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24Mar/110

A Modern Whodunit

This post was written by Tracy

Back in December, a bill to protect whistle blowing federal employees was expected to pass.

Instead, it disappeared.

The Whistleblower Protection Enhancement Act of 2010 (S. 372) was introduced in February of 2009. The bill is summarized by congress as “A bill to amend chapter 23 of title 5, United States Code, to clarify the disclosures of information protected from prohibited personnel practices, require a statement in nondisclosure policies, forms, and agreements that such policies, forms, and agreements conform with certain disclosure protections, provide certain authority for the Special Counsel, and for other purposes.” The Senate finally passed the bill in December 2010, which was subsequently passed a few weeks later by the House of Representatives.

Following a year long editing process, The Whistleblower Protection Act finally made it to the House, only to disappear ten days later as it was being voted.

So what actually happened?

One senator slyly put an anonymous block on the bill, using a last-minute “secret-hold.” This controversial practice allows any senator, for any reason, to anonymously prevent a bill from being passed or a nomination from coming to vote.
In 2011, the senate eliminated this tradition on a 92-4 vote.

WNYC’s On the Media began an investigation, narrowing down the possible culprits to five senators. Two then stated that they did not put the secret block on the bill.

So now there’s three senators left, and nobody’s talking.

Ironically, the three possible transgressors all voted to reform the “secret-hold” practice. Republican senators Jon Kyl of Arizona, Jeff Sessions of Alabama, and James Risch of Idaho all chose to reform the practice, yet are being suspected of using it.

Senator Risch’s and Senator Sessions’ offices both neither confirm nor deny their votes, but both adhere that anonymous votes should remain anonymous. Senator Kyl’s office would not make any statements, though one staffer hinted Kyl’s stance by pointing out that the bill was amended twice, and was not given nearly enough attention to on the way to the house. Kyl’s vote to get rid of the “secret-hold” practice would have been a very good cover for him, as his verbal opposition to the reform as well as his use of the secret hold before on a similar matter involving the Freedom of Information Act, strongly indicates his feelings on the bill.

After the long, seemingly fruitful journey of this bill to only be stopped in its tracks by a senator who won’t even step forward, is a major disappointment. I can’t help but think of the Schoolhouse Rocks song “I’m just a Bill.” I imagine the Whistleblower Protection Enforcement Act sitting glum on the steps of the courthouse.

Boy: Listen to those congressmen arguing! Is all that discussion and debate about you?

Bill: Yeah, I'm one of the lucky ones. Most bills never even get this far. I hope they decide to report on me favourably, otherwise I may die.

Boy: Die?

Bill: Yeah, die in committee. Oooh, but it looks like I'm gonna live! Now I go to the House of Representatives, and they vote on me.

Boy: If they vote yes, what happens?

Bill: Then I go to the Senate and the whole thing starts all over again.

Boy: Oh no!

Bill: Oh yes!

I guess all we can do now is hope and pray, while the bill sulks on the steps.

Sources:
http://www.esquire.com/blogs/politics/whistleblower-secret-hold-5370157

http://www.opencongress.org/bill/111-s372/show

http://www.techdirt.com/articles/20110308/13475113403/down-to-just-3-senators-who-refuse-to-say-if-they-anonymously-killed-whistleblower-bill.shtml

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Filed under: Legislation No Comments

18Jan/110

IRS Proposes New Whistleblower Reward Plan

This post was written by Tracy

The Internal Revenue Service announced today new rules that will alter the Whistleblower Rewards Programshould it be taken into effect.

Senator Chuck Grassley of Iowa, the author of the 2006 law, modeled the Whistleblower Rewards Program after the successful False Claims Act. In June, Grassley expressed his concern with the limitations of the 2006 law, which this new proposal intends to correct.

According to Grassley, the agency procedures were limiting whistleblowers’ abilities from claiming rewards:

“These regulations are good news for whistleblowers. The Commissioner made the common-sense decision of ensuring that individuals who blow the whistle on improper refund claims will be rewarded, as I intended when I wrote the law. These new regulations will help the IRS target tax fraud. This is an issue of fairness for honest taxpayers. I hope these new regulations mean the IRS has turned the corner on encouraging whistleblowers and that this program will be a success. Next, the IRS needs to finalize these regulations quickly so they will apply to all the whistleblowers who filed claims after the 2006 law and have been waiting for their awards.”

