Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

The Ninth Circuit U.S. Court of Appeals reinstated a Sarbanes-Oxley case and made some helpful comments about SOX. In a decision issued last month, the Court reversed a dismissal by a Nevada magistrate judge and sent the case back so Lena and Shawn Van Asdale can have their day in court. "The success, or failure, of the Van Asdales’ lawsuit does not depend on their ability to show any actual fraud, only that they reasonably believed that fraud had occurred," the Court says.  Here, here. "An employee need not cite a code section he believes was violated," the opinion adds. The case is Van Asdale v. Int'l Game Technology, ___ F.3d. ___, No. 07-16597 (9th Cir. Aug. 13, 2009).

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The National Whistleblowers Center (NWC) is benefiting from a fine group of interns this Fall.  Standing are Yongjin, Christina, Tommy, Meryl, Erin, Laraib and Jonathon.  Seated are Katya, Adam, Lindsay, Karen and Phil.  Not pictured: Jason.  Thank you all for your dedication to our cause.

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The Department of Labor's Administrative Review Board (ARB) has issued a decision reversing a recommended decision of an Administrative Law Judge (ALJ). The decision finds that nuclear  whistleblower  James Speegle is entitled to statutory remedies for Stone & Webster's  2004 decision to fire him. The attorneys representing Speegle include David Marshall and Daniel Edelman of Katz, Marshall & Banks in Washington, DC, and Frank Potts of Florence, Alabama.

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The Metro Washington Council, AFL-CIO and the DC Labor Film Festival last night hosted an area premiere showing of Michael Moore's new film, Capitalism: A Love Story. In the film, Moore skillfully juxtaposes modern American ideas of capitalism against traditional values of equality, justice and democracy. Someone says capitalism is established by the U.S. Constitution? Moore visits the National Archives but cannot find "capitalism" or "free enterprise" anywhere in the original Constitution. Capitalism has brought us the highest standard of living and prosperity? Moore finds victims of the foreclosure crisis who disagree, persuasively. I laughed out loud when Moore portrayed what Jesus might have said if Christianity endorsed capitalism.

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The first ever Whistleblower Film Festival is opening this Thursday, October 1, 2009, 6:30 pm at the Capitol Visitors Center; 1st Street and East Capitol Street, NE. The first film will be The Pentagon Wars. The film is free and open to the public. The Whistleblower Film Festival is part of the DC Labor FilmFest which features a series of films from October 13-16.  The Whistleblower Film Festival will continue every Thursday in October with Mr. Smith Goes to Washington (10-8), Silkwood (10-15), The Insider (10-22) and finally, The Most Dangerous Man in America: Daniel Ellsberg and the Pentagon Papers (10-29). Sponsors of the Whistleblower Film Festival include the Project On Government Oversight, Public Citizen, the Government Accountability Project, the National Whistleblowers Center, Union of Concerned Scientists, Bernabei & Wachtel, the Fund for Constitutional Government, Marshall & Banks and The Nation Institute. The Festival is part of their call for the Whistleblower Protection Enhancement Act (WPEA), a bill to give federal employee whistleblowers effective access to jury trials.

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Even federal agencies use independent contractors and skirt the protections provided to "employees." This month, a federal judge in Washington, DC, held that a former translator can sue the Voice of America officials who terminated her contract after she made an anti-war music video. Using the authority of Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971), Judge Ellen Segal Huvelle has ordered that Melodi Navab-Safavi can proceed with her lawsuit against the Broadcasting Board of Governors (BBG) and its officials.  Judge Huvelle noted that Navab-Safavi made the video on her own time, without using any government resources.“[T]he law is settled that as a general matter the First Amendment prohibits government officials from subjecting an individual to retaliatory actions . . . for speaking out.”

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In response to the many requests from our Attorney Referral Service (ARS) members and non-members looking for advice on whistleblower protection cases, the National Whistleblower Legal Defense & Education Fund will hold a two-hour telephone conference call on Wednesday September 30th from 10:00 am – 12:00 pm (EST) conducted by leading attorney experts.  This is the ideal way for attorneys to get answers to your tough questions about whistleblower protection, case strategies, legal remedies and laws.

