IRS Whistleblower Program

The Internal Revenue Service’s Whistleblower Program still hasn’t adequately addressed internal problems identified several years ago, according to a new report issued by the Treasury Inspector General of Tax Administration, or Tigta.

The Treasury Department’s inspector general for tax administration, following up on a 2009 audit, said that the IRS needed to do more to ensure that whistleblower claims were accurate and that it had a more concrete timeline for processing claims.

According to the report, the IRS could also more deeply evaluate the effectiveness of its program.

“Without adequate oversight of whistleblower claims, the IRS is not as effective as it could be in responding timely to tax noncompliance issues,” Russell George, the tax administration inspector general, said in a statement. “The IRS’s effort to improve compliance is critical to reducing the Tax Gap and maintaining the integrity of the voluntary tax compliance system.”

Whirlpool and Safety

February 26, 1980
Supreme Court decision on Whirlpool affirming workers’ rights to engage in safety and health-related activities.

In 1973, the OH manufacturing company wanted to address product falling off conveyors.  They installed a screen under the conveyors as a solution. The workers had to go up on the screens to retrieve fallen product. Several employees had fallen partly through the old screen, and on one occasion an employee had fallen completely through to the plant floor below, but had survived. A number of maintenance employees had reacted to these incidents by bringing the unsafe screen conditions to the attention of their foremen. The company’s safety instructions admonished employees to step only on the angle-iron frames.  On June 28, 1974, a maintenance employee fell to his death through the guard screen in an area where the newer, stronger mesh had not yet been installed. Following this incident, the petitioner effectuated some repairs and issued an order strictly forbidding maintenance employees from stepping on either the screens or the angle-iron supporting structure. An alternative, but somewhat more cumbersome and less satisfactory, method was developed for removing objects from the screen. This procedure required employees to stand on power-raised mobile platforms and use hooks to recover the material. On July 7, 1974, two of the maintenance employees, Virgil Deemer and Thomas Cornwell, met with the plant maintenance superintendent to voice their concern about the safety of the screen. The superintendent disagreed with their view, but permitted the two men to inspect the screen with their foreman and to point out dangerous areas needing repair. Unsatisfied with the employees’ response to the results of this inspection, Deemer and Cornwell met on July 9 with the plant safety director. At that meeting, they requested the name, address, and telephone number of a representative of the local office of the Occupational Safety and Health Administration (OSHA). Although the safety director told the men that they “had better stop and think about what [they] were doing,” he furnished the men with the information they requested. Later that same day, Deemer contacted an official of the regional OSHA office and discussed the guard screen. The next day, Deemer and Cornwell reported for the night shift at 10:45 p.m. Their foreman, after himself walking on some of the angle-iron frames, directed the two.men to perform their usual maintenance duties on a section of the old screen. Claiming that the screen was unsafe, they refused to carry out this directive. The foreman then sent them to the personnel office, where they were ordered to punch out without working or being paid for the remaining six hours of the shift. The two men subsequently received written reprimands, which were placed in their employment files.

DOE wants dismissal from Hanford whistleblower case

Judge Lonny Suko heard the Department of Energy argue to be dismissed from a lawsuit brought by a Hanford whistleblower Thursday, but he declined to rule immediately.

However, the Eastern Washington District U.S. judge indicated how he plans to rule on two of three other motions discussed in Yakima within a lawsuit brought by Walter Tamosaitis, the former manager of research and technology at the Hanford vitrification plant.

Tamosaitis, a Richland resident, has sued his employer, URS Energy and Construction; its parent company, URS Corp.; and DOE, claiming he was removed from work at the $12.2 billion vitrification plant project because he raised safety concerns.

Walt Tamosaitis was helping to design a $12 billion waste treatment plant in southeast Washington. He claims that his employer called URS took him out of his high-level management position for raising safety concerns. Tamosaitis also alleges that a Department of Energy manager was involved in that decision. He wants his job back, damages from URS and a jury trial.

Construction began in 2001 on the plant, which will convert millions of gallons of radioactive waste to glasslike logs for permanent underground disposal. Its estimated cost has vaulted from $4.3 billion in 2000 to at least $12.3 billion now, and a recent federal audit helps show why.

The audit took issue with the federal Energy Department and private contractor Bechtel National Inc. on two counts. The audit found Bechtel fell short in meeting requirements of a quality assurance program for storage tanks, and it questioned the Energy Department for paying the contractor a $15 million incentive fee for a tank that was determined to be defective. The federal agency demanded that Bechtel return the fee but never followed up on getting it back, and the money remains in Bechtel’s hands.

The concern came to light in the most recently released weekly staff report of the Defense Nuclear Facilities Safety Board, which said that DOE had identified a Priority Level 1 finding “associated with the potential breakdown in contractor management and their less than adequate performance.”

