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

My friends at the Truck Safety Coalition are reporting a victory for truck safety advocates in yesterday's deal between the House and Senate for transportation reauthorization.  The Senate bill, called MAP-21, included a number of truck safety initiatives, and those have survived in the final deal. A number of the new provisions will have implications for truck driver whistleblowers.  Most famously, the bill requires that commercial trucks start carrying Electronic On-board Recorders (EOBRs).  Employer and other economic pressures to cheat on the log books should become a thing of the past as each trucker's actual hours of driving will be recorded automatically with GPS devices.  One can imagine ways in which cheating might still occur, but with the higher standards, safety whistleblowers should have more evidence on their side. Disputes over hours of operation have been a bane for truck drivers for too long.  Tired drivers have killed too many. Thankfully, today is a day on which safety has prevailed.

The bill also increases the standards for truck driver medical qualifications, training and drug and alcohol testing. I am pleased with the heightened standards for broker financial responsibility and insurance. Hopefully, we will not see so many shady operators who fold up shop at any sign of trouble and then reopen under a new name.  This should make it easier for whistleblowers to collect when they win their cases. Trucker drivers should know that the time limit to file a whistleblower retaliation complaint under the Surface Transportation Assistance Act (STAA) is 180 days from the date of each adverse action. The Truck Safety Coalition's announcement is in the continuation of this blog post.

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The whistleblower documentary Top Priority: The Terror Within makes it east coast premiere at the IFC Film Center in New York City tomorrow, June 29th. It will be playing in NYC through July 5th and then will be showing at Laemmle NoHo Theatre in North Hollywood, California from July 13th through July 19th.
 

Top Priority: The Terror Within documents the true-life story of national security whistleblower and anti-terrorism/immigration expert, Julia Davis. Julia Davis served as a former Customs and Border Protection Officer at the San Ysidro Port of Entry - the largest and busiest land border crossing in the U.S. and in the world. While working at the border, she exposed glaring shortcomings in the processing of applicants for admission into U.S. from terrorist countries. In response, she filed a report with the FBI’s Joint Terrorism Task force detailing the Department of Homeland Security’s failure to properly protect the U.S. from potential threats to national security. Instead of conducting an investigation and praising Ms. Davis for her hard work and diligence, the DHS labeled her as a “Domestic Terrorist”. In return for standing up for the security and safety of the American people, Ms Davis was thrust into a never-ending nightmare filled with unprecedented levels of retaliation against her, her family and witnesses.

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Yesterday, I had one of those moments that makes a lawyer's adrenalin run.  At 4:00 p.m., the clerk's office called to inform me that my request for an extension of time was denied. My brief would be due by midnight. Luckily, I was somewhat prepared with a draft of my brief on whether Congress intended the Sarbanes-Oxley Act (SOX) to protect corporate whistleblowers outside the U.S. boundaries. It is an issue that will affect millions of employees who work for multinational corporations around the world. It is an issue important enough to make adrenalin run.

The amicus brief for the National Whistleblowers Center got filed late last night.  It explains how the "crucial" whistleblower protection will not work if corporate fraudsters can just transfer their compliance-sensitive work overseas. If the workers outside the U.S. have no whistleblower protection, managers who want to retaliate will know they can fire them at will. Internal compliance programs will be ineffective at encouraging employees to come forward with information about violations. Does anyone really think that Congress passed the SOX whistleblower protection to encourage companies to transfer jobs outside the U.S.?

The case is Villanueva v. U.S. Department of Labor, No. 12-60122, in the U.S. Court of Appeals for the Fifth Circuit. In 2008, Villanueva sent emails to corporate executives in Houston reporting how other company executives were engaged in tax transfer schemes that falsely transferred profits to low-tax Curacao, an island in the Caribbean Sea. He also reported that Core Labs accountants in Columbia were making false claims to evade the Columbian value added tax (VAT). After Villanueva refused to sign a false tax return, Core Labs fired him. I reported on this case in prior blog posts when the Department of Labor's Administrative Review Board ruled 3-2 against Villanueva, and when NWC and NELA submitted an amicus brief to the ARB.

William Villanueva's attorney, David Mair of New York City, filed the Brief of Petitioner last week. It argues that when Core Labs officials made the decision to fire Villanueva, they did so in Houston and thereby violated SOX.  Both Mair and the NWC amicus argue that when Core Labs filed its financial reports with the SEC, it was promising the U.S. government that it was complying with SOX and protecting all the whistleblowers who had concerns about the correctness of that report. As SOX was intended to enhance public confidence in our financial markets, the whistleblower protection must protect anyone with information about attempts to misrepresent a company's true liabilities.

