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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

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