Archive for November 16, 2008

 Broken Oversight, Investigations & Justice Dept. Affect Whistleblowers


I recently, received an email from the group administrator of a
Whistleblower group I belong to chastising the group members about
only sending in posts of direct implication and interest to
whistleblowers, not notes on general corruption etc. This post is
about the problem of focus and scope of the focus and why the
patterns of corruption we see are indeed most germane to every
whistleblower, and everyone else who cares about integrity in
government and industry.


Advice from effective investigators: keep a broad focus while
digging for the details; follow the money, search for patterns and
connections. The problem may be bigger than you think.


One has to wonder about the true depth of manipulation of the various
arms of our Justice Department. It appears that there has been quite
a lot of this lately. I mean by that, finding that the FBI and
others have been turned away from certain cases, or types of cases,
and put onto selected other more politically convenient lines of investigation.

Another part of the pattern of operations by the current
Administration or their minions appears to be effective use of a “red
herring” as it gets investigators off chasing other demons, and helps
divert public attention from dangerous ground.  I have heard from some

DoD whistleblowers that their experiences have included:  having initial response of shock and indignation over the merits of the cases taken to law enforcement/ investigative personnel  (Justice and others) agencies. That followed by investigations purposefully initiated with great energy and resolve by field personnel accompanied by check backs and good communication, only to have those law enforcement/investigative personnel, inexplicably after
a few weeks, become quite mute.


These whistleblowers have further explained that they have discovered the following kinds of things have occurred:


a.      Investigators were told to stop by higher ups, sometimes
quite a bit higher levels of management.

b. Investigators were loaded down with other work and told their
priorities, which did not include the whistleblower case of concern.

c. Investigators were removed from the case and another
investigator, in one case a very senior investigator are put on it
instead, one who appeared to be on marching orders to drag it out,
obstruct the investigation and make it “go away.”

d. The whistleblowers have also reported that even though well
developed cases were turned over to the appropriate three or four
letter acronym agencies for criminal investigations, including lists
of people to be interviewed, deposed, or subpoenaed, no contacts by
the investigator now in charge to interview or communicate with those
witnesses with further evidence whatsoever.

e. In one case, the investigator ignored a list of a dozen
witnesses, and spoke instead to an employee in an involved
department, who was new, and obviously had no history and no
knowledge of the case, which many other employees with more seniority
and experience did have knowledge of, and were listed in the
witness/source list that the investigator chose to ignore. The
investigator in this case was quoted, as saying the reason the case
was not going anywhere was that “No one will talk to me.” In the
mean time, the whistleblowers were informed by the witnesses on the
list waiting to tell what they knew, that no one had contacted them.
They understandably expressed frustration that the case was not being


It seems that many view things a bit myopically. This is somewhat
understandable due to the level of stress and pressure most
whistleblowers feel, and the lack of energy and time may have to
research and reflect while in the slowly heating pot surrounding
their own particular situation. Good communication and a broader
view are necessary.


This is not about just one whistleblower.  The problems we are having are not limited only to one agency or area. The stories that do break are symptomatic of a much bigger problem. A problem created not in small part by the corruption and excesses of those who have been in powerful positions of influence and control, and position to profit from those corruptions and
excesses. Justice and law enforcement are not being allowed to function like they are supposed to and that is affecting all of us, particularly “whistleblowers.”






This was an interesting site, someone sent me regarding the expected actions of President George W. Bush, plans for pardons and final blocking of investigations into wrongdoing and whistleblower allegations.  -GFS


From The Seattle P.I.

Boeing responses to questions: Round one

Last updated July 16, 2007 10:08 p.m. PT

Before providing executives for interviews, The Boeing Co. asked the Seattle P-I to outline its questions in written form. The P-I submitted two rounds of questions, which are displayed here along with the company’s official responses.

Boeing’s summary statement:

Follow links to read full response to questions.



The Seattle P.I.

Boeing responses to questions: Round two

Last updated July 16, 2007 10:08 p.m. PT

These are the P-I’s second round of questions and Boeing’s written responses.

·  Some organizations, including Standard & Poor’s, encourage full disclosure of deficiencies even though law does not require it. What factors went into Boeing management’s decision not to discuss internal control deficiencies in its filings to the Securities and Exchange Commission?

