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

Last week, National Public Radio reported that, in March of 2007, after documenting years of inspection failures by Southwest Airlines, FAA inspector Bobby Boutris discovered that Southwest Airlines had failed to do mandatory safety inspections for cracks around the windows of their 737s.  These inspections are very important because, if such cracks develop, they could cause the plane to explosively decompress during flight.  This happened on an Aloha Airlines 737 flight in 1988, where cracks caused an 18 foot section of the plane’s roof to blow out and sucked a flight attendant out of the plane to her death.  

Unfortunately, despite discovering serious violations that posed a significant risk to the safety of Southwest’s passengers, Boutris’ story took a turn depressingly familiar to whistleblowers.  Instead of taking action, Boutris’ supervisor Douglas Gawadzinski, who was close friends with Southwest’s manager for regulatory compliance (himself a former FAA inspector) chose to ignore Boutris’ reports.  When Boutris wanted to send Southwest a letter of inspection, Gawadzinski refused.  When Boutris pressed harder, Gawadzinski first simply blocked him and then removed him from the inspection and told him that “his career was in jeopardy” because of “undisclosed complaints from anonymous Southwest officials.” 

The second FAA whistleblower, Douglas Peters, took over the inspection after Boutris’ removal.  However, after he confirmed Boutris’ findings, he too met with resistance from his superiors and the FAA took no action to correct Southwest’s dangerous inspection failures.

This case highlights the critical importance of passing H.R. 985, the Whistleblower Protection Enhancement Act of 2007.  Among its other substantial improvements to current whistleblower protections, this proposed law specifically protects statements that a federal employee makes in the course of performing his “official duties.”  This is necessary because, under current law, public employees like Boutris and Peters, who discover and report wrongdoing while on the job, have virtually no protection against reprisal from hostile superiors.

H.R. 985 has been approved by the House of Representatives, and similar, yet inferior, legislation (S.274) has passed the Senate. These bills are now in conference committee. President Bush has vowed to veto H.R. 985.

The courts have long held that the current Whistleblower Protection Act does not prevent public employers from retaliating against employees who, like Boutris and Peters, make unwelcome reports of wrongdoing as part of their “official duties.”  For a time, these “official duty” whistleblowers could still seek protection under the First Amendment, but in 2006 the Supreme Court held that the First Amendment did not protect statements made by public employees in the course of performing their “official duties.”  This effectively gave federal employers carte blanche to retaliate however they pleased against these conscientious public servants, as Bobby Boutris discovered when his supervisor relieved him of his authority to investigate Southwest and threatened his career.  Had the FAA fired Boutris or Peters for doing their jobs and reporting Southwest’s violations, there would be nothing they could do about it. 

Stephen M. Kohn, president of the National Whistleblower Center, issued the following statements regarding the FAA revelations:

“In light of these events it is more important than ever to make sure that public employees like Bobby Boutris and Douglas Peters are able to report the wrongdoing that they discover without fear of retaliation from their superiors.  Public employees, especially federal regulators and inspectors, are often in the best position to not only discover dangers to the public safety, but also to do something about them.  That hostile supervisors can freely retaliate against these dedicated public servants for doing their jobs and working towards the public good is completely intolerable and threatens the safety of every American.  Congress must take action to protect these conscientious individuals.”

...but also said that DOJ has deep reservations about the provision in the bill which would allow government employees to become Qui Tam relators if the government did not take any action on their issue for 1 year after it was reported. Their view is that it would give an appearance of impropriety for a government employee to receive a whistleblower reward for reporting something that they learned in their official capacity.
Senator Leahy also questioned Mr. Herz on the Justice Department’s FCA statistics that were recently submitted by the AG  (and reported by our blog here>>). Specifically Sen. Leahy was concerned about the number of Iraq/Afghanistan cases that had not been intervened upon, and why.

Ms. Gonter’s was a moving testimony by a whistleblower who risked everything to stop her employer, in this case a Northrup Grummond subsidiary who was making defective ship valves for Navy submarines, from putting people’s lives at risk. Ms. Gonter went to great lengths to prove their guilt, even wearing a wire to work for a time. Although the Justice Department did not intervene in her case against Northrup Grummond, she did eventually hold them accountable and obtain a settlement

Judge Clark offered the point of view of a relator’s attorney (not Ms. Gonter’s, but he has represented many Qui Tam whistleblowers).  He deftly made the point that the Rockwell, Totten, and Custer Battles cases had been wrongly decided, and that the public disclosure bar was routinely, and incorrectly, being used as a defense by contractors.

Most notably, Judge Clark said (to paraphrase him): That although he must counsel his prospective clients as to the personal and professional hardships of being a whistleblower, it is even more important and difficult to tell them that the legal landscape of the FCA offers just as many, if not more obstacles. Meritorious cases often don’t proceed because of the previous bad court decisions that have eroded the intent of the law.

…Then it was Mr. Boese’s turn to represent the views of corporate defendants (he disclosed that his firm had defended Northrup Grummond in Ms. Gonter’s case).