Based on our experience in Schroeder v. Greater New Orleans Federal Credit Union, we can expect that the Fifth Circuit will conduct oral argument this winter and issue a decision next year.

UPDATE: The Department of Labor, in conjunction with lawyers from the Department of Justice, has just filed their response brief (on August 22, 2012). It addresses the NWC amicus only on page 19, relying only on Congress' silence on the issue of extraterritoriality.  To me, this is a weak response to the argument that SOX will not work if multinational companies can just shift their compliance work to locations outside the US and thereby evade the SOX whistleblower protection.  Do they think Congress was unaware of how big companies have subsidiaries all over the world?  When Congress amended SOX to include all subsidiaries, and when it is necessary to cover all subsidiaries to make the law work, that should make clear enough that SOX covers all the employees of all the subsidiaries.

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

In the first half hour, Steven Kohn interviews whistleblower and former U.S. prosecutor Richard Convertino about the recent U.S. Court of Appeals decision that reinstated his Privacy Act case. In 2003, Mr. Convertino blew the whistle on former Attorney General Ashcroft's handling of terrorism prosecutions. High-ranking Justice Department officials retaliated against him by leaking highly disparaging and untrue information about him to the Detroit Free Press. The Appeals Court decision allows Mr. Convertino to continue to conduct discovery into who illegally leaked the information about him.

In the second half hour, Richard Renner speaks with whistleblower Charles Scott Howard about his recent reinstatement in his case against Cumberland River Coal Co. The company was also ordered to pay a $30,000 fine for discriminating against a whistleblower. Mr. Howard, no stranger to blowing the whistle on unsafe conditions in mines, started exposing safety issues back in 2007. He has also testified before a Congressional committee about mine safety issues. Australian singer/songwriter, Raymond Crooke, wrote a folk song about Scott (which was based on Dave Jamieson's 6/19/12 HuffPost article about Scott winning).

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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Washington, DC, attorney Steven N. Berk wrote the following in his blog, The Corporate Observer. He has generously given permission for us to repost it here:

To many, whistleblowers are akin to lottery winners; just plain lucky. If you complain enough (like buying plenty of lottery tickets) you may eventually get lucky. To others, whistleblowers are disloyal, greedy and opportunistic. Fueling these characterizations is surely a public perception that whistleblowers obtain huge awards for little or no work.

I am here to argue that perception is wrong. If whistleblowers’ compensation is measured against their contribution to the common good and compared to let’s say, the Hollywood movie star du jour or the corporate executive that, after a losing year, convinces the Board of Directors (wink nod) to provide a pay package worth tens of millions, whistleblowers are a bargain. Yes a bargain. If anything they are under compensated.

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On Wednesday, the IRS announced a plan for a comprehensive review of its whistleblower program, working with both “internal and external shareholders” to produce a program that can evaluate whistleblower claims and make quicker payouts to whistleblowers. As a part of the review, the IRS will set up new timelines, including a mandatory 90 day deadline to review whistleblower claims after receipt. Furthermore, debriefings of whistleblowers will become “the rule, not the exception.”

This development comes in the wake of a critical report from the Treasury Inspector General for Tax Administration. The report found that the whistleblower program may produce inaccurate data when pursuing cases and that deadline goals were not strong enough. Republican Senator Charles Grassley told Reuters that the report was evidence that “the IRS isn’t serious about processing whistleblower claims in a timely way.”

In 2010, the IRS paid out $18.7 million in rewards to whistleblowers and collected $464.7 million in taxes thanks to whistleblowers. Senator Grassley said that since last September, he has heard a number of complaints from whistleblowers stating that their claims have been stalled at the IRS. If the IRS can run its whistleblower program so that whistleblowers are actually encouraged to submit reports, billions of additional dollars would be recovered from fraudsters.

This blog post was written by intern Julia Maloney.

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FDA Whistleblowers’ Complaint Sparks OSC Guidance Memo on Electronic Surveillance

Today, U.S. Special Counsel Carolyn N. Lerner issued a formal memorandum that the Office of Management & Budget (OMB) sent to the Chief Information Officers and General Counsels of all executive departments and agencies stating that electronic surveillance of an employee’s contacts with an Inspector General and/or the Office of Special Counsel (OSC) is illegal.

The Special Counsel’s action was sparked by allegations of illegal surveillance of Food and Drug Administration (FDA) whistleblowers supported by the National Whistleblowers Center (NWC).

