Click for Whistleblowers Index

News & Views

March 2007

MICHIGAN

County settles lawsuit with former employee

Settlement cost taxpayers more than $250,000

By Craig McCool

3-30-07 -- A settlement with a former county employee cost taxpayers more than a quarter-million dollars, county records show. . . . Officials tried to keep the agreement secret, but records obtained by the Record-Eagle through the state Freedom of Information Act show Jacqueline Rozema, longtime Charlevoix prosecutor's office manager, received $275,000 to drop her lawsuit against the county. . . . The county cut the check to Rozema on Dec. 28. County Board chair Shirley Roloff, who signed off on the final agreement, said she had been told by the county's lawyer, Janice Hildenbrand, to keep the terms confidential. . . . "When I talked to our attorney who was handling the matter, she informed me that I wasn't to talk about it,” Roloff said. "I'm glad it's out there for people to know what's happening.” . . . County Clerk Jane Brannon, who provided the check register documents and the four-page agreement after the Record-Eagle submitted a FOIA, said she, too, was told the agreement was not to be discussed. . . . "We thought 'confidential' meant just that,” she said. . . . A county employee for more than two decades beginning in 1981, Rozema in 2003 became involved in a series of contentious Whistleblower Protection Act lawsuits.

UNITED STATES SUPREME COURT

Supreme Court Tightens Rules in Whistleblower Lawsuits

Justices restrict when an individual can collect for suits under False Claims Act

Mark Sherman, The Associated Press

3-27-07 -- The Supreme Court made it harder Tuesday for whistleblowers to share in the proceeds from fraud lawsuits against government contractors.  . . The Court ruled 6-2 that James Stone, an 81-year-old retired engineer, may not collect a penny for his role in exposing fraud at the now-closed Rocky Flats nuclear weapons plant northwest of Denver. .  . Writing for the Court, Justice Antonin Scalia said Stone was not an original source of the information that resulted in Rockwell International, now part of aerospace giant Boeing Co., being ordered to pay the government nearly $4.2 million for fraud connected with environmental cleanup at the Rocky Flats plant. . . . Rockwell must pay the entire penalty anyway. The only question before the Court was whether Stone would get his cut.

February 2007

NEW JERSEY

Whistleblower in Pigeon Shootings Wins Retaliation Case

New York Lawyer, By the Associated Press

A city worker was awarded $660,000 over claims he was unfairly punished after reporting that fellow employees were shooting pigeons for fun on department grounds. . . . William M. Lakes, 46, who worked for the Department of Public Works, reported the pigeon shooting to the Occupational Safety and Health Administration in 2003. . . . A local radio station later reported that police were investigating the shootings. . . . According to the Press of Atlantic City, Lakes's supervisors then held a meeting and offered amnesty to anyone who came forward with information about the bird shootings. . . . Lakes said after he told supervisors what he knew, he was harassed and shunned by co-workers and later demoted.

Postmaster indicted in sack of scams

U.S. attorney says Sussex ex-official faces 12 years, $750,000 fine for multiple fraud schemes

By Jim Lockwood, Star-Ledger Staff

2-28-07 -- A former Sussex County postmaster who later oversaw 75 post offices in northern New Jersey was indicted yesterday for his role in a number of brazen schemes, including directing hundreds of thou sands of dollars in unnecessary repair work on postal vehicles to a Newton garage. . . . John F. Balliro, 51, of Hamburg and other unnamed co-conspirators -- including another postmaster -- are accused of improperly steering $600,000 in repair work on postal vehicles to the Newton garage, having unnecessary construction work performed at various postal facilities, having a postal employee do work at his ex-wife's home in Pennsylvania, and misusing employee work time and leave, said U.S. Attorney Christopher J. Christie. ***************Concealed the fraud by submitting documents containing false statements and/or omissions, conducted cash transactions to eliminate an audit trail and intimidated a whistleblower by sending that employee a cartoon of three henchmen throwing a dog with its paws encased in cement off a bridge. The cartoon bore the caption "He bit the Godfather" and had Balliro's name and the names of two close associates handwritten on it, indi cating they were the henchmen; the dog was identified as the whistleblower.