Mr. Boese (which, as he said to Senator Durbin, “rhymes with crazy”) said that his concern was not with protecting the guilty contractors, but the ones that were falsely accused -- as if FCA relators and attorneys are routinely risking their careers to pursue frivolous claims. Later, in response to a question from Sen. Durbin, Mr. Boese suggested that if the scope of the False Claims Act were expanded, the plaintiffs’ attorneys would be filing suits every time a federal worker or Social Security recipient bought a defective product (because the money came from the government). Senator Durbin was not amused with the alarmist tactic, and had the quote of the day when he responded that Mr. Boese had “some of the most tortured logic he had ever heard on this committee.”

The debate was a spirited one, and it was evident that the FCA is in need of real repair.

Prepared Statement of Senator Chuck Grassley of Iowa

Senate Committee on the Judiciary

Department of Justice Oversight Hearing

Attorney General Michael Mukasey

Wednesday, January 30, 2008

Chairman Leahy, thank you for calling this hearing today on Department
of Justice oversight.  It has only been three months since Attorney
General Mukasey was last here for his confirmation hearings, but it is
always good to hold oversight hearings and check in on the
administration.

As a senior member of the Senate, I've always held great respect for the
oversight function of Congress.  The Constitution placed great power in
the Legislative Branch and that is not limited to just writing laws.
Instead, the Constitution requires that we ask tough questions of the
Executive Branch.  We need to make sure they are being faithful stewards
of taxpayer dollars and that they are enforcing and implementing the
laws as Congress intended.  That said, I want to ask the Attorney
General a number of questions today and follow-up on some responses he
submitted following his confirmation hearing back in October.

One topic I'd like to discuss with the Attorney General is a letter he
signed regarding the Federal Employee Protection Act (S.274).  This bill
provides some necessary revisions in the Whistleblower Protection Act
and unanimously passed the Senate back in December.  This legislation
will ensure that whistleblowers are protected and not subject to
retaliation.  I have some concerns with the letter signed by the
Attorney General and want to hear his rationale for raising objections
to S.274.

Next, I have some follow-up questions related to oversight of the
Federal Bureau of Investigation (FBI).  These questions relate to the
Counterterrorism Division of the FBI and allegations that have been made
public by employees within the FBI.  I also have questions regarding the
FBI's use of "exigent letters" in relation to the investigation
conducted by the Department of Justice Office of Inspector General on
the FBI's use of National Security Letters.  These questions are vitally
important to ensuring that efforts to protect our homeland are accurate
and in accordance with the law.  I've been asking questions for some
time and look forward to further dialogue and, more importantly, some
answers on these matters.

I also would like to work with the Attorney General in the second
session of the 110th Congress on two very important legislative
initiatives, S.2041 the False Claims Act Correction Act of 2007, and
S.473, the Combating Money Laundering and Terrorist Financing Act of
2007.

The False Claims Act Correction Act will clarify negative court
interpretations of the False Claims Act which I amended in 1986.  The
FCA is the premier tool in the Government's toolbox for combating fraud.
Since the 1986 amendments were signed into law by President Reagan, it
has helped the government recover over $20 billion that would otherwise
be lost to fraud, waste, or abuse.  However, 20 years later the law
needs a few tweaks to deal with court decisions that run contrary to the
spirit and intent of the 1986 amendments.  I look forward to working
with the Justice Department to ensure that the FCA will continue to work
as intended for the next 20 years.

The Combat Money Laundering and Terrorist Financing Act is an important
bill that will ensure that our laws are up to date in combating the
laundering of terrorist and criminal proceeds.  I've long believed that
to effectively combat terrorists and criminal organizations, we need to
hit them where it hurts, right in the pocketbook.  However, as the fight
against terrorism continues, we need to make sure that our laws against
money laundering keep pace with technological advances, such as the use
of prepaid debit cards.  In fact, there are additional loopholes in the
law that have been pointed out that I also intend to address in this
legislation.  This is a testament to the ever-evolving world of money
laundering, and we need to ensure that our laws are not outpaced by the
creativity and unrelenting nature of terrorist and criminals around the
world.

I hope the Attorney General, and members of this Committee, will work
with me on these two legislative initiatives in the near future. 

Prepared Questions from Senator Chuck Grassley

(1) Oversight and Timeliness of Document Requests:

During your confirmation hearing you assured us that you would assist my
congressional oversight efforts with the Department.  I appreciate your
cooperation and will hold you to your word.

I'd like you to know that prior to this hearing the Department provided
responses to requests, dating back to March 2007.  Unfortunately, we
received these responses on Friday and have had four days to digest
nearly 250 pages of answers.

Buried in the responses from the FBI was a response to questions 64
through 83 that said answers are "provided separately", but they were
not.  

Attorney General Mukasey, I am troubled when I get responses stating one
thing but then you do another.  When can I expect this response from the
FBI I've been waiting for since March of 2007?  Can I expect these
answers before a full year has passed?

(2) Whistleblowers

At your confirmation hearing you testified about whistleblowers at the
FBI and said "people ought to be encouraged to come forward...and that
they should be protected."