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In Nancy M. Modesitt’s recent research article “The Garcetti Virus,” she explains how a doctrine known as the job duties exclusion has come to erode protections once afforded to whistleblowers. She explains that this doctrine allows the discharge of an individual who discovers illegal activities while performing his or her job and then reports those issues to a supervisor. Although one might think the current whistleblower laws would protect such disclosures, Modesitt explains that is no longer the case.
Modesitt details how the the Federal Circuit created the job duties exclusion more than a decade ago in the case of Wills v. Department of Agriculture (1998). The case involved an employee in the Department of Agriculture who reported to his supervisor that a number of farms he had investigated were not complying with a government soil-protection program. The supervisor disagreed with the employee’s findings and overruled him on 6 of the 7 cases. The employee complained about the decision and later claimed that he was retaliated against for his comments. When the case was heard by the Federal Circuit, the court decided that the employees comments did not put him “at personal risk for the benefit of the public good.” As such, the court ruled that his comments could not “constitute a protected disclosure under the [Whistleblowers Protection Act (WPA)].” In later cases involving disclosures made by federal employees, the courts further limited the protection afforded to them for their whistleblower activities.

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This week, OSHA found that Norfolk Southern Railway Co., a major transporter of commodities based in Norfolk, Virginia, owed over $800,000 in damages to three whistleblowers. These actions are the most recent of a number of OSHA decisions against Norfolk Southern Railway Co. in the past year. OSHA found that the company continues to retaliate against employees for reporting work-related injuries and has created a chilling effect on the railroad industry.

On August 14, 2009, the first of the three whistleblowers was terminated after reporting an injury as a result of being hit by the company’s gang truck. The railroad charged the employee with improper performance of duties. As the only employee actually injured in the incident, the whistleblower was the only one to report an injury and the only employee fired. OSHA ordered the company to pay punitive damages of $200,000, compensatory damages of $110,852, and attorney’s fees of $14,325.

The second whistleblower was was terminated on March 31, 2010, after reporting an injury as a result of a fall. After an investigative hearing, which OSHA found to be flawed and intentionally biased against the employee, the company charged him with falsifying his injury. OSHA ordered $150,000 in punitive damages, $50,000 in compensatory damages, and $7,375 in attorneys fees.

The final employee was terminated on July 22, 2010, after reporting a head injury after falling down a flight of stairs. The day before this injury occurred, the employee had been declared an excellent employee. In the previous 35 years, he had not missed any work time due to injuries. Norfolk Southern Railway Co. decided that he had falsified the injury report, failed to promptly report the injury, and had made false and conflicting statements. OSHA found that the company’s hearing on the matter had been flawed and ordered the railroad to pay the employee $175,000 in punitive damages, $76,732.27 in back wages, and $17,993.43 in compensatory damages.

“Firing workers for reporting an injury is not only illegal, it also endangers all workers. When workers are discouraged from reporting injuries, no investigation into the cause of an injury can occur,” said Assistant Secretary of Labor for Occupational Safety and Health Dr. David Michaels. “To prevent more injuries, railroad workers must be able to report an injury without fear of retaliation. The Labor Department will continue to protect all employees, including those in the railroad industry, from retaliation for exercising these basic worker rights. Employers found in violation will be held accountable.”

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House and Senate leaders are in "conference" right now debating whether or not employees in the Public Health Service (PHS) will obtain whistleblower protections. At stake is whether or not thousands of PHS employees who work at the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) will be protected if they blow the whistle on waste, fraud or safety violations.

The National Whistleblowers Center is urging Congress to grant PHS employees the same protections against retaliation as their colleagues who work at HHS and the FDA.

The House-Senate Conference debating the FDA Reform Act (S.3187 / H.R. 5651) will decide the fate of PHS whistleblowers within hours.

Currently there is a loophole in federal law that allows government bureaucrats to fire PHS employee who blow the whistle. There is no protection for PHS whistleblowers who report the waste of taxpayer money or "bad science" being used to justify major public health decisions.

This weekend whistleblower advocates, with strong support among many Members of Congress, proposed a legislative fix for this unjustifiable and dangerous loophole. The fix would simply provide PHS employees with the same protection that all other workers at HHS/FDA have. It gives them the right to lawfully blow the whistle, have an independent investigation conducted by the Office of Special Counsel into any retaliation, and a hearing on the merits of their case. Simple due process.

Take action and tell us your thoughts on this glaring loophole in the comments.

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U.S. District Court Judge Leonard B. Sand issued a ruling on Tuesday that allowed a corporate fraud whistleblower, Benjamin Ashmore, to proceed with his case under the Sarbanes-Oxley Act (SOX).

The CGI Group is a Canadian company that lists its stock on the New York Stock Exchange (NYSE: GIB).  It provides technology and management services.  Its US subsidiary, CGI Federal, provides administrative services to public housing authorities (PHAs) to help them manage their "Section 8" programs for low-income tenants.  In 2007, the Department of Housing and Urban Development (HUD) under the Bush Administration announced that it would require a rebid of all Section 8 administrative contracts.  CGI wanted to win a larger share of the market through this rebid.  One kink in this plan was a HUD plan to limit contractors to administration of 300,000 housing units.  CGI already had 267,000 units, so the rule would severely limit CGI's opportunity for growth.  CGI formed a management team to address this problem.  They called this team the Rebid Assessment Team, or "RAT Pack."