 

Countrywide whistleblower sees no change in financial sector

Eileen Foster beamed as she accepted an award at the National Press Club in Washington for blowing the whistle on mortgage fraud at Countrywide Financial but told the crowd she was deeply disappointed.

Foster, who was fired from her position as head of mortgage fraud investigations for Countrywide after uncovering evidence of fraud and urging a wider inquiry, said not enough has changed in the U.S. financial system.

“Here we are, several years after the onset of the financial crisis, caused in large part by reckless lending and risk-taking in major financial institutions, and still not one executive has been charged or imprisoned,” she said at the Press Club on Wednesday, after receiving the Ridenhour Prize for Truth Telling.

Bank of America, which took over Countrywide in 2008, has reached several settlements with U.S. prosecutors over alleged fraud and discrimination in Countrywide’s mortgage lending practices. Bank of America also was among five banks that agreed to a $25 billion joint state and federal mortgage servicing settlement, though the banks did not admit any guilt.

It has said it discontinued the mortgage lending practices that were in place at Countrywide before 2008.

Foster was fired by Bank of America shortly after the mortgage lender was absorbed. She had been lobbying her superiors to expand an investigation into fraud by loan officers that included forgery of documents and signatures and inventing income streams for loan applicants.

After a three-year battle, the U.S. Department of Labor’s Occupational Health and Safety Administration last year ordered Bank of America to reinstate her and pay her nearly $1 million in lost wages and expenses. Bank of America, however, is appealing the decision, leaving Foster without the job or money.

“Bank of America has objected to OSHA’s determination last year in Ms. Foster’s SOX case and the matter is under appeal,” said a spokesman for the bank in a statement on Thursday.

Foster currently works as vice president for security, investigations and procurement at a credit union in Southern California.

“I believed that Countrywide had totally duped Bank of America (and) as soon as Bank of America looked at the evidence that I had assembled that they would hire me back,” she said in an interview on Tuesday.

“I was naive.”

The Ridenhour Prize for Truth Telling is sponsored by the Fertel Foundation and the Nation Institute, non-profits that support whistleblowers in the government and corporate world.

Other winners Ridenhour Prizes included an army officer who refused to hush up bad news coming out of Afghanistan and a former marine who campaigned to expose a water contamination problem on the Marine Corps’s Camp Lejeune base in Jacksonville, North Carolina.

Also honored were an FBI agent who wrote a book about what he called the U.S. government’s botched campaign to justify torturing terror suspects and U.S. congressman John Lewis of Georgia, who was badly beaten while protesting for civil rights in the 1960s.

Two of Foster’s former colleagues, both of whom also battled Bank of America after losing their jobs, attended the event at the club on Wednesday.

Michael Winston, who was Countrywide’s chief leadership officer, won a $5 million judgment from a jury in California in early 2011. The bank has appealed the decision and has not paid any of the damages.

Cynder Niemela, who had been Countrywide’s senior vice president for culture and communications, settled her wrongful termination suit with the bank and is prevented from disclosing details of the settlement.

CIA whistle-blower loses

A federal judge has ruled a CIA whistle-blower will have to forfeit any future money he earns from a scathing book he wrote about the spy agency after he failed to get approval from his former employer prior to publication.

The CIA accused the officer of breaking his secrecy agreement with the U.S. The former officer, who worked deep undercover, published the book in July 2008 using the pseudonym “Ishmael Jones.”

The CIA says his book, “The Human Factor: Inside the CIA’s Dysfunctional Intelligence Culture,” was submitted to the agency’s publications review board under a secrecy agreement that covers books written by former employees.

But Jones published the book before the process was completed. Jones has said the book contained no classified information.

In a written ruling entered Thursday, U.S. District Judge Gerald Bruce Lee in Alexandria, Va., also barred Jones from publishing anything in the future without the CIA’s blessing.

Jones said he put the profits in brokerage accounts belonging to children of U.S. soldiers killed in action. After the judge’s ruling, Jones, who hasn’t revealed his identity, took aim at the government.

“I think it’s despicable that they’ve spent two years and a great deal of taxpayer money on an order to confiscate future money belonging to the children of American soldiers,” Jones said.

CIA spokeswoman Jennifer Youngblood said: “The Jones case demonstrates that the CIA is committed to enforcing the secrecy agreements of its employees and contractors. The breach of such an agreement is a violation of a solemn public trust.”

Whistleblower Jay Palmer.

Palmer, a principal consultant for Infosys, accuses the tech giant of putting Americans out of work by illegally bringing in foreign workers at lower wages.

Now, Grassley is pressing for “a thorough investigation by the Departments of State and Homeland Security of the B-1 visa program.”

