Snitching for Dollars: The Economics and Public Policy of Federal Civil Bounty Programs
Marsha J. Ferziger & Daniel G. Currell   |   1999 U. Ill. L. Rev.

The federal government routinely pays individuals for tips that facilitate its regulatory and law enforcement efforts. However, in the aftermath of public reaction to Linda Tripp's role in bringing the Clinton-Lewinsky affair to light, combined with recent hostility to-ward IRS informant and collection practices, such bounty programs have fallen out of social and political favor. Indeed, the bounty pro-grams federal agencies offer are vastly inconsistent and devoid of a clear understanding of the incentives facing potential informants. These political and technical shortcomings of bounty programs un-dermine their effectiveness. In this article, Ferziger and Currell examine four federal bounty schemes-the False Claims Act and the schemes created by the SEC, IRS, and U.S. Customs Service-constructing an economic model to aid agencies and legislators alike in the formulation of more efficient and effective bounty programs. The authors first articulate a frame-work through which existing programs can be analyzed, elucidating such factors as informant anonymity, bounty award amounts, ad-ministrative program costs, and program publicity. Upon this frame-work, the authors set forth their comprehensive model of the incen-tives and motives underlying agency-informant interaction throughout the bounty process. Taking into account a host of socio-political concerns, the authors then demonstrate the real-world appli-cability of the economic model they have fashioned.
* Bigelow Fellow and Lecturer in Law, University of Chicago Law School.
** Associate, Winthrop & Weinstine, P.A., Minneapolis, Minnesota. The authors would like to thank James Cox, Sara Tollefson Currell, David Currie, Steven Duf-field, Richard Epstein, Daniel Fischel, Erik Luna, Brian Nagorsky, Douglas Sylvester, Ralph Vartabe-dian, Adrian Vermuele, and Sarah Waldeck for extremely helpful information, comments, and discus-sion. Errors are ours alone, although each of us will probably blame the other.