Follow links to read full response to multiple questions. 


Now, if those “investigator/reviewers” will dig beneath the upper and middle layers and get to the people who can really tell them what is going wrong, maybe we’ll get somewhere.  One person wrote me and told me that it did not matter who was appointed head of the agency (and they did indeed come and go with an alarming speed),  this person worked for, as the managers and middle managers below the appointed head, kept them uninformed and dazed, while the corruption continued to brew and strengthen itself and the corrupt ones found ways to profit.




The Washington Post




Agency Reviews Start Monday

Federal employees: Take note! Get a haircut and wear your best suit to work on Monday, because that’s when Obama transition team members may show up in your office to start reviewing “over 100 departments, agencies and commissions of the United States government,” according to Obama transition co-chairman John Podesta.

John Podesta, the co-chairman of Obama’s transition team. (Tim Sloan/AFP/Getty Images)

The former White House chief of staff said the agency review teams “will ensure that senior appointees have the information necessary to complete their confirmation process, lead their departments and begin implementing signature policy initiatives immediately after they’re sworn in.”

In a demonstration of unprecedented transition transparency, Podesta said his team will publicly release the names of every person on the agency review teams and those that will enter the agencies for review.

“They will be posted on our Web site,, as they are cleared to do their work,” Podesta said. “A list of team leaders with short bios will be available later this week. Other team members will be posted on the Web site when cleared, but prior to their entry into the agencies.” The transition Web site currently has a list of names but no biographies of those leading up the transition.

We know however that Melody Barnes and Lisa Brown will serve as the transition’s co-directors of agency review. Barnes used to work at the Center for American Progress, the group that Podesta heads and is currently on leave from.

Last Fall Barnes was named one of Washingtonian Magazine’s “Ten Well Dressed Women.”

Brown is on a leave of absence from her role as executive director of the American Constitution Society. She served as counsel to Vice President Al Gore, earned a B.A. in political economy from Princeton University in 1982 (Michelle Obama’s alma matter) and received a law degree from the University of Chicago Law School in 1986.

The transition itself will employ roughly 450 people, Podesta said, with a budget of at least $12 million. It will maintain offices in Washington and at the federal building in Chicago. We can expect President-elect Obama to publicly announce all cabinet-level appointments from Chicago and less-senior appointments will be announced as necessary.

So what do you think the Obama team’s reviews will unearth? Do you have any suggestions for what they should look for? Leave your thoughts in the comments section below.

By Editors  |  November 11, 2008; 4:30 PM ET  | Category:  Revolving Door
Previous: And Now, The Federal Eye | Next: The Eye Opener: Nov. 12, 2008


From The Seattle Post Intelligencer

The world of audit contracts is in the money

It’s a high-stakes competition

Last updated July 24, 2007 8:26 p.m. PT


Some folks familiar with the world of regulatory compliance have joked: Those who can, do. Those who can’t, audit. Perhaps they should add, “and make gobs of money.”

An entire industry has evolved to help companies comply with the Sarbanes-Oxley Act of 2002, the largest change to corporate governance since the 1930s. Vying for those audit-consulting contracts is a high-stakes, high-value competition.

By the end of 2008, U.S. public companies will have spent $32 billion on compliance with Sarbanes-Oxley, with more than half of that on outside consulting, AMR Research reports. A recent Seattle P-I investigation detailing compliance challenges at The Boeing Co., the region’s largest employer, found that the aerospace giant has spent more than $165 million in three years on the effort.


Link to full story:

The Seattle P.I.

At work, all e-mail can be public

Friday, November 16, 2007
Last updated 11:27 a.m. PT


By now, most employees have gotten the message: It’s both technically possible and legally permissible for your employer to read e-mail you send or receive at work.

That seems logical. If you’re using an e-mail address ending with your company’s name — a type of e-mail known as POP3 (Post Office Protocol) — the address makes it clear that the company owns the domain name and the server on which the e-mail system resides.

But what about Web-based e-mail, such as Gmail, Hotmail and Yahoo Mail?


