Archive for September, 2010


Sep 29, 2010

Whistleblower Office Vindicates FAA Whistleblower, But Questions Remain On Hundreds Of Improperly Closed Cases

By Nick Schwellenbach, POGO

Excerpt:

“The federal Office of Special Counsel (OSC) yesterday announced that it substantiated the findings of Federal Aviation Administration (FAA) whistleblower Robert Spahr.  Spahr, who is an aviation safety inspector, reported to the OSC that the FAA’s flight standards district office in Pittsburgh and the FAA Eastern Division Regional Office violated regulations by failing to take action against three entities regulated by the FAA.

CNN’s Allen Chenoff reports that “Erie Aviation, a repair station operator that services commercial airlines; C.J. Systems, which pilots helicopters for hospitals around the country; and Air Charter Service, an operator of private charter flights,” were the three entities FAA failed to take action against.  Enforcement actions should have been taken in response to mechanical deficiencies and false entries in aircraft logs, according to the OSC.

But questions still remain about OSC’s previous work with whistleblowers, including those at the FAA and Federal Air Marshal Service (the subject of a 2008 POGO report).  Under Scott Bloch, the former Special Counsel who pled guilty to lying to Congress, literally hundreds of whistleblowers’ cases were closed without investigation.”

Link to entire article:  http://pogoblog.typepad.com/pogo/2010/09/whistleblower-office-vindicates-faa-whistleblower-but-questions-remain-on-hundreds-of-improperly-clo.html

Honestly, now that salmon are missing in action, they

 are now going to wager on whistleblowers?  These

 people really do need to take the medication on a

regular basis, that the nice Doctor prescribed.  Wacky!

– GFS

Whistle-Blowers Become Investment Option

for Hedge Funds

By DAVID KOCIENIEWSKI

Hedge funds have found a new market to invest in: whistle-blowers.

Informants who turn in tax cheats have to wait years to get their share of any reward from the I.R.S.’s recently expanded whistle-blower program. So hedge funds, private equity groups and other big investors are offering an alternative. They are essentially agreeing to buy a percentage of those future payouts in exchange for a smaller amount upfront to the whistle-blowers.

The surging size of the potential awards is driving all the interest. Three years ago, the I.R.S. began offering bigger rewards — 15 percent to 30 percent of whatever money the government recovered — in a move that has turbocharged the agency’s whistle-blower program.

Where it once handled only a trickle of tips, often involving relatively small amounts of unpaid taxes, I.R.S. offices now receive a torrent of big money claims. Accountants and company employees have taken to trooping in bearing computer records and boxes of documents to back up their claims of underpayment by big companies.

In what is believed to be the first of these structured tax payouts, an I.R.S. informant who reported that an overseas multinational corporation had underpaid its taxes by billions of dollars received $4 million last month from a private equity firm. In exchange, the firm will receive a portion of the award the informant expects to collect eventually.

The whistle-blower’s lawyer, Eric R. Havian, declined to name his client or provide specifics of the deal, such as how much more than $4 million the investor expects to get. But he said the informant needed money to cover living expenses because he had had trouble finding work since filing his claim.

“The investors take a big bite out of the awards because they could get nothing if the I.R.S. decides not to pay,” said Mr. Havian, a partner in Phillips & Cohen, a firm in Washington specializing in whistle-blower cases.

“And for the whistle-blowers, the amount of the potential award is so astronomical — tens of millions, hundreds of millions of dollars — that they have to ask themselves, ‘How many times over do you have to be rich?’ and ‘Would I be better off with the guarantee of some money now?’ ”

Determining the value of a whistle-blower complaint is a risky endeavor for the investors. Confidentiality rules forbid I.R.S. officials from discussing the status of an investigation even with the whistle-blower, so investors are left to gauge the strength, and potential payoff, of any claim by reviewing the documentation provided by the informant and his lawyer.

I.R.S. officials acknowledge that they have discussed such agreements with whistle-blower lawyers, but the agency does not keep track of how many may have been executed.

Among the lawyers, hedge funds and investors who may provide the financing for class-action lawsuits and whistle-blower cases against government contractors, the reinvigorated I.R.S. program has attracted attention.

Even Credit Suisse, the big Swiss bank, which has been criticized by the United States and other governments for allowing tax evaders to use its private accounts to hide assets, has explored the possibility of investing in a whistle-blower’s award, according to lawyers involved in the negotiations. A Credit Suisse spokesman, however, said the bank had not made any deal and was no longer interested in one.