In May, 2009, CGI Federal hired Benjamin Ashmore.  Ashmore had worked for five years as a senior policy analyst for HUD. CGI assigned Ashmore to the RAT Pack. Ashmore quickly learned that the RAT Pack was cooking up a scheme to evade the 300,000 unit cap. Ashmore called the plan the Director Shell Company Scheme. Four CGI directors would officially resign from CGI and set up their own companies that were officially independent of CGI.  CGI would withdraw from some of its partnerships to open a way for these new companies to establish market share. Meanwhile, CGI would make its resources available to the new companies to give them a competitive advantage. After the rebid was over, CGI could acquire these companies and exceed the unit cap. Ashmore opposed the shell game on grounds that it was fraudulent, and that it was bad for future business. HUD eventually dropped the unit cap altogether. In June 2010, CGI removed Ashmore from the RAT Pack.  Two days later, CGI fired Ashmore. Ashmore filed an OSHA complaint under SOX, and later refiled his case in U.S. District Court in New York City.

CGI initially argued that until July 22, 2010, SOX did not cover the employees of subsidiaries. Judge Sand rejected this claim by citing Johnson v. Siemens Bldg. Techs., Inc., ARB No. 08-032, ALJ No. 2005-SOX-015 (ARB Mar. 31, 2011). Johnson was a decision last year by the Department of Labor's Administrative Review Board (ARB). The National Whistleblowers Center (NWC) and other groups submitted "amicus" briefs to the ARB in support of Carri Johnson in that case. Judge Sand agreed with the ARB that Congress amended SOX to clarify what it had always meant.  As such, SOX always covered the employees of subsidiaries.

CGI also argued that for claims arising before July 22, 2010, the time limit for SOX complaints was 90 days.  Judge Sand said that the 180 day time limit applied because Ashmore filed his complaint after July 22, 2010.

Judge Sand also held that Ashmore did not have to explain how CGI violated the law.  He only needed to show that he had a reasonable basis to believe there was or would be a violation.  Ashmore did that. On page 11, Judge Sand said that, "it is not unreasonable for someone with his background and experience to believe—perhaps correctly—that the use of the telephone lines and email to further a scheme that, as described in the complaint, was explicitly intended to defraud HUD, constituted mail and/or wire fraud under federal law." Judge Sand said that SOX does not require whistleblowers to explain the basis of their beliefs to the employer. Whistleblowers only have to "identify the specific conduct that the employee believes to be illegal." Judge Sand reached this conclusion without reference to the recent ARB decision in Sylvester v. Parexel International LLC, ARB No. 07-123, ALJ No. 2007-SOX-39, 42 (May 25, 2011). Judge Sand also held that Ashmore made sufficient pleadings about how he informed managers of his concerns so that he could show the employer had knowledge of them, and that he could pursue a claim for breach of contract based on non-payment of his bonus which was due after he had worked for CGI for a full year.

Congratulations to New York attorney David Mair on obtaining this fine decision.  Mair is also the attorney representing William Villanueva in a case testing whether SOX can protect whistleblowers working in other countries.

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Tune in tomorrow at 1:00pm EDT to Honesty Without Fear on Progressive Radio Network.
  
In the first half hour, Jane Turner interviews whistleblower Justin Hopson about his recently released book Breaking the Blue Wall: One Man's War Against Police Corruption. During his first days as a New Jersey State Trooper, Mr. Hopson witnessed an unlawful arrest and false report made by his training officer. When he refused to testify in support of the illegal arrest, he suffered severe harassment from a secret society within the State Police know as the "Lords of Discipline." For decades, The Lords' mission was to keep troopers in line. Mr. Hopson stood up to decades of silencing and sparked the largest internal investigation in State Police history. Listen to Jane and Mr. Hopson discuss his journey as a whistleblower.

In the second half hour, Richard Renner discusses a sweeping new pro-whistleblower decision by the Department of Labor with attorney Daniel Corey of the Sensible Law Institute. Attorney Corey represents Thomas Spinner who was fired for blowing the whistle on internal control problems at New York City's largest owner of office buildings, SL Green. The question in Mr. Spinner's case was whether the Sarbanes-Oxley Act (SOX) would protect him because he was fired by one of SL Green's contractors – not by SL Green. On May 31, 2012, the Department of Labor's Administrative Review Board (ARB) explicitly rejected the holding of the First Circuit in Lawson v. FMR, LLC and held that SOX does in fact protect the employees of contractors. Tune in to hear how this will affect workers in the future.

