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News From The Center

20 Million Employees Get Whistleblower Protection rubberduck

Consumer Product Safety Reform Signed by President
 

Washington, D.C. August 14, 2008. Today President Bush signed the Consumer Product Safety Improvement Act. Overwhelming Congressional majorities sent the bipartisan bill to the president's desk on July 30, after a reaching compromise on several key provisions, including whistleblower protection. This Legislation is Congress' response to recent massive consumer product recalls, on everything from lead-laden children's toys to toxic toothpaste, which had angered Americans and prompted calls for reform.

The law includes whistleblower protections approved as part of the Consumer Product Safety Commission Reform Act (H.R. 4040 and S.2663).

The whistleblower provision of the new law will guarantee protection for over 20 million employees involved in the manufacture, distribution, and sale of consumer goods. This protection ensures that employees have the right to report defective and hazardous consumer goods to their superiors or a regulatory agency, such as the CPSC.

Stephen M. Kohn, the President of the National Whistleblower Center issued the following statement on behalf of the NWC:

    This law is a major victory. Today, despite attacks from big business, the interests of American families have prevailed. Finally, employees in the manufacturing industry have the vital whistleblower protections necessary to report hazardous products. Now American regulatory agencies must follow the government's lead and enforce these critical protections.

The law can be viewed in its entirety HERE

FBI Whistleblower Testifies On Mistakes
Inside Counterterrorism Program

Unit Chief discloses shortfalls in war on terrorBassem_Youssef

Washington, D.C. May 22, 2008. FBI Counterterrorism Whistleblower Bassem Youssef testified before the House Judiciary Subcommittee on Crime, Terrorism, and Homeland Security on Wednesday, May 21, 2008. 

During the oversight hearing, titled The FBI Whistleblowers: Exposing Corruption and Retaliation Inside the Bureau, Supervisory Special Agent Bassem Youssef was able, the for the first time, to alert Congress and the American people to the grave deficiencies within the FBI's Counterterrorism Division since 9/11.

Youssef is the Unit Chief of the FBI's Communications Analysis Unit. He is the highest-ranking Arab-American agent in the Counterterrorism Division, and the highest-ranking fluent Arabic speaker. In 1994, he earned the Intelligence Community's prestigious and coveted award, the National Intelligence Distinguished Service Medal, awarded by the Director of Central Intelligence. The award was for outstanding accomplishments in a terrorism case involving an al-Qaeda-related investigation.

Youssef has also been instrumental in reporting and rectifying problems with the FBI's National Security Letter program.

For more information about Bassem Youssef:

OFFICE OF SPECIAL COUNSEL RAIDED BY FBI

Agency Head and Staff Suspected of Obstructing Justice

Scott BlochWashington, D.C. May 6, 2007. In a notably ironic turn of events, FBI agents raided the office of Special Counsel Scott Bloch this morning, seizing computers and documents as part of an ongoing obstruction of justice investigation. Bloch, who is charged with protecting federal whistleblowers, has been under investigation for, among other things, whistleblower retaliation within his own agency.

Marshall Chriswell, Communications Director of the National Whistleblower Center issued the following statement on this issue:

    "It is shocking that the individual who is primarily responsible for investigating federal whistleblower complaints would be the target of an investigation in which he and his staff are suspected of obstructing justice."

    "The Bush administration must take whistleblower protection seriously, relieve Mr. Bloch of his position, and appoint a Special Counsel who possesses the necessary qualifications and integrity to do the job right."

  • FBI raids special counsel's office

Support Tax Justice for Whistleblowers

Washington, D.C. April 24, 2008. In 1996, Congress - in a middle-of-the-night backroom deal - reversed nearly eighty years of tax law. They stripped whistleblowers (along with all other victims of civil rights violations) of their right to be "made whole" after suffering emotional distress or loss of reputation. Attorneys for the National Whistleblower Center, in Murphy v. IRS , fought the constitutionality of this law all the way to the Supreme Court. This week, the Supreme Court refused to hear the case, so now -- 12 years later -- we must turn back to Congress and ask them to pass the Civil Rights Tax Relief Act of 2007.

Take Action for Victims! Click Here to Email your Representatives!  

This 1996 law allows the IRS to tax victims who are being compensated for mental, emotional, and/or reputational damages. This is especially troublesome considering that the IRS is not allowed to tax compensation for physical injury. Congress' mindset in this instance was mean-spirited, cruel, and defied years of medical research, which shows unequivocally that mental distress is every bit as harmful as physical injury. Ever since this amendment was passed, according to the IRS, if a whistleblower suffers a heart attack (which some have) as a result of the stress from a wrongful discharge - their court awarded compensation is taxable because the IRS considers it to be an emotional, not a physical injury.