David Desser, whose capital management firm specializes in litigation finance, said the market was likely to expand once the I.R.S. awarded its first whistle-blower a check under the expanded program, which is expected later this year.

“As soon as the I.R.S. begins paying whistle-blowers, more people will realize that this is a whole new class of assets to be monetized,” Mr. Desser said. “It will be limited in size, because only a percentage of whistle-blowers will have incentive to sell. But for investors there is potential here for outsized returns.”

While the market in whistle-blower futures is in its infancy, investors have been requesting as much as 65 percent of any award an informant receives, according to lawyers negotiating possible deals. In the more established field of litigation finance, investors who underwrite the cost of a lawsuit get 5 percent to 50 percent of any legal settlement or jury award.

Although the I.R.S. has long accepted tips from informants, until recently it seemed reluctant to investigate their complaints or reward them. For the five years ended in 2008, the I.R.S. received about 80 whistle-blower complaints a year, and recovered an average of $155 million a year from tips in previous years, paying an average of $14 million annually in awards.

Since sweetening its awards, the whistle-blower’s office has been receiving more than 500 tips a year, involving far larger amounts. In the five years through fiscal 2008, tips from informants led to 20 cases in which the I.R.S. had been underpaid by at least $2 million. Now the I.R.S. receives 40 or 50 such tips a month, about 10 percent claiming fraud of $100 million or more.

It is too early to gauge whether the program will deliver on the promise that it might recover billions each year, but the preliminary results are promising: an audit by the Treasury Department found that in 2008 alone, whistle-blowers had reported $65 billion in unpaid taxes.

Law firms have been aggressively marketing themselves by setting up whistle-blower blogs and seminars, financing taxpayer antifraud groups, firing off press releases to trumpet big claims, and holding whistle-blower boot camps to train lawyers.

Some accountants and tax lawyers warn that the lure of big money awards could taint the process, even encouraging false accusations from unscrupulous business rivals, or disgruntled employees looking to cash in.

Donald L. Korb, former chief counsel of the I.R.S., said he considered it “unseemly” for the government to encourage citizens to become bounty hunters by informing on their co-workers, employers and neighbors.

During his tenure at the I.R.S., Mr. Korb said he had tried to set up a sophisticated set of procedures to vet complaints because he feared that misuse of the program might bring new complaints about overzealousness by I.R.S. auditors. “I think it’s a bad precedent,” said Mr. Korb, now a partner at the law firm Sullivan & Cromwell. “It’s a disaster waiting to happen.”

But I.R.S. investigators say that the whistle-blower’s office will carefully screen cases to prevent abuse and that the program already precludes monetary awards for people involved in planning or initiating the tax fraud they report.

Those restrictions will be tested in the case of Bradley C. Birkenfeld, the whistle-blower who helped pierce the secrecy of the Swiss banking system.

Mr. Birkenfeld’s tip helped the government win a $780 million settlement from UBS, another big Swiss bank, and could lead to billions more because he helped the I.R.S. find thousands of Americans with offshore accounts.

But Mr. Birkenfeld also withheld information from investigators about his actions to help a client evade taxes, and is now serving a 40-month sentence. Dean A. Zerbe, who represents Mr. Birkenfeld, said the I.R.S. risked undermining the program if it reneged on paying an award.

“He came forward and helped them recover more tax money than anyone else in history,” said Mr. Zerbe, who helped write the new whistle-blower rules four years ago, while working for the Senate Finance Committee. “And if people see that he went to jail and didn’t get the kind of award the I.R.S. has been promising, why would anyone ever come forward again?”

A recent round of “program changes” by the I.R.S. announced that informants are entitled only to a portion of the money directly paid to the government. If a tip simply leads to the denial of a refund — or if the unpaid taxes are used to offset other losses — the whistle-blower comes up empty.

Erika Kelton, a whistle-blower lawyer who testified before the Senate when the rules were being amended, predicted the limits would be struck down “either in tax court or in Congress.”

This article has been revised to reflect the following correction:

Correction: May 21, 2010

An article on Thursday about hedge funds’ investing in informants who turn in tax cheats misstated, in some copies, the business of Sullivan & Cromwell, where Donald L. Korb, former chief counsel of the I.R.S., now works. It is a law firm, not an accounting firm.