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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In this week's Honesty Without Fear radio program, I interviewed Robert "Bob" Whitmore and his lawyer, Paula Dinerstein, about the landmark decision Whitmore won from the U.S. Court of Appeals for the Federal Circuit last week. The Federal Circuit has finally put to rest the unfortunate practice of judges at the Merit System Protection Board (MSPB) of allowing the agency to "prove" that they would have fired the whistleblower anyway, and then never hearing the whistleblower's side of the story.  The Court rejected this procedure saying:

Doing so prevents whistleblowers from effectively presenting their defenses, and leaves only the agency’s side of the case in play. This can have a substantial effect on the outcome of the case, and so constitutes harmful error. (Page 28.)

The Court also held that the MSPB judge erred in excluding Whitmore's witnesses about his whistleblowing.  The Court upheld the exclusion of one witness on grounds that Whitmore's attorney had not submitted a detailed statement of what the witness would say (a claim that Dinerstein disputes). Most importantly, the Court held that the MSPB failed to consider evidence that points to retaliation as management's real motive for firing Whitmore, and that without considering this evidence, it cannot say that the agency proved "by clear and convincing evidence" that it would have fired Whitmore even if he had never done any whistleblowing.  This decision represents a bold change in direction for the Federal Circuit, and breaths life into the 1994 amendments to the Whistleblower Protection Act.  The Federal Circuit concluded its decision by recognizing the important role that whistleblowers play in our country:

The laws protecting whistleblowers from retaliatory personnel actions provide important benefits to the pub- lic, yet whistleblowers are at a severe evidentiary disad- vantage to succeed in their defenses. Thus, the tribunals hearing those defenses must remain vigilant to ensure that an agency taking adverse employment action against a whistleblower carries its statutory burden to prove—by clear and convincing evidence—that the same adverse action would have been taken absent the whistleblowing. ...

Congress decided that we as a people are better off knowing than not knowing about such violations and improper conduct, even if it means that an insubordi- nate employee like Mr. Whitmore becomes, via such disclosures, more difficult to discipline or terminate. Indeed, it is in the presence of such non-sympathetic employees that commitment to the clear and convincing evidence standard is most tested and is most in need of preservation.

Dinerstein, a lawyer at Public Employees for Environmental Responsibility (PEER), this victory is a remarkable accomplishment. Dinerstein also represented whistleblower Teresa Chambers.  Chambers has been reinstated to her position as Chief of the U.S. Park Police after winning a decisive victory from the Federal Circuit last year. As Dinerstein explained on Honesty Without Fear this week, the Chambers opinion was more narrowly crafted to help Chambers without changing too much precedent.  Whitmore's decision is a sweeping opinion that rejects the limitations of past Federal Circuit decisions, requires MSPB judges to conduct full hearings with all the relevant witnesses, and enforces the "clear and convincing" standard for the agency's burden.

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Today, attorney Stephen Kohn (Executive Director of the National Whistleblowers Center) and I are filing an amicus brief with the U.S. Department of Labor's Administrative Review Board (ARB). The brief urges the ARB to affirm a decision of an Administrative Law Judge (ALJ) in favor of Christopher Bala, a signalman for the PATH railway that carries commuters between New Jersey and New York City. As one of the first cases the ARB will address under the 2008 amendments to the Federal Rail Safety Act (FRSA), this case could set the tone for railroad workers cases for years to come.

Christopher Bala suffered a back injury at home in June 2008. His doctor ordered him to rest and refrain from work through the end of the next month. PATH's doctor agreed that he should not work. Still, his supervisor decided to launch a disciplinary hearing against him for violating PATH's absenteeism policy. In October 2008, Congress amended the FRSA to protect rail workers when they follow their medical treatment plans. The 2007 version of the FRSA already protected rail workers who raise concerns about safety or refuse to perform duties they reasonably believe are unsafe. Notwithstanding the change in the law, PATH proceeded with the disciplinary hearing against Bala. PATH eventually found him guilty of absenteeism and imposed a suspension. Bala complained to OSHA which ruled in his favor. PATH requested a hearing, and the ALJ again found that PATH violated the FRSA by imposing discipline on Bala. The ALJ held that the FRSA protects rail workers when they follow medical treatment plans for injuries that occurred on or off the job.