NWC Special Counsel Dean A. Zerbe was recently added to the faculty for the call to address tax and False Claims Act questions.  Mr. Zerbe was active in Congressional investigations of government waste, fraud and abuse for over 25 years.  Mr. Zerbe left Congress in 2008 where his last position was as Senior Counsel and Tax Counsel on the Senate Finance Committee for Senator Charles E. Grassley. In his work for Senator Grassley, Mr. Zerbe was the driving force behind the drafting and passage of legislation that created the Whistleblower Office at the IRS as well as changes in the tax code that greatly expanded the rewards for tax whistleblowers. In addition, Mr. Zerbe was closely involved with the False Claims Act on behalf of Senator Grassley - who is the author of the modern False Claims Act/Qui Tam.

Faculty also includes Stephen M. Kohn, National Whistleblowers Center (NWC) Executive Director, Michael D. Kohn, NWC President, David K. Colapinto, NWC General Counsel, and Richard R. Renner, NWC Legal Director.

SIGN UP TODAY FOR THIS SPECIAL CONFERENCE CALL OPPORTUNITY!

For more information please click here.

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Public Employees for Environmental Responsibility (PEER) reports that it has filed briefs for Robert McCarthy, the former General Counsel for the United States Section, International Boundary and Water Commission (USIBWC).  PEER says that USIBWC fired McCarthy on July 31, 2009 -- three days after McCarthy disclosed his reports of waste, fraud and abuse by USIBWC.  McCarthy claims  that USIBWC planned to build “cosmetic” levees along the Rio Grande. These would give the appearance of flood control while leaving residents vulnerable to seasonal flooding. USIBWC also planned to divert flood control funds to subsidize building a border barrier.  PEER had previously labeled the USIBWC "the worst agency in the federal government." USIBC Commissioner Bill Ruth, a Bush Administration holdover, fired McCarthy for “continued failure to support me [Ruth]…in a constructive and collegial manner." PEER is asking the Merit System Protection Board (MSBP) to reinstate McCarthy.

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Transparency International (TI) today released its 2009 Global Corruption Report: Corruption and the Private Sector (GCR). TI finds that one out of five business executives report that they received a solicitation for a bribe.  An equal number report that they lost business due to a competitor paying a bribe.

I like to read the GCR together with the Price Waterhouse study reported here in 2008.  It found that the most effective way to uncover corruption is through whistleblowers.  The logical conclusion is that we need effective legal protections and rewards for whistleblowers, both here and in other countries.

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WCNC television news released a story last week about BB&T bank whistleblower Amy Stroupe. While working as an investigator for the bank, she uncovered a $20 million ponzi scheme. A bank official and some developers used a phony land development to recruit customers.  They actually paid some monthly mortgage payments for the customers to keep a lid on the scam while they recruited new customers.  Stroupe is represented by James, Hoyer, Newcomer, Smiljanich & Yanchunis of Tampa, Florida. She is now waiting for a decision from the U.S. Department of Labor, Office of Administrative Law Judges, under the Sarbanes-Oxley Act (SOX).

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On September 14, 2009, the International Criminal Court for the former Yugoslavia (ICTY) in The Hague ordered Florence Hartmann to pay a fine of 7,000 Euros for violating the court's confidentiality pledge.

Florence Hartmann, a former journalist for the French Daily Le Monde, was a spokeswoman for the ICTY from 2000 to 2006. After she left her position as a spokeswoman for the former chief war crimes prosecutor Carla del Ponte in 2006, she wrote a book – Peace and Punishment: The Secret Wars of Politics and International Justice and several articles in Paris Match magazine. In her book and articles, she revealed “the ICTY had decided in secret not to disclose information that could have proved a link between Belgrade and war crimes committed in Bosnia – most notably massacre of up to 8,000 Muslim men and boys at the Bosnian village of Srebrenica in 1995.” During the war crimes case against former President Slobodan Milosevic, the Serbian government had submitted the document to the court on the condition of secrecy. Upon Milosevic’s death in March of 2006, the trial ended – without a verdict. The original documents have been not published yet (BBC News, 2009).

