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Project on Government Oversight
 

 

 

 

Questions and Answers on Whistleblower Reform

August 1, 2011 

 

 Q: What are the obstacles to rooting out waste, fraud and abuse in government?

A: Federal employees are best positioned to disclosure wrongdoing in order to protect taxpayer dollars and the public trust, but the law to shield those employees from retaliation is antiquated and broken.  The Whistleblower Protection Act (WPA) is supposed to encourage federal workers to come forward when they witness waste, fraud and abuse, but court decisions over the years and a flawed administrative process have eroded the law.  The WPA now undermines instead of encourages good government practices. Additionally, the federal whistleblower law is outmoded and has not kept pace with the standards in eleven laws passed since 2002 to protect private sector whistleblowers.  Today, it is well known in government that workers who use legal channels to expose waste, fraud, or abuse frequently are silenced, fired or demoted, perhaps for political reasons, and then have a less than a one percent chance of fighting these actions and winning. We need to fix the WPA to increase accountability to taxpayers.

Q: Will expanding federal whistleblower protections save money?

A: We know that whistleblowers save money.  Each year, whistleblower lawsuits under the False Claims Act save taxpayers nearly one billion dollars.  A recent PricewaterhouseCoopers study, which surveyed more than 5,400 companies in 40 countries, found that employee disclosures were responsible for detection of more fraud than auditors, internal compliance officers, and law enforcement combined.

There are many ways to encourage fiscal responsibility, but whistleblower protection must be a key ingredient in this comprehensive mix.  Whistleblowers facilitate the flow of information Congress needs to fulfill its mission of budgetary oversight, and strong protections for whistleblowers can in turn deter the kind of fiscal mischief that thrives on excessive secrecy.

That’s why dozens of government accountability groups such as the National Taxpayers Union strongly support whistleblower protections along with more than 400 other non-governmental organizations with more than 80 million members from across the ideological spectrum.  They know that encouraging federal workers to blow the whistle on waste, fraud and abuse in government will save billions of taxpayer dollars and make government more efficient.

Q: What are some examples of whistleblowers saving taxpayer dollars?

A: There have been many examples of valuable information from government employees and private contractors involving literally tens of billions of dollars in potential savings to taxpayers.  Ernest Fitzgerald, a legendary whistleblower, uncovered more than $2 billion in cost overruns on the C-5A project.  Since then, conscientious Americans like Mr. Fitzgerald have helped government investigators to expose items ranging from Medicare benefit fraud to irregularities at the Pentagon’s own Office of Inspector General.

There are other less apparent but equally important examples.  Thanks to the testimony of employees within the Internal Revenue Service, legislative hearings during 1997 and 1998 on the IRS Restructuring and Reform Act effectively focused Congress and the American people on the personnel and structural problems that had long plagued the tax agency.  These firsthand accounts lent great credibility to the findings of the National Commission on Restructuring the IRS, whose recommendations later became the basis for the 1998 law.  Although arguably much more needs to be done, input from courageous “insiders” has helped to lay the foundation for a less abusive tax collection system.

Unfortunately, at a time when America most urgently needs the best value for every dollar Washington spends, victories for taxpayers are far too rare without whistleblowers. The recoveries of taxpayer dollars through the False Claims Act were only $6-25 million a year until whistleblowers were deputized, yielding an average of nearly $1 billion a year since.

Q: Who is currently protected by the Whistleblower Protection Act?

A: Most civil servants have the limited protections provided by the WPA. However, there are no specific protections for many workers critical to our national security, including intelligence community and Transportation Security Administration employees.  These employees must have safe, legal channels for identifying wrongdoing in order to prevent unlawful leaks and increase our national security.  Also, federal scientists do not have specific protections for challenging censorship, obstruction, or misrepresentation of the results of their federal research.

Q: How is the federal whistleblower law enforced?

A: Legitimate whistleblowers who try to fight retaliation face daunting odds under the current law.  Whistleblowers who are fired, demoted, or face other types of retaliation can file a complaint with the Office of Special Counsel (OSC) and appeal to the Merit Systems Protection Board (MSPB) for a hearing.  But these agencies have created so many loopholes in the law that it is ineffective.  For decisions on the merits, the MSPB track record is 2-54 against whistleblowers from 2000 through 2009.  In a Senate Homeland Security and Governmental Affairs hearing on June 11, 2009, Senator Akaka said, “The law has become so weak that many employees, with good reason, fear they will not be protected from retaliation if they come forward to report wrongdoing.”

Q: How does the current system of appellate review work against accountability?

