The sky is no longer the limit for the Canadian women’s Olympic soccer team. On 22 July, 2024, the New Zealand women’s soccer team filed a complaint with French police that they saw a drone flying overhead during one of their practices. The police traced that drone back to Canada Soccer analyst Joseph Lombardi, who had been using the drone to spy on the New Zealand women’s team during a practice ahead of their match against one another. Canada went on to win that game with a final score of 2-1.
In response to the scandal, the Canadian Olympic Committee reported that it sent Lombardi and the assistant coach he worked for, Jasmine Mander, back home. Head coach Beverly Priestman issued a statement that she denounced their actions and did not “direct” them to spy but was “voluntarily” stepping down from coaching the game against New Zealand. This scandal has not only affected the integrity of the coaching staff, but also undermines the character of the Canadian women’s soccer team as an institution, thereby eroding the trust of soccer fans worldwide.
Canada Soccer’s Chief Executive, David Blue, says this was not an isolated incident and that Priestman likely knew of the drone spying. As a result, on 27 July, FIFA banned Priestman, Lombardi, and Mander from working in soccer for one year, issued a fine of 200,000 Swiss francs, and penalized the Canadian team with six points at the Olympics. This spying culture is not unique to the women’s team, however. The men’s team has attempted to view closed practices before, including during the Copa America this year. Following the steep penalties they faced, Canada women’s soccer appealed the decision but was denied. According to FIFA appeals judge Neil Eggleston, the Canadian women’s soccer team has always spied and “it was the difference between winning and losing”. This systemic usage of spying within the Canadian teams has broader implications that affect not just soccer, but all professional sports.
Scandals like this highlight the importance of enforcement and transparency regarding corruption and cheating within professional sports. Canadian NDP Member of Parliament Niki Ashton has called for Priestman to testify to Canada’s House of Commons heritage committee because of the systemic nature of the repeated drone usage to spy on other teams.
Strong compliance programs can not only improve the reputation of sports organizations such as Canada Soccer, but also can prevent corruption from taking root in the first place and revitalize the trust of fans and sponsors when things go wrong. Ahead of the 2024 Paris Olympics, the International Olympic Committee (IOC) implemented strict compliance standards to keep sports corruption-free. In fact, in 2017, the IOC launched the International Partnership against Corruption in Sport (IPACS) at the IOC’s International Forum for Sports Integrity (IFSI).
The United Nations Office on Drugs and Crime (“UNODC”) has published reports addressing the role of corruption in sports, and how to minimize the risk of improper behavior. Since 2017, the UNODC Programme on Safeguarding Sport from Corruption and Economic Crime has been working to support governments, sports organizations, and relevant stakeholders to address and mitigate corruption and economic crime in sport. The Programme recommends certain activities to address the risk of corruption, such as
- Strengthening legal, policy, and institutional frameworks to counter corruption and crime in sport
- Increasing cooperation among and between governments and sports organizations at national and international level
- Enhancing understanding and capacities to tackle corruption and crime in sport through research and analysis
With discussions of sporting events making global headlines, the fight against corruption in sports is a topic that shouldn’t be ignored. There will always be bad actors who attempt to manipulate the game for their personal gain, but with robust policies and procedures, as well as clear expectations of accountability and proper conduct, future athletes needn’t have their lifelong dreams marred by the corrupt activities of those undermining the integrity of the sport and community. Learning from past infractions and incorporating the recommendations from anti-corruption agencies and organizations can help hold professional sports teams accountable not just to each other but fans across the globe.
J.D. Candidate, The George Washington University Law School, Class of 2026
1. Introduction
On August 1, 2024, the U.S. Department of Justice (DOJ) launched the Corporate Whistleblower Awards Pilot Program (Program) to encourage reports of corporate misconduct not covered by other federal whistleblower programs. Under the Program, eligible whistleblowers may receive an award if they provide original, truthful information that leads to a successful forfeiture exceeding $1M in net proceeds.
One of the Program’s central targets is foreign corruption falling outside the scope of the Securities and Exchange Commission (SEC) Whistleblower Program; that is, violations involving privately held companies and others that are not issuers of U.S. securities.1 More specifically, the Program aims to generate cases involving violations of the Foreign Corrupt Practices Act (FCPA) and the recently enacted Foreign Extortion Prevention Act (FEPA), which adds a new tool to prosecutors’ arsenal: the ability to hold foreign officials liable under U.S. law for corruption violations.