The IRS described the proposal as an amendment to 26 CFR Section 301.7623-1.

“This regulation clarifies the definitions of proceeds of amounts collected and collected proceeds for purposes of section 7623 and that the provisions of Treas. Reg. Sec. 301.7623-1(a) concerning refund prevention claims are applicable to claims under section 7623(a) and (b). In clarifying the definitions of proceeds of amounts collected and collected proceeds, this regulation provides that the reduction of an overpayment credit balance is also considered proceeds of amountscollected and collected proceeds under section 7623.”

The actual language of the text is as follows:

Sec. 301.7623-1 Rewards and awards for information relating to violations of internal revenue laws.

(a) In general--(1) Rewards and awards. When information that has been provided to the Internal Revenue Service results in the detection of underpayments of tax or the detection and bringing to trial and punishment persons guilty of violating the internal revenue laws or conniving at the same, the IRS may approve a reward under section 7623(a) in a suitable amount from the proceeds of amounts collected in cases when rewards are not otherwise provided by law, or shall determine an award under section 7623(b) from collected proceeds. (2) Proceeds of amounts collected and collected proceeds. For
purposes of section 7623 and this section, both proceeds of amounts collected and collected proceeds include: tax, penalties, interest, additions to tax, and additional amounts collected by reason of the information provided; amounts collected prior to receipt of the information if the information provided results in the denial of a claim for refund that otherwise would have been paid; and a reduction of an overpayment credit balance used to satisfy a tax liability incurred because of the information provided.

* * * * *

(g) Effective/applicability date. This section is applicable with respect to rewards paid after January 29, 1997, except the rules of paragraph (a) of this section apply with respect to rewards and awards paid after these regulations are published as final regulations in the Federal Register.

In existence for five years, the Whistleblower Reward Program has brought in an increasing amount of tips. In an annual report submitted by Congress in 2009. Whistleblowers identified 1,941 taxpayers who were each suspected of owing more than $2 million in taxes. This is a significant increase from 2008, where only 1,246 taxpayers were identified.

The IRS will be accepting written or electronic comments and requests for a public hearing until April 18, 2011.
The full text released by the IRS is located here: http://edocket.access.gpo.gov/2011/2011-928.htm

Sources:

F-A Mag

IowaPolitics.com

WhistleblowerBlog

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Tagged as: Chuck Grassley, government, Grassley, qui tam, whistleblower rewards No Comments

29Nov/100

Senator Grassley: Again to the Rescue

This post was written by Jack D. Howard

Once again, there is a bad taste in the mouth over FDA’s appetite for whistleblowing. In posh sections of Virginia Beach, one might not have known that the FDA’s top criminal investigator was allegedly conducting high profile criminal investigations.

For one thing, a home office might not be quite as secure as a federal office building.

Iowa’s senior senator, Chuck Grassley (R), has disclosed a whistleblower’s allegation that the number one investigator for FDA’s criminal enforcement section, Terry Vermillion, has been acting beyond the safe scope of his employment. Besides the allegation of an unauthorized telecommute, Vermillion was also charged with specific instances of “alteration of internal agency reports,” and additional misconduct.

Vermillion announced his resignation over the 2010 Thanksgiving holidays (The Wall Street Journal, November 24, 2010). Vermillion, whose branch has been investigating allegations of doping in professional bicycle racing, reportedly refused any comment on the high-profile whistle blower’s anonymous allegations.

Grassley received the anonymous letter in September, but chose to begin an initially private investigation before pushing ahead with a more formal investigation. It was unclear as to whether additional data had been received from the anonymous whistle blower. Vermillion’s branch was large, even by Washington insider standards: Vermillion’s salary was $200,000 annually, and had grown to more than 200 employees with a $41 million budget.

Interestingly, in a pattern not uncommon among qui tam cases. The CI unit had been feeling heat for two years. In 2008, Senate and House Republicans criticized the unit for over-emphasizing drug cases, instead of corporate misconduct. And early in 2010, the GAO criticized the lack of “accountability” over Vermilion’s—a former secret service agent-- activities.

When it comes to whistleblowing, a fine art has emerged in the Nation’s Capitol. Some critics, however, are concerned the process is becoming more opera than openness.

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