Link to original:  http://www.nytimes.com/2010/05/20/business/20whistleblower.html?th=&emc=th&pagewanted=all

I received this from POGO (Project On Government Oversight), last week.  –GFS

 *********

Dear G. Florence,

Two important developments to tell you about:

On the heels of testimony by POGO’s Angela Canterbury, Congress has repealed a provision that had given the SEC outrageous secrecy privileges.

This is a major victory for defrauded investors, for whistleblowers and for open government.

POGO is joining a bi-partisan group of senators in calling for new leadership in a key government oversight position.

The current Special Inspector General for Afghanistan Reconstruction (SIGAR)—the government watchdog who is supposed to root out fraud, waste, and abuse of taxpayer dollars in Afghanistan reconstruction efforts—has had a disappointing tenure.

Taxpayers have spent over $51 billion on reconstruction in Afghanistan since 2002, and it’s time to put an effective watchdog in place.

I encourage you to read more about these issues at POGO”s Website:

Brief analysis of the bill to repeal SEC secrecy privileges  http://pogoblog.typepad.com/pogo/2010/09/sec-secrecy-repeal-sent-to-obama.html

Highlights from POGO testimony arguing for need to repeal these privileges  http://www.pogo.org/pogo-files/alerts/financial-oversight/fo-fra-20100915.html

Why the current SIGAR needs to go   http://www.pogo.org/pogo-files/alerts/government-oversight/go-igi-20100923.html

Is this useful?  It seems to me that the traditional advice given about handling stress does not work so well in today’s setting.  Anyone have any thoughts, critiques, or better advice?  GFS

 

Stress 

 

A lecturer, when explaining stress management to an audience,

raised a glass of water and asked, ‘How heavy is this glass of water?’

 

Answers called out ranged from 20g to 500g.

 

The lecturer replied, ‘The absolute weight doesn’t matter.

It depends on how long you try to hold it. If I hold it for a minute, it’s not a problem. If I hold it for an hour, I’ll have an ache in my right arm. If I hold it for a day, you’ll have to call an ambulance. In each case, it’s the same weight, but the longer I hold it, the heavier it becomes.’

 

He continued,

‘And that’s the way it is with stress management.

If we carry our burdens all the time, sooner or later

the burden will become increasingly heavy

and we won’t be able to carry on.’

 

‘As with the glass of water, you have to put it down for a while and rest before holding it again.

When we’re refreshed, we can carry on with the burden.

So, before you return home tonight, put the burden of work down: don’t carry it home. You can pick it up tomorrow.

Whatever burdens you’re carrying now,

let them down for a moment if you can.’

 

So, my friend, Put down anything that may be a burden to you right now. Don’t pick it up again until after you’ve rested a while.

 

Here are some great ways of dealing with the burdens of life:

 

* Just accept that, some days, you’re the pigeon

and some days, you’re the statue.

 

* Always keep your words soft and sweet – ,

just in case you have to eat them.

 

* Always wear stuff that will make you look good

if you die in the middle of it.

 

*Drive carefully. It’s not only cars that can be

“recalled” by their maker.

 

* If you can’t be kind, at least have the decency to be vague.

 

* If you lend someone $20 and never see that person again,

It was probably worth it.

 

* It may be that your sole purpose in life is simply to be kind to others.

 

* Never put both feet in your mouth at the same time,

because then you won’t have a leg to stand on.

 

* Nobody cares if you can’t dance well.

Just get up and dance.

 

* Since it’s the early worm that gets eaten by the bird,

sleep late.

 

* The second mouse gets the cheese.

 

* When everything’s coming your way,

you’re in the wrong lane.

 

* Birthdays are good for you.

The more you have, the longer you live.

 

* You may be only one person in the world,

But you may also be the world to one person.

 

* Some mistakes are too much fun to only make once.

 

* We could learn a lot from crayons… Some are sharp; some are pretty; and some are dull. Some have weird names; and all are different colours; but they all have to live in the same box.

 

*A truly happy person is one who can enjoy the scenery on a detour.

 

 

Have an awesome day and know that someone has thought about you today….  I did…

 

 

 

Do you realize in about 40 years we’ll have thousands of OLD LADIES running around with sagging TATTOOS?  and  RAP MUSIC will be the GOLDEN OLDIES (Now that is SCARY)—– Maxine

 

Washington Senate Race Endorsements, MoveOn.Org and the Deaf Ears of Politicians to Whistleblowers

 I got an email from MoveOn.Org last week. I am not sure how I got on their mailing list. In my blogs, I pretty much criticize everyone who I believe deserves it regardless of political party affiliation.