Follow link for full story:



Mr. Eastman endured two trials if one can call them that.  Boeing settled in an odd agreement requiring Mr. Eastman not to say bad things about the company, and to agree to undergo several what is turning out to be long interrogations from Boeing managers and legal.  He is still enduring retribution and harassment from Boeing and trying to put his life together that Boeing turned upside down and backwards.    See his website:




Internal Boeing Documents Support Whistleblower’s Allegations: Aircraft Quality Control Problems Cited

May 8, 2008


Internal Boeing documents obtained by the Project On Government Oversight show that the allegations of a former Boeing quality control inspector facing criminal charges have merit.  Quality control problems at Boeing increase the likelihood that defective aircraft parts end up on planes and flaws in the manufacturing of planes remain uncorrected.  This can potentially threaten public safety and drive up the cost of aircraft maintenance. These documents are linked at the bottom of this release.

Gerald Eastman, the former Boeing inspector, is facing a second trial of criminal charges for disclosing Boeing information to the press.  His first trial last month resulted in a mistrial when jurors could not agree on whether Eastman committed “computer trespass.”  Mr. Eastman claims that his involvement with the press stemmed from the lack of corrective actions taken by Boeing and the government in response to his disclosures of wrongdoing to them.

An internal Boeing memo sent to Boeing employees in October 2000 stated that misuse of “production stamps” or “roller-stamping” can result in negative consequences for the company and the individual misusing their stamp.  Roller-stamping is the misuse of production stamps to stamp work on critical parts and assemblies as complete and fully inspected when there has only been a cursory inspection, if one at all, of the part or assembly in question.  Eastman’s central claim is that he had perceived widespread “roller-stamping” and Boeing did little to curtail the practice.

“These documents show that Eastman clearly had a reasonable basis for his belief roller-stamping was occurring,” according to Nick Schwellenbach, POGO investigator.  “It’s one thing to break company policy on releasing documents and getting fired, it’s another matter to file criminal charges.  Who do the prosecutors work for?”

The Boeing memo came months after the Federal Aviation Agency conducted a special technical audit of Boeing that concluded that there were systemic quality control problems.  The 2000 FAA special technical audit found “in some cases, manufacturing planning was not adequate, requirements were not followed, inspections were not specific, or personnel were not knowledgeable about requirements.”  Thus, “parts, assemblies, and installations are released through the system that do not conform” to approved designs.  Also, in 2000, the FAA proposed “a record $1.24 million in civil penalties against Boeing for inadequate supplier oversight and for failing to quickly report cracked parts on two older jetliners,” according to a news report (James Wallace, “FAA Audit Rips Boeing Over 100 Production, Design Problems Detailed; Company Plans Corrective Action,” Seattle Post-Intelligencer, August 11, 2000.). 

Years later, roller-stamping was still occurring when Eastman acted on his concerns.

Boeing certainly was aware of the practice because a Boeing document dated January 2004, states that, “There appears to be a systemic issue within BCA [Boeing Commercial Aircraft] involving parallel process breakdowns of mechanics and inspectors involved in assembling and inspecting aircraft, assemblies and parts.”  The 2004 document also states that the FAA examined 55 issues at Boeing between 2002 and 2003 and found that “24% of these issues have involved instances where the mechanic and inspector created and accepted nonconforming conditions”—i.e. roller-stamping.

In further support of Eastman’s claims, other Boeing employees became whistleblowers when they reported that Boeing supplier Ducommun was regularly supplying non-conforming parts to Boeing, according to the whistleblowers’ False Claims Act lawsuit obtained by POGO.  Now-former Boeing employees Taylor Smith, Jeannine Prewitt and James Ailes were then retaliated against by management because Boeing allegedly did not want to deal with the repercussions of their findings. 

For additional information

Boeing Commercial Airplane Group memorandum, “Use of personal stamps in our production system,” October 31, 2000.

Federal Aviation Administration, “Special Technical Audit of Boeing Commercial Airplane Group,” December 1, 1999, through February 11, 2000.

Boeing Airplane Program Systemic Issues Chartered Team 1, “Investigation of ‘Dual Failures,’” January 2004.

United States of America ex rel Taylor Smith, Jeannine Prewitt and James Ailes vs. The Boeing Company and Ducommun, Inc., Federal District Court of Kansas. Filed on March 11, 2005.   

Founded in 1981, the Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more accountable federal government.