The Program’s success in reaching foreign corruption under these statutes will require that the Program align with the realities and practicalities of cases brought under these statutes. We discuss three areas of the Program that may particularly benefit from further clarification and thoughtful amendment to ensure such alignment: (1) the Program’s eligibility requirements barring whistleblower reports from “elected or appointed” foreign government officials; (2) the Program’s reliance on asset forfeiture for whistleblower recovery; and (3) the Program’s award cap and the discretionary nature of the award.
2. Eligibility
In FCPA cases—and likely in forthcoming FEPA cases—foreign government officials may well be the best source of new information to uncover foreign corruption, and foreclosing their participation in the Program seems counterproductive to the Program’s goals.
In our experience, corruption by foreign officials is rarely performed without witnesses. Governmental bureaucracy often requires several officials to be involved in, or witnesses to, the execution of a corrupt scheme. Consider, for example, the rigging of a tender process in exchange for a bribe. A government agency will usually have a team formulating and drafting a request for proposals. Often this takes months or even years in the case of very technical tenders. The agency will then likely have the proposals evaluated by technical staff and by a separate team evaluating the economics of each proposal. Those evaluations will be submitted to a tender committee consisting of several officials. In the end, it could be that one top official will make the ultimate decision as to an award, but several officials would have been privy to the tender process and may well have evidence that the process was dirty.
When one speaks to witnesses of corruption, particularly in emerging markets, the feeling of helplessness in the face of corruption is obvious. Many feel that reporting corruption to their country’s authorities would be an exercise in futility or, worse, would put them and their family at risk. Lacking a viable in-country reporting mechanism, foreign officials witnessing corruption would, one would think, welcome the opportunity—and incentive—of reporting to DOJ.
A whistleblower program seeking to ferret out foreign corruption should allow for eligibility of foreign government officials who have original, truthful information, and are not themselves “meaningful participants” in the criminal activity. The Program, however, currently renders ineligible current or former “elected or appointed” foreign government officials who obtained original information in the context of their official role. This is consistent with DOJ’s relatively new voluntary disclosure program for individuals, which also excludes “elected or appointed” foreign government officials.2 With this approach, DOJ is all but guaranteeing it will not hear from foreign government officials about corrupt schemes.
It may be that DOJ is intending to include some types of foreign officials within the Program, but its use of the term “elected or appointed” officials is too vague for us to know. DOJ has not yet provided guidance as to how it is defining “elected or appointed” officials for the purpose of this Program, or who exactly it intends to exclude.
While it is fairly clear who is considered an "elected" official, it is less clear who is considered an "appointed" official. This definition may vary widely across jurisdictions and contexts. For example, in DOJ’s notable FCPA case against Petrobras in 2018, the non-prosecution agreement and $853M criminal penalty was based in part on evidence from four Petrobras executives who were “appointed” to their positions “under the influence of a political party.”3 Are these, and other executives of state-owned entities, considered “appointed” officials under the Program? At a minimum, DOJ should seek to clarify the definition of an "appointed" official for the purposes of the Program.
In this regard, DOJ’s language does appear to be more inclusive of foreign government officials than the SEC’s Whistleblower Program, which renders ineligible any “member, officer, or employee of a foreign government, any political subdivision, department, agency, or instrumentality of a foreign government, or any other foreign financial regulatory authority....”4 This expansive definition of ineligible foreign actors tracks more closely the FCPA’s broad definition of foreign official, which is “any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or of a public international organization, or any person acting in an official capacity for or on behalf of any such government or department, agency, or instrumentality, or for or on behalf of any such public international organization.”5 It remains to be clarified whether this is an intentional divergence on the part of DOJ.
DOJ should also consider whether there is a need, or strong justification, to exclude even these “elected or appointed” officials as whistleblowers. In our view, the Program will benefit from greater inclusivity of foreign officials as whistleblowers, subject to limits that may exist under local law. At least with respect to the SEC Program, there was clear Congressional intent for the inclusion of foreign nationals in the Program to ensure that anyone with knowledge of violations was encouraged to come forward.6 There is an even stronger case for the inclusions of foreign nationals—including foreign government officials—here, where a primary focus of the Program is foreign corruption.
This is perhaps especially true in the context of FEPA, which DOJ has suggested it hopes to “vigorously enforce” using the Program. First passed in December 2023, and amended in July 2024, FEPA makes it a crime for foreign officials to demand or accept bribes from U.S. persons or businesses, or to demand or accept bribes from within the territory of the United States.7 FEPA, in essence, puts foreign officials who demand bribes on the same footing as corporations that pay them. If DOJ wants to incentivize corporate insiders to come forward and report instances of corporate corruption, DOJ should do the same with regard to foreign government insiders.
In our view, the Program risks falling well short of its goals if it bars a significant swath of potential whistleblowers due to their status as foreign government officials.
