In Other Whistleblower News...3 More Important Stories
If you haven't noticed, we have been really focused on passing stronger whistleblower laws in the economic stimulus bill. We had a major success when the bill passed the House of Representatives, and now we are moving on to the Senate. Although this legislation is the major whistleblower story this week, there are a few other stories on our radar, and I just wanted to share them with our readers.
First, and easily the second biggest whistleblower-related news story of the week, is the testimony of Harry Markopoulos, a financial analyst who tried to blow the whistle on Bernie Madoff's $50 billion fraudulent Ponzi scheme for over a decade. Markopoulos offered stunning testimony before the House Financial Services Committee this week, condemning the SEC for ignoring his reports and mismanaging the investigation. Markopoulos told lawmakers that he "gave them [the SEC] a road map and a flashlight to find the fraud, and they didn't go where I told them to go.”
Here are some articles detailing his testimony:
CBS NEWS: "Madoff Whistleblower is Finally Heard"
CNN MONEY: "Madoff Whistleblower Blasts SEC"
TIME: "A Madoff Whistleblower Tells His Story"
Now for some good news. Along with the legislative progress being made at the national level, two states are considering statutes to create and/or strengthen whistleblower protections. This Minnesota Star-Tribune opinion piece explains the how Minnesota (and all states) can benefit from a False Claims Act. Minnesota's legislature is considering enacting an FCA modeled on the federal law.
North Dakota is also considering strengthening its whistleblower laws after recent retaliation against state employees revealed that the laws are inadequate.
Our last bit of news comes from Texas, where Marilou Morrison, a former employee of the Texas Commission on Human Rights was awarded a jury verdict of nearly $1 million after suffering retaliation for blowing the whistle on racial discrimination in the agency's hiring practices. The kicker is this: the Texas Commission on Human Rights is the agency that is supposed to enforce laws against discrimination. Ms. Morrison's attorney Gary Bledsoe summed it up nicely by saying, "The agency that is supposed to enforce civil rights is being hit with basically a million dollar judgment for violating the very statutes they are required to enforce."
Ok, now that you are up to date on whistleblower news from around the country, keep checking back for more information on the federal employee whistleblower legislation!
Dear NWC, 2/6/2009
Please note that a previous reply to your Sam Dratch NWC Article that mentioned Mr. Stephen and Michael Kohn and Mr. Colapinto willingness to assist our Legislatures and presumably all other vested Entities and/or Individuals in their efforts within this Whistleblower 'Oversight and Accountability' Protection Restoration Enhancement Act was removed after several days from your website.
Please note that you continue to have my support even though I have become more aware of some major discrepancies as from my not previously having more fully read the intended legislation Amendment. Also I have not completely and/or more fully read many parts of this impending Legislation Amendment although I would like to re-mention my previous reply which was
'Thank you Mr. Stephen and Michael Kohn and Mr. Colapinto and all at the NWC for your continued due diligence, proper and forthright, dedication and perseverance with exemplary Fidelity, Integrity and Bravery in your admirable efforts and endeavors on behalf of all to support our great Country, Nation and democracy within and towards the proper and forthright interpretation(s) to preserve and protect our US Constitution, Bill of Rights and our Declaration and endeavors towards Life, Liberty and the Pursuit of Happiness'.
Please note that in my view and opinion 'ALL CIRCUIT REVIEW' in our US Courts including in District, Appellate is mandated in proper and forthright interpretation of our US Constitution Bill of Rights and without a 5 year time limit and may not be excluded as in the Platts//Van Hollen revised HR985 Amendment!! As I presume you well know that this 'ALL CIRCUIT REVIEW' is absolutely critical and in compliance of our US Constitution Bill of Rights to hope to insure as best as possible a unfettered balance in our US Legal System and a mandated substantial and necessary reduction to conflict of interest concerns.
Also I am saddened to notice that most of these very same US Legislatures as I have previously stated on NWC, GAP and POGO websites as a blog comment reply have instituted the repeal of Glass Stegal, Gramm//Billing etcetra Act and the 2000 Commodity Futures Trading Act. Also, today I was again further saddened to hear that the new CIA Chief has somehow presumptively stated his recommendation to not prosecute for past (and possibly future??) crimes of torture!! A seemingly complete lack of respect and regard to 'Oversight and Accountability" and our US Justice Department that has seemingly accomplished remarkable accomplishments in the recent past few weeks!! even though I continue to be saddened that the US application implementation of the Death Penalty has not been halted!! Absolutely appalling!!
Obviously there are many other concerns and acknowledgements that I would prefer to mention at this time, although in my efforts to be brief, I will close and wish you the best of good luck and good wishes.
Thank you and all for your time and considration.
Sincerely,
Axel
Axel V. Sabersky
The Federal Government also imposes laws against unlawful discrimination, civil rights violations, and retaliation for whistleblowing.
IRS discriminatory Taxation on Civil Rights violations awards is unconstitutional and violates the First Amendment by enforcing unfair and excessive taxation on settlements of these cases. This excessive and unfair taxation is likely to deter the expression of protected speech by making it very difficult to be “made whole†after filing claims.
