The Senate Judiciary Committee is holding a confirmation hearing on Judge Merrick Garland’s nomination as the Attorney General for the United States. Congress must use this opportunity to question Judge Garland on his view of whistleblowers and the steps he will take to ensure the Justice Department fully implements whistleblower protection laws.
Judge Garland is in a unique position to transform the Justice Department’s whistleblower programs. In 1979 Judge Garland, while a young attorney at the Justice Department, appeared on a panel of DOJ witnesses who testified before the Senate Judiciary Committee on modernizing the False Claims Act. Based on that testimony, it is clear he understood the importance of fixing the False Claims Act so it would be an effective tool to fight corruption in government contracting.
Years later, while a Judge on the U.S. Court of Appeals for the District of Columbia Circuit, he participated in two key whistleblower cases under the False Claims Act. In his first major whistleblower case, U.S. ex rel. Yesudian v. Howard University, he successfully advocated for a broad reading of the FCA’s anti-retaliation provision. Over the dissent from one of his colleagues on the Court ruled that whistleblowers who only make internal complaints were fully protected from retaliation under the FCA.
The second opinion he wrote was even more consequential. In United States ex. rel. Totten v. Bombardier Corp., Judge Garland wrote a major dissenting opinion protesting a narrow reading of the False Claims Act. The majority decision was written by Circuit Judge John Roberts, who would later be named the Chief Justice of the U.S. Supreme Court. The Roberts decision narrowed the scope of companies that could be held liable under the False Claims Act and created a loophole in the law that would cost the taxpayers billions of dollars in lost revenue and permit fraudsters to go unpunished. Under Totten, subcontractors who ripped off the government but submitted their invoices to a prime contractor for payment, could escape liability under the FCA. Judge Garland dissented. He then warned that the majority’s ruling in Totten “leaves vast sums of federal monies without False Claims Act protection,” because “under the court’s interpretation, the government cannot recover against a contractor that obtains money by presenting a false claim to a federal grantee — even if every penny paid to the contractor comes out of an account comprised wholly of federal funds.”
The Totten decision was highly criticized by Congress, and the False Claims Act was amended to close the loophole. In its report on the amendment, the Senate Judiciary Committee unanimously agreed with the reasoning of Judge Garland’s dissent.
Judge Garland understands whistleblower-triggered anti-corruption laws like the False Claims Act. He understands whistleblowing. Thus, it is incumbent upon him to use this background and reform all DOJ programs that interact with whistleblowers. There are many.
In addition to the False Claims Act, the DOJ plays a vital role in criminal prosecutions under whistleblower reward laws, including the Foreign Corrupt Practices Act, the Commodity Exchange Act, the environmental and wildlife trafficking crimes, the Securities Exchange Act, the Anti-Money Laundering Act, and IRS tax evasion laws. As Attorney General Judge Garland must ensure that his Department’s efforts under these laws are coordinated, that whistleblower confidentiality is fully protected, and that the Department has the resources to investigate and prosecute the fraudsters whistleblowers risk their jobs and safety to report.
Some of these laws have tremendous weaknesses. As Attorney General, Judge Garland must have these laws amended and modernized, just as he advocated for the False Claims Act back in 1979. This would include needed amendments to the False Claims Act on the “materiality” issue, reforms to the Dodd-Frank Act insuring that reward determinations are timely made and that the agencies have resources to investigate whistleblower claims, and most significantly, amending the flawed Anti-Money Laundering whistleblower law so it will actually protect whistleblowers and reward them for their heroism.
Beyond anti-fraud laws, the Justice Department has taken the lead in prosecuting whistleblowers, some without firm legal basis, and others who clearly engaged in First Amendment protected speech or whose disclosures served the public interest. Judge Roberts must take a fresh look at these prosecutorial policies and ensure that the Justice Department’s prosecution of whistleblowers is thoroughly grounded in facts and does not create a chilling effect on speech that is in the public interest. Threatening to prosecute journalists and whistleblowers under the Espionage Act must come to an end. The Espionage Act was designed to prosecute spies. Whistleblowers who face lengthy prison sentences have been bullied into pleading guilty to crimes they otherwise could have contested. The case of Reality Winner should be reviewed.
Additionally, the Justice Department should also employ the Pardon Attorney to take another look at some of the more outrageous prosecutions of whistleblowers. For example, the most important tax whistleblower in history, Bradly Birkenfeld, was prosecuted even though he also reported the most significant tax violations in history. The IRS found him to be a fully qualified whistleblower and gave him a large reward. Billions of dollars were returned to the taxpayers in fines and penalties based solely on his disclosures. Moreover, the factual predicate used by the Justice Department has been completely discredited by an investigation conducted by his attorneys. Yet Mr. Birkenfeld remains a convicted felon. His case stands as a warning to other whistleblowers that they cannot trust the DOJ.
Other reforms Judge Garland should institute within the DOJ include:
- Guaranteeing strict confidentiality to all whistleblowers and supporting their confidentiality in judicial proceedings (such as those under the False Claims Act) when needed;
- Follow the guidelines set by Congress in evaluating rewards under the False Claims Act. The DOJ is notorious for reducing rewards. Thus, individual whistleblowers have obtained larger rewards in both the IRS and SEC whistleblower programs that are far smaller and newer than the FCA program.
- Interpret the False Claims Act as permitting rewards in all “related action” cases, including criminal cases, as required under the statute.
- Stop going into Court and arguing that False Claims Act cases filed by whistleblowers should be dismissed, regardless of the quality of evidence presented by the whistleblowers or the outrageousness of the crimes committed by contractors.
- Establish a Whistleblower Office modeled on the highly successful SEC program to publicize whistleblower laws, coordinate investigations, and ensure that all valid whistleblowers are fully protected and compensated.
- Enforce the special Obstruction of Justice whistleblower anti-retaliation law. That law was passed as part of the Sarbanes-Oxley Act’s whistleblower reforms but has mostly remained unused by federal prosecutors.
Congress should insist that the new Attorney General reach out to the whistleblower community, learn the issues that they face, and take steps to fix these problems. The Attorney General must take the lead in modernizing the Justice Department’s approach to whistleblowers and ensure that the tremendous contributions of whistleblowers to the detection and prosecution of frauds are effectuated, as intended by Congress.
Whistleblower attorney Stephen M. Kohn’s article in The National Law Review about Judge Garland.