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

Today, the New York City Council will vote on three whistleblower laws. I had the opportunity to testify about these three bills on April 16th this year before the Committee on Governmental Affairs. The NWC supports the NYC Council's efforts to improve whistleblower protections.

Proposed Int. No. 479-A requires city contractors and subcontractors to post a notice informing employees about their whistleblower rights. Knowledge of existing whistleblower laws is essential in encouraging employees to report fraud.

The NWC strongly supports Proposed Int. No. 816-A, which extends protections under New York City's Whistleblower Law to employees of city contractors and subcontractors.

Proposed Int. No. 828-A is a good first step in making the New York City False Claims Act more effective in detecting and deterring fraud. We look forward to working with the Council in the future to continue improving the Act to ensure accountability of city contractors.

If you would like to know more about these three bills check out the audio from the NYC Committee hearing or my written testimony.

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With the change of seasons comes another class of interns.  This summer, we are pleased to have a large group of law students, and some undergraduates, who have devoted themselves to learn about whistleblower advocacy.  Pictured here are Adrian, Jane, Nate, James, Barrett, Julia, Sehra, Samantha, Abisola, Lauren, Adam, Andy, Bassim, Matt, Amber, Vicki, Simon, Russell, Joseph, and James. Thank you all for joining us as interns.

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Tune in today at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.

Jane Turner interviews attorney Jeff Anderson. Mr. Anderson has pioneered the use of civil litigation to seek justice for survivors of childhood sex abuse case and has filed thousands of lawsuits alleging sex abuse by priests. Jane and Mr. Anderson discuss the difficulties in blowing the whistle.

 
Submit Your Question to be asked on air during the show or call in to 1-888-874-4888.

Missed last week's episode?? You can listen to the podcast.

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Last night, I walked into my son's room to say goodnight. I found him with a black sharpie and a pack of stencils. He had used them on a white t-shirt, which now read, “Vicky is NOT a Snitch.” Vicky is not his friend's real name but the one I'll use to relate his story.

High school administrators accused Vicky of starting a fire in the girls’ restroom. She denied it and told them she was innocent. The administrators found new evidence that pointed to another student as the perpetrator of the crime. Vicky says they did not get the information from her. The administrators at this point went off track in their zest for a confession. Instead of telling the accused student that they had a witness, they told her that Vicky was the witness against her. In doing this, the administrators were able to get a complete confession. The guilty student immediately started her campaign of retaliation against Vicky both at school and via social media.

The school administration failed to protect the alleged whistleblower. It doesn't matter whether or not they got the information from Vicky. They still threw an innocent student under the bus to get the confession. This has created a chilling effect on the entire student body. When other students hear of this story and see the retaliation Vicky is experiencing, they will all think long and hard before reporting anything to the administration. Students will most likely decide not to report what they witness.

It is sad that negative stigma surrounding “snitching” still exists in today's society. Students should be taught there is honor in doing the right thing. The School administration had an opportunity to create an atmosphere of Honesty Without Fear. Unfortunately, they instead created an environment that is hostile to whistleblowers.

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Tune in today at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.

In the first half hour, Jane Turner interviews whistleblower Julia Davis. Ms. Davis was a Customs and Border Protection Officer who was retaliated against for exposing serious shortcomings in the processing of aliens from countries known to harbor terrorists. Jane and Ms. Davis discuss her whistleblower experience portrayed in the recently released documentary “Top Priority: The Terror Within.”

In the second half hour, co-host Lindsey Williams will interview Mike Kohn, one of the lead attorneys for whistleblower Dr. Kenneth Jones. Kohn will discuss Dr. Jones' recent court victory against Harvard Teaching Hospital. The victory clears the way for Dr. Jones to put Harvard Teaching Hospital on trial for research fraud in one of the largest NIH grants for Alzheimer's research. Tune in to learn about how the False Claims Act protects tax dollars invested in scientific research.

 
Submit Your Question to be asked on air during the show or call in to 1-888-874-4888.

Missed last week's episode?? You can listen to the podcast.

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Dr. Frederic Whitehurst took on the FBI because he knew that defendants had been wrongly convicted on the basis of seriously flawed testimony by the FBI crime lab. On Wednesday, the Washington Post reported that the D.C. Superior Court overturned the conviction of a man who wrongly served 28 years in prison for killing a taxi driver. It is amazing to see the positive result of Dr. Whitehurst’s hard work. One person really can make a difference.

