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Outsourcing the War On Whistleblowers

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The federal government is not alone in waging a war on whistleblowers. In recent months, we learned that two of the government’s largest vendors make employees sign away their rights to report fraud, waste, and abuse on federal contracts and grants.

Earlier this year, The Washington Post reported that when contracting heavyweight KBR investigates misconduct allegations, employees are required to sign a confidentiality statement forbidding them from discussing the subject matter of the investigation without first obtaining permission from the company’s lawyers. By signing the statement, employees agree that “the unauthorized disclosure of this information could cause irreparable harm to…and reflect adversely on KBR,” and that a violation will lead to “disciplinary action up to and including termination of employment.” The confidentiality statement came to light during pre-trial discovery in the case of Harry (“Hap”) Barko, Jr., a former KBR employee who filed a False Claims Act lawsuit alleging KBR overcharged the military in Iraq.

A few months later, the Post profiled International Relief and Development (IRD), a nonprofit humanitarian organization that has received billions of dollars in federal funds for Iraq and Afghanistan reconstruction. The article revealed that some former IRD employees were reluctant to talk about their experiences at IRD due to a confidentiality agreement they signed upon leaving forbidding them from making “derogatory, disparaging, negative, critical or defamatory statements” about IRD or any of its current or former employees “to anyone, including…funding agencies or…officials of any government.”

Legal experts believe these two confidentiality agreements violate various federal whistleblower protection laws and regulations, including the False Claims Act (see subsection h), the Securities Exchange Act (see section 21F, subsection h), and the Federal Acquisition Regulation. The Securities and Exchange Commission and the Special Inspector General for Afghanistan Reconstruction (SIGAR) are investigating the whistleblower policies of KBR and IRD, respectively. SIGAR also asked the U.S. Agency for International Development (USAID)—IRD’s largest customer, by the way—to take steps to make sure its contractors and grantees do not infringe current and former employees’ rights to report fraud and other critical information to governmental authorities. Although IRD admitted to the Post that its confidentiality agreement needs to be revised “to ensure that our policies conform to the latest developments in employment law,” IRD’s initial response to SIGAR suggests the company is dragging its feet in addressing SIGAR’s concerns.

The Project On Government Oversight wrote a letter to Attorney General Eric Holder requesting an investigation into the use of confidentiality agreements by all federal fund recipients. We suggested the need for guidelines to ensure that confidentiality and non-disclosure agreements conform to whistleblower laws and are not used to impede government investigations.

Whistleblowers are the first and best line of defense against waste, fraud, and abuse on federal contracts and grants. They need to be protected from retribution for the act of reporting wrongdoing. We hope that KBR and IRD are aberrations, and that the publicity will compel them to change their whistleblower policies. We fear, however, this practice might be far more extensive, and that many companies that do business with the federal government are concealing misconduct by forcing vows of silence on current and former employees.

Emily Binkow, a former Legal Intern at POGO, contributed to this blog post.

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Whistleblower Protections

Related Content: Contractor Accountability

Authors: Neil Gordon

Submitted by Jon at: June 8, 2014
The government itself seems to makes such confidentiality clauses part of their own contracts with KBR, et al... but with the added weight of espionage charges, which (of course) aren't made against the corporation (Heaven Forbid!), but against the conscientious whistle-blower.
Submitted by Jules Bartow at: June 7, 2014
The DFARS allow the companies to stifle reporting of illegal activity? Can a source selection chairman and CO put terms and conditions into the contract preventing such prohibitions? I certainly would. Whistleblowers can be a pain in the ass, but overall tend to keep managers honest and competent.
Submitted by plibpob at: June 7, 2014
This is an excellent blog and points out the extent of criminal behavior that some companies will go to protect their ill-gotten gains. It needs to be outlawed with severe criminal penalties or else the whole whistleblower process will come to a screeching halt.
Submitted by beyond me at: June 7, 2014
I just recently came from working on this project (CNTPO). I can tell that there is A LOT of corrupt things that can be found if the right person investigates. Besides if we worked that many hrs I guess DynCorp needs to back pay everyone there.
Submitted by beyond me at: June 7, 2014
I can tell you that DynCorp is at the top of the list with violating U.S. citizens rights. If they signed a contract with there subsidiary in the UAE also known as DIFZ (DynCorp International Free zone). They claim you have no rights. If you get hurt, fired or killed your supposed to just suffer.
Submitted by meyati at: June 7, 2014
seems there could be a link to a petition about these issues, such as "Whistle Blowing". I find the issues to be informative and well-written, but they leave me with an empty and unsatisfied feelings, because there isn't a link. You have a related post-so you are capable of finding a petition link, or starting a petition. We have a president that campaigned to help Whistle Blowers and give them protection, but this administration has a record high prosecution of "Whistle Blowers" and increasing laws to prosecute "Whistle Blowers"
Submitted by IT Contractor at: June 7, 2014
Confidentially agreements are common in IT consulting. If you want work you have to sign the agreement. So, for example, if you work for a consulting firm that does work for a state agency that receives funding from the federal government, and you uncover a known pattern of overcharging the feds, you are prohibited from reporting it to the feds.

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