On appeal to the ARB, PATH has argued that the FRSA was only meant to encourage workers to report on-the-job injuries. PATH ignores portions of the congressional record showing that Congress wanted to reduce the number of rail accidents. PATH is asking the ARB to adopt an interpretation of the FRSA that would add a limitation that is not in the words Congress used. PATH is also asking to be exempt from the FRSA in cases where the disciplinary process was started before the effective date of the 2008 amendments to the FRSA. The Association of American Railroads (AAR), submitted its own amicus brief supporting PATH. It argued, without supporting data, that the ALJ's holding would impose costs on railroads, and go against the holdings of arbitrators and courts applying other laws.

The NWC amicus focuses on the plain language of the FRSA which explicitly protects railroad workers when they are following medical treatment plans. The brief reviews the legislative history behind the FRSA and shows that members of Congress wanted to save lives by reducing accidents. The brief explains how the FRSA fulfills the safety purpose by preventing management from pressuring workers to work when their medical condition could make them impaired. The brief sets out how similar laws for truck drivers (STAA) and airline workers (AIR21) protect them when they refuse to work due to medical impairments. The NWC amicus challenges the AAR's claims about costs, and the holdings of courts under other laws. It challenges the PATH brief for arguing that it should be allowed to continue its discipline of Bala even after the FRSA was amended to make that discipline unlawful.

I am particularly pleased to submit this amicus brief in one of the first cases under the new FRSA. Corporate fraud whistleblowers suffered for years when the ARB's initial decisions under the 2002 Sarbanes-Oxley Act (SOX) required a high standard for whistleblowers to win. The ARB finally abated that problem in last year's Sylvester case. With a good decision for Bala, rail workers may find the protection they need to avoid untold future accidents.  For that, we will all be safer.

Available here are:

• PATH's brief against Bala
• AAR's amicus brief against Bala
• Bala's brief
• NWC's amicus brief in support of Bala
• Solicitor of Labor's amicus brief in support of Bala

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The Alaska Dispatch published a story yesterday that reveals how the Federal Bureau of Investigation (FBI) condones misconduct and punishes those who speak out for the truth. The story by investigative reporters Amanda Coyne and Tony Hopfinger is called, "Why is the lead agent in the botched case against Ted Stevens still working for the FBI?" The lead agent in question is Mary Beth Kepner.  The whistleblower is Chad Joy, who was Kepner's partner during the 2008 Stevens investigation.  In an eight page whistleblower disclosure, Joy alleged that Kepner (1) hid information that Stevens' legal team should have been entitled to review, (2) leaked grand jury testimony of a government witness, (3) didn't document interviews, (4) acted inappropriately with sources, and (5) failed to properly document for a judge an application for a wire tap. Joy alleged that the prosecution also failed to disclose evidence and transported a witness back to Alaska to make him unavailable to testify at the trial. Coyne and Hopfinger reference a newly released Department of Justice report that confirmed Kepner's misconduct in the Steven's investigation. The report is dated August 2011. Kepner is still on the job at the FBI.  

The Stevens' case was Joy's first case as an FBI agent.  "I don't want to be punished for coming forward," he wrote. In 2009, the FBI removed him from all criminal cases. Coyne and Hopfinger say this, "effectively end[ed] his career." In early 2010, he resigned. Meanwhile, the U.S. Attorney's office in Anchorage, Alaska, launched an investigation led by Frank Russo. Russo found that Kepner's lapses were minor, and then nitpicked Joy's work.

Stephen M. Kohn, Executive Director of the National Whistleblowers Center, told Coyne and Hopfinger that Russo's investigation into Joy's complaint was illegal. Kohn explained that  procedures require investigations to be forwarded to the Inspector General for the Department of Justice. DOJ officials refused to answer Coyne and Hopfinger's questions about the Russo investigation.

"This all very troubling. If someone blows [the whistle] on an issue, they are going to face retaliation," Kohn said. "Part of the defense is always to discredit the witnesses. That's why it's necessary to take the whistleblower case out of the hands of the locals. Kohn called for the Inspector General to look into Joy's original complaint and begin an investigation into how the complaint itself was handled.

FBI rules bar a supervisor from taking retaliatory action against a whistleblower. Kohn said that because Joy's whistleblower memo helped trigger the investigation -- one that ultimately led to Stevens essentially be exonerated -- the review of the charges and the decision to take him off of criminal cases was a "retaliatory action."

Former FBI agent and NWC board member Jane Turner also suffered retaliation. She blew the whistle on agents who took mementos from Ground Zero following the 9/11 terrorist attacks. She won a jury verdict against the FBI over her treatment.
Turner said that agents who violate the FBI's code of silence are undercut and isolated. "They do everything they can to get you to quit" she said.

When you blow the whistle on the FBI, "it's death by a million paper cuts," she told Alaska Dispatch.