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Sen. Harry Reid (D-NV) and other politicians have called on the administration to review the cases of Robert MacLean and Spencer Pickard, according to a story in today's Las Vegas Review-Journal. Both MacLean and Pickard were fired by the Transportation Security Administration (TSA) after going public about shortcomings in TSA's security plans.  Robert MacLean  criticized TSA for grounding all the air marshals, nationwide, during a security alert, to meet a budget goal.  Spencer Pickard criticized TSA for requiring air marshals to meet wardrobe requirements that made them stick out like sore thumbs.  Both cases well demonstrate why we cannot rely on administrative procedures where all the decision makers are appointed by the administration that is being criticized.  Both cases show how public safety will be enhanced if Congress passes the House version of the Whistleblower Protection Enhancement Act (WPEA), HR 1507, and allows jury trials for federal employee whistleblowers.

The Review-Journal article notes how the new administration promised last June that it would review whistleblower cases from the prior administration.  We are still waiting for the outcome of that review.

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Last Wednesday, Robert Mueller, Director of the Federal Bureau of Investigations, appeared before the Senate Judiciary Committee for an oversight hearing.  Sen. Charles Grassley (R-Iowa) used the opportunity to question Dir. Mueller about how the administration's proposed whistleblower bill (S. 372) came to propose the repeal of the protection for FBI employees (5 USC 2303).  Dir. Mueller testified that he did not recall what that section of law said off hand, but promised to get back to Sen. Grassley about that. The Director also promised to check whether any FBI employees were involved in making the proposal to repeal 5 USC 2303.  You can read about the exchange in The Washington Times. The National Whistleblower Center (NWC) has now posted a transcript of the Senate Judiciary Committee Oversight Hearing, and of Sen. Grassley's press conference where he says he will place a hold on all Justice Department nominations until his questions are answered.

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David Colapinto, General Counsel of the National Whistleblowers Center (NWC), spoke with ABC News correspondent Lindsey Ellerson in a story released today.  Ellerson looked at how the new movie, The Informant!, sheds light on other more notable whistleblowers.

Colapinto told Ellerson, "In terms of the Whitacre case itself, I thought that it was both entertaining and it was an interesting portrayal of that unique case -- but it should not be confused with what whistle-blowers face on a day-to-day basis." Colapinto suggested that other cases, such as Colleen Rowley's better portrayed the whistleblower experience. "What she did in terms of coming forward on the problems with the failure to report the events of 9/11 was just absolutely incredible, Our government has still not come to terms with the lessons of 9/11 which she was responsible for really shining the light on in terms of the lack of communication between agencies in the executive branch, law enforcement, intelligence, etc."

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The Informant! is a new movie that plays the price-fixing crimes of ADM, and the embezzlement of whistleblower Mark Whitacre, for airy comedy. The original music track by Marvin Hamlisch gives an upbeat 1960's feel to this 1990's corporate crime drama.

The producers of The Informant! provided a screening of their new film for whistleblower advocates in Washington, DC.  They hope to start a dialogue about what their film can contribute to the whistleblower cause.  It is a serious endeavor spawned from a film that looks for laughs. Then again, whether we can reach deeper insights, and wider audiences, while laughing is itself a serious question. The informant! is opening tonight.

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Michael D. Kohn, President of the National Whistleblowers Center, is attending the Anti-Corruption and Transparency Symposium this week in Seoul, South Korea. According to an article in today's The Korea Times, the symposium is co-hosted by Korea's Anti-Corruption and Civil Rights Commission (ACRC) and the APEC Secretariat. It is called, ``Systematic Approach to Building Anti-Corruption Capacity,'' 

Michael Kohn is speaking on the importance of protecting whistleblowers to encourage them to come forward with information about corrupt activities in government and business. Other photos of the event, including photos of the food served there, are available from a Korean language blog.