They were asking me who they should endorse in the Washington Senate Race (incumbent Senator Patty Murray (D) or challenger Dino Rossi (R)

They also left a space to write in a candidate. Then they left a space to write in explanatory comments. Against my better judgment, I wrote in a name in the write in slot and then explained why.

I explained that I had a problem with both the incumbent and the challenger. I clarified that the incumbent had a history of supporting her industrial campaign contributors and was willing to ignore her individual constituent’s appeals to her for help when they were federal or industry employees being treated badly as whistleblowers, or threats to the corruption done by the employers. Her deafening silence has not endeared her to multiples people who’ve been standing up to the creeps pretty much on their own. She has been doing a lot of cheerleading for a particular very large defense contractor/aerospace corporation, despite their catalog of sins and continued mistreatment of their own employees and federal oversight employees. There is a very good reason she is known as the Senator from Boeing.

As far as her challenger, I explained that I considered him no better. He keeps whining and running for office, and his only lack is that he hasn’t been in a position of power and authority so he can do exactly what Murray has been doing. So, there would be no difference; they are both disasters.

I explained that I had written in the name of my attorney, as I really found that despite commonly held views about attorneys and all the jokes, although I didn’t always agree with my attorney politically, I found him to me much more ethical and honest than either of those candidates.

The next day, I got another email from Moveon.org, happily announcing they had endorsed Patty Murray who was going to help them stop all those corrupt corporations and contractors from continuing their campaign of fraud, waste, and abuse.  It went on and on beyond that.  After I got through shrieking and laughing myself out of my chair, I deleted it.  (It’s still in the trash file, should I need to get it out and post it on the blogs with annotations.) I am still plotting my blog post I will write about it.

Presently more than disgusted with nearly everyone,

GFS

 *******

 

Response from The Last Inspector:   

LOL, G. Florence.

I know about intimately and agree with everything you wrote.

Murray did help me a tiny bit, albeit behind the scenes so as not to appear anti-Boeing.

The problem with most Democrats is they are too meek, albeit republicans are as meek in many ways (they have to be, as if they campaign honestly on what their agenda is, the vast majority of people will never vote for them).

If Murray and Democrats didn’t always appear to be afraid of their own shadows on how they responded to every issue and just did what they wanted to do, they would be far more successful in the polls.

Being afraid to go up against the political power of an evil corporation like Boeing is illustrative of that.

Despite all of her bowing to Boeing, the evil management at the company stabbed her and all Boeing workers in the back by putting the second 787 line in SC.

That’s what happens when you in essence make deals with devils like Boeing management.

However, despite their meekness in standing up to those forces more powerful than even a US senator, there still is no equivalency between Democrats and republicans, no matter how bad the Democrat is (except in the very few cases when the democrat actually acts like a republican when elected).

That is the falsehood that many spout out when their subconscious is desperately looking for reasons to justify voting for the other side.

Democrats are angels when compared to evil republicans, although there is never complete black and white, the following is as black and white as it gets:

Democrats are honest. Republicans are liars.

Democrats believe and legislate for what WJWD without wearing their Christianity on their sleeves. republicans believe and legislate for the opposite of what WJWD and then falsely proclaim themselves the “party of Christians and Jesus.” They demonize Democrats, when it is actually themselves that are working for the head demon.

Democrats are the opposite of hypocrites; republicans are the worst hypocrites in existence. Just look at one issue–they impeached a president for lying about an affair, yet they now have several republicans in the Congress who have had affairs and even lied about them, yet their hypocritical supporters still support them, and few if any ask them to resign or ask for their impeachment (that would require not being a hypocrite).

Democrats work for the people, as the Constitution “wants,” and only suck up to corporations because of our corrupt campaign finance system that gives corporations the key to politician’s doors when citizens are shut out, and due to their meek natures (like Murray). Republicans work solely for corporations, and never for the people, only sucking up to the delusional and stupid people in the electorate around election time with lies and making up bogus wedge issues like the “Ground Zero Mosque,” for they could never get elected if they campaigned honestly on their true beliefs. Like the devil, the only way they can convert souls is to deceive.

