The Whistleblower's Dilemma: Why Companies Must Act Swiftly on Internal Complaints in the Current DOJ Enforcement Era

Companies today face a critical crossroads when internal whistleblowers report potential misconduct. The Department of Justice's revised enforcement policies have created powerful—and competing—incentives that make swift, decisive action on internal complaints more important than ever. While the DOJ offers unprecedented benefits to companies that voluntarily self-disclose criminal or civil violations, it simultaneously provides whistleblowers with substantial financial rewards for reporting directly to the government. This tension, combined with the realities of shifting enforcement priorities across administrations, demands that corporate compliance leaders and their counsel act with both urgency and strategic sophistication.

The Enhanced Benefits of Voluntary Self-Disclosure

In May 2025, Assistant Attorney General Matthew Galeotti fundamentally reshaped the DOJ's approach to corporate enforcement through his memorandum, Focus, Fairness, and Efficiency in the Fight Against White-Collar Crime. The revised Corporate Enforcement Policy (CEP) announced in the memo represents a sea change: companies that voluntarily self-disclose, cooperate fully, and remediate effectively now receive declinations (no prosecution) as a matter of course, not merely as a presumption. As Galeotti emphasized in his June 2025 remarks at the American Conference Institute, "I am standing behind this policy" and will "closely scrutinize any VSD (voluntary self-disclosure) that is not recommended for a CEP declination."

The message is unequivocal: for those who voluntarily come forward, "the benefits to companies that self-disclose and cooperate have never been clearer and more certain." The revised policy narrowed what constitutes an "aggravating factor," providing greater transparency and predictability. Even companies that narrowly miss eligibility for a full declination remain positioned for favorable Non-Prosecution Agreements (NPAs). Moreover, the Criminal Division has undertaken individualized reviews of existing corporate monitorships, terminating many where circumstances permit companies to achieve compliance through self-reporting and certifications rather than costly external oversight.

Critically, the DOJ has committed to moving corporate investigations much more quickly. Galeotti directed prosecutors to "move expeditiously to investigate cases and make charging decisions," acknowledging that "investigations into corporate crime can linger for years and, at times, with little meaningful progress." This focus on efficiency benefits both the government and companies under investigation, but it also creates time pressure: the window for voluntary self-disclosure before the government independently discovers misconduct on its own or via a whistleblower may be shorter than in prior years.

The Competing Pull of Whistleblower Financial Incentives

While the DOJ incentivizes companies to self-report, it simultaneously provides powerful financial incentives for individual whistleblowers to bypass internal reporting channels entirely. The Criminal Division's Corporate Whistleblower Awards Pilot Program, significantly expanded in May 2025, now covers a broad range of corporate misconduct including just about every type of fraud.

The financial stakes are substantial. Whistleblowers may receive up to 30% of the first $100 million in net forfeiture proceeds, and up to 5% of proceeds between $100 million and $500 million. At the ACI conference in January 2026, DOJ reported receiving 1,100 submissions since the program launched in 2024, with approximately 50% referred to prosecutors for investigation. Since expanding the program's scope in May 2025, DOJ received more than 100 additional tips, with an 80% referral rate to prosecutors.

These numbers tell a sobering story: with reduced DOJ resources focused on narrower enforcement priorities, whistleblowers have become "a vital source of new leads and case generation." This notion was reinforced by Deputy Assistant Attorney General Brenna Jenny in a speech in late February 2026, when she indicated that despite improvements in data mining and analytics, DOJ remains heavily reliant on whistleblower tips^[1]. For an employee who discovers misconduct, the calculus is stark: report internally and hope the company acts appropriately, or report directly to DOJ and potentially secure a life-changing financial award while the company loses the benefits of voluntary disclosure.

Importantly, the whistleblower program explicitly encourages parallel reporting: a whistleblower can report both internally and to DOJ within 120 days and still qualify for an award. The program considers internal reporting favorably when calculating award amounts, creating a structure where whistleblowers can—and should—report through both channels. This means companies cannot rely on the assumption that internal reporting will keep issues "in-house" for any meaningful period.

The Imperative of Speed: Investigations in the Current Environment

When an internal complaint surfaces, companies face two critical time-sensitive decisions that will shape the entire trajectory of any potential enforcement action: first, whether the issue falls within DOJ's stated enforcement priorities; and second, whether circumstances warrant escalating to Main Justice or senior Administration officials.

The current Administration has articulated clear enforcement priorities, focusing on health care fraud; procurement fraud; trade and tariff evasion; fraud involving Chinese variable-interest-entity (VIE)^[2] structures; and threats to national security, including sanctions violations, corporate support to terrorist organizations or cartels, money laundering related to drug manufacturing, violations of controlled substance laws, and certain bribery cases impacting U.S. national interests. However, as recent practice demonstrates, these priorities are subject to evolution and sometimes rapid shifts.

Consider the dramatic changes in FCPA enforcement. Following the February 2025 Executive Order directing DOJ to "pause" certain FCPA investigations and the June 2025 guidance emphasizing "vindication of U.S. interests," FCPA enforcement dropped precipitously—just seven new cases in 2025 compared to historical averages over the past decade in which the number of cases brought was in double digits. Yet the statute remains on the books, and the June guidance contemplates continued enforcement in cases involving cartels, transnational criminal organizations, and matters related to U.S. national security.