House Committee Unanimously Approves Whistleblower Protections

By: Government Accountability Project
2-15-07 -- By a unanimous 28-0 vote, the House Oversight and Government Reform Committee approved landmark legislation to overhaul the law protecting federal government whistleblowers. Lead sponsors for H.R. 985, the "Whistleblower Protection Enhancement Act of 2007," include Committee Chairman Henry Waxman (D-CA), Ranking Member Tom Davis (R-VA), and Rep. Todd Platts (R-PA). . . . "Today the Government Reform Committee lived up to its name. Now the spotlight is on House leadership to do the same, by scheduling a floor vote without delay," commented Government Accountability Project (GAP) Legal Director Tom Devine. GAP has been working seven years for the reform's enactment. Devine added, "If this legislation becomes law, it will create a gold standard for public employee free speech rights, and a breakthrough for government accountability."

December 2006

Bush Declares ECO-Whistleblower Law Void For EPA Employees

12-06-06 --  The Bush administration has declared itself immune from whistleblower protections for federal workers under the Clean Water Act, according to legal documents released Monday by Public Employees for Environmental Responsibility (PEER). As a result of an opinion issued by a unit within the Office of the Attorney General, federal workers will have little protection from official retaliation for reporting water pollution enforcement breakdowns, manipulations of science or cleanup failures. . . . Citing an "unpublished opinion of the [Attorney General's] Office of Legal Counsel," the Secretary of Labor's Administrative Review Board has ruled federal employees may no longer pursue whistleblower claims under the Clean Water Act. The opinion invoked the ancient doctrine of sovereign immunity which is based on the old English legal maxim that "The King Can Do No Wrong". It is an absolute defense to any legal action unless the "sovereign" consents to be sued. . . . The opinion and the ruling reverse nearly two decades of precedent. Approximately 170,000 federal employees working within environmental agencies are affected by the loss of whistleblower rights.

Qui Tam/Whistleblower Case Histories In The Healthcare Industry

12-4-06 --  Here are some examples of recent Qui Tam cases from all over the United States. Approximately one of every three dollars recovered through false claims cases relate to healthcare fraud.

Tenet Heathcare
$900,000,000 under the False Claims Act: . . . In July 2006, Tenet Healthcare (formerly known as NME) consented to pay $900 million to the federal government to atone for the company's manipulation of the Medicare system via bill padding, kickbacks, and upcoding.

HCA
$745,400,000 under the False Claims Act: . . . In December 2000, the Nashville-based corporation known as the Health Corporation of America (HCA), agreed to pay the government $745 million to settle charges of fraudulent billing to Medicare and other government agencies. The fines levied against HCA arose out of the company's systematic defrauding of the healthcare system-i.e. billing for unnecessary tests, upcoding, and charging the government for advertising, which was disguised beneath the blanket of "community education."

HCA
$631,000,000 under the False Claims Act: . . . In June 2003, the Nashville-based corporation known as HCA, (formerly known as Columbia/HCA) consented to pay the federal government $631 million in civil penalties and damages to address false claims that were submitted to Medicare and other federal health programs. HCA incurred these fines because of the company's participation in kickback schemes and egregious billing practices.

Serono
$567,000,000 under the False Claims Act: . . . In October 2005, the Swiss biotech company Serono entered into agreement to pay $704 million to the federal government. The fines extracted from the company settled a fraud case involving the company's AIDS drug, Serostim, a human growth hormone product used to treat AIDS-related wasting. Serono amassed these fines because of the company's participation in kickback schemes, off-label promotion, and use of non-FDA approved diagnostic equipment that was used generate more prescriptions than necessary.