Sadly, Mr. Tribble was not the only victim of the misconduct by the FBI crime lab. After Dr. Whitehurst's original whistleblower disclosures, the Justice Department formed a Task Force to review thousands of cases impacted by his allegations and to determine if any individuals were wrongly convicted. Although the Justice Department and FBI pledged to correct their mistakes, documents obtained by the NWC through the Freedom of Information Act (FOIA) show they failed.

Last month, the Washington Post published a series of articles about the failures in the Task Force’s “investigation,” including that they never issued a final report and did not inform defendants about the misconduct in their cases. Once again, this only came to light because Dr. Whitehurst followed through on his personal vow to find out who was harmed. He was the one who lead the NWC Forensic Justice Project’s FOIA fight to release the documents about the Task Force.

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In a notice published in yesterday's Federal Register, Dr. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health, announced the formation of the Whistleblower Protection Advisory Committee (WPAC). The notice explains: 

WPAC’s duties will be solely advisory and consultative. WPAC will advise, consult with, and make recommendations to the Secretary and the Assistant Secretary on ways to improve the fairness, efficiency, effectiveness, and transparency of OSHA’s whistleblower protection activities. In particular, WPAC will make recommendations regarding the development and/or implementation of:

• Better customer service to both workers who raise complaints and
• employers who are the subject of investigations;
• Improvement in the investigative and enforcement process, and the training of OSHA investigators;
• Improvement of regulations governing OSHA investigations;
• Cooperative activities with federal agencies responsible for areas also covered by the whistleblower protection statutes enforced by OSHA; and
• Other matters concerning the fairness, efficiency and transparency of OSHA’s whistleblower investigations as identified by the Secretary or the Assistant Secretary.

“Workers who expose securities and financial fraud, adulterated foods, air and water pollution, and workplace safety hazards have a legal right to speak out without fear of retaliation, and the laws that protect these whistleblowers also protect the health, safety and well-being of all Americans,” Dr. Michaels said in a press release. “Establishing a federal advisory committee is another important effort to strengthen protections for whistleblowers.”

OSHA enforces the whistleblower provisions of the Occupational Safety and Health Act and 20 other statutes protecting employees who report violations of various workplace, airline, commercial motor carrier, consumer product, environmental, financial reform, food safety, health care reform, nuclear, pipeline, public transportation agency, railroad, maritime and securities laws.

Under these various whistleblower provisions enacted by Congress, employers are prohibited from retaliating against employees who raise various protected concerns or provide protected information to the employer or the government. Some federal whistleblower laws have surprisingly short time limits to file complaints.  Environmental whistleblowers, for example, have only thirty (30) days to file their complaint with OSHA.  Those seeking to make a claim of retaliation can find a lawyer through the Attorney Referral Service of the National Whistleblowers Legal Defense and Education Fund.

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The Treasury Inspector General for Tax Administration (TIGTA) issued a report that criticizes the Internal Revenue Service (IRS) for dragging its feet in processing whistleblower claims. The report follows up on TIGTA's 2009 report and found, "deficiencies in the IRS’s internal controls and timely resolution of whistleblower claims." Now, three years later, the IRS still has "not fully and adequately" addressed those concerns. Meanwhile, last August the General Accounting Office (GAO) issued a report making recommendations for improvements at the IRS Whistleblower Office. IRS management has promised to implement those recommendations and make a report by October 12, 2012.

In 2009, TIGTA found that the Whistleblower Office was tracking its inventory on three different systems. In response, the IRS had employees manually transfer the data to a single system. However, the IRS did not audit the data to discover and reconcile errors. IRS management responds that no errors have been identified.  Readers may wonder, though, if that is because no one looked for errors. IRS management did not allow the TIGTA direct access to the information system, even though the 1978 law creating the TIGTA gives it "authority to access all records, reports, audits, reviews, documents, papers, recommendations, or other material . . .." The 2009 report identified 1,973 claims for which TIGTA wanted to review the tracking data.  Without direct access to management's database, TIGTA could not determine how many of these claims are correctly logged into the information system.

Also, TIGTA found that the Whistleblower Office has not yet fully developed standards for timeliness in processing claims.  When management trained the staff at the Whistleblower Office, it did not instruct them to check the date a claim was received. According to TIGTA, this point "is critical when reporting business results to internal and external stakeholders."

I find it interesting that the report's chart on page 8 shows that the IRS has no standards for how long it should take to acknowledge receipt of a claim, or for issuing rejection letters to whistleblowers. Under "Steps in the Claims Process," the chart does not even have a line for actual issuance of awards. This blog editor is aware of only one award the IRS has actually made.

