Antitrust Whistleblower Program Launched
Another week, another whistleblower rewards program announced by the U.S. federal government. This time it’s the Antitrust Division at the Justice Department, which just launched its first-ever rewards program to dig up allegations of procurement fraud, price fixing, market allocation, and similar misconduct.
The Division announced the rewards program on Tuesday in conjunction with the U.S. Postal Service, which apparently helps federal prosecutors to investigate procurement fraud. Anyway, the two agencies touted the program with all the usual warnings that enforcement risk is rising. “This program raises the stakes,” assistant attorney general Abigail Slater of the Antitrust Division said. “If you’re fixing prices or rigging bids, don’t assume your scheme is safe — we will find and prosecute you, and someone you know may get a reward for helping us do it.”
The particulars of the rewards program are nothing that compliance officers haven’t heard before. Whistleblowers can submit their tips about antitrust violations via a dedicated web page set up by the Antitrust Division and the Postal Inspection Service. Should their tips lead to criminal enforcement with monetary penalties of $1 million or more, whistleblowers will be eligible to collect up to 30 percent of the fines imposed. The presumptive award amount will be 15 to 30 percent, the Justice Department says.
This antitrust whistleblower program arises from the Justice Department’s Procurement Collusion Strike Force, established in 2019. That task force has notched enforcement victories from time to time since then; clearly this whistleblower rewards program is meant to drum up even more leads for prosecutors and investigators to chase down.
The Antitrust Division was one of the last fiefdoms within the Justice Department not to have its own whistleblower program. This week’s news now seals up that gap. The Criminal Division has had its own whistleblower program for several years now, and the Civil Division solicits whistleblower tips all the time under the auspices of the False Claims Act. (It just published another call last week for tips about healthcare fraud, in fact.)
Compliance Program Implications
We can think about the implications for corporate compliance programs in two ways.
First, ideally this antitrust rewards program shouldn’t affect your internal reporting system all that much, in the sense that you should already be striving to have employees report suspected misconduct via internal channels anyway — regardless of whether that misconduct is procurement fraud or anything else.
Perhaps you might want to retool your training materials so employees know what procurement fraud looks like in your industry, so they’ll be able to recognize it when they see it, and then report it. But fundamentally, fraud is fraud, and the company always wants to hear suspicions about it; that’s the message.
Second, the rewards program could mean that your company might want to invest more in your capabilities to identify suspected procurement fraud internally, so you can intercept and address the issue before a whistleblower goes to regulators. That is, since the risk of procurement fraud enforcement is rising, your ability to identify procurement fraud might need to rise along with it. That’s a decision each company will need to make for itself.
For example, you might want to refresh policies about employees’ interactions with competitor firms, or to step up your monitoring of employee communications for certain keywords that suggest antitrust schemes on their part. Internal audit teams might want to examine the procurement function to look for any suspicious patterns in the timing of bids submitted for contracts or the prices quoted therein.
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