AP [Taketa-Abbott Pharmaceutical] Pharmaceutical Products Inc.
$559,483,560 under the False Claims Act: . . . In October 2001, TAP Pharmaceutical Products Inc. consented to pay $875 million to settle civil liabilities and criminal charges. These charges flowed out of the disreputable practices that the company engaged in to promote its prostate cancer fighting drug, Lupron. Of the amount that the company agreed to pay, $559,483,560 was obtained under the False Claims Act. Furthermore, TAP agreed to pay $290 million to settle criminal charges, which stated that the company had conspired to subvert the Prescription Drug Marketing Act.

CALIFORNIA

Whistleblower in Orange County bankruptcy becomes supervisor

Associated Press

12-05-06 --  The man who repeatedly warned officials of an impending financial disaster that hit Orange County more than a decade ago took his seat Tuesday on the county Board of Supervisors. . . . John Moorlach was elected Orange County Treasurer-Tax Collector in the wake of the county's 1994 filing for bankruptcy protection. He kept the position for nearly a dozen years before winning a seat on the board in June. . . . Orange County got into trouble after its then-treasurer, Robert Citron, funneled billions of public dollars into questionable investments while consulting psychics and astrologers. At first the returns were high and cities, schools and special districts borrowed millions to join in his investments. . . . But the strategy backfired, and Citron's investment pool lost $1.64 billion. Nearly $200 million had to be slashed from the county budget and more than 1,000 jobs were cut. The county was also forced to borrow $1 billion. . . . Moorlach has lately warned that Orange County now faces a similar problem with unfunded pension costs. Future costs, previously estimated at $1.3 billion, are now estimated at $2.3 billion. . . . "This fiscal year, the pension plan is certainly the elephant in the room," Moorlach said at his swearing-in. "It's something I want to work on with a passion."

NEW JERSEY

Whistleblower suit filed in N.J.

A former finance official at UMDNJ says she was forced out after looking into improper billings.

By Janet Frankston Lorin, Associated Press

12-01-06 -- Senior officials at the University of Medicine and Dentistry of New Jersey concealed that the school overbilled the federal government by tens of millions of dollars and then retaliated against an employee who wouldn't help in the cover-up, according to a lawsuit filed by the whistleblower yesterday. . . . In her lawsuit, Kathryn Gibbons, 48, a former finance official at the school's University Hospital, claims that she spent four years trying to properly report and correct irregular and improper billing and cost-reporting practices related to Medicare and Medicaid claims at the school. . . . Filed in State Superior Court in Middlesex County, the lawsuit seeks punitive and compensatory damages from the school and its top officials, including lost wages, attorney fees, and other costs related to the suit. It is the second whistleblower lawsuit filed against the school this month. . . . A spokeswoman for the school, Anna Farneski, said the incidents referred to in the lawsuit "have been under active investigation by the U.S. Attorney's Office and the federal monitor for many months with our active cooperation." . . . "They were aware of our personnel decisions concerning Ms. Gibbons. This was not a case of retaliation," Farneski said.

PENNSYLVANIA

State agency whistleblower gets job back

By Mark Scolforo, Associated Press Writer

12-07-06 -- A whistleblower who complained about how computer software contracts were handled in the Department of State must be given his job back and the state must pay his legal fees, a judge ruled. . . . Christopher Van Hine can return to his job directing the department's information management systems and may also be entitled to damages for how he was treated, Senior Judge Barry F. Feudale said in a ruling Wednesday. . . . Van Hine suffered discrimination and retaliation "solely because of his good-faith report of wrongdoing and waste to his superiors and an appropriate authority," Feudale wrote. . . . Van Hine sued the department, former Secretary of State C. Michael Weaver, and one of his aides over being stripped of his duties in 2002 after complaining about the software contracts to a supervisor.