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San Francisco attorney Cliff Palefsky testified on Tuesday about the need for legislation to protect workers from losing their right to trial by jury through employer-imposed pre-dispute binding arbitration agreements.  Palefsky testified to the House Judiciary Committee on behalf of the

, and a copy of his testimony is now available. The Committee is currently considering the Arbitration Fairness Act of 2009, HR 1020, which would prohibit employer-imposed arbitration agreements from having any effect on employment discrimination and retaliation claims that arise after the agreement is signed.  Too many whistleblowers have lost their right to a trial by jury because of employer policies that require employees to sign away this right as a condition of employment.  Hopefully, Congressional action passing this bill will restore the right to trial by jury for whistleblowers and for all of America's working men and women.

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U.S. District Judge Gladys Kessler has rejected employer attempts to constrict the whistleblower protections of the federal and District of Columbia False Claims Acts.  In a decision issued last week, she corrected a judgment from a jury verdict, and overruled the employer's attempts to vacate that verdict. The case is Kakeh v. United Planning Organization, Case No. 05-1271 (GK) in the U.S. District Court for the District of Columbia.

Attorney Jason Zuckerman of The Employment Law Group writes today that, "Judge Kessler rejected several arguments by UPO that would undermine the statutory whistleblower protections under which Kakeh brought his claim, the D.C. Whistleblower Protection Act (“WPA”) and the retaliation provisions of the False Claims Act (“FCA”) and the D.C. False Claims Act (“DCFCA”)." These include attempts to apply the "but for" standard of causation that the U.S. Supreme Court applied to age discrimination cases in Gross v. FBL Fin. Svcs., Inc., 129 S.Ct. 2343 (2009), and the "duty speech" exclusion adopted for First Amendment claims in Garcetti v. Ceballos, 547 U.S. 410 (2006). Judge Kessler also rejected a proposal to require "magic words" of "waste, fraud and abuse," and held that even disclosure of public information about false claims is still protected. Jason Zuckerman's post follows in the continuation of this blog entry, reposted here with his permission

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Stephen M. Kohn, Executive Director of the National Whistleblowers Center (NWC), is in Montenegro this week calling for enactment of whistleblower protections as a key component of transparency.

Kohn is traveling to Montenegro under the auspices of the U.S. Department of State. Today, the on-line journal Vijesti is running an article in Croatian about Kohn's visit to Podgorica, Montenegro's capital.

According to the Vijesti article, Kohn is saying that efforts to expose corruption in government and in businesses depend on protecting whistleblowers. A translation of the Vijesti article is available in the continuation of this blog entry.

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On July 29, 2009 the Senate Committee on Homeland Security and Governmental Affairs unanimously reported out of committee S. 372, the Whistleblower Protection Enhancement Act of 2009.  Unfortunately, this bill contains many significant differences from the House Bill (H.R. 1507), which the National Whistleblowers Center (NWC) fully supports.  

This post is the twelfth in a series of twelve, examining specific weaknesses in the Senate Bill. Each installment examines a crucial issue of whistleblower rights compromised by the Senate’s version of the bill.

XII: WHAT HAPPENED TO THE WHITE HOUSE?

I had the “honor” of being involved in the initial discussion process with the White House and reviewing the proposals circulated by the White House.  I could spend the rest of this blog venting my frustration over what did and did not happen as a result of that process, but I won’t.

The bottom line is that President Obama did promise, on numerous occasions, to support whistleblowers.  He did specifically endorse the framework for protection set forth in the House bill.
 

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In 2003, John Kopchinski was earning $125,000 a year selling the drug Bextra for Pfizer.  He had a baby son, and his wife was pregnant with twins.  The Gulf War veteran says that, "In the Army, I was expected to protect people at all costs."  At Pfizer, though, he was expected to sell Bextra, even though it raised the risk of heart attacks and strokes.  After Kopchinski expressed his concerns about Bextra's safety, Pfizer fired him.  He eventually got a new job paying $40,000 a year.

