Bharara Says Whistleblower Awards May Aid Corruption Fight

Speaking at a Fordham University School of Law event on Friday, March 6, U.S. Attorney for the Southern District of New York, Preet Bharara said that whistleblower bounties and leniency agreements could be useful tools for uncovering public corruption. Bharara is the latest law enforcer to endorse the benefits of rewarding tipsters who come forward with information about misconduct.

Bharara noted that other federal statutes, including the False Claims Act and the Dodd-Frank Act, already offer payments to whistleblowers, and the U.S. Department of Justice’s antitrust division runs a “first-in-the-door” leniency program for individuals and companies who are first to approach the government with a confession of participating in criminal antitrust violations. Bharara also noted that the law allows prosecutors some discretion to seek leniency for those who cooperate in other investigations. “If there is some proposal that would not unduly let blameworthy people off the hook but would simultaneously help to bring more blameworthy people in the system, that’s obviously something people should look at carefully because it has worked in other contexts.

Bharara’s comments were not part of any formal proposal, but they echo other calls to ramp up the government’s ability to offer incentives to recruit individuals to come forward with evidence of wrongdoing that might otherwise not makes its way into the government.

On Feb.26, New York Attorney General Eric Schneiderman announced plans for legislation to create a whistleblower rewards and protection program, a program modeled after the U.S. Securities and Exchange Commission program instituted following the Dodd-Frank Act.

In September of last year, U.S. Attorney General Eric Holder called for increasing the rewards available for whistleblower tips made pursuant to the Financial Institutions Reform, Recovery and Enforcement Act. As it stands, the law caps these awards at $1.6 million, markedly smaller than the multibillion-dollar penalties that government has imposed upon big financial institutions under FIRREA.

Contact one of our

Experienced Attorneys

If you are aware of any person, corporation or entity that you think may be violating the Federal False Claims Act or a State False Claims Act, contact us today.