U.S. Government and 16 States Join False Claims Act Lawsuit Against Pharm Co. Wyeth

The United States Government, along with the governments of 15 states and the District of Columbia, have joined with two whistleblowers who allege that drug manufacturer Wyeth bilked US taxpayers out of hundreds of millions of dollars. As reported in the Wall Street Journal and the FierceHealthcare website, Wyeth is accused of overcharging Medicare and Medicaid programs nationwide for purchases of it's acid-reflux drug Protonix. Under federal law, drug companies are required to offer prescriptions to federal aid programs at the lowest possible price. Wyeth, however, the suit alleges, was offering Protonix at a 90% discount to private hospitals, while charging the federal government much higher rates.

 

The lawsuit was filed under the False Claims Act, which has its roots in the civil war era, and remains  the United States' most powerful tool for rooting out fraudulent government contracts. President Obama's administration has recently expressed its support for strengthening the law, and legislation to do so is currently pending in Congress.

Congress Protects Some Whistleblowers, Leaves Others Out

On Wednesday, behind closed doors on Capitol Hill, House and Senate leaders hammered out a deal to pass the economic stimulus bill. Both the original House and Senate versions of this bill included protections for employee whistleblowers. By Wednesday evening, news sources such as Talking Points Memo were reporting that the whistleblower provisions in the bill had been cut.
 

Well, we got our hands on the final text of the bill, and it turns out that whistleblower protections for state, local, and government contractor employees have made the final bill! Unfortunately, the proposed protections for federal employees have been eliminated completely.


This is a partial victory, but a victory nonetheless. Now we must continue to fight for the rights of federal employees. Stephen and Michael Kohn, the President and General Counsel of the National Whistleblowers Center, released the following press statement this morning: 

 

"Private contractors and state and local government employees are covered. They have a right to file a claim and present their case to an independent court and jury. It is now up to Congress to finish the job, and ensure that federal employees have the same rights. It makes no sense to protect some workers who have responsiblity over the stimulus, but to deny protections to the federal regulators who will have the primary duty to police the spending and ensure that there is no political favoritism in the allocation of billions of dollars in taxpayer monies," said Stephen Kohn, the President of the National Whistleblower Center.

"Congress has started to listen," said Michael Kohn, General Counsel of the National Whistleblower Center and attorney for Bunny Greenhouse. "We need to redouble our efforts and obtain universal whistleblower protection coverage for all American workers, including federal government employees," Michael Kohn added. Earlier this week Greenhouse had asked that both the McCakill Amendment and the Platts-Van Hollen Amemdnets be enacted into law. The Senate approved the McCaskill amendents, but cut out the protections for federal employees.


"Senator Clare McCaskill did an incredible job getting these changes into the stimulus. It was a tough and fast paced environment and she was able to ensure strong oversight provisions for some of the workers involved in spending taxpayer monies. She worked in an open an bi-partisan manner and obtained the support from other key Senators, including Independent Senator Liberman and Republican Senator Collins. We hope that the reforms included in the stimulus package will be made permament, will apply to the use of all taxpayer monies and will cover federal workers."

In Other Whistleblower News...3 More Important Stories

If you haven't noticed, we have been really focused on passing stronger whistleblower laws in the economic stimulus bill. We had a major success when the bill passed the House of Representatives, and now we are moving on to the Senate. Although this legislation is the major whistleblower story this week, there are a few other stories on our radar, and I just wanted to share them with our readers.


First, and easily the second biggest whistleblower-related news story of the week, is the testimony of Harry Markopoulos, a financial analyst who tried to blow the whistle on Bernie Madoff's $50 billion fraudulent Ponzi scheme for over a decade. Markopoulos offered stunning testimony before the House Financial Services Committee this week, condemning the SEC for ignoring his reports and mismanaging the investigation. Markopoulos told lawmakers that he "gave them [the SEC] a road map and a flashlight to find the fraud, and they didn't go where I told them to go.”

Here are some articles detailing his testimony:

CBS NEWS: "Madoff Whistleblower is Finally Heard"
CNN MONEY: "Madoff Whistleblower Blasts SEC"
TIME: "A Madoff Whistleblower Tells His Story"


Now for some good news. Along with the legislative progress being made at the national level, two states are considering statutes to create and/or strengthen whistleblower protections.  This Minnesota Star-Tribune opinion piece explains the how Minnesota (and all states) can benefit from a False Claims Act. Minnesota's legislature is considering enacting an FCA modeled on the federal law.


North Dakota is also considering strengthening its whistleblower laws after recent retaliation against state employees revealed that the laws are inadequate.


Our last bit of news comes from Texas, where Marilou Morrison, a former employee of the Texas Commission on Human Rights was awarded a jury verdict of nearly $1 million after suffering retaliation for blowing the whistle on racial discrimination in the agency's hiring practices. The kicker is this: the Texas Commission on Human Rights is the agency that is supposed to enforce laws against discrimination. Ms. Morrison's attorney Gary Bledsoe summed it up nicely by saying, "The agency that is supposed to enforce civil rights is being hit with basically a million dollar judgment for violating the very statutes they are required to enforce."