A: Whistleblowers who appeal the decision of the MSPB have access to only one court, the Federal Circuit Court of Appeals, which consistently has ruled against whistleblowers.  Since 1994, when Congress last strengthened federal whistleblower protections, through February 2011, whistleblowers have won only three out of 219 cases the Federal Circuit decided. That's a success rate of about one-half of one percent.  And its decisions over the years have gutted the whistleblower rights legislated by Congress, discouraging honest federal workers who see waste from exposing it.  For example, although the law on paper protects "any" lawful disclosure an employee "reasonably believes evidences" significant misconduct, the Court now excludes the most common scenarios in which whistleblower disclosures are made, such as:

  • The whistleblower's disclosure is made in the course of doing one's job duties, such as an auditor or safety inspector.
  • Someone else previously has pointed out the same misconduct, whether or not the whistleblower knows that.
  • The disclosure concerns the consequences for the public of a policy decision, even if it institutionalizes government illegality, waste, mismanagement or abuse of authority.
  • The disclosure is to a co-worker.

 

Q: How would access to jury trials help reduce waste in government?

A: Unlike other Americans hurt by government illegality or abuse of power, federal employees who blow the whistle do not have access to a day in court to enforce their rights. Administrative hearings are not equipped, in terms of resources or political independence, to resolve cases involving the most significant wrongdoing or scandals, particularly those involving high-level Administration officials. Further, access to court as a last resort when the administrative process fails would put pressure on federal managers and political appointees to not try to punish employees who are vigilant against waste and have the courage to expose wrongdoing at federal agencies because the whistleblower would have an independent avenue to fight back.  It also would improve the administrative process by forcing the OSC and MSPB to work smarter to resolve these cases promptly and accurately.

Q: How does the private sector deal with whistleblowers?

A:  Since 2002, Congress has granted millions of private sector workers whistleblower protections that are far stronger than those for the federal workforce.  Whistleblower protections have become synonymous with bipartisan accountability reform for many industries, from the financial sector to retail commerce to trucking to stimulus spending. In each of these laws, whistleblowers are granted an ultimate right to a jury trial.

Q: Wouldn't access to jury trials cause federal employees to file thousands of lawsuits and burden the courts?

A: Evidence shows that giving federal whistleblowers access to court would create a trickle, not a flood.  The experience with Sarbanes-Oxley Act, which provides whistleblower protections for employees of all publicly-traded corporations and covers some many times more employees than the WPA does, is informative.  For example, in the first three years after its enactment, approximately 500 employees filed a whistleblower complaint.  Nearly all of them were eligible to go to district court, but the vast majority stuck with the administrative process.  Only 54 whistleblowers went to court or about 18 whistleblower cases annually.

Federal employees now can sue in federal court when they believe they have suffered discrimination because of their age, disability, religion, national origin, their race or gender.  Of the 8,000 discrimination complaints reviewed by administrative judges each, just about one percent go to court.

In order to pursue a court case, a whistleblower could easily spend at least $50,000 in legal fees. Costs in six figures are common. This is a difficult hurdle, particularly for a federal employee who has been fired for whistleblowing.

Q: Will granting federal employees access to jury trials prevent federal managers from exercising legitimate supervisory oversight of federal staff?

A: Empirically, passage of whistleblower laws giving access to jury trials has not had any impact on the normal patterns of disciplinary and performance-based actions by managers.  Reviews of these actions before and after the passage of such laws don’t record any change in the overall rate of disciplinary actions and related litigation.

Filing a whistleblower complaint does not protect any federal employee from legitimate discipline – managers only have to prove that an employee deserved the discipline for legitimate reasons.  Managers that keep records of employee performance and disciplinary problems should have no problem defending legitimate discipline.

The solution for effective management is not to deprive whistleblowers of credible rights to defend themselves when harassed for challenging government breakdown.  It is to hire and train managers who are not afraid to exercise their own authority for the proper reasons.

Q: What can Congress do to improve the status quo for whistleblowers and help shrink government waste?

A: The Whistleblower Protection Enhancement Act (WPEA) would provide meaningful reform of government whistleblower law by ensuring legitimate disclosures of wrongdoing will be protected.  The bill would restore and expand free speech rights, strengthen failed procedures, increase accountability, and, for the first time, provide limited access to a court.

After a several hearings and months of negotiations, versions of the WPEA passed the Senate and the House unanimously, but due to a last-minute secret hold in the Senate, the 111th Congress adjourned before it became law.  On April 6, 2011, Sen. Daniel Akaka (D-Hawaii) re-introduced the Whistleblower Protection Enhancement Act (S. 743) with co-sponsors Susan Collins (R-Maine), Chuck Grassley (R-Iowa), Joseph Lieberman (I-Conn.), Carl Levin (D-Mich.), Tom Carper (D-Del.), Patrick Leahy (D-Vt.), Tom Harkin (D-Iowa), Mark Pryor (D-Ark.), Mary Landrieu (D-La.), Claire McCaskill (D-Mo.), Jon Tester (D-Mont.), Mark Begich (D-Alaska), and Ben Cardin (D-Md.).

Quick passage of the Whistleblower Protection Enhancement Act of 2011 is an opportunity for this Congress to prove its commitment to tackle waste and increase transparency and accountability to the American taxpayer.

 

For more information, please contact Angela Canterbury, Director of Public Policy, Project On Government Oversight, at 202-347-1122 or acanterbury@pogo.org, or Tom Devine, Legal Director, Government Accountability Project, at (202) 457-0037 or tomd@whistleblower.org.


Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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