# # #




Here are some articles and link to the Seattle Post Intelligencer and the work of Andrea James, and others. -GFS



Boeing struggles with Sarbanes-Oxley

Sarbanes-Oxley is a wide-ranging law aimed at preventing stockholder rip-offs like the Enron scandal from happening again. Among its requirements, it forced public companies like Boeing to shine a light on their internal controls. It must show it has checks and balances on people and computer systems to guarantee accuracy of financial statements.

The P-I provides a rare glimpse into Boeing’s struggles with Sarbanes-Oxley compliance in its information technology department.


Computer security faults put Boeing at risk
For the past three years, The Boeing Co. has failed, in both internal and external audits, to prove it can properly protect its computer systems against manipulation, theft and fraud.

Businesses say accounting reform costly, onerous
Sarbanes-Oxley was passed as a tool to restore honesty to corporate behavior and reassure investors. But many businesses say it’s onerous and costly and hurts U.S. competitiveness.

Boeing has been stung by internal theft before
Information security controls are meant to do a lot more than stop hackers and kill computer viruses — especially because corporate fraud comes from within. Internal fraud can happen to any size firm — even tech-savvy Boeing.

Boeing responds
Before providing executives for interviews, The Boeing Co. asked the Seattle P-I to outline its questions in written form. The P-I submitted two rounds of questions, which are displayed here along with the company’s official responses:
Round One | Round Two


Follow-up articles

The world of audit contracts is in the money
Some folks familiar with the world of regulatory compliance have joked: Those who can, do. Those who can’t, audit. Perhaps those folks should add, “and make gobs of money.” A look at the high-stakes arena of audit contracts.

SEC unanimously votes for new rules to lower audit costs
Nearly five years after the passage of a sweeping corporate accounting reform law, the U.S. Securities and Exchange Commission threw a lifeline to public companies by voting to accept new rules that would lower audit costs.

Boeing worker says he was fired for talking to P-I
The Boeing Co. fired at least one employee Friday for having a conversation with the Seattle P-I in July, the employee said.

Boeing bosses spy on workers
Reading private e-mails, following workers, collecting footage of them — it’s not the latest Bond flick, but rather how The Boeing Co. investigates its employees, the P-I has learned.

Progress made in computer compliance, Boeing says
The Boeing Co. has told the Seattle P-I, in response to questions, that it is making progress on its Sarbanes-Oxley compliance testing in its information technology department, despite auditor turnover.




OMB issues memo on new contractor self-reporting rule




The final rule, published in the Federal Register on Wednesday, establishes mandatory self-reporting by company executives as soon as there is “credible evidence” that the company or one of its employees has violated contracting regulations related to fraud, bribery, conflicts of interest, false claims or gratuity.

The policy has undergone multiple revisions and comment periods and generated a firestorm of controversy in Congress for its initial exclusion of contractors working outside the United States. That loophole was closed forcibly with legislation passed earlier this year.

Contractors and procurement lawyers also have been concerned about the rule since it was first proposed, and Colleen Preston, executive vice president for policy and operations at the Professional Services Council, said the contracting community still is watching with trepidation to see how the new policy will be implemented.

It remains unclear, Preston said, exactly when contractors are supposed to disclose a violation and what constitutes “credible evidence.” She said she also doesn’t know the extent to which inspectors general will take into consideration corrective action already taken by companies.

“Our fear is they’ll be taking action on every disclosure,” she said. “The concern is that — and this is the nature of how [inspectors general] do business — they’ll open an investigation and investigate it until they don’t have any issues left [and] then make some determination. But really we have no idea how they’ll implement this.”

Lesley Field, deputy administrator for OMB’s Office of Federal Procurement Policy, said the memo will ensure that agency officials know about the new rule and have the resources they need to increase its visibility.

“I think we have a responsibility to make sure contractors understand their responsibilities subject to this change, since they’re subject to debarment and suspension for knowingly failing to disclose violations,” Field said.

Another administration official, speaking on condition of anonymity, said government efforts to clear up any uncertainty surrounding the new rule, including explanatory presentations, were under way already and will continue now that the policy has been finalized.

