to receive a portion of the recovery that is paid out of the resulting forfeiture if they have not been involved in the criminal activity itself, and if they do not qualify for payments from other government programs. The whistleblower will be paid only after all victims have been properly compensated.
With respect to the information whistleblowers may provide, Monaco noted any violations of federal law are accepted, but specified that DOJ is particularly interested in information about three categories of offenses: criminal abuses of the US financial system; foreign corruption cases that are outside of the SEC's jurisdiction, such as Foreign Corrupt Practices Act (FCPA) violations by non-issuers and violations of the recently enacted Foreign Extortion Prevention Act;4 and domestic corruption cases, "especially those involving illegal corporate payments to government officials."
Monaco said that the program is designed to enhance the coverage of the "patchwork quilt" of existing whistleblower programs at the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), which "doesn't cover the whole bed," or address the full range of corporate and financial misconduct that the Department prosecutes.
The day following Monaco's speech, Acting Assistant Attorney General Nicole Argentieri spoke in more detail about DOJ's whistleblower rewards program and said it may lead to an increase in FCPA cases. "[W]e anticipate that the program could prove especially useful in developing foreign corruption cases that are outside the jurisdiction of the SEC, including FCPA violations by non-issuers," she said.
Monaco's speech also gave examples of whistleblowers who could qualify for payouts under the rewards program: "Maybe you've got a client at a private equity firm, and she discovers the CFO is forging underlying loan documents," she said. "If your client reports it, a portion of the recovery could be hers."
As another example, Monaco said, "Maybe you work—or your client does—at a fast-growing private startup here in the Bay Area, and you discover the company's been paying bribes to get regulatory approvals and doctoring the books to hide the payments. If you come forward, you could get paid as part of the recovery from that criminal case."
Enhanced AI Enforcement
Monaco also emphasized DOJ's focus on increased enforcement with respect to AI and announced several new AI-related initiatives, including an effort to integrate AI into the sentencing guidelines and the way DOJ evaluates corporate compliance programs, as well as a plan to convene a group, Justice AI, bringing together various stakeholders to address the impacts of AI to help inform the Department's AI policy.
First, Monaco stated that prosecutors would be able to seek increased penalties for criminals who "deliberately misuse AI to make a white-collar crime significantly more serious—for individual and corporate defendants alike." Referring to AI's potential to effect "great peril when criminals use it to supercharge their illegal activities, including corporate crime," Monaco likened the sentencing enhancements for criminals who use AI to increased penalties for criminals who use firearms or other dangerous weapons.
Second, DOJ's corporate compliance evaluation guidance—the Evaluation of Corporate Compliance Programs—will now incorporate an assessment of disruptive technology risks, giving prosecutors guidance on how to assess the way a company manages AI-related risks as part of its compliance efforts.
Finally, Monaco noted that during the ABA conference, DOJ would convene the first session of Justice AI, an initiative that brings together stakeholders across industry, academia, law enforcement and civil society to address the impacts of AI. Monaco announced Justice AI at a speech titled "The Promise and Peril of AI" at the University of Oxford last month.5
Monaco said of AI, "All new technologies are a double-edged sword—but AI may be the sharpest blade yet. It holds great promise to improve our lives—but great peril when criminals use it to supercharge their illegal activities, including corporate crime."
In February, Attorney General Merrick B. Garland appointed the Department's inaugural chief AI officer,6 a new role created pursuant to Executive Order 14110, Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence(the Executive Order), signed in October 2023. The Executive Order requiresgovernment agencies to designate chief AI officers to coordinate their agency's use of AI, promote AI innovation in their agency and manage risks from their agency's use of AI.7 Jonathan Mayer, a Princeton University professor, will work in the Department's Office of Legal Policy as an advisor to Garland on intra-departmental and cross-agency efforts on AI and adjacent issues and lead the Department's newly established Emerging Technology Board.
"Jonathan's expertise will be invaluable in ensuring that the entire Justice Department—including our law enforcement components, litigating components, grantmaking entities and US Attorneys' Offices—is prepared for both the challenges and opportunities that new technologies present," Garland said.
Key Considerations for Companies
- The whistleblower rewards program tracks DOJ's recent trend in incentivizing whistleblowers to provide early and new information. The program is the latest DOJ initiative after the Mergers & Acquisitions Safe Harbor policy, announcedlast October, as well as the new whistleblower program launched this past February by the US Attorney's Office for the Southern District of New York (SDNY), which offers non-prosecution agreements to individuals providing timely information on corporate misconduct.8
- The whistleblower rewards program complements the SEC's current program relating to public companies by providing financial incentives for employees of privately held companies to come forward.
- The whistleblower program might signal an increase in FCPA cases in the coming years, as Argentieri previewed in her speech, if whistleblowers now report FCPA violations that do not fall within the SEC or CFTC's jurisdiction.
- We expect to see continued attention to AI not just from DOJ but from other enforcement authorities. Companies should consider reassessing their policies in this area, as well as assessing their approach to communicating and enforcing those policies, in light of the increasing attention and evolving guidance from DOJ.
Footnotes
1 DOJ Press Release: Deputy Attorney General Lisa Monaco Delivers Keynote Remarks at the American Bar Association's 39th National Institute on White Collar Crime (March 7, 2024), https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-monaco-delivers-keynote-remarks-american-bar-associations.
2 WilmerHale Client Alert: DOJ Announces New Mergers & Acquisitions Safe Harbor Policy (Oct. 5, 2023),https://www.wilmerhale.com/insights/client-alerts/20231005-doj-announces-new-mergers-acquisitions-safe-harbor-policy.
4 WilmerHale Client Alert: Congress Enacts the Foreign Extortion Prevention Act Targeting Foreign Officials' Conduct (Dec. 21, 2023),https://www.wilmerhale.com/en/insights/client-alerts/20231221-congress-enacts-the-foreign-extortion-prevention-act-targeting-foreign-officials-conduct.
5 DOJ Press Release: Deputy Attorney General Lisa O. Monaco Delivers Remarks at the University of Oxford on the Promise and Peril of AI (Feb. 14, 2024),https://www.justice.gov/opa/speech/deputy-attorney-general-lisa-o-monaco-delivers-remarks-university-oxford-promise-and.
6 DOJ Press Release: Attorney General Merrick B. Garland Designates Jonathan Mayer to Serve as the Justice Department's First Chief Science and Technology Advisor and Chief AI Officer (Feb. 22, 2024),https://www.justice.gov/opa/pr/attorney-general-merrick-b-garland-designates-jonathan-mayer-serve-justice-departments-first.
7 The White House Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (Oct. 30, 2023),https://www.whitehouse.gov/briefing-room/presidential-actions/2023/10/30/executive-order-on-the-safe-secure-and-trustworthy-development-and-use-of-artificial-intelligence/.
8 SDNY Whistleblower Pilot Program (Feb. 13, 2024),https://www.justice.gov/d9/2024-02/sdny_wb_policy_effective_2-13-24.pdf.
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