The B-1 visa allows foreign companies to send employees to the U.S. for meetings. But Palmer says Infosys was sending them to the U.S. for jobs.

Grassley said, “If you’re bringing them here to work full time and maybe cheaper labor, it’s not only against the law, it’s immoral and unjustified and unethical.”

Palmer says the practice displaced American workers qualified for the same jobs, but, he charges, it increased profits.

Palmer said, “For example…if I’m gonna pay you $15,000 a year, why would I pay an American or a legal worker $65,000 a year? It makes no – it’s just economics.”

Ron Hira, an expert on immigration and visa policy, told CBS News the problem is bigger than just one company. “A number of companies, very profitable, large companies that are expanding very rapidly are exploiting loopholes that should be closed,” he said.

Palmer says after he blew the whistle, Infosys retaliated against him. Now he is suing the company. Infosys categorically denies all of Palmer’s allegations, saying they will address the facts in court.

On “CBS This Morning” Friday, CBS News senior correspondent John Miller said the State Department has acknowledged that the B-1 visa program needs more oversight because of the potential fraud.

Miller said, “I think one of the things that has irked Sen. Grassley, is in 2011, the company in this story, and there are others, applied for 4,700 more of these worker visas on the idea that they needed nearly 5,000 people that had skills so specialized that no American computer worker could do them.”

The living conditions of the people who come to the U.S., Miller said, are of concern also to Palmer and fellow Infosys employee Marti Harrington.

“(They) were appalled by the conditions,” Miller said. “These people came in on either these specialized worker visas or visas where you’re just allowed to come for a meeting and not supposed to work at all and were stacked three in a motel room. They were in tiny apartments. Jay Palmer actually went out with his own money and bought air mattresses for them to sleep on and a lot of them didn’t want to be here. His charge is that this is all about profit.”

Obama Administration Intensifying Whistleblower Crackdown

A federal grand jury in Alexandria, Virginia, unveiled a five-count indictment against John C. Kiriakou, who gained attention for publicly expressing misgivings about the efficacy of waterboarding, an interrogation technique that simulates drowning.

According to the indictment, Kiriakou disclosed the identity of a colleague to journalists and divulged information about the part a different colleague played in the capture of suspected al-Qaida financier Abu Zubaydah. According to the Justice Department, some of the information provided to a journalist later surfaced in a case presented by attorneys representing prisoners held at Guantanamo Bay.

Kiriakou is the sixth whistleblower that the Obama administration has charged under the Espionage Act for the alleged mishandling of classified information – more than all past administrations combined. In a rare move, the indictment was sealed until today.

Kiriakou is also charged with telling a journalist that Zubaydah was pursued with the help of a “magic box” — a device that can track a cell phone’s location, according to the New York Times story that allegedly uses information gleaned from Kiriakou — and subsequently lying about the “magic box” when he submitted a draft of his book to a CIA review board. He allegedly told his co-author Michael Ruby that he planned to tell the board, “we’ve fictionalized much of it, even if we haven’t.”

Kiriakou is a Central Intelligence Agency (CIA) veteran who headed counterterrorism operations in Pakistan after 9/11, organized the team operation that captured suspected al-Qaeda operative Abu Zubaydah, and refused to be trained in torture interrogation tactics. In December 2007, Kiriakou gave an on-camera interview to ABC News in which he disclosed that Zubaydah was “waterboarded” and that “waterboarding” was torture. Kiriakou was one of the first CIA officers to label waterboarding as torture, and his interview helped expose the CIA’s torture program as policy, rather than the actions of a few rogue agents. Kiriakou further exposed the CIA’s torture program and the CIA’s deception about torture even to its own employees in his 2009 book, The Reluctant Spy: My Secret Life in the CIA’s War on Terror.

Another Railroad verdict.

In a historic move, a federal jury awarded a Metro-North Railroad worker about $1 million in punitive damages following a lawsuit that accused the railroad of retaliation after the worker reported an on-the-job injury.

The lawsuit, filed by railroad worker Andrew Barati, tested the Federal Railroad Safety Act of 2008, which prohibits railroad management from interfering with injured workers’ medical treatment or disciplining them for reporting or seeking treatment for an on-the-job injury.

Barati’s attorney, Charles Goetsch of New Haven, said this is the first time ever that Metro-North has been hit with punitive damages in court, and the jury that heard the case in U.S. District Court is sending a clear message about retaliation.

Barati, 48, of Waterbury, said he broke his big toe when a jack failed and a rail tie fell on his foot in April 2008. He explained that after reporting the injury, he was the subject of retaliation when the railroad presented him with a notice of firing. He then reportedly received a three month suspension before he was hired back at Metro-North.