Democrats are the party of all sane true Christians. Republicans are the party of the American Taliban, who, like the Taliban, are doing the opposite of the “holy books” their faiths are based on. All those who fall victim to the false Christianity of the republicans will go to hell, if there is one. I am an agnostic, so I believe they can’t go to a place that doesn’t exist, but their sole legacy will be that they made the world hell while they were alive, whereas the democrats worked to make it a place more heaven-like and WWJD-like. If hell existed, and Jesus were alive, he would likely re-state that a republican’s chance of getting into heaven is as likely as a 747 flying through the eye of a needle unscathed.   

So, albeit Murray has hurt this whistleblower through almost total inaction almost as deep as my wife when she betrayed me, even I may hold my nose and vote for her, especially if she pledges to break the “senator from corrupt Boeing management” mantra. A vote for anyone else is a vote for Rossi, who is the very definition of the evil that is today’s republican party. In evilness, there is no comparison. As noted, Murray is an angel compared to Rossi. If he gets in, things will be 100 times worse for us whistleblowers.  

In all things perspective is needed. Anger can cloud our vision. In the long term, we need to fix the campaign finance system that republicans and the evil five on the Supreme Court back for selfish reasons, as giving more power to contribute to the powerful only enhances their goal of furthering our Plutocracy.

Once that is done, Democrats can be true Democrats, and stand up to the evils against the people like Boeing management. Rossi will always side with the evildoers.

Any republicans out there should get themselves exorcized. Anyone out there not under the influence like G Florence should regain their perspective before the election and get motivated. If you can’t hold your nose and vote for Murray, work for any other Democrats out there like your country’s and whistleblowers’ fates depend on it, for it does.

Christian Republicans, and those “going toward the republican light (that leads to the opposite of heaven), repent now, while you can save yourselves from an earthly or unearthly hell that the republicans will attempt to bring back into existence if taking power again.

Gerry

Encourage whistleblowers, Metro told

By Katherine Shaver
Washington Post Staff Writer
Friday, September 24, 2010; B4

Metrorail is safer than it was before the fatal June 2009 Red Line crash, but the transit agency can’t build an effective “culture of safety” unless it convinces employees that they can report problems and close calls without fearing discipline, a top federal safety official said Thursday.

Deborah A.P. Hersman, chairman of the National Transportation Safety Board, told a House subcommittee examining Metro’s response to the board’s investigative findings and safety recommendations that Metro leaders have successfully broadened their primary focus from keeping trains running to also keeping passengers safe.

Even so, Hersman said, “You have to bring employees to the table if you’re going to be successful . . . You need to set up a structure where employees feel comfortable reporting things.”

Hersman said NTSB investigators found that the operator of the train that was hit near the Fort Totten Station was operating his train in manual mode – against Metro policy at the time – because he’d been disciplined for overshooting a station platform in automatic mode. Although that operator didn’t cause the crash, Hersman said, his behavior showed a “punitive culture” that discouraged employees from reporting problems and the agency from figuring out how to fix them.

The NTSB’s report, issued in July, said the accident that killed nine people and injured dozens of others revealed a lax safety culture at all levels of Metro. The board found that a faulty track circuit kept Metro’s automatic train-control system from detecting the stopped train and making it send another train crashing into it from behind.

The NTSB also found that Metro’s oldest rail cars, about a quarter of its fleet, pose an “unacceptable risk to Metrorail users” because they offer little protection in a crash.

Richard Sarles, Metro’s interim general manager, told the panel that Metro will fulfill all NTSB recommendations. He said Metro has dedicated more than $30 million in capital spending over the next three years to carry out many of the safety improvements.

Sarles said Metro has begun replacing the problematic track-circuit modules; hired a new chief safety officer and filled 12 vacant safety department positions; hired an independent firm to analyze the automatic train-control system; and developed a plan to equip all rail cars with onboard event recorders.

Metro gave approval this summer for Kawasaki, the manufacturer of the next generation of rail cars, to begin building replacements for the older 1000 series cars. The first cars in the 7000 series are expected to arrive in 2013.

To improve the agency’s safety culture, Sarles said, Metro has begun working with the union to develop a way for employees to report “near-misses” without facing punishment and has strengthened its whistleblower policy to encourage reporting of safety problems.

Sarles acknowledged that “it’s going to take a long time” to build trust between Metro management and employees.

“It’s a start,” Sarles said of the changes Metro has made. “It’s not an end.”

But Anthony W. Garland, a local transit union official, told the Federal Workforce, Postal Service and District of Columbia subcommittee that Metro’s leadership must do more to build morale and “reconnect” with employees, many who “are always looking over their shoulder.”