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Transparency International (TI) hosted a conference for whistleblowers last week in Berlin, Germany. Mark Worth is reporting in a blog post that around the world, "Powerful cultural, political and social forces – often dating back centuries – can keep the lid on bribery, extortion, collusion and other crimes that by any measure should see the light of day." Delegates from thirteen countries agreed that, "whistleblowers . . . still lack adequate legal protections in nearly every country in the world." The participants are working on a set of principles to include in whistleblower laws.  They may benefit from the National Whistleblowers Center's model whistleblower legislation.

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The U.S. Department of Labor, Administrative Review Board (ARB) issued a precedent setting decision last week holding that the Sarbanes-Oxley Act (SOX) does protect the employees of contractors to publicly traded companies.  The decision is particularly noteworthy as the ARB rejected the First Circuit decision in Lawson v. FMR, LLC, Case No. 10-2240 (1st Cir. 2012). The ARB decision is Spinner v. David Landau and Associates, LLC, ARB Nos. 10-111 and -115, ALJ No. 2010-SOX-29 (ARB May 31, 2012).

Thomas Spinner started working as an internal auditor for David Landau & Associates (DLA) in March 2008.  Spinner is a Certified Public Accountant, a Certified Internal Auditor and a Certified Fraud Examiner.  DLA is not a publicly traded company, but it provides internal audit, management consulting and SOX compliance services to publicly traded companies, including SL Green Realty Corp..  SL Green is a large real estate company that owns many office buildings in New York City.  On September 2, 2008, DLA assigned Spinner to work full time in providing audit services to SL Green.  Spinner quickly discovered internal control and reconciliation problems at SL Green, and he reported those problems.  On October 1, 2008, DLA fired Spinner.

Spinner filed a timely SOX retaliation claim which OSHA dismissed.  Spinner requested a hearing, but the Administrative Law Judge (ALJ) dismissed his case.  The ALJ concluded that Spinner was not protected by SOX because he worked for a contractor that is not publicly traded. The ARB concluded that Spinner was covered by SOX.  The ARB reversed the dismissal and returned the case to the ALJ for a hearing on the merits.

The ARB decision relies on the plain language of SOX which specifically prohibits retaliation by "any officer, employee, contractor, subcontractor, or agent of such [publicly traded] company ... ."  18 U.S.C. § 1514A(a). The ARB also relied on the Department's regulation at 29 C.F.R. § 1980.101  which includes employees of contractors as "employees." On pages 5 and 19, the ARB cites prior ARB decisions, of both the current and prior administrations, supporting coverage for employees of contractors. From pages 6 through 16, the ARB then explains why the First Circuit majority was wrong in Lawson. My own critique of the Lawson holding is in this prior blog post. The ARB and I are in agreement about how the plain text of SOX, the legislative history and the remedial purpose, all support protection for employees of contractors. On page 14, the ARB goes farther:  "An interpretation limiting protection of whistleblowers to those only directly employed by a publicly traded company would sabotage the overriding purpose of protecting investors." Well said.

In a lengthy concurring opinion, Judge E. Cooper Brown expands on the reasons for holding that contractor's employees are protected by SOX.  On page 25, he notes how the Enron scandal that inspired SOX featured the misconduct of their outside accountants at Arthur Anderson. The Senate Report on SOX (S. Rep. 107-146) noted how Arthur Anderson had removed a partner who raised concerns about Enron's accounting. The Senate Committee wanted to end the "corporate code of silence" and Judge Brown recognizes that this can't happen unless SOX protects those who raise concerns about SOX violations, whether they work for the publicly traded company itself, a contractor, or any other affiliated entity. He states:

If the overriding purposes of Sarbanes-Oxley are to be met, employees of contractors, subcontractors, and agents of publicly traded companies must be afforded the same protection against retaliation by their employer that is afforded employees of publicly traded companies.

By page 32, Judge Brown has considered the ARB practice of broad interpretation of whistleblower protections to accomplish their remedial purposes and concludes that SOX is equally deserving of the same broad scope.

The ARB's decision to flatly disagree with a federal court of appeals is reminiscent of the Secretary of Labor's rejection of the Fifth Circuit decision in Brown & Root v. Donovan, 747 F.2d 1029 (5th Cir. 1984). There, the Court held that nuclear whistleblowers were not protected when they raised safety concerns to their superiors.  The Fifth Circuit would only protect disclosures to the NRC.  No other circuit followed this holding. In 1992, Congress amended the Energy Reorganization Act (ERA) to protect internal whistleblowing explicitly. In 2005, the Fifth Circuit finally conceded that its 1984 holding "was incorrect."  Willy v. Administrative Review Bd., 423 F.3d 483, 489, n. 11 (5th Cir. 2005). Let us hope that the Lawson holding will not stay on the books for anything close to 21 years.  The ARB's firm rejection of Lawson is a good sign.

