Phillips & Cohen partner Edward Arens writes in Westlaw Today about a new federal program to reward whistleblowers who provide information on antitrust crimes such as bid-rigging and price-fixing.
New antitrust whistleblower program targets market manipulation
Whistleblowers can be rewarded for reporting antitrust crimes and related offenses under a new Whistleblower Rewards Program created by a partnership between the U.S. Department of Justice’s (“DOJ”) Antitrust Division, the United States Postal Service (“USPS”), and the United States Postal Service Inspector General (“USPIS”).
The new program expands DOJ’s existing authority to reward whistleblowers who come forward with information on antitrust crimes, such as price fixing, bid rigging, and monopolization. The USPS and USPIS’s involvement in the new program reflects the USPS’s historic authority to pay rewards for information on crimes affecting the postal service.
The False Claims Act (“FCA”) has long authorized rewards to whistleblowers who report antitrust crimes that harm the government, such as bid rigging on federal, state, or local contracts, result in successful recoveries for the United States. There has been no such program for whistleblowers who report antitrust crimes affecting the private sector. DOJ’s new program narrows that gap.
Program eligibility and how rewards are determined
Under the new program, eligible whistleblowers who voluntarily provide original information regarding an eligible criminal violation, and whose information leads to a criminal fine or equivalent recovery of at least $1 million, will be eligible for an award, provided that the violation affects the USPS, its revenue, or property. Whistleblowers may report information anonymously, through an attorney.
Whether a criminal violation is eligible for the new program is within the discretion of the Antitrust Division. The Memorandum of Understanding (“MOU”) issued by the Antitrust Division, USPS, and USPIS specifies that antitrust violations under sections 1, 2, and 3 of the Sherman Act are “presumptively” eligible, as are violations committed to effectuate, facilitate, or conceal violations of the Sherman Act.
Also presumptively eligible are violations “targeting or affecting federal, state, or local public procurement” or “targeting or affecting the conduct of federal competition investigations or proceedings.”
Whether a violation affects the USPS is determined by the USPIS. Under the MOU, the USPIS must decide whether the whistleblower’s information “reasonably articulate[s]” violations of law affecting the USPS, its revenues, or property pursuant to federal law — the standard under which Congress has authorized the USPS to pay awards.1
To meet this standard, the whistleblower must produce “sufficient facts and evidence” for USPIS to “conclude that the Postal Service has suffered an identifiable harm.” The harm, however, “need not be material or otherwise pose any substantial detriment to the Postal Service.”
The Antitrust Division determines the amount of the whistleblower award, which will presumptively be between 15% and 30% of the recovered criminal fine. Upon the recovery of over $1 million, the Antitrust Division will direct a portion of the recovery to the Postal Service, which pays the reward to the whistleblower.
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