Ok, now that you are up to date on whistleblower news from around the country, keep checking back for more information on the federal employee whistleblower legislation!

Washington Independent Highlights Urgent Need For Whistleblower Protection

The Washington Independent published an article addressing the lack of protection offered to whistleblowers in the stimulus bill.  The article quoted Stephen Kohn, who states: "The biggest defect in the current language in the House and Senate versions, is about blowing the whistle internally." The bill protects only employees that report wrongdoings to Congress or an Inspector General, but does not provide protection to those that make internal reports to their own employers. Protecting taxpayer money with strong oversight and accountability safeguards is of extreme importance, therefore Congress must provide adequate protection for all whistleblowers. 

"Whistleblowers Vulnerable in Stimulus" by Daphne Eviatar

 

*Thelma Lizama (a NWC intern) contributed to this posting

Encouraging Whistleblowers

Audit Firm Finds White-Collar Fraud and Whistleblower Complaints Are on the Rise

A leading global risk-management company, Kroll, Inc., has issued a new report finding that one of the unfortunate byproducts of our current global financial crisis will be an uptick in white collar crimes, particularly corporate fraud. As the Kroll report describes the situation, companies experiencing lean profits will have increased incentives to engage in fraudulent behaviour. More companies 'cooking the books' also means something else...more honest employee whistleblowers stepping forward to put a stop to this unethical behavior.


These often unsuspecting whistleblowers will no doubt experience harsh retaliation from employers, as the company executives scramble to save their hides. Whistleblowers will be harrassed in any number of ways; they will be demoted, fired, threatened, persecuted, and prosecuted. And unfortunately there aren't many good laws out there to protect them.  Unless our leaders in Congress act to pass whistleblower protection laws immediately, many of these heroes will be left out in the cold.....


Click here to sign a petition telling Congress to pass whistleblower laws.

Click here to view the 16-page Kroll fraud report.

 

 

DIGG this story here

Three Ways You Can Help Advance Whistleblower Rights

The dawning of a new administration is upon us, and with it comes an opportunity for whistleblower rights supporters to make their voices heard, and to achieve real changes to our ineffective whistleblower laws.


Over the past couple of years, Congress has inched towards reforming whistleblower laws for government and corporate employees, but the constant threat of veto from the Bush Administration tempered their political willpower. Now, with Obama (who has consistently supported whistleblower protection legislation) moving into the White House, as well as major concerns with transparency in doling out government bailout money AND the $50 billion Madoff scandal, we have a big chance to get the attention of Congress and new administration officials. But, nothing will happen unless we can show that the American people support protecting government and corporate whistleblowers who come forward to report illegal activity at work. We need you to get involved!!!


Here are 3 ways you can help fight for whistleblowers this inaugural season: 


1. Sign the National Whistleblowers Center petition! The NWC is sponsoring a petition urging members of Congress to enact a national whistleblower protection law. Please join the thousands of whistleblower supporters have signed on!

2. Volunteer at Inaugural Events This Weekend! The NWC is looking for volunteers to collect signatures for our petition in support of strong whistleblower legislation (see #1 above). We are planning to petition at Inaugural events on Sunday, Monday, and Tuesday. For more information, call the NWC at 202-342-1903 or email Advocacy Director Lindsey Williams at lmw@whistleblowers.org

3. Vote for Whistleblower Protection! The Obama Transition Team website is requesting that Americans vote on the issues that are most important to them. Whistleblower Protection has been steadily moving up the ranks - let's get it to the top of the list!
 

 

 

 

 

Eighth Circuit says not so fast on STAA amendments

Today the Eighth Circuit U.S. Court of Appeals held that 2007 amendments to the whistleblower protection for truck drivers is not retroactive.  In Elbert v. True Value Company, Case No. 08-1222 (8th Cir. 2008-12-19), the Court said that Timothy Elbert did not have a right in 2007 to file in federal district court a claim against his 2005 discharge.  The August 3, 2007, amendment to the Surface Transportation Assistance Act (STAA) is not retroactive.

 

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Brief: It's not "absurd" to follow SOX law.

A few federal judges have been reluctant to follow a provision in the 2002 Sarbanes-Oxley (SOX) law that allows corporate fraud whistleblowers to have a de novo trial in federal court. One judge in Maryland ordered a SOX case back to the Department of Labor's Administrative Review Board (ARB) saying that the de novo provision was "absurd."  Yesterday, I filed an amicus brief with the Fourth Circuit Court of Appeals explaining why this is the law, and why it is not "absurd" to follow the law.

 

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Fourth Circuit leaves SOX whistleblower out in the cold

The Fourth Circuit U.S. Court of Appeals has affirmed an administrative appeal decision that leaves corporate whistleblower Stacy Platone out in the cold.  The December 3, 2008, opinion affirms a decision of the U.S. Department of Labor's Administrative Review Board that took away Platone's order from an Administrative Law Judge.  The Court held that under the Sarbanes-Oxley (SOX) employee protection, whistleblowers have to be specific about their allegations of fraud to be protected from retaliation.

 

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