“Over the years,” Garland said, “the solution to everything has been to increase discipline.”

Most of the questions at the two-hour session were posed by Del. Eleanor Holmes Norton (D-D.C.), who was alone on the dais for much of the time. Norton had requested that the panel convene the hearing.

September 20, 2010

Oil Company Fined in Royalty Case

By ERIC LICHTBLAU

WASHINGTON — Nearly seven years after a government auditor charged that an oil company had cheated the government out of millions of dollars in royalties, a federal judge has ordered the company to pay nearly $23 million in penalties — including $5.7 million to the auditor who uncovered the problem.

The company, Kerr-McGee Oil and Gas, was ordered to pay treble damages, or triple the $7.5 million that a jury said in 2007 the company was liable for, because of the false royalty claims it submitted to the federal government.

The judge in the case found that the auditor who first reported the royalty fraud, Bobby Maxwell, was entitled to 25 percent of the judgment, or about $5.7 million, under the federal whistle-blower program for uncovering fraud and abuse.

“I’ve been working on this case for seven years, and I’m just very happy to finally have a judgment,” Mr. Maxwell, 57, said in a telephone interview from his home in Tennessee, where he is now retired.

Mr. Maxwell was an auditor for the federal Minerals Management Service — the same agency implicated in the recent problems leading to the BP oil rig explosion in the Gulf of Mexico — when he said he discovered that Kerr-McGee was vastly underpaying royalties on the 57 oil leases it held with the government.

A jury found that Kerr-McGee was selling its oil to the Texon Corporation for below-market prices from 1999 to 2002 as part of an arrangement with Texon to provide marketing services and other incentives.

But Mr. Maxwell’s bosses at the minerals service were not persuaded by his claims, and he was let go by the agency after bringing the accusations — a move that he charged was a clear case of retaliation.

“This whole thing has been much more difficult than I ever imagined,” Mr. Maxwell said. “I was fired, I was ostracized, I was threatened. I think I was on the right side of history, but I also paid a tremendous price for it.”

A lawyer for Kerr-McGee, which is owned by Anadarko Petroleum, declined to comment on the judgment, which was signed last Thursday by Marcia S. Krieger, a federal judge in Colorado. Officials at the minerals service, which has been renamed the Bureau of Ocean Energy Management, Regulation and Enforcement, had no comment.

Kerr-McGee could still appeal the ruling, and Mr. Maxwell said that even if he collected his portion of the award, “the majority of it is going to the attorneys, not to me.”

Michael Porter, the lead lawyer for Mr. Maxwell in Wheat Ridge, Colo., said that the fraud charges brought by his client served as a precursor to the types of problems seen in the BP disaster, where minerals agency officials were found to be too close to the oil companies they were supposed to be overseeing.

Indeed, a 2007 report from the Interior Department inspector general’s office found that the Maxwell case was part of a troubling culture of management problems at the service, in which officials had overlooked evidence of abuses or fraud by oil companies.

There are about 100 so-called qui tam or whistle-blower lawsuits brought each year from people claiming to have uncovered fraud against the government. But Mr. Maxwell’s case was highly unusual because the whistle-blower was a government auditor and because officials at his own agency largely rebuffed his charges, said Patrick Burns, an official with Taxpayers Against Fraud, a nonprofit group in Washington that tracks whistle-blower suits.

“This case is very, very unusual in the way it played out,” Mr. Burns said. “Bobby Maxwell, in my book, is a true hero.”

Link to original:  http://www.nytimes.com/2010/09/21/business/energy-environment/21whistle.html?th&emc=th

Here is another story sent by Government Accountability Project (GAP).  GFS

 

GAO Report Slams Labor Dept. Program to Protect Whistleblowers

Posted by admin2 • September 17, 2010

by Marian Wang, ProPublica

The Labor Department’s Occupational Safety and Health Administration — the federal agency responsible for worker safety — isn’t adequately protecting whistleblowers from retaliation by their employers, according to a report (PDF) released Thursday by the Government Accountability Office.

OSHA’s whistleblower protection program, which is responsible for “receiving and investigating most whistleblower complaints filed by nonfederal workers,” hasn’t gotten enough attention from the agency, the report said.

“We found that OSHA has done little to ensure that investigators have the necessary training and equipment to do their jobs, and that it lacks sufficient internal controls to ensure that the whistleblower program operates as intended,” it concluded.