Hundreds of individuals and organizations commented on draft versions of the rule and while the fundamental premise of mandatory contractor self-reporting did not change, Preston said she thinks the Civilian Agency Acquisition and the Defense Acquisition Regulations councils made a good-faith effort to take the feedback into consideration.

“I think they made some adjustments and did, at least, go through and listen to everyone’s concerns and discussed them,” Preston said. “And they did make some changes. They didn’t concede anything but then again they did respond to some of the fundamental concerns.”

Field said changing the reporting trigger from as soon as there is “reasonable grounds” to suspect a violation to “credible evidence” of a violation shows the government’s commitment to avoiding a knee-jerk ethics requirement.

“It’s about striking the right balance,” Field said. “We want disclosure and made it very strong that contractors could be disbarred for not disclosing, but also want to show some semblance of fairness when there is uncertainty.”

Now that the rule is finalized and will be implemented as of Dec. 12, companies must get to work establishing the corporate mechanisms to deal with the new requirements.

“Companies are really going to have to ramp up their compliance programs,” Preston said. “I think everybody’s still uncertain at this point what that will mean, but certainly it will increase substantially the burden on contractors to increase their training and increase their legal and compliance departments to make sure they’re in sync with this.”

The Office of Management and Budget issued a memorandum to chief acquisition officers and senior procurement executives on Thursday informing them of a new rule requiring companies to disclose government overpayments and their own criminal contracting violations.


From: National Whistleblowers Center []

Sent: Tuesday, November 11, 2008 2:13 PM


Subject: Special Training: “Whistleblower Protections in the Consumer Products Safety Improvement Act of 2008”




“Whistleblower Protections in the Consumer Products Safety Improvement Act of 2008”


The National Whistleblowers Center Announces the First Legal

Training Seminar on New Whistleblower Protections Contained in the

Consumer Product Safety Act


Willard Intercontinental Hotel

Taft Room

1401 Pennsylvania Avenue, NW

Washington, D.C.


Friday, November 21, 2008 – Space is Limited

(CLE credit available)

Scholarships Available


On August 14th, 2008, the Consumer Product Safety Improvement Act became law. This Act contains groundbreaking whistleblower protections covering millions of workers employed in the manufacture, distribution, and sale of consumer goods. The Act contains strong pro-employee provisions, including the right to a trial by jury, compensatory damages and attorney’s fees and costs.


The law protects workers who blow the whistle on safety problems in over 15,000 different types of consumer products, including Asbestos, benzene, bicycle helmets, blasting caps, carpets and rugs, caustic or corrosive substances, 
flammable products, 
fireworks, gasoline, 
toxic substances, 
imported consumer products, lead paint, and 
toys. The protections extend beyond the Consumer Products Safety Act, an include disclosures concerning violations of the Federal Hazardous Substances Act, the Flammable Fabrics Act, and the Poison Prevention Packaging Act.


This is the first seminar specifically designed to train plaintiff’s lawyers in the mechanics of the Act, and how this law would protect witnesses in product liability cases.


To register on line please click here.


To review the full program and faculty click here.


For more information or request a scholarship contact: 
Estelle S. Kohn
 — Seminar Coordinator — National Whistleblowers Center
 — 3238 P Street, NW
 — Washington, DC 20007
 — Phone: 202-342-1903 — 
Fax: 202-342-1904 — 




Friday, November 21st, 2008


9:00 a.m. – 10:30 a.m.



• Legislative history and content

• Summary of the law’s substantive and procedural requirements

• Overview of the cutting edge provisions contained in America’s newest whistleblower law

10:45a.m. – 12:15 p.m.




• Overview of initial complaint and the OSHA investigative process

• How to properly exhaust administrative procedures

• Overview of DOL whistleblower adjudicatory rules


12:15 p.m. – 1:30 p.m. LUNCH BREAK


1:35 p.m. – 3:05 p.m.




• Whether to litigate a case in the DOL or remove to federal court

• How to ensure trial by jury

• Obtaining compensatory damages and other special relief

• Relationship between the Act and pendant state claims

• How to prevail under the “contributory factor” standard


3:20 p.m. – 4:50 p.m.





• Strategic planning to ensure that new case precedents decided by the Department of Labor and the courts are consistent with Congress’ intent to provide strong relief for whistleblowers working in the manufacturing sector.


Scholarships Available

Space limited