3. Method of Recovery
Whether a whistleblower is compensated under the Program hinges on successful criminal, civil, or administrative forfeiture exceeding $1M in net proceeds.8 This is distinct from the SEC and Commodity Futures Trading Commission Whistleblower Programs, which award whistleblowers based on monetary sanctions exceeding $1M.9
Asset forfeiture involves a complex web of rules and procedures. Importantly, it is not the only, nor the required, method of punishment for criminal activity. It is ultimately a discretionary process, though the Attorney General’s latest guidance encourages DOJ to use asset forfeiture to the “fullest extent possible.”10
In the context of the FCPA, there has historically been a dearth of forfeiture orders. This was born out of a concern about the need to use forfeited funds to compensate victims, which in the case of an FCPA violation, might mean giving the funds back to a corrupt government. Forfeited proceeds are not required to go to “victims”; payments to victims are discretionary, including payments to foreign governments.11 And there are several other uses of forfeited funds, including reimbursements to federal agencies and payment of whistleblower awards.12 We note that under the Program, where the victim is a foreign government or other entity, the whistleblower will be compensated first as a matter of priority, which is a helpful tenet.13
DOJ appears to have changed course in the past few years in its stance on forfeiture awards in FCPA cases. In November 2023, Principal Deputy Assistant Attorney General (DAAG) Nicole Argentieri stated that “all companies should expect to both pay applicable fines and forego the proceeds of their criminal activity” through forfeiture.14 DAAG Argentieri pointed to the 2022 Glencore case as an example, where Glencore agreed to a fine of more than $428M and criminal forfeiture and disgorgement of more than $272M for its FCPA violations.15 The recent cases against other commodities traders, Gunvor and Trafigura, confirm the apparent trend, with forfeitures of $287M and $46M, respectively.16
While this recent trend is promising, we are not yet to the point of surety that asset forfeiture will become a mainstay of FCPA cases. This puts whistleblowers in a precarious position. The Program would benefit from a stronger commitment from DOJ that it will consistently pursue asset forfeiture in FCPA and FEPA cases that originate from whistleblower reports.
4. Award Cap and Government Discretion
Assuming the hurdles are met with respect to eligibility and asset forfeiture, whistleblowers still face limits under the Program.
One limit is that the amount of recovery is capped at $50M,17 unlike the SEC Program that allows for an uncapped recovery of 30% of the money collected or False Claims Act qui tam actions that allow for an uncapped recovery of 15% to 30% of the money collected.18 The Program has faced some criticism for its divergence from these other programs, though we note that $50M is still likely enough money to incentivize most whistleblowers to come forward. Further, DOJ has indicated that the $50M cap was set with acknowledgement that SEC awards have historically totaled $50M or less.
Another notable limit is that the decision of whether to award a whistleblower is at DOJ’s discretion, with no enforceability mechanism.19 We echo sentiments of our industry peers that the discretionary nature of the reward may counteract the Program’s stated goal of encouraging whistleblowers to come forward—perhaps for some, the enormous risk that comes along with blowing the whistle will outweigh the non-guaranteed, years-away possibility of a payout.
Billy Jacobson, Partner, Jacobson Lopez
Jonathan Lopez, Partner, Jacobson Lopez
Megan Monteleone, Associate, Jacobson Lopez
1 Department of Justice Corporate Whistleblower Awards Pilot Program Guidance (Aug. 1, 2024) https://www.justice.gov/criminal/media/1362321/dl?inline (hereinafter, “Program Guidance”).
2 Program Guidance; The Criminal Division’s Pilot Program on Voluntary Self-Disclosure for Individuals (Apr. 15, 2024) https://www.justice.gov/criminal/media/1347991/dl?inline.
3 Non-Prosecution Agreement for Petróleo Brasileiro S.A. – Petrobras (Sept. 26, 2018) https://www.justice.gov/opa/press-release/file/1096706/dl
4 Securities Whistleblower Incentives and Protections (Oct. 4, 2022) https://www.sec.gov/files/amended-whistleblower-rules-2022.pdf
5 A Resource Guide to the U.S. Foreign Corrupt Practices Act, Second Edition (July 2020) https://www.justice.gov/criminal/criminal-fraud/file/1292051/dl; see, e.g., 15 USC § 78dd-1(f)(1)(A).
6 2014 Annual Report to Congress on the Dodd-Frank Whistleblower Program (Nov. 17, 2014) https://www.sec.gov/files/owb-annual-report-2014.pdf.
7 See Foreign Extortion Prevention Technical Corrections Act, S. 4548, 118th Cong. (2023), https://www.congress.gov/bill/118th-congress/senate-bill/4548/text; 18 U.S.C. 1352.