The Center for Public Integrity reported in July that claims of reprisal from whistleblowers were, for the most part, dismissed by OSHA’s whistleblower protection program. From CPI:

Since Congress passed the landmark Sarbanes-Oxley corporate reform law in 2002, the U.S. Department of Labor upheld 25 whistleblower claims under the law — and tossed out 1,066 claims, according to figures available through June 30. That translates into a winning percentage of little more than 2 percent for workers seeking whistleblower status.

At the time, OSHA chief David Michaels told CPI he was “concerned with the statistics,” and had ordered a “top-to-bottom review” of the program.

He mentioned the review again in a statement responding to the GAO’s report.

“With our available resources, OSHA is working hard to ensure that whistleblowers are protected from retaliation,” Michaels said. He added that OSHA had begun taking action on some of the GAO’s recommendations, and was studying others.

The GAO report comes at a time when Congress is trying to encourage more whistleblowing. The Dodd-Frank financial reform bill, for instance, contained a provision promising greater incentives to individuals blowing the whistle on violations of securities law.

ProPublica is an independent, non-profit newsroom that produces investigative journalism in the public interest.   This article is republished with permission under a Creative Commons license.

Link to original story:  http://business-ethics.com/2010/09/17/1323-gao-report-slams-labor-dept-program-to-protect-whistleblowers/

Here is something that came in today from Government

 Accountability Project.  This is exactly what many of us 

have been talking about.  It is a continuation of fraud,

 waste, abuse and U.S. Taxpayers are still footing the bill,

 while no one in the government, oversight or criminal

 investigations seems willing or able to do anything about

 it.  That in itself is criminal.  I must remind everyone of

 the non-prosecution deal worked out between Eric Holder

 and the Boeing company after the outing of Darleen

 Druyan and Michael Sears, and the later prosecution of

 them.  As long as the company can point to a scapegoat,

 those employees will take the full blunt of the blame,

 prosecution and punishment while the company can

 continue on its same path, using its same business

 practices.  This solved nothing.  It is interesting that under

 the direction of Holder, this game is once again in play. 

GFS

 

U.S. contractor accused of fraud still winning big Afghan projects

By Marisa Taylor and Warren P. Strobel

McClatchy Newspapers

WASHINGTON | On July 31, 2006, an employee of The Louis Berger Group, a contractor handling some of the most important U.S. rebuilding projects in Afghanistan, handed federal investigators explosive evidence that the company was intentionally and systematically overbilling American taxpayers.

Neither the whistle-blower’s computer disk full of incriminating documents nor a trail of allegations of waste, fraud and shoddy construction, however, prevented Louis Berger from continuing to reap hundreds of millions of dollars in federal contracts.

In fact, two months after the government learned of the employee’s allegations, the U.S. Agency for International Development tapped Louis Berger — which has an office in Kansas City — to oversee $1.4 billion in reconstruction contracts in Afghanistan.

The decision to brush aside the allegations and the evidence and keep doing business with Louis Berger, underscores a persistent dilemma for the Obama administration in Afghanistan and elsewhere.

Cutting ties with suspect war-zone contractors in Afghanistan would threaten the administration’s effort to rebuild the country and begin withdrawing some of the nearly 100,000 U.S. troops there next July. However, as the recession, unemployment and budget deficits prompt belt-tightening at home, the billions the administration is spending to try to rebuild Afghanistan and Iraq are receiving increasing scrutiny from Congress and the public.

Louis Berger’s alleged overbilling, a practice that dates at to least the mid-1990s, swelled to tens of millions in lost tax dollars, according to a person familiar with the inquiry who spoke to McClatchy Newspapers on the condition of anonymity because the allegations are the subject of a sealed court case.

Court documents, however, reveal that the Justice Department is negotiating a deal that would “aid in preserving the company’s continuing eligibility to participate” in federal contracting in Afghanistan and elsewhere.

Founded in 1953, The Louis Berger Group does engineering and construction-related work domestically and in about 80 countries worldwide, according to the company’s website. It has more than 5,000 employees and is based in Morristown, N.J.

Holly Fisher, a Louis Berger spokeswoman, said the investigation into the company’s pricing shouldn’t taint its work for the government.

“While its work in Afghanistan was covered by that methodology, it is the methodology that is in question, not the work in Afghanistan,” she said.

Fisher declined to answer additional questions about the investigation or to make any corporate officers available for interviews.