The Tax Relief and Health Care Act of 2006 created the mandatory IRS whistleblower award program for tips that lead to recoveries of over $2 million. As a result of the program deficiencies at the Whistleblower Office, the program "is not as effective as it could be" in assisting tax enforcement, reducing the gap between the taxes due and the taxes collected, and in "maintaining the integrity of the voluntary tax compliance system."

The new report is called, Improved Oversight Is Needed to Effectively Process Whistleblower Claims.

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Today, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit ruled in favor of whistleblower Michael Davis and overturned the limitation of that Court's decision in United States ex rel. Findley v. FPC-Boron Employees’ Club, 105 F.3d 675 (D.C. Cir. 1997).  In Findley, the Court held that to be an "original source" for a qui tam claim under the False Claims Act (FCA), a whistleblower must make his or her disclosure to the government before there is any public disclosure of the same allegation.  Today, the Court recognizes that this holding is inconsistent with the Supreme Court's holding in Rockwell International Corp. v. United States, 549 U.S. 457 (2007). It also recognizes that the Findley holding "bars productive suits." Even where there has been some public disclosure of the alleged fraud against the government, a whistleblower could still come forward with original information that would help the government prove that fraud.  Accordingly, it is in the public interest to allow that whistleblower to recover the qui tam award so that other whistleblowers will be encouraged to come forward even after a public disclosure.

Michael Davis used to be an accountant for the District of Columbia.  While he was preparing the District's Medicaid claim for special education services rendered in 1998, the District changed accountants.  Davis nevertheless completed the claim. He had all the required supporting documentation.  However, the District actually submitted a claim prepared by the new accountant without the required documentation. The District collected $10.3 million on that claim.  In 2002, the District's Auditor reported that the District had to repay $15 million for three years of overpayments. In 2004, Davis informed the federal government of the District's lack of documentation. The Court recognized that Davis was an original source for the information he disclosed in 2004. However, the Court also held that since the District actually provided the special education services that the Medicaid program paid for, there were no actual damages to the government. Sill, Davis can recover statutory damages for the false certifications about the supporting documentation.

The case is United States ex rel. Davis v. District of Columbia, No. 11-7039 (D.C. Cir. 5-15-2012). Congratulations to Michael Davis and his attorneys Frederick A. Douglas, Curtis A. Boykin and Alex M. Chintella.

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Tune in today at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.

We invited candidates from one of the most hotly-contested House races, incumbent Michael Grimm and Mark Murphy, to come on the show to discuss the Grimm Act (H.R. 2483) with host Steve Kohn. The Grimm Act would reverse the corporate whistleblower protections passed in the Dodd-Frank Wall Street Reform Act. Congressman Grimm did not respond to the interview request, but candidate Murphy discusses his position on the Grimm Act and whistleblower protections.

Additionally, whistleblower Eugene Ross and attorney Jordan Thomas will join Steve to weigh in on how the Grimm Act will impact corporate culture. Eugene Ross blew the whistle on corporate fraud at Bear Stearns, and Jordan Thomas is partner at Labaton Sucharow and former SEC official who worked on drafting the SEC rules for Dodd-Frank.

 
Submit Your Question to be asked on air during the show or call in to 1-888-874-4888.

Missed last week's episode?? You can listen to the podcast.

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Whistleblower Dr. Kenneth Jones and his wife Priscilla Jones won an appeal yesterday in the U.S. Court of Appeals for the First Circuit. In vacating a summary judgment, the Court held that Jones presented sufficient evidence of fraud to require a jury trial. Dr. Jones claims that Drs. Marilyn Albert and Ronald Killiany fudged brain scans in a project studying Alzheimer's Disease (AD) to support continued federal funding of their research. Their project was one of the largest Alzheimer's Disease research grants awarded by the National Institutes of Health (NIH). After the study failed to show positive results, Dr. Killiany re-traced certain areas of selected brain scans to get the positive results they were seeking. They further reported that their data exceeded reliability measures without disclosing that those measures applied to the negative results, not the positive results that came from the retracings. Finally, defendants made a false certification that they complied with the regulations governing investigations into scientific misconduct (42 C.F.R. § 50.103(c)(3)). The case is US ex rel. Jones v. Brigham and Women's Hospital and Harvard University.

Dr. Jones was the chief statistician for the NIH grant. He blew the whistle after realizing that measurements used to demonstrate the reliability of the study had been secretly altered. Without these alterations, Dr. Jones explained, there was no statistical significance to the major findings of the study. After Dr. Jones insisted that the altered measurements be subjected to a reliability study and that the results could not be presented as part of a $15 million federal grant extension application, he was terminated and his career came to an end.