8 Program Guidance.
9 Strengthening Anti-Retaliation Protections for Whistleblowers and Enhancing the Award Claims Review Process (May 22, 2017) https://www.cftc.gov/sites/default/files/idc/groups/public/@newsroom/documents/file/wbruleamend_factsheet052217.pdf; Securities
Whistleblower Incentives and Protections (Oct. 4, 2022) https://www.sec.gov/files/amended-whistleblower-rules-2022.pdf.
10 Asset Forfeiture Policy Manual (2023) https://www.justice.gov/criminal/criminal-afmls/file/839521/dl?inline.
11 See Asset Forfeiture Policy Manual (2023) https://www.justice.gov/criminal/criminal-afmls/file/839521/dl?inline; The Attorney General’s Guidelines on the Asset Forfeiture Program (July 2018) https://www.justice.gov/criminal/criminal-mlars/file/1123146/dl?inline; 28 U.S.C. § 524(c).
12 28 U.S.C. § 524(c).
13 Program Guidance.
14 Acting Assistant Attorney General Nicole M. Argentieri Delivers Keynote Address at the 40th International Conference on the Foreign Corrupt Practices Act (Nov. 29, 2023) https://www.justice.gov/opa/speech/acting-assistant-attorney-general-nicole-m-argentieri-delivers-keynote-address-40th.
15 Press Release, U.S. Dep’t of Justice, Glencore Entered Guilty Pleas to Foreign Bribery and Market Manipulation Schemes (May 24, 2022) https://www.justice.gov/opa/pr/glencore-entered-guilty-pleas-foreign-bribery-and-market-manipulation-schemes
16 Press Release, U.S. Dep’t of Justice, Swiss Commodities Trading Company Pleads Guilty to Foreign Bribery Scheme (Mar. 28, 2024) https://www.justice.gov/opa/pr/swiss-commodities-trading-company-pleads-guilty-foreign-bribery-scheme; Press Release, U.S. Dep’t of Justice, Commodities Trading Company Will Pay Over $661M to Resolve Foreign Bribery Case (Mar. 1, 2024) https://www.justice.gov/opa/pr/commodities-trading-company-will-pay-over-661m-resolve-foreign-bribery-case.
17 Program Guidance.
18 U.S. Securities and Exchange Commission, Whistleblower Program https://www.sec.gov/enforcement-litigation/whistleblower-program; The False Claims Act: A Primer (Apr. 22, 2011) https://www.justice.gov/sites/default/files/civil/legacy/2011/04/22/C-FRAUDS_FCA_Primer.pdf.
19 Program Guidance.
In the UK, the Economic Crime and Corporate Transparency Act 2023 (the Act) has expanded the general longstanding rule that the conduct of "directing minds and wills" could create criminal liability for a corporate. It now includes liability based on the actions of senior managers. Senior management is undefined by the Act, but it is designed to encompass a wider group of people within an organisation than was captured under the common law. The expectation is that prosecutors will make use of the statutory mechanism to hold more organisations to account in a wider variety of circumstances than before, including for substantive bribery offences.
The UK Bribery Act 2010 (the UKBA) criminalises organisations if they have failed to prevent bribery by an associated person that is intended to benefit that organisation. This is a strict liability offence for corporates and there have been a number of actions and deferred prosecutions concluded in relation to it. UKBA can also be used to criminalise organisations for substantive bribery offences providing that the mental state of a natural person committing these offences can be attributed to the company.
It has historically been more difficult for prosecutors to attribute substantive active or passive bribery by an individual to a corporate, in part due to challenges with identifying a directing mind and will. A very few deferred indictments have contained charges of conspiracy to corrupt (under the pre-UKBA law) or active bribery contrary to s.1 UKBA. No company has ever been convicted of (or had an indictment deferred containing) a passive bribery offence under s.2 UKBA. The Act makes it easier to prosecute organisations for substantive bribery offences – both active and passive bribery (and as opposed to failure to prevent bribery) – because of the expanded group of individuals whose actions and mindsets can be attributed to the business.
There is, in theory, a tension whereby a relevant organisation could have adequate anti-bribery and corruption procedures that form a proper defence to a failure to prevent bribery offence, but could nevertheless face an action for a substantive bribery offence carried out by people within its business. How a senior manager will be defined is yet to be tested by the courts, but we may well see prosecutors using the expansion of the law to prosecute corporates in cases where they might otherwise have encountered difficulties showing the lack of procedures necessary to succeed on the strict liability offence.
Partner, Addleshaw Goddard LLP