USAID officials acknowledged last year in an internal report that they’d lost confidence in Louis Berger to oversee projects under the latest, $1.4 billion Afghanistan contract, which is jointly held with Black & Veatch of Overland Park.

USAID, however, didn’t respond for three weeks to repeated requests for interviews about why it continued to award contracts to Louis Berger or about the ongoing criminal investigation or on contracting in Iraq and Afghanistan.

Instead, the agency issued a statement pointing to its internal report about the joint venture.

“The assessment found vulnerabilities, and we immediately worked to address the identified issues,” USAID said.

The agency said it began to hold weekly meetings with company officials, assigned monitors to every site and changed personnel involved in the contract.

“USAID continues to take necessary actions to protect U.S. taxpayer funds in this matter,” the statement said. “We are engaged in ongoing dialogue with the Louis Berger Group, Inc. to ensure that the corporation is in full compliance with our contracts.”

However, Ashley Jackson, the head of policy in Afghanistan for the international aid organization Oxfam, said little has changed despite the Obama administration’s pledge to revamp the agency.

USAID hasn’t been an aggressive watchdog in Afghanistan, partly because it’s under political pressure to pump billions into the country without regard to the quality of the work, Jackson said.

“A system has emerged where USAID is basically like a pass-through for these contractors,” she said.

Posted on Sat, Sep. 18, 2010 10:15 PM

Read more: http://www.kansascity.com/2010/09/18/2233583/us-contractor-accused-of-fraud.html#ixzz1088SGxKH

Outgoing DSS Director, Kathleen (Kathy) Watson has stated in her farewell letter that the new acting Director of DSS in October when she leaves will be Barry Sterling.   -GFS

 As a start, here is what is posted on the Defense Security Service Website:

Barry E. Sterling

Chief Financial Officer

Defense Security Service

Barry E. Sterling, a member of the Senior Executive Service, is the Chief Financial Officer of the Defense Security Service. In this position, he is the primary advisor to the Director, DSS, in the areas of budget formulation, budget execution, financial management and policy, financial systems, and financial/cost reporting.  Additionally, he provides executive leadership to the agency’s safety, logistics, nationwide facility management programs, the Strategic Management Office, and manages the Base Realignment and Closure (BRAC) Program.  Prior to this assignment, Mr. Sterling was assigned to the Deputy Under Secretary of Defense for Intelligence Counterintelligence and Security (DUSD(I) CI&S) where he formulated and executed the DUSDI financial program and provided financial oversight of the Defense Security Service and The Counterintelligence Field Activity.

Mr. Sterling is a retired U. S. Air Force Officer who during his Air Force career performed management assistance services, spearheaded Wing and Command level Management Information Programs, cost and economic analysis, and developed and administered cost analysis policy for 120 analysts at Headquarters Air Education and Training Command (AETC) and its 13 bases; interpreted, clarified and supplemented Air Force guidance on budget policy and procedures, tracked congressional, DoD and Air Force budget actions and developed the AETC financial plan and oversaw the execution of over $4 Billion in multiple appropriations.

Mr. Sterling commanded the 325th Comptroller Squadron where he provided financial services, budgeting and accounting of 34 appropriations exceeding $360 million.  He also served as a Senior Financial Manager, Secretary of the Air Force Financial Management, performing strategic planning activities and conceived and managed manpower policy for all 13,000 Air Force Financial Management and Comptroller positions Air Force wide.

He served as the Comptroller and Director of Financial Management for Headquarters Air Force Office of Special Investigations (HQ AFOSI) where he developed and defended a $325 million budget supporting Counterintelligence, Counterespionage, Force Protection and Security and investigative activities.  He was the Secretary of the Air Force Inspector General’s (IG) representative to the Headquarters Air Force Resource Management program providing oversight and input to SAF/IG’s financial program and provided oversight to the (HQ AFOSI) and Air Force Inspection Agency.  He also was the SAF/IG representative to the USAF Group and USAF Board representing SAF/IG input into the Air Force Corporate Structure making resource decisions affecting all Air Force entities upon his retirement from active duty.

Prior to his military career, Mr Sterling was a Vice President/Branch Manager for a large Florida Bank managing all branch financial operations. He has had a 30-year career in financial management.  He holds a Bachelor’s degree from the University of Maryland and a Master’s degree from Central Michigan University both in business.  He also holds a Florida Bankers Association School of Banking Branch Management Institute degree.

Current as of September 2009