November 2006

FBI whistleblower Sibel Edmonds serves up Turkey after the holiday

By Bill Conroy
11-29-06 -- Sibel Edmonds has been raising hell for years. And she is about to throw a few more coals on that hell fire. . . . Edmonds, founder and director of the National Security Whistleblowers Coalition, asked Narco News to help provide some exposure for a recent article she penned on Turkey, narco-trafficking, the nuclear black-market and U.S. lobbyists. It should make some interesting reading for those interested in the farce of the drug war. . . . But before presenting today’s show, it is only proper to provide some background on the lead character. . . . Edmonds was born in Iran but spent much of her early life in Turkey before moving to the United States for college. After graduating, she wound up working in the criminal justice field and was eventually hired by the FBI in 2001 as a contract translator. . . . Edmonds’ walk down the path of the American dream came to an abrupt end in March 2002, though, when she was fired by the FBI — after blowing the whistle on alleged espionage being carried out by a fellow FBI employee. She was prevented from pursuing a whistleblower retaliation lawsuit filed in 2002 (based on alleged violations of her First Amendment rights) because of the state-secrets privilege claim invoked by the government. That claim essentially shut down her ability to present evidence in the case under the smokescreen that it would threaten national security. . . . The U.S. Supreme Court ultimately rejected her appeal in that case. Several related lawsuits filed by Edmonds also were subsequently derailed with the hammer of national security. . . . But Edmonds was not about to be silenced by the President’s Star Chamber. . . . In 2002, she launched the National Security Whistleblowers Coalition, which today is some 100 members strong and counts among its rank and file:

Daniel Ellsberg, who exposed the Pentagon Papers;

Russ Tice, a former NSA intelligence analyst who helped to expose the Bush Administration’s illegal domestic spying program;

Ray McGovern, a former CIA analyst who, in front the national press, challenged Defense Secretary Donald Rumsfeld on his lies about the Iraq war;

Sandalio Gonzalez, a former Special Agent in Charge of DEA’s El Paso, Texas, field office who blew the whistle on the House of Death mass murder.

September 2006

Whistleblower safe harbor not safe anymore

By Michael Hampton

Government employees who come forward with reports of waste, fraud, abuse, and illegal and dangerous activities are known as whistleblowers. They alert us when something has gone seriously wrong with the bureaucracy, as opposed to the everyday low-level wrongness. Unfortunately, the usual reaction to a whistleblower by his or her management is not a correction of the problem, but rather retaliation: forced transfers, demotions, revocation of security clearances, and even being fired. . . . Whistleblowers who are retaliated against are supposed to be able to go to the U.S. Office of Special Counsel to seek redress. Acting independently, the OSC can force investigations into retaliation and misconduct which whistleblowers report to it. But lately the OSC isn’t such a friendly place to whistleblowers. . . . “The Office of Special Counsel is supposed to be the agency where whistleblowers can turn to when they have been fired, harassed, demoted, moved to the basement or otherwise retaliated against,” writes Beth Daley, Director of Communication and Development for the Project on Government Oversight. “This theoretical safe haven against retaliation was supposed to provide a counterbalance for whistleblowers who risk losing their jobs, their careers, their homes, and even their marriages.” -9/9/06

Whistle-blower gets taste of vindication

Prison safety officer honored — by mail

By Michael Doyle, Bee Washington Bureau

9/8/06 -- Leroy Smith paid a price for blowing the whistle at Atwater federal prison. Thursday, the Bush administration paid him back with some honors. . . . Smith's work was vindicated, but that does not erase the pain he endured. The Office of Special Counsel named Smith its 2006 Public Servant. The award recognizes the prison safety officer as the nation's "outstanding whistle-blower." . . . But 15 minutes before the ceremony was set to start, Smith said, his attorney learned the event was being canceled. . . . Instead, he was advised his award and certificate were being dropped in the mail.