The First Circuit overturned a summary judgment.  The First Circuit found that the lower judge had abused his discretion in failing to consider substantial evidence of fraud. This evidence established that Harvard knew of the falsifications and failed to take action to correct or disavow the data. Dr. Jones presented testimony from three experts: a statistician who confirmed that the alterations were responsible for the statistical significance of the study results, a medical researcher who identified that the altered results could not be justified and were changed to establish a predetermined outcome, and a third expert who confirmed that NIH would not have funded the study had the falsity of the data been revealed during the application process and that Harvard failed to adequately investigate allegations of research fraud.  The published First Circuit opinion concludes:

the essential dispute is about whether Killiany falsified scientific data by intentionally exaggerating the re-measurements of the EC to cause proof of a particular scientific hypothesis to emerge from the data, and whether statements made in the Application about having used blinded, reliable methods to produce those results were true.

"This is a major breakthrough holding universities accountable for the integrity of reported research results," explained Michael D. Kohn, one of the lead attorneys for Dr. Jones. "Fraud committed to obtain NIH funding not only robs taxpayers, but also sets back long-term medical research goals. The facts of this case indicate that the report of false data misdirected research efforts at other institutions."

Kohn, who also serves as President of the National Whistleblowers Center, continued:

This is a potent example of how employees who risk their careers to do the right thing can hold even the most powerful and prestigious institutions accountable. Bullying and blacklisting scientists by the likes of Harvard to cover-up research fraud represents a terrible disservice to society as a whole.

Congratulations go to Dr. Jones' legal team, including Jeremy L. Friedman, William D. Hughes and Michael Kohn.

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Whistleblowers have succeeded in a $1.5 billion off-label marketing case against Abbott Laboratories Inc., the Department of Justice announced today. Combined, the $700 million criminal fines and $800 million civil fines are the second largest government recovery from a drug company in history.

The Department of Justice intervened after four whistleblowers filed suit against the company. These plaintiffs provided original information to prove that Abbott marketed a drug called Depakote for controlling agitation and aggression in elderly dementia patients and to treat schizophrenia. However, the FDA had never approved Depakote for either use, and Abbott-sponsored studies showed that the drug was both ineffective in these areas and also potentially dangerous. 

“Not only did Abbott engage in off-label promotion, but it targeted elderly dementia patients and downplayed the risks apparent from its own clinical studies,” said Acting Associate Attorney General Tony West. “As this criminal and civil resolution demonstrates, those who put profits ahead of patients will pay a hefty price.”

The fines from these suits are hefty, indeed. Government recoveries are three times the amount of the fraud. Since many crimes are never discovered, though, companies still see an incentive to commit fraud. The Department of Justice's visible and successful cooperation with whistleblowers will force companies to reevaluate their cost-benefit analyses. It is clear, then, that this $1.5 billion settlement is a win for accountability and a win for American health and safety.

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By Guest Columnist: Donna Boehme
Principal at Compliance Strategists LLC and editor of the weekly CS Newsflash (and former chief compliance and ethics officer at two leading multinationals)

Holy Wal-Mart Whitewash, Batman!  Without a doubt, the unfolding Wal-Mart bribery scandal in Mexico (coming soon to a business school case study near you) is ripe for “lessons learned”  for governance experts everywhere.   But it is also illuminating to drill down a little further and examine the implications from a whistleblower point of view.   

It’s true that only some of the facts are known so far, revealed in an exhaustive New York Times 8,000+ word investigative report.  But those reported facts are not boding well for the giant retailer.  This we know:  1) in 2005, a whistleblower with intimate knowledge of a Mexican bribery scheme (to secure permits and rapidly expand the market share) sent an email raising the flag to the international general counsel 2) although that international GC strongly recommended an expanded independent investigation, she was overruled (and ultimately resigned) 3) the top GC, CEO and “a small group of executives”  decided to refer the investigation to the very Mexican GC who authorized the bribes in the first place, who then 5) promptly closed the matter with a finding of “nothing to see here”  6) Wal-Mart decided to “self-report” only after learning of the soon-to-be newspaper expose and 7)  none of the execs or legal counsel involved in the handling of the matter have been fired or disciplined,  and a few have even been promoted.   Whew!  

As this tale of corporate whistleblower woe publicly unfolds, what have we learned? Early observations from the whistleblower standpoint:

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Tune in Tuesday at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.

