In the Charlie Brown Halloween Special, when the Peanuts gang looks into their goody bag, Lucy says: “I got five pieces of candy.”  Sally says: “I got a chocolate bar.” Pigpen says, “I got a quarter.” Charlie Brown says: “I got a rock.”  As the night went on, all poor Charlie Brown ever got was a rock. YouTube.  When it comes to whistleblower legislation, the Antitrust Division must feel the same way.  The SEC got Dodd-Frank, the IRS got the IRS Whistleblower Office and just recently, financial fraud prosecutors got the Anti-Money Laundering Whistleblower Improvement Act (AML).

            The Antitrust Division “got a rock” or more precisely, an anti-retaliation whistleblower protection provision under the Criminal Antitrust Anti-Retaliation Act (CAARA). The “Interim final rule; request for comments” provisions for filing a complaint with the Occupational Safety and Health Administration of the Department of Labor were just published on February 20, 2023 (here).

            Under CAARA, a person who believes that they have been discharged or otherwise retaliated against in violation of the Act (complainant) may file a complaint with the Secretary of Labor (Secretary) within 180 days of the alleged retaliation. Upon receipt of the complaint, the Secretary must provide written notice to the person or persons named in the complaint alleged to have violated the Act (respondent) and to the complainant’s employer (which in most cases will be the respondent) of the filing of the complaint, the allegations contained in the complaint, the substance of the evidence supporting the complaint, and the rights afforded the respondent throughout the investigation. The Secretary must then conduct an investigation, within 60 days of receipt of the complaint, after affording the respondent an opportunity to submit a written response and to meet with the investigator to present statements from witnesses.

         This antitrust anti-retaliation provision may not be a “rock,” but it is unlikely to incentivize any individual to come forward and “blow the whistle” on an international or major cartel. Perhaps I am overly cynical, but a potential criminal antitrust whistleblower is not going to be put at ease knowing she can file a retaliation complaint with OSHA if her post-whistleblower life turns to hell.

            I’m writing again about the need for a criminal antitrust whistleblower statute because the AML Improvement Act was just passed, showing that there can be bi-partisan support for whistleblower legislation when Congress’ attention can be focused.  The motivation behind the AML Improvement reform was the desire to incentivize Russian sanctions-evader whistleblowers, a goal with admittedly more urgency than a desire to bust international price fixing cartels.  But if criminal antitrust whistleblower legislation can be weighed on its own merits,  stripped away from more ambitious but controversial large scale antitrust reform (such as Senator Klobuchar’s sweeping antitrust legislation which does contain within it a whistleblower provision), a criminal antirust whistleblower statute, standing alone, should get bipartisan support.  Even in today’s crazy political world, being pro-cartel is not popular.

              The AML Improvement Act significantly strengthens the existing Anti-Money Laundering statute by establishing a funding source for whistleblowers who provide information that leads to the successful enforcement of an AML action with a monetary sanction exceeding $1 million.  Before the amendment, while there was an Anti-Money Laundering Whistleblower provision, there was no funding for actually making a monetary award to successful whistleblower.  Without the ability to obtain a monetary award, there were no/few whistleblowers.  It is a huge financial and emotional risk to become a whistleblower.   This equation holds true almost universally:  NO POTENTIAL WHISTLEBLOWER AWARD = NO WHISTLEBLOWER. A whistleblower reward mechanism not only provides a financial incentive to balance the risk of being a whistleblower, but it also enables the whistleblower to hire an attorney on a contingent fee basis.  You cannot, or at least should not, be a criminal antitrust whistleblower without competent legal representation.

            Is there a need for a whistleblower statute?  It depends.  If you think large domestic or international cartels have been deterred out of existence, then the lack of cartel prosecutions is a deterrence success story.  But, if you believe that deterrence is not the complete answer and that corporate leniency, the reigning cartel whistleblower program champ, has lost its vigor (for many reasons), then a new cartel busting tool is warranted.  Whistleblower legislation has generated spectacular results for the SEC, CFTC, IRS, etc.….  Why not for consumers– with a criminal antitrust whistleblower statute?

            Over the next couple of weeks Cartel Capers will publish several posts arguing in favor of a criminal antitrust whistleblower statute.  These may be a mix of prior writings or something new.  Posting a blog entry feels like putting a message in a bottle; you have no idea who is going to read it, or if the right person is going to read it.  But, like a message in a bottle—you never know….

         PS.          If a criminal antitrust whistleblowers statute was modeled on the AML Improvement Act, that would be just fine.  Key provisions of that legislation are:

  • The amendment was needed so that successful whistleblowers who report violations of sanctions requirements or money laundering will now qualify for mandatory financial rewards between 10% and 30% of any sanction, fine, or penalty triggered by the disclosure.The previous AML Act was toothless because, like for cartel crimes currently, it had no provision to financially reward whistleblowers.
  • AML whistleblowers can report violations anonymously and confidentially. Since cartel investigations are often resolved with plea agreements without a trial, a whistleblower has a decent chance of remaining anonymous.
  • An AML whistleblower does not have to be a US citizen to qualify for financial rewards. This would be an equally important provision in whistleblower legislation designed to undercover, destabilize, and prevent international price fixing cartels.

            There would be more details to iron out, but a criminal antitrust whistleblower act could rejuvenate antitrust cartel enforcement the way the 1993 Corporate Leniency Program did for decades.

      Thanks for reading.

Bob Connolly   

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