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30Aug/100

Shouldn’t We All Be Equally Protected?

If Congress is supposed to make laws to protect people, and if all people are created equal, shouldn’t members of Congress and their employees abide by the same laws as others? Shouldn’t Congressional employees be protected by Congressional legislation as well? The logical answer to these questions would be “yes.” However, in some cases, Congress has made laws for others to abide by, but has not applied the law to its own branch of government.

Strangely enough, while Congress passed laws to protect whistleblowers, it has not extended the same protections to its own employees. Because legislative branch employees are not protected under the same laws, they may be less inclined to blow the whistle, for fear of losing their jobs or potential lawsuits. Senator Chuck Grassley (R-IA) (see previous article) is trying to change the status quo to allow Congressional employees to speak up without fear of being punished. Last year, Sen. Grassley and Sen. Claire McCaskill (D-MO) introduced the Congressional Whistleblower Protection Act to amend the Congressional Accountability Act to allow legislative branch employees to enjoy the same whistleblower protections as executive branch employees and others. Grassley justify his Act not only because it protects the whistleblowers, but also because it allows for a more transparent government that abides by the laws. He stated that “‘Compliance isn’t just something to check off a list once, but it should be a daily effort to be sure the Senate is abiding by the law.’” In order to ensure that the government does abide by the law, whistleblowers should be able to report on wrongful activities in Congress without the worry of losing their jobs or facing lawsuits. According to Rep. Todd Platts (R-PA) “Being a whistleblower takes courage…Any federal employee, including those who work in the legislative branch, who sees wrongful and unethical conduct in the workplace, should be able to report such conduct without fear of losing their job.”

Legislative branch employees are able to voice concerns to the Ethics Committee in the House or Senate or the to Office of Compliance. However, they are not protected if they blow the whistle. Grassley’s Act would provide them with protection. Act’s similar to Grassley’s have been offered in the previous 3 Congresses but have never come out of Committee. Grassley’s Act is stuck in Committee now as well. Despite the fact that the Office of Compliance has called for such protections to be extended to legislative branch employees for more than 10 years, no such Act has been passed.

Even though this seems like striking news, this is not a new issue. You may be questioning why you have not heard of this issue before. Part of the reason is that Congressional employees are not keen to blow the whistle when not protected by the law. Additionally, they may be uncomfortable lobbying Congress for the law to be extended to them. According to Danielle Brian, Executive Director of the Project on Government Oversight, this is due to loyalty. People working for someone in Congress are loyal to the Congressperson they represent and therefore are less likely to blow the whistle on inappropriate activity. So, despite the fact that the Act is being offered by Grassley, it is questionable as to which will trump: loyalty to the employer or the need to report wrongdoings.

If Grassley’s Act makes it out of Committee and was voted on and passed, would Congressional employees blow the whistle more often, or will loyalty still stand in the way?

NOTE: The Qui Tam Team has written a News Article about this issue. See “Congressional Employees Do Not Receive Whistleblower Protections” at http://quitamteam.com/news/legal-news/678-congressional-employees-do-not-receive-whistleblower-protection

In related news see:
Blog: “Why It’s Worth It to Be a Whistleblower” at http://quitamteam.com/blog/worth-whistleblower/#comments
News: “Grassley Promoting ‘The Value of Whistleblowers’ by writing to Drug Companies at http://quitamteam.com/news/top-headlines/661-senator-grassely-promoting-the-value-of-whistleblowers-by-writing-to-drug-companies

Sources:
Lovely, Erika. “Congress delays on whistleblowers.” Politico. 17 August 2010. http://www.politico.com/news/stories/0810/41178.html.
“S. 474: Congressional Whistleblower Protection Act of 2009.” Govtrack.us. 111^th Congress. http://www.govtrack.us/congress/bill.xpd?bill=s111-474.

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Filed under: Legislation No Comments

15Jul/100

FCA Warming

This is not a good climate in which to be committing fraud against the government. A new article notes that the FCA is on fire, concluding that

[u]nprecedented government spending, recent amendments to the FCA, increased fraud enforcement budgets and priorities, skyrocketing FCA recoveries, state legislative and enforcement activities, and the sheer volume of ongoing government investigations and pending qui tam actions suggest that the FCA will remain the fastest growing area of federal litigation.

One of the most important factors contributing to FCA mania is lawmakers' obsession with tweaking the Act. The FCA has already been amended twice in the first six months of 2010, and Congress is hankering to amend the FCA once again.

Congress passed the Fraud Enforcement Recovery Act ("FERA'') in May 2009. FERA made some of the most significant amendments to the FCA in 20 years. FERA already expanded protections for agents or contractors who blow the whistle. The latest version of the Financial Reform Bill would expand the scope of protected whistleblower conduct to include not only "efforts to stop 1 or more violations" but also lawful behavior "in furtherance of an action'' under the FCA.

Massive outlays of federal dollars combined with Congress's FCA infatuation guarantee that these types of cases will stay hot. 2010 may well be the year of titanic clashes over the FCA, so grab a front row seat as the dollars fly!

This article is brought to you by the QTT, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.

Tagged as: corporate fraud, False Claims Act, FCA, fraud, government, qui tam, whistleblower No Comments

29Apr/100

Protecting Corporate Whistleblowers

A corporate whistleblower faces a very real risk of retaliation by her employer, commonly in the form of termination. Certain provisions of the Sarbanes-Oxley Act (SOX) provide protections for whistleblowers, and new whistleblower protections could potentially come through the proposed financial reform bill.

18 U.S.C. sec. 1514A of SOX protects corporate whistleblowers by providing them with the remedy of a civil action in the event of retaliation by their employer. Publicly traded companies, as well as their contractors, subcontractors, and agents, are prohibited from retaliating against a whistleblower who participates in an investigation or participates in an action stemming from violations of Federal law relating to fraud against shareholders.

If a whistleblower does suffer some sort of retaliation, she has two options depending on the amount of time that has elapsed. She could file a complaint with the Secretary of Labor, or, in the event that the Secretary of Labor has not issued a decision within 180 days of the filing of the complaint and the whistleblower has not done anything in bad faith to cause the delay, the whistleblower can go ahead and file a lawsuit in federal district court. As a side note, there is a special loophole created for whistleblower plaintiffs here. Normally, in order to get into federal district court the amount in controversy must be $75,000 or more. For whistleblowers alleging discrimination, this requirement is waived.

The proposed financial reform legislation, which may be headed to the Senate floor this week, could significantly expand whistleblower protections. Under both the House version of the bill as well as that proposed by Senator Chris Dodd, the SEC would be authorized to reward whistleblowers for any insider trading violations (not just those related to securities, as the law currently stands). In addition, the whistleblower's share of the SEC sanction would be increased to 30% from its current 10%. This is a significant jump, putting it in line with the maximum recoveries available to qui tam relators and IRS whistleblowers.

Blowing the whistle is by no means without risk. The whistleblower should take some comfort, however, in the fact that there are several protections available, and stronger protections likely are on the way. Recent events in the financial world, such as the Goldman Sachs short selling debacle, are sure to provide an impetus to Congress to reinforce whistleblower protections in this area.

This article was sponsored by The Qui Tam Team, the epicenter for whistleblowers and people interested in the False Claims Act, Qui Tam Provisions, and Medicare and Medicaid fraud. To discuss a potential case, please call Eric Young at 1 (800) 590-4116.