“I figured I was punished enough by being in pain,” he said Thursday evening, about an hour after the verdict was released. “I was the only one working — my wife wasn’t working — and at the time I had twin 7-year-old girls. I was trying to figure out how to take care of my family.”

After the week-long trial, Barati said he is glad the jury upheld his rights under the Federal Railroad Safety Act and hopefully it will make is easier for other employees to come forward when injured.

Marjorie Anders, spokeswoman for Metro-North Railroad, said Thursday evening that the railroad had just received the court decision, had not yet decided whether to appeal, but would be “reviewing it with an eye to appeal.”

“Suffice it to say that there was no permanent injury, the injury was not severe and the man is still working for Metro-North,” she said.

“This suit is about being wrongfully terminated. But he is working for the railroad and has been.”

Whistleblower from China’s scandal-hit city disappears

A whistleblower has disappeared from his Beijing apartment after he was reportedly seized by authorities from a scandal-hit city in south-western China, his attorney said Thursday.

Zhang Mingyu went missing after saying four men from Chongqing arrived Wednesday at his apartment, according to lawyer Pu Zhiqiang and a report posted by a friend on Zhang’s microblog.

‘I can’t find him; I can’t contact him,’ Pu said by telephone, adding that Beijing police had questioned him Thursday about Zhang.

‘It should be because they are afraid he will talk about Wang Lijun and Bo Xilai,’ he said when asked the reason for Zhang’s apparent detention.

Bo Xilai is a member of the ruling Communist Party’s powerful 25-member Politburo and heads the party’s Chongqing branch.

Bo was the only Politburo member to miss a plenary session of China’s annual parliament, the National People’s Congress, on Thursday morning.

Chongqing officials declined to comment on Bo’s absence but said he would attend a scheduled press conference on the sidelines of the parliament on Friday, Singapore’s Lianhe Zaobao newspaper reported.

Bo attended a meeting of Chongqing’s parliamentary group on Thursday afternoon, the newspaper said.

Wang Lijun, Chongqing’s former police chief, is reportedly under investigation by State Security officers after he spent one day last month in the US consulate in Chengdu, a city close to Chongqing.

US officials declined to specify what Wang did in the consulate, saying only that he left voluntarily, but unconfirmed sources said he discussed possible asylum in the United States.

Zhang turned whistleblower early last year when he made public allegations of corruption against Weng Zhenjie, the head of Chongqing-based South-west Securities and a close associate of the city’s mayor.

Zhang had planned to hold a press conference Thursday, according to postings by other micobloggers, including one by lawyer Zhao Xiaoliang, who said he received a text message from Zhang Thursday.

Zhao quoted the text message as saying Zhang was in Chongqing for ‘urgent family business.’

Zhang’s mobile phone remained out of service Thursday afternoon.

In an interview with dpa last year, Zhang, a former Chongqing property developer, alleged that Weng was involved in illegal activities linked to loans and property deals.

Chongqing Mayor Huang Qifan and officials in Beijing were protecting Weng from prosecution while dozens of other officials and business executives were arrested in a massive anti-organized crime campaign led by Wang, Zhang said.

The Hong Kong-based South China Morning Post on Wednesday quoted sources as saying the party had officially labelled Wang a traitor.

Bo had been seen as a strong candidate for one of top leadership posts at a party congress scheduled for November.

But some analysts have speculated that the scandal over the anti-organized crime drive and Wang’s entry into the US consulate could ruin his chances of promotion.

 

 

Trucking firm must pay $190K and reinstate fired whistleblower

A Georgia-based trucking firm has been ordered to reinstate a fired south suburban truck driver and pay him more than $190,000 in back wages and damages because he was fired for lodging complaints against the firm.

 

The Sauk Village driver was terminated by Interline Logistics Group after reporting safety concerns about brakes on his truck and refusing to violate U.S. Department of Transportation regulations for allowable driving and rest hours, a release from the Occupational Safety and Health Administration said.

 

OSHA also ordered the company to stop retaliating against the driver for exercising federally-protected rights.

 

The driver — whose name was not released — filed a whistleblower complaint with OSHA, claiming he was fired after notifying the company about the deficient brakes. The company had sent the driver to a repair shop to service the brakes and he was then told to go to his dispatch location to pick up a return load, the release said.

 

But the driver refused, saying he was over the work hours allowed by federal regulations. The following day, the driver was terminated for failing to follow dispatch instructions, according to the company. However, OSHA found reasonable cause to believe the disciplinary charges and termination were not for breaking a company work rule but for reporting a safety issue, the release said.

 

Interline Logistics, which is headquartered in Kennesaw, Ga., can file an appeal with the U.S. Labor Department’s Office of Administrative Law Judges, but the preliminary reinstatement order will stand, the release said.