New court filings against BBG's 50-million-dollar contractor

BBG Watch Commentary

US Complaint in Intervention - GallupWhile the Broadcasting Board of Governors (BBB) 50-million-dollar contract with the Gallup Organization is not part of the current U.S. Department of Justice (DOJ) legal action, in a 57-page civil complaint filed in federal court in Washington, D.C., the DOJ accuses Gallup of bilking the State Department and U.S. Mint out of millions of dollars by falsifying labor-hour estimates on government contract work between 2007 and 2009.

Also see: Gallup accused of bilking government, The Washington Post, Nov. 28, 2012

The Department of Justice urged the BBG to audit its 50-million-dollar, five-year contract with Gallup, which was viewed by many BBG employees and at least one BBG member, Ambassador Victor Ashe, as highly excessive and questionable in times of high budget deficits and proposed cuts in programming positions and broadcasts to countries without free media. Critics also also questioned the utility of Gallup polling in countries like Iran and China.

The 50-million-dollar Gallup contract was supported by the BBG’s International Broadcasting Bureau (IBB) executives in charge of administration, research and strategic planning who at the same time advocated eliminating about 200 programming positions and many broadcasts to nations without free media, including China and Tibet.

A huge research contract with Gallup that required extensive administrative support would insure that their executive positions would be protected. Cutting programs and programming positions would also give these executives more funds to administer and spend on Gallup and other contractors. Opposition in the U.S. Congress prevented BBG/IBB executives from carrying out most of their proposed programming cuts.

BBG/IBB executives are also wasting U.S. taxpayers’ money by organizing costly public panels and presentations of Gallup’s findings, in which few people except themselves are interested in and which could be easily accessed online at very little expense.

No accusations of fraud have been brought against Gallup in connection with the BBG, but BBG/IBB executives have been resisting calls for making public any audit results of the BBG Gallup contract. BBG/IBB executives have also been encouraging BBG board members to adopt rules making it more difficult for whistleblowers within the agency to come forward to the media and the U.S. Congress with accusations of waste, fraud and abuse. See: Rep. Rohrabacher – BBG strikes blows against government transparency and Congressional oversight

One insider told BBG Watch that the Gallup issue continues at the BBG with very few answers being provided by the BBG/IBB staff.

The DOJ complaint charges Gallup with submitting 268 false claims to FEMA, the State Department and the U.S. Mint, totaling $12.96 million.

The Department of Justice’s complaint adds considerable detail to a whistleblower “qui tam” lawsuit brought by former Gallup employee Michael Lindley under seal in 2009 and made public in August 2012. The “qui tam” provisions of the federal False Claims Act authorize private citizens to bring suit on behalf of the United States against companies that defraud government agencies.

Through his attorneys at the qui tam law firm Vogel, Slade & Goldstein, LLP and the whistleblower law firm Katz, Marshall & Banks, LLP, Lindley also filed an amended complaint today, detailing how he spent months as Gallup’s Director of Client Services trying to convince the company to stop engaging in pricing fraud and other corrupt practices. When his attempts proved unsuccessful, Lindley allegedly told management that he intended to report Gallup’s misconduct to the Justice Department. The following day, according to the amended complaint, Gallup’s chief counsel fired Lindley and told him, “When you start talking about going to the Department of Justice, we don’t trust you anymore.”

DOJ’s complaint alleges that under both a 2008 contract to assess passport demand for the State Department and a 2007 contract with the U.S. Mint to measure demand for newly minted coins, the agencies relied on cost estimates supplied by Gallup in order to determine contract prices. However, Gallup allegedly maintained a double set of records. The DOJ complaint charges that Gallup created grossly inflated labor estimates which it provided to the State Department and the Mint to drive up prices, while maintaining separate records of the true and much lower estimated costs of their work.

Lindley’s attorneys applauded the government’s action in joining his whistleblower lawsuit. “Michael’s experience – as alleged in the complaint — is too typical: an honest employee tries to stop a profit-driven fraud, only to be fired from a promising career,” said whistleblower attorney Janet Goldstein. “But, thankfully, the story didn’t end there. Michael brought the alleged fraud to the attention of the Justice Department, which after its own three-year investigation is pursuing civil claims against Gallup under the False Claims Act.”

With the government’s intervention in his lawsuit, Lindley will help DOJ prosecute the government’s fraud claims while also pursuing his own claims against Gallup for wrongful termination under the False Claims Act’s anti-retaliation provision and under District of Columbia law. David J. Marshall, a partner with Katz, Marshall & Banks, LLP who also represents Lindley, stated, “Corporate employees like Michael Lindley serve a critical function when they try to stop fraud on the taxpayers. Companies need to know that they cannot get away with silencing a whistleblower for opposing fraudulent practices.”

The lawsuit, which was filed in the United States District Court for the District of Columbia, is captioned U.S. ex rel. Lindley v. The Gallup Organization, et al. 1:09-cv-01985. Additional information about the lawsuit, including the DOJ complaint and Lindley’s amended complaint, can be found at: www.vsg-law.com and www.kmblegal.com.

View: UNITED STATES’ COMPLAINT IN INTERVENTION – PDF

View: RELATOR’S FIRST AMENDED COMPLAINT – PDF

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