WASHINGTON, April 22, 2013 – Whistleblowing is exposing wrongs. It can be very lucrative when the Government is the vicim.
Before we get to that, let us acknowledge and applaud some of the most famous whistleblowers of our time.
“Deep Throat” (much later identified as W. Mark Felt) exposed President Nixon’s involvement in the Watergate illegalities in 1972. This led to Nixon’s resignation and incarceration for two staff members.
Karen Silkwood exposed serious safety violations in 1974 at her workplace, an Oklahoma nuclear plant. The film “Silkwood” told her story. She died as she was driving to meet a reporter. No proof exists that her death was murder, but it was suspected.
Daniel Ellsberg, a U.S. State Department analyst, risked severe pressure and retaliation from the federal government in 1971 when he revealed secret pretexts for the war in Vietnam by providing the study called “Pentagon Papers” to The New York Times.
Frank Serpico is perhaps the most famous police officer to report widespread corruption (1960’s) in a police department (New York City’s). He risked his life to come forward.
Linda Tripp told the Office of Independent Counsel that her friend had committed perjury, thus beginning the whole “Monica Lewinsky affair” in 1998. The Clinton administration then leaked personal information about her, and she successfully sued based Privacy Act violations.
Whistleblowing can be very hazardous. Exposing bad-guys can result in losing your job, being ostracized in your industry, and complete financial ruin.
Lawsuits might be filed against you for defamation or interference with business relations.
Defense costs and attorney fees can be assessed against you if your case is unsuccessful or if the court finds that the case has been brought for vexatious, harassing, or improper purposes.
We know that some government agencies and businesses have shady or outright illegal practices. Sometimes these practices serve only to enhance the wrongdoers, but sometimes they cause widespread harm. Despite that many people may have knowledge, these shady practices remain undisclosed. Most people don’t like to rock the boat, even when these practices result in others dying. Most will turn a blind eye and allow bad things to happen, rather than upset the lives they have built.
The incidence of whistle-blowers coming forward, however, is on the rise. Because of this increase the Securities and Exchange Commission created the Office of the Whistleblower. It began operating in August 2011, and received 2,700 tips in the first year, according to Sean McKessy, chief of the office.
The potential for a financial recovery can be attractive.
In 2003 Cheryl Eckard was paid $96 million for exposing dangerous and contaminated drugs produced by GlaxoSmithKline in their Puerto Rico factories.
Whistle-blowers earned more than $532 million in 2011 through lawsuits alleging fraud against the U.S. government, a record for such payouts, according to a law firm study published in 2012.
In 2011 the I.R.S. paid $8 million to 97 people.
In 2012 Bradley Birkenfeld was paid $104 million by the IRS for revealing secrets about the Swiss banking tax-dodge schemes of UBS (the global wealth management/investment bank company).
In 2012 the IRS said it was on track to pay $24 million to about 100 people, excluding Birkenfeld.
The “newest” whistleblowing trend is exposing pharmaceutical and medical fraud. Payouts for exposing Medicare, Medicaid and Tricare fraud will be staggering.
Money is rarely the primary motivation for coming forward.
Revenge has been identified as a factor, but it is rarely the driving force.
Vindication is sometimes a motive. Many people become angry and are motivated after management ignores their concerns. Being marginalized, harassed, or fired can be the spark to tell the world.
The single biggest factor in exposing wrongs seems to be moral outrage. Most people who are committed enough and strong enough to blow the whistle have deep ethical constitutions and they feel they must act.
Going public can take many forms. Unfortunately, telling law enforcement authorities is often ineffective. Equally problematic is calling government fraud reporting hotlines; these are usually a date with answering machines.
When the government is being defrauded, filing a qui tam lawsuit under the False Claims Act is often the only avenue to effect change. The FCA was designed to encourage individuals with inside knowledge of fraud on the government to come forward and report it.
A qui tam lawsuit begins with the whistle-blower filing the lawsuit. The Department of Justice is then notified, and it then conducts an investigation. This investigation can take years. The government may join the case as a Plaintiff with the whistleblower. If it does not join, the whistleblower may proceed alone, and the government may join later, or, not at all.
Having the government involved is highly advantageous, as it has superior resources and it has a weapon, sanctions, that a private plaintiff does not. Settlements are much more likely with the government involved.
These cases are typically held “under seal” (not disclosed to the public). The purpose of concealing the lawsuit is to allow the investigation to proceed without the defendant’s knowledge. Where criminal conduct is alleged, these cases can remain under seal for years.
Because of the extraordinary complexity of these cases, it is almost mandatory to engage an attorney to assist with the filing and prosecution of a qui tam case. Selecting the right attorney or law firm is critical. The appropriate attorneys will have a record in working with government lawyers and investigators. The more closely a whistleblower and the whistleblower’s attorney work with the government, the more likely it is that the case will be successful. As noted, the chances of a winning a case are much better if the government joins it.
Qui tam cases are very expensive. There are considerable out-of-pocket expenses that include hiring consultants to do analyses and substantiate allegations.
A qui tam lawsuit can be dismissed if it is not the first one to make the allegations or if the fraud becomes public before the case is filed (thus it is a good idea to avoid posting information or allegations on social media, and to refrain from blogging or tweeting).
Qui tam lawsuits must normally be filed within six years of the date the fraud is committed.
If you know something is amiss, you must weigh the consequences – yours, and those if you do nothing.
Paul A. Samakow is an attorney licensed in Maryland and Virginia, and has been practicing since 1980. He represents injury victims and routinely battles insurance companies and big businesses that will not accept full responsibility for the harms and losses they cause. He can be reached at any time by calling 1-866-SAMAKOW (1-866-726-2569), via email, or through his website. He is also available to speak to your group on numerous legal topics. Paul is the featured legal analyst on the Washington Times Radio, in Washington, D.C., on the Andy Parks show, the featured legal analyst for America’s Radio News Network, heard in 165 markets nationwide, and he is a columnist on the Washington Times Communities.
His book The 8 Critical Things Your Auto Accident Attorney Won’t Tell You is free to Maryland and Virginia residents and can be obtained by ordering it on his website; others can obtain it on Amazon.
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