Guest Host Dr. David Lewis interviews fellow EPA whistleblower William Sanjour about his recent article "Designed to Fail: Why Regulatory Agencies Don't Work" in Independent Science News. Mr. Sanjour uses his 30 years of experience at the EPA to not only explain the problem, but also to offer some solutions. One of those solutions is to better protect the whistleblowers who raise concerns. Listen to Lewis and Sanjour discuss why administrative regulations are broken and why they failed to prevent events like the BP Oil Disaster.

You can take action to protect whistleblowers by signing the petition.
 
Submit Your Question to be asked on air during the show or call in to 1-888-874-4888.

Missed last week's episode?? You can listen to the podcast.

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Last week the U.S. Department of Justice announced that it has intervened in a whistleblower lawsuit brought against an ink manufacturer for skirting the payment of import duties. The case against Toyo Ink is still in its early stages, but government intervention is a significant victory for the whistleblower, John Dickson.

When employees are harassed or fired for reporting misconduct, fighting and paying for a whistleblower lawsuit can look seem like an insurmountable challenge. When you imagine this battle of David versus Goliath, you can start to grasp how big this news is for Mr. Dickson's case.

Government funds are, of course, limited. The benefits of False Claims Act investigations like this one, however, are well worth the cost. If the Department of Justice can demonstrate that Toyo Ink did, in fact, cheat its way out of paying import duties on its ink, the company will be forced to pay back the costs threefold. That money pays for the investigation, and it serves as a powerful deterrent to other would-be fraudsters.

Cases like these are great examples of how whistleblowing works. Mr. Dickson's courage to step forward has been recognized with this government assistance. Hats off to the Department of Justice for stepping up to bat for this whistleblower–another American hero.

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In two landmark decisions last week, the federal Merit System Protection Board (MSPB) held that it does have the authority to enforce the procedural protections for federal employees who suffer adverse employment actions as a result of issues with their security clearances.  The MSPB recognizes that it does not have authority to review the security determinations themselves, respecting the Supreme Court's decision in Department of Navy v. Egan, 484 U.S. 518 (1988). Still, federal employees are "entitled to constitutional due process when the agency indefinitely suspend[s] [them] from federal employment based on a suspension of access to classified information." McGriff v. Department of the Navy, 2012 MSPB 62 (April 26, 2012), p. 12. Special Counsel Carolyn Lerner submitted a most helpful amicus brief urging the MSPB to reach this result. In Buelna v. Department of Homeland Security, 2012 MSPB 63 (April 26, 2012), the Board reached the same result for a federal air marshal working at the Transportation Security Administration (TSA) by applying the agency's Management Directive (MD) No. 1100.75-3. I reported in a 2009 blog post about a federal court decision concluding that Bunny Greenhouse could pursue a claim for her supervisor's refusal to submit her request for a security clearance. The new MSPB decisions represent a significant advance for national security whistleblowers who face shenanigans with their security clearances in reprisal for making lawful disclosures of misconduct by their agencies. Now they have recourse for violations of their due process rights, even if they cannot challenge a security decision about their clearance.

Congratulations to Corry McGriff's attorneys Laura O'Reilly and Neil Bonney of Virginia Beach, Virginia, to Alexander Buelna's attorney, Jeffrey Jacobsen of Tucson, Arizona, and the Special Counsel Carolyn Lerner and her legal staff, including Bruce Fong and Elisabeth Brown.

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Today, Independent Science News published an article by William Sanjour, an EPA whistleblower and NWC Board Member.

In “Designed to Fail: Why Regulatory Agencies Don’t Work,” Mr. Sanjour uses his 30 years of experience at the EPA to not only explain the problem, but also to offer some solutions. One of his suggested solutions is to better protect whistleblowers.

“Congress ought to consider not merely protecting whistle blowers, but rewarding them. When a whistle blower’s charges prove correct, they should be given a cash reward in proportion to the importance of the revelation. Whistle blowers cost much less and are far more effective than salaried government enforcement officials.”

Mr. Sanjour’s article does a great job of explaining why administrative regulations are broken and why they failed to prevent the BP Oil Disaster and the loss of 25 miners’ lives in West Virginia.

“Compare this [EPA enforcement procedures] with what happens when you park under a “No Parking” sign. A policeman writes a ticket, and you can either pay the fine or tell it to the judge. If the EPA wrote the rules for parking violations, the officer would first have to determine if there were sufficient legal parking available at a reasonable cost and at a reasonable distance, and would then have to stand by the car and wait until the owner showed up so that he could negotiate a settlement agreement.”

Mr. Sanjour points out what we know to be true. Employees are the number one way to detect and deter fraud. Therefore, to find fraud you have to protect employees.

Please take a few minutes to read Mr. Sanjour’s article. It will be time well spent.

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