The FBI and Justice Department have not always had a culture that
supported whistleblowers.  Instead the culture usually worked to prevent
whistleblowing through intimidation and retaliation.

One of the most difficult issues in whistleblowing is that of national
security whistleblowers.  These individuals have security clearances
that prevent the disclosure of our Nation's closest held secrets.  I
understand that a security clearance is a privilege and not a right.

However, individuals with security clearances who witness wrongdoing
often face a catch-22.  They can either report the wrongdoing to
supervisors who may retaliate against them, or they can sit silent and
let the wrongdoing continue.  Either situation is unacceptable.

As a solution, the Senate unanimously passed S.274, the Federal Employee
Protection Act of 2007.  This bill attempts to strike a balance.  It
allows individuals who know of wrongdoing in classified matters to come
forward and report that wrongdoing to Congress.  BUT, it only allows
disclosure to specific persons cleared to hear classified information.

This bi-partisan legislation would ensure that national security
information remains secret, while allowing Congress to conduct oversight
required under the Constitution.

On January 22, 2008, you along with Director of National Intelligence
McConnell, Secretary Gates, and Secretary Chertoff, signed a letter
objecting to S.274.  I am concerned by statements in this letter which
claim that secure reporting mechanisms for whistleblowers are somehow
unconstitutional or jeopardize national security.  While I agree that
this information needs to be secure, Congress must be able to conduct
oversight of the Executive Branch on matters involving National
Security. 

Further, I find it difficult to reconcile this letter with statements
made at your confirmation hearings.

Now, I'm not for a blanket privilege allowing whistleblowers to release
classified information at will.  That is not practical or safe.
However, we need a secure mechanism to allow whistleblowers to make
protected disclosures to Congress.

Why doesn't Congress have a right to classified information when
providing that information is necessary to report wrongdoing?

Why isn't it enough to require that whistleblowers report classified
information to those with the necessary security clearances?

(3) Bassem Youssef

As you know, in the 1990s whistleblowers exposed major problems with the
FBI crime lab. Dr. Frederic Whitehurst, testified before you when you
were a judge in New York, raised concerns about the lack of expertise in
the FBI crime lab.  In response, the former Attorney General recruited
five outside forensic experts to carefully review the work of the crime
lab and all of Dr. Whitehurst's concerns and to make recommendations.

One of the changes was to ensure that the FBI placed scientists in
charge of the lab.  In other words, the FBI put people with expertise in
leadership positions.  Now, there is another FBI whistleblower named
Bassem Youssef who is prepared to testify about major problems with the
FBI's counterterrorism operations.  The FBI has taken the position that
neither Arabic skills nor expertise with Middle Eastern counterterrorism
are required for management positions in its counterterrorism programs.
This sounds too much like the days when the FBI didn't think it needed a
scientist to run the crime lab.

After your confirmation hearing, I asked you about these issues and
whether you would consider appointing an independent panel of experts to
give them serious consideration.  In your written answers, which we just
received, you said you were unfamiliar with the problems outlined by
Youssef, but that it would be among your "highest priorities" to
familiarize yourself with the Bureau's counterterrorism efforts.

Special Agent Youssef, through his counsel, provided my office with a
copy of a ten page letter (dated October 11, 2007) filed with your
office detailing threats to our nation's security caused by the failure
of the FBI to hire and promote subject matter experts within the FBI's
counterterrorism division. The examples set forth in that letter are
extremely troubling.  [Mr. Chairman, I ask that the letter be placed in
the record.]

What action has your office taken to investigate the issues and concerns
raised in Mr. Youssef's October 11, 2007 letter?

Do you plan to seek an independent review of Youssef's allegations about
how lack of expertise among FBI managers is hindering its
counterterrorism efforts?  Why or why not?

(4) Exigent Letters:

Youssef is also a central figure in the controversy over so-called
"exigent letters" issued by the FBI.  These letters obtained phone
records by falsely claiming an emergency and promising that a grand jury
subpoena would be issued later.  According to Youssef, he helped the FBI
identify and fix the problems with these letters.

The FBI General Counsel recently briefed Committee staff and claimed
that her office did not know of the letters "at the time."  However,
according to page 93 of the Inspector General's report, interviews and a
review of email indicates that a division of the General Counsel's
Office did know "at the time," about the exigent letters as early as
2004, long before the FBI stopped sending them.

We should not have to rely on misleading statements from FBI officials
when there is evidence available that would clarify exactly how this
mess happened.  The Committee requested all of the emails related to
exigent letters last year, DOJ promised them to us, but we have received
only one small batch of heavily redacted documents.

When are these documents coming-it has been almost a full year since we
first asked?

in a December 18 press release, the No FEAR Coalition, an organization whose mission is to push for the enactment of laws protecting federal employees, put forth the following statement:

"This law will provides courageous federal government workers with concrete tools to defend themselves against a government of lawlessness, for the first time, government employees will be entitled to legal defense, groups, such as medical doctors...will be protected against harassment and retaliation when they expose corruption in hospitals. Agencies will have to disclose the total dollar amount spent to pursue victims of discrimination and retaliation. We commend Congressman Wynn for introducing this historic legislation."