More significantly, as practitioners must recognize, the statute of limitations for both criminal and civil enforcement typically extends five years, meaning conduct occurring today could be prosecuted well into the next administration, which may take a more expansive view of enforcement.

This temporal mismatch creates strategic complexity. Companies discovering potential violations today face genuine uncertainty: the current Administration may decline prosecution, but a future Administration—taking office while the conduct remains within the limitations period—may pursue charges aggressively. A company that "waits out" the current Administration risks facing an empowered, well-resourced enforcement regime with diminished voluntary disclosure credit and armed with evidence the company had the opportunity to disclose years earlier.

Echoing the need for speed, in early February, Jay Clayton, the U.S. Attorney for the Southern District of New York, announced that his Office (which has historically handled a significant portion of DOJ’s corporate prosecutions) will offer swift non-prosecution agreements as a "big carrot" to companies that promptly self-report and cooperate on criminal matters, while warning that those who fail to cooperate will face a "big stick" in the form of heightened consequences. The SDNY unveiled its office-specific VSD policy in late February.

Best Practices for Corporate Response

The confluence of these factors demands a swift and meticulous approach to internal whistleblower complaints. Companies must:

• Act with Genuine Urgency. The 120-day window before a whistleblower can report both internally and to DOJ with full award eligibility is not the timeline for investigation. Companies should assume whistleblowers will report to DOJ contemporaneously with or shortly after internal reporting. The investigation must be scoped, resourced, and executed quickly enough to reach a preliminary determination on voluntary disclosure potentially within weeks, not months depending on the risk profile. DOJ's emphasis on efficiency in its own investigations creates both pressure and opportunity: prosecutors expect swift cooperation and document production, and delays attributed to the company will undermine cooperation credit.
• Evaluate Priority Alignment Immediately. Upon receiving a complaint, counsel should immediately assess whether the conduct falls within DOJ's articulated enforcement priorities. This evaluation should consider not only current priorities but also the likelihood that conduct will remain within the statute of limitations into a subsequent administration. For issues clearly within priority areas— e.g., health care fraud, procurement fraud, sanctions violations, tariff evasion —the decision calculus may heavily favor prompt voluntary disclosure. For issues in deprioritized areas, the analysis must account for the risk that future enforcement authorities may scrutinize the company's decision not to disclose, particularly if a whistleblower has already reported to DOJ.
• Maintain Robust Internal Channels. The whistleblower program explicitly rewards those who report internally before (or simultaneously with) external reporting, increasing potential award amounts for whistleblowers who utilize company compliance systems. Companies should ensure their compliance infrastructure is sufficiently robust and visible so that employees feel internal reporting is a genuine option. Critically, any action that "impedes an individual from communicating directly with the Department"—including enforcement of confidentiality agreements—may be considered by DOJ in assessing cooperation credit and may be viewed as obstruction.
• Engage Experienced Counsel Early. The strategic decisions implicated by internal complaints—voluntary disclosure timing, priority assessment, potential escalation to senior DOJ officials, management of parallel whistleblower reporting—require sophisticated judgment informed by experience dealing with and relationships within DOJ and understanding of current enforcement dynamics.
• Document Thoroughly. Companies should consider with counsel whether and how to document their response to internal complaints, their investigation scope and findings, their reasoning regarding voluntary disclosure decisions, and any risk assessment regarding enforcement priorities. Initial determinations about maintaining attorney-client privilege and work product protections over the investigative record may have serious repercussions down the road.

If DOJ ultimately investigates—whether through whistleblower reporting or independent discovery—these contemporaneous records will be critical to demonstrating that the company took reasonable steps to investigate and evaluate disclosure options, even if the ultimate decision was to not voluntarily disclose based on a good-faith assessment of the facts and enforcement priorities.

Conclusion

The DOJ's revised enforcement policies create a high-stakes environment where timing, strategic judgment, and execution excellence are paramount. Companies that maintain robust compliance programs, respond decisively to internal complaints, and work constructively with experienced counsel will continue to achieve favorable outcomes. Those that delay, equivocate, or fail to appreciate the competing pressures on potential whistleblowers risk forfeiting the substantial benefits of voluntary disclosure while facing empowered whistleblowers, resource-constrained but focused prosecutors, and the very real possibility that conduct occurring during a period of relaxed enforcement will face scrutiny from future authorities with different priorities.

As Mr. Galeotti made clear in his May 2025 memorandum, the DOJ is "committed to rooting out" white-collar misconduct while "minimizing unnecessary burdens on American enterprise." Companies that embrace this partnership through prompt disclosure, genuine cooperation, and comprehensive remediation will find receptive prosecutors. Those that wait for whistleblowers or government investigators to discover misconduct will find that "all the benefits of our policies will not be available to these offenders." The choice, and the window for making it, belongs to corporate leadership—but that window is narrower than ever before.

[1] Refer to Mintz’s summary of DAAG Jenny’s comments and other takeaways related to False Claims Act enforcement in 2026.

[2] DOJ’s May 2025 memo defines a VIE as “typically Chinese-affiliated companies listed on U.S. exchanges that carry significant risks to the investing public for several reasons. These companies provide few protections to investors, facilitate the flow of U.S. investor funds into strategic industries in China, and can be used to facilitate fraud in the U.S. markets, including schemes such as “ramp and dumps” and other market manipulation targeting U.S. investors.”

Subscribe To Viewpoints