The Internal Revenue Service (IRS ) is a public entity duly organized and existing under the laws of the Federal Government and therefore must abide by the Constitution of the United States. By imposing discriminatory, unfair, and excessive tax on non-pecuniary compensatory damages awarded to victims of whistleblower retaliation and other civil rights violations, the IRS is depriving those who report unlawful discrimination, sexual harassment, and whistleblower cases of their rights under the United States Constitution.
In Coszalter v. the City of Salem , the court correctly held that defendants’ actions were adverse employment actions. In making its determination, the court correctly emphasized the fact that a government employer (and I would extend this to the IRS or any other government agency) cannot abuse its position and interfere with the constitutional right to exercise freedom of expression guaranteed to employees under the First Amendment. I would ask the President to extend this ruling to the IRS.
Unfair and excessive taxation of Civil Rights Settlements by the IRS would appear to be intentional and outrageous and done for the purpose of causing government employees who suffered retaliation by their employers for exercising their First Amendment Rights to suffer further insult and financial injury. These unfair tax laws were and continue to be enforced with reckless disregard of the consequences to those seeking relief for the actions of their employers. In imposing excessive and unfair taxation on whistleblower and other Civil Rights cases, I believe it is done by the IRS for the purpose of making an example of those who settle or litigate their cases to other government employees not to comment on or criticize the practices of the government.
IRS Unfair Tax Laws are Retaliatory and Fly in the Face of the Whistleblower Protection Act
“Prior to the amending Section 62 (a) of the American Job Creations Act of 2004 on October 22, 2004, those who received settlements for unlawful discrimination cases could not deduct attorneys’ fees and were taxed on the total settlement. Potentially, a victim of such discriminatory tax laws could spend years fighting a case and end up receiving nothing, and in fact, owing the IRS taxes due to the taxation of attorneys’ fees. (A Government Employee settles his case and the Government takes back everything that was supposed to make the employee “whole†after years of litigation). This obviously unfair and excessive tax injustice has finally been resolved.
Today, there remain two major sources of excessive and unfair taxes in such cases:
1. Taxation of damages for noneconomic harm that employees suffer as a result of egregious, intentional harassment, retaliation, or similar workplace wrongs; and
2. Taxation of lump-sum settlements or awards that compensate for lost back pay over a period of years at the artificially high marginal tax rates of the year of receipt.†-
Any one of the three above examples of excessive and unfair taxation by the IRS is considered discriminatory and an adverse action against an employee for expressing matters of public concern. When taken together, the IRS actions towards whistleblowers amount to “a severe and sustained campaign of retaliation that is ‘reasonably likely to deter’†government employees from engaging in speech protected under the First Amendment.â€ÂÂÂ
“Because whistleblowers are indeed placed in a precarious position with their decision to speak out against their employer, an employer may “wait until the victim is especially vulnerable or until an especially hurtful action becomes possible.†Most importantly, the court stressed that, a per se rule specifying a time period as too long to support an inference of retaliation would enable the employer to “wait until they [thought] the lapse of time [would disguise] their true motivation.â€ÂÂÂFor example, an employer could simply not reveal his intentions and also not provide demonstrably false or pretextual reasons for his acts, and thus escape freely from any allegations of retaliation.†3
As an agent of the Government, the IRS is aiding and abetting the other government agencies by acting indirectly on their behalf within the scope of their agency to retaliate against those who express protected speech. The IRS under color of law, and pursuant to the IRS’s official policy, practice, regulation, custom, and usage, is depriving whistleblowers and others of their rights guaranteed by the United States Constitution.
"Often the very act of whistle blowing indicates that governmental regulation has been inadequate to protect the public; it represents a breakdown of systems whose very goal is to make sure that misconduct does not occur in the first place.†‘In a dynamic society where breakdowns of systems are inevitable, the whistle blowing employee provides the public some assurance that the government is functioning properly, especially in the areas of safety and health, and waste of Taxpayers’ money.â€ÂÂÂ
In the case of Coszalter, Jones, and Johnson, the Ninth Circuit expanded the First Amendment protection of these plaintiffs from their employer’s adverse employment actions. In so doing, the Ninth Circuit has provided the necessary protections to future employees who are faced with similar circumstances as the plaintiffs faced in this case.â€ÂÂÂ
The Civil Rights Tax Relief Act provides the same necessary protections to employees who finally receive settlements by protecting the employee from unfair taxation and further retaliation by another government agency. (IRS) Unfair taxation of Civil Rights Cases is egregious and flies in the face of the whistle blower protection act.
320 F.3d 968 (9th Cir. 2003).
(National Employment Lawyers Association – NELA)
Coszalter, 320 F.3d at 976 (listing all the employment actions the court
believed could have been adverse under the “reasonably likely to deter†test).
Winters v. Houston Chronicle Publishing Co., 795 S.W.2d 723, 729 (Tex. 1990)).
6 David Uchida, 3/16/2004, “COSZALTER V. CITY OF SALEM:1 JUSTWHISTLE WHILE YOU WORK—EXPANDINGFIRST AMENDMENT PROTECTION FOR THEWHISTLEBLOWING EMPLOYEE