Justice Department, Not Trump, Decides Payouts Under the New $25 Million Fraud Whistleblower Program

The Justice Department, not the President, decides who is paid under the new $25 million Fraud Whistleblower Incentive Program, and its published terms say the decision is “neither appealable nor subject to judicial review.” President Trump said on Tuesday that he would be “the arbitrator of all of these decisions.”

The programme, known as WHIP, was announced by Mr Trump and Vice President JD Vance in the Oval Office on 20 October. The department’s press release the same day describes awards of $10,000 to $30,000 for information that leads to criminal charges in health care fraud and in fraud on programmes run by eight federal departments and agencies, with the Treasury “committing $25 million to ensure the program’s successful implementation.” Tips go through america.gov/fraud.

Who decides whether a tipster is paid?

The department, alone. The terms and conditions published by its National Fraud Enforcement Division say it “will approve awards pursuant to the Fraud Rewards Program in its sole discretion and may decline to pay a reward as it deems appropriate,” and that the reward determination is “entirely discretionary” and “neither appealable nor subject to judicial review.” The press release repeats the point: awards are made “in the Justice Department’s sole discretion following the filing of criminal charges.”

That is not what was said in the Oval Office. “I will be the arbitrator of all of these decisions,” Mr Trump said, according to the Associated Press. “It’ll be a binding arbitration.” Arbitration ordinarily means parties agreeing in advance to put a dispute before a decision-maker. Nothing in the published terms provides for it, or for any role for the President.

What law lets the department pay rewards?

A general rewards power, and it sets the limits. The terms cite 28 U.S.C. § 530C(b)(1)(L), which lets the department pay rewards “pursuant to public advertisements for assistance to the Department of Justice,” under procedures set by the Attorney General. The statute caps a reward at $3 million outside terrorism cases, requires the personal approval of the Attorney General or the President for any reward of $250,000 or more, with written notice to the appropriations and judiciary committees within 30 days, and allows other executive agencies to give the Attorney General money for rewards. It also says neither a refusal to pay nor the amount paid is subject to judicial review.

The President’s only role in that scheme is as an alternative signatory on rewards of $250,000 or more. Every WHIP award, at $30,000 or less, sits below that line. On the statute and the published terms, a dispute between two people claiming the same tip is resolved by the department, and the terms anticipate it: “Rewards may be given to more than one tipster in connection with the same matter,” and it is “within the Department’s sole discretion whether multiple tips are distinct or related.”

When is a reward paid, and how much?

At charging, which is earlier than other federal whistleblower schemes. The terms describe “a defined, $10,000 to $30,000 financial reward for actionable tips at the charging stage of a criminal case,” to be paid “at or around the time charges are filed,” with no reward while charges remain sealed unless the department decides otherwise. An individual is eligible for “one award between $10,000 and $30,000 for each distinct tip.” The programme has an initial three-year term.

The accounts given at the announcement differ from the documents on both points. The White House said, in the AP’s report, that a tip leading to “a fraud conviction or a significant federal enforcement action” could earn up to $30,000; the department’s trigger is the filing of charges. Mr Trump said rewards would equal 1 per cent of the fraud a tip uncovers. A 1 per cent share reaches the $30,000 ceiling at $3 million of fraud; that is this publication’s arithmetic, and no published document mentions a percentage. Mr Vance, whom Mr Trump put in charge of an anti-fraud task force in March, said: “The president has said it must stop. It is stopping. And if you want to help us stop it, you get to share in the rewards.”

Who cannot claim?

A qualifying tipster “must be an individual,” the terms say. Department officials, employees and contractors are excluded, with some of their relatives and household members, as are foreign government officials. So is anyone who “meaningfully participated in the criminal activity he or she reported,” subject to an exception for a minimal role. Mr Trump said journalists could take part.

How does this differ from the False Claims Act?

In almost every respect. Under the False Claims Act, 31 U.S.C. § 3730, a private person sues “in the name of the Government” over fraud on federal money, the complaint stays under seal for at least 60 days while the government decides whether to intervene, and the share is fixed by statute: “at least 15 percent but not more than 25 percent of the proceeds of the action or settlement of the claim” if the government takes over the case, and “not less than 25 percent and not more than 30 percent” if it does not. A court approves the result. This publication has described how much federal fraud enforcement already runs through that private suit.

WHIP pays a fixed sum, for criminal charges rather than civil recovery, from a fund rather than from the money recovered, with no court involved. The terms say eligibility “does not preclude an individual from also recovering whistleblower payments at a later stage of the proceedings,” and the release names the Criminal Division’s Corporate Whistleblower Awards Pilot Program as one such route. The terms do not mention the False Claims Act.

The White House had said Mr Trump would present a “$10,000 check” at the announcement to Nick Shirley, a right-wing influencer whose video claimed fraud at Minnesota childcare centres; no cheque was handed over in front of reporters, the AP reported. Nothing published says whether that payment would be made under WHIP. If it were, the terms name the payer, and it is not the man who said he would arbitrate.