Congratulations to Spinner's attorney, Daniel Corey of Drexel Hill, Pennsylvania, on obtaining this fine result.  Corporate whistleblowers will benefit from this decision for years to come.

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An assistant professor at Middle Tennessee State University has launched a website to recruit participants for her study of government whistleblowers and reporters who use whistleblowers as sources. Dr. Cary A. Greenwood, APR, Fellow PRSA, is a former corporate and government public relations manager who knows somthing about the problems of government whistleblowers. If you are a government whistleblower who is willing to be interviewed for an anonymous study about the impact of whistleblowing on your relationship with your government agency, or if you are a reporter who has used whistleblowers as sources, please contact her at cary.greenwood@mtsu.edu. You can also review her credentials.

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

In the first half hour, whistleblower Robert Whitmore speaks with Richard Renner about the landmark decision in his case last week. Mr. Whitmore's 37-year career with the Department of Labor came to an end after he disclosed how OSHA accepted impossibly low industry reports of worker injuries and illnesses. Last week, the U.S. Court of Appeals for the Federal Circuit held that Mr. Whitmore did not get a fair hearing from the Merit Systems Protection Board (MSPB).

In the second half hour, Richard interviews Mr. Whitmore's attorney, Paula Dinerstein of Public Employees for Environmental Responsibility (PEER). Ms. Dinerstein shares her experience in pursuing Mr. Whitmore's case when so few whistleblowers were winning cases at either the MSPB or the Federal Circuit. She also shares her analysis of the Mr. Whitmore's Federal Circuit decision, including what means for whistleblowers, their advocates, federal managers, and the MSPB.

 
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 National Whistleblowers Center filed a motion for preliminary injunction under the Freedom of Information Act in U.S. District Court in DC. The motion has been filed in order to get the FDA to release all documents pertaining to their illegal surveillance of employees’ private email correspondence. NWC has a limited number of documents that show the FDA conducted special targeted monitoring of employees who blew the whistle on misconduct and inappropriate approvals of unsafe medical devices. The FDA activated spyware on whistleblowers’ work computers to spy on their password protected Gmail-to-Gmail correspondences to Congress, the Office of Special Counsel and other oversight authorities.

According to Lindsey Williams, Director of Advocacy and Development for the National Whistleblowers centre, “It is critical that the FDA immediately release the documents related to their illegal spying program. The program has created a chilling effect throughout the federal government. Federal employees must feel free to report their concerns to Congress and OSC.”

As per preliminary injunction rules, the judge must hold a hearing within the next 20 days and rule shortly there after.

*Abisola Ojikutu (a NWC intern) drafted this posting

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On May 22, 2012, the No FEAR Coalition honored three whistleblowers and our own Richard Renner, who serves as the Legal Director and Secretary of the National Whistleblowers Center. The award for Renner recognized his advocacy for whistleblowers and his pro bono work. Appropriately the awards ceremony was held at the Martin Luther King, Jr. National Memorial. Renner, who has a long record of service for civil rights issues, received his award at the entrance to the memorial of the revered civil rights leader.

During the ceremony the No FEAR Coalition also honored three other whistleblowers. Dr. Marsha Coleman-Adebayo, founder of the No FEAR Coalition (and a Board Member of the National Whistleblowers Center), presented awards to Dr. Margaret Flowers, a pediatrician, single payer advocate, organizer of Occupy Washington DC and co-director of ItsOurEconomy.US.  Alease Wright, former National Federal Women’s Program Manager at the U.S. Environmental Protection received an award for advancing the rights of women and involvement in community activities for women and youth throughout her career. Ms. Wright was victimized by EPA, but continued to maintain her integrity and commitment to others. Alicia Dabney, an employee of the U.S. Forest Service received an award for speaking out against sexual assaults by supervisors in that Service.

Before beginning the event Dr. Marsha Coleman-Adebayo led a demonstration in front of the memorial, chanting “No justice, no peace!” This was primarily in protest to the retaliation of federal agencies against whistleblowers, and the agencies’ inefficiency in handling the outrageous number of discrimination and retaliation claims pending in their offices of civil rights. Some speakers, for example, mentioned they had cases pending since 1989. This was an inspiring crowd of whistleblowers and whistleblower supporters that gathered at the MLK Memorial. They were loud and clear that they were not scared to stand up for justice, and were definitely not scared to let their voices be heard. Matthew Fogg spoke about his whistleblowing at the U.S. Marshals Service. Melissa Seaver spoke about continuing federal discrimination against Native Americans, and about losing her home to a Department of Agriculture foreclosure.

Photos by NWC interns Adrian Amaya and Andy Lugo, and Richard Renner. This blog post was written by Adrian Amaya.
 

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