Whistleblower Vindicated in Federal Law Judge Decision

09/06/06 -- A federal administrative law judge has ruled that the U.S. Bureau of Land Management (BLM) illegally fired one of its employees for blowing the whistle on environmental and worker safety hazards at an abandoned Nevada copper mine. . . . Earle Dixon, who was hired by BLM in October 2003 to manage the cleanup of hazardous materials at the Anaconda Mine near Yerington, Nev., filed a complaint with the Department of Labor after BLM dismissed him on Oct. 5, 2004. When an OSHA regional administrator determined BLM had legitimate business reasons for firing Dixon, Dixon filed an appeal with the Department of Labor's Office of Administrative Law Judges. . . . Dixon argued that BLM terminated him because he voiced concerns that the Anaconda Mine cleanup efforts were not being conducted in compliance with environmental laws such as the Safe Drinking Water Act and the Comprehensive Environmental Response, Compensation and Liability Act. Dixon also claimed that he clashed with BLM and other parties involved in the mine cleanup because Dixon believed BLM safety and health policies were being ignored, putting workers at risk of exposure to radiological hazards.  

Former BLM supervisor wins whistleblower suit

Staff Report

RENO — The firing of a former Bureau of Land Management (BLM) supervisor overseeing cleanup at the old Anaconda Mine site west of town was recently ruled unjust via a federal administrative law judge in Reno. . . . Former BLM Supervisor Earle Dixon said he was illegally dismissed as manager overseeing the cleanup in October 2004. The filed whistleblower complaint charged his termination was a result of having brought to light worker safety and radiation, air and water pollution violations relating to the site. . . . In the ruling, Federal Administrative Judge Richard Malamphy ordered the defendant to pay Dixon two years of back pay and benefits totaling more than $120,000 saying it was clear “Dixon was fired for this whistleblowing activities” at the former copper mine. – 9/7/06

No Fear Coalition advocates for government whistleblowers and federal employee rights in general.

Bush Declares Eco-Whistleblower Law Void for EPA Employees
Stealth Repeal of Clean Water Act Protections by Invoking "Sovereign Immunity"

By: Public Employees for Environmental Responsibility
The Bush administration has declared itself immune from whistleblower protections for federal workers under the Clean Water Act, according to legal documents released today by Public Employees for Environmental Responsibility (PEER). As a result of an opinion issued by a unit within the Office of the Attorney General, federal workers will have little protection from official retaliation for reporting water pollution enforcement breakdowns, manipulations of science or cleanup failures. . . . Citing an "unpublished opinion of the [Attorney General's] Office of Legal Counsel," the Secretary of Labor's Administrative Review Board has ruled federal employees may no longer pursue whistleblower claims under the Clean Water Act. The opinion invoked the ancient doctrine of sovereign immunity which is based on the old English legal maxim that "The King Can Do No Wrong." It is an absolute defense to any legal action unless the "sovereign" consents to be sued. . . . The opinion and the ruling reverse nearly two decades of precedent. Approximately 170,000 federal employees working within environmental agencies are affected by the loss of whistleblower rights. . . . "The Bush administration is engineering the stealth repeal of whistleblower protections," stated PEER General Counsel Richard Condit, who had won several of the earlier cases applying environmental whistleblower protections to federal specialists. "The use of an unpublished opinion to change official interpretations is a giant step backward to the days of the secret Star Chamber." PEER ultimately obtained a copy of the opinion under the Freedom of Information Act. – 9/4/06

August 2005

Fraud lawsuit targets Hillary
Fund-raiser claims 'smoking guns' prove campaign in massive scam
By Art Moore; WorldNetDaily.com

As Hillary Clinton positions herself for a presidential run, a former fund-raiser is moving ahead with a lawsuit claiming the New York senator orchestrated the largest campaign-finance fraud ever by an American political campaign. . . . In an interview with WorldNetDaily, Los Angeles millionaire lawyer and businessman Peter Franklin Paul asserted Clinton failed to declare to the Federal Election Commission more than $2 million in contributions – a massive omission he believes prevented her 2000 senatorial campaign from going bankrupt in the crucial final weeks. . . . Paul has filed a civil suit charging Sen. Clinton and her husband, former President Clinton, with fraud, coercion and conspiracy. California courts so far have denied the Clintons' motions to dismiss, and Paul expects the case to proceed at the beginning of the year, just as Hillary Clinton prepares to defend her Senate seat.

8/22/05