Kopchinski hired attorney Erika Kelton of Phillips & Cohen.  In 2005, Pfizer withdrew Bextra from the market.  Now Pfizer is pleading guilty to felony charges of promoting Bextra for unapproved uses.  Pfizer will pay penalties of $2.3 billion, and Kopchinski will get a $51.5 million share for filing the "qui tam" lawsuit under the False Claims Act (FCA) that helped the government collect these penalties.  Kopchinski is one of five whistleblowers sharing in the settlement.  He says that he does not expect his life to change much now, according to a news account of this settlement available from Reuters.

Attorney Dean Zerbe, senior counsel to the National Whistleblowers Center, told Reuters and the ABA Journal that he hopes publicity of this settlement will encourage other whistleblowers to come forward with information about fraudulent marketing. "The use of whistleblowers has really opened up the keys to the kingdom in terms of what's going on in these companies," said Zerbe, who is also a partner at the law firm of Zerbe, Fingeret, Frank and Jadav in Washington. "You'd never find out what's happening without this kind of reward structure." 

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A child welfare employee has won a million dollar jury verdict in Palm Beach County, Florida, according to the Miami Herald.  Gerolyn Shapiro says that she was fired because her testimony pointed to the negligence of another county employee.  Shapiro had worked for the county's Department of Children and Families for ten years.  She testified that the negligence resulted in the deaths of two children and the severe brain injury of a third child.

Notably, Shapiro's testimony occurred years before her 2006 discharge.  The jury was apparently unmoved by how the county managers allowed Shapiro to continue working for years after the testimony at issue, and was still able to connect the dots to find that the manager's anger over the testimony was still the cause of the discharge. This case well explains why whistleblowers everywhere need to have access to juries to have confidence that the legal system will protect them.

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The Mid-Hudson News reports that Ulster County, New York, has now adopted a Whistleblower Employee/Agent Protection  Policy. The report says that the policy will protect employees of the county and its contractors.  One proponent of the policy was County Comptroller Elliott Auerbach. The article quotes him as saying that the policy is, “To give the county employee, or county contractor, an oasis, where they can feel safe when they bring an issue forward. Realize how important that is, and put into perspective what’s been going on the past six to nine months in our county, and you’ll understand the value of the legislation that you are going to pass tonight.”

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On the 8th anniversary of the terrorist attacks on the World Trade Center and the Pentagon, FBI whistleblower Coleen Rowley has issued a call to action for the White House and Congress to pass effective legislation protecting national security whistleblowers.  Ms. Rowley is urging all Americans to put pressure on their Senators and Congressmen to immediately enact whistleblower protections for national security employees, whose whistleblowing actions are often vital to the safety and security of our citizens.

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The Open Society Institute National Security Human Rights Campaign is sponsoring an event on September 15th entitled, “Whistle-blowers: A Conversation with Daniel Ellsberg and John Dean.”  The event celebrates the U.S. premiere of the feature documentary, “The Most Dangerous Man in America: Daniel Ellsberg and the Pentagon Papers.”

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On July 29, 2009 the Senate Committee on Homeland Security and Governmental Affairs unanimously reported out of committee S. 372, the Whistleblower Protection Enhancement Act of 2009.  Unfortunately, this bill contains many significant differences from the House Bill (H.R. 1507), which the National Whistleblowers Center (NWC) fully supports.  

This post is the eleventh in a series of twelve, examining specific weaknesses in the Senate Bill. Each installment examines a crucial issue of whistleblower rights compromised by the Senate’s version of the bill.

XI: IS FILING A NATIONAL SECURITY WHISTLEBLOWER CASE UNDER S. 372 MALPRACTICE PER SE?

In the posts 9 and 10, we set forth some of the deficiencies in the national security whistleblower section of S. 372.  We explained how it is basically impossible for a whistleblower to win under the current Senate language.

Simply wasting many years and thousands of dollars in a new bureaucracy that Franz Kafka would have marveled at is not enough unto itself to say that filing a claim under the Senate provisions would constitute legal malpractice.  However, Title II of S. 372 is not so benign.  It is a retaliators fantasy.  It creates a process, which permits the agency to completely discredit an employee and destroy their career in law enforcement and intelligence forever.

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At a Labor Day rally held yesterday in Cincinnati, Ohio, President Barack Obama told the story about his visit to Greenwood, South Carolina in the presidential primary campaign. Not realizing the remote location of Greenwood, President Obama agreed to visit that small southern town in exchange for the primary endorsement of a South Carolina state legislator.

Having forgotten about his promise, on his next trip to South Carolina Mr. Obama was tapped on the shoulder by a campaign staffer who informed the Senator that he needed to wake up early the next morning.  

Mr. Obama asked why?  “Because you need to be in the car at 6:30am so we can go to Greenwood like you promised,” the staffer replied.

Upon arriving at Greenwood, the future president was disappointed by the size of the small crowd of about 20 people, but that small crowd proved to be a turning point in his campaign when Mr. Obama was greeted by a Greenwood city council member, who started chanting, “Fired, Up? Ready to Go!”   
By keeping a promise, Mr. Obama by happenstance found his voice in the primaries and his campaign was re-energized all the way to the White House after adopting that chant.

It is now time for Mr. Obama to keep another promise he made during the campaign. 

In May of 2007, Mr. Obama’s presidential campaign promised America's whistleblowers in writing that he stood behind their need for legal protection and fully supported federal court access and jury trials for all federal employees.

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As you may know, Army Corp of Engineers whistleblower Bunny Greenhouse has been actively involved in the fight for stronger whistleblower protection.  She has often said that she is only trying to allow the truth to be spoken.  Studies have proven that the best way to discover the truth is to encourage employees to blow the whistle and protect them from retaliation.

Ms. Greenhouse, concerned about the provisions included in the Senate bill, wrote a letter urging the Senate and the White House to “stop paying lip service to strong whistleblower protection for federal employees.”  She stated that despite all the retaliation she suffered as a result of blowing the whistle on the no-bid contract to Halliburton she would still not be able to tell her story to a jury of her peers.  Ms. Greenhouse explained that most federal employee would also be denied court access under the current Senate bill.

Her letter featured on the front-page of today’s Washington Times has sparked a debate over the true effectiveness of the Senate jury trial provision.

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On July 29, 2009 the Senate Committee on Homeland Security and Governmental Affairs unanimously reported out of committee S. 372, the Whistleblower Protection Enhancement Act of 2009.  Unfortunately, this bill contains many significant differences from the House Bill (H.R. 1507), which the National Whistleblowers Center (NWC) fully supports.  

This post is the tenth in a series of twelve, examining specific weaknesses in the Senate Bill. Each installment examines a crucial issue of whistleblower rights compromised by the Senate’s version of the bill.

X: IF IN DOUBT – THROW OUT THE CASE!

Buried at the very end of the national security whistleblower section of S. 372 is a grant of unprecedented power to the directors of the FBI, CIA, NSA and every other intelligence agency.  

These directors are authorized to have any whistleblower case summarily dismissed, with no administrative or judicial review. 

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On July 29, 2009 the Senate Committee on Homeland Security and Governmental Affairs unanimously reported out of committee S. 372, the Whistleblower Protection Enhancement Act of 2009.  Unfortunately, this bill contains many significant differences from the House Bill (H.R. 1507), which the National Whistleblowers Center (NWC) fully supports.  

This post is the ninth in a series of twelve, examining specific weaknesses in the Senate Bill. Each installment examines a crucial issue of whistleblower rights compromised by the Senate’s version of the bill.

IX: DUE PROCESS FOR NATIONAL SECURITY WHISTLEBLOWERS?

The national security whistleblower protection sections of S. 372 are a bad joke.  They completely undermine any semblance of whistleblower rights, and ensure that no national security worker will ever prevail in a disputed whistleblower case.  The language set forth in Title II of S. 372 is disheartening, and should be struck from the law without delay.  

Why is it so bad?

First, there is no court access.  

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