President Clinton realized the nefarious nature of the amendment when he signed the 1996 bill (a minimum wage increase), saying:

"Such damages are paid to compensate for injury, whether physical or not, and are designed to make victims whole, not to enrich them. These damages should not be considered a source of taxable income."

Take Action for Victims! Click Here to Email your Representatives!

We are asking for your help to see that Congress passes the Civil Rights Tax Relief Act of 2007 this term! The law, which was introduced in both the House (HR.1540) and Senate (S.1689) last year, would in essence repeal the 1996 amendment that destroyed the ability of whistleblowers to be made "whole."

U.S. Supreme Court Refuses to Hear Murphy v. IRS

Advocates To Continue Pressing for Changes in Civil Rights Tax Law

Washington, D.C. April 21, 2008. -- The United States Supreme Court announced its decision not to grant certiorari in the case of Murphy v. IRS. The order, posted on the Court's website this morning, means that the IRS can continue to tax non-pecuniary compensatory damages awarded to victims of whistleblower retaliation and other civil rights violations. These damage awards, which are intended to make the victim "whole" again, include payments for loss of reputation and emotional distress.

The case was brought by Marrita Murphy, an environmental whistleblower who won her case before Department of Labor, and was awarded compensatory damages to vindicate her rights under six federal environmental whistleblower statutes. Murphy filed suit when the IRS demanded that she pay taxes on the "make-whole" award as if it were income. After having her case dismissed, Murphy filed an appeal.

After full briefing and oral argument, the Appeals court initially held that Murphy's award was not income and the tax on her damages violated the U.S. Constitution. Then, under pressure from the Bush Administration, the judges decided to rehear the case. In this ruling, Murphy II, the D.C. Circuit reversed its own previous decision, declaring that non-physical compensatory damages are taxable as gross income.

National Whistleblower Center General Counsel David K Colapinto, who represents Ms. Murphy, released the following statements regarding the Court's decision:

"The DC Circuit's decision was contradictory and wrong. It will have a tragic impact on thousands of whistleblowers and victims of discrimination. We are not surprised though, that the Supreme Court declined to hear the case, as there was not a traditional "split in the circuits," as the DC Circuit was the first court to take this issue on. Given the DC Circuit's difficulty in dealing with this issue, I expect that it will be taken up in other courts across the country."

"It is unfair and unconstitutional to tax victims of discrimination and retaliation when the awards were simply compensation to make them whole again. The money is to restore a loss for personal injury; it is not income."

Unfortunately, as a result of the Court's decision not to hear the Murphy case, whistleblowers and other civil rights victims whose make whole compensatory damages awards are taxed will have to continue to fight the IRS through the courts. The only alternative to continued litigation is for Congress to change the tax code.
Currently pending before Congress is the Civil Rights Tax Relief Act of 2007 ("CRTRA"), H.R. 1540, which would end unfair taxation of noneconomic damages received by those who have suffered unlawful discrimination in the workplace or other violations of their employment rights.

The CRTRA was introduced in the House by Representative John Lewis (D-GA), who was joined by a bipartisan group of original CRTRA cosponsors, including Representatives Deborah Pryce (R-OH), Sander Levin (D-MI), Jim Ramstad (R-MN), Xavier Becerra (D-CA), and Phil English (R-PA). The Senate companion bill was introduced by Senators Jeff Bingaman (D-NM) and Susan Collins (R-ME).

The CRTRA has broad bi-partisan support. It is supported by employer and employee advocacy groups alike because both business and employee organizations recognize that taxing non-economic make whole compensatory damages makes settlement more difficult and results in protracted litigation in employment disputes.

For more information:

 

Consumer Product Reform Legislation Going to Conference;
Whistleblower Protection Provisions In Jeopardycapital2

Washington, D.C. March 21, 2008. Massive consumer product recalls, on everything from lead-laden children’s toys to toxic toothpaste, have angered Americans and prompted calls for reform. Congress listened, and is now working on legislation to protect our children and families from dangerous manufactured goods. Both the House and the Senate have passed such legislation, and the law, now called H.R. 4040, is on it’s way into a conference committee, where the final language will be nailed down.

The most important aspect of this litigation is protection for whistleblowers. Other provisions of the bill, such as increasing the Consumer Product Safety Commission budget to add hundreds of new regulators and inspectors, can only be effective if these employees have the freedom to tell the truth about defective and dangerous products.

Right now, H.R. 4040 includes strong protections for every employee responsible for the quality of these products, from the worker on the factory floor, right up through the government employees who inspect them. The law will give these employees the courage to speak up when they see dangerous procedures, because they will know they are protected from retaliation.

Not surprisingly, whistleblower protections have become the #1 target of big business lobbyists, such as the National Association of Manufacturers. These powerful groups carry a lot of influence in Washington, and they want nothing more than to see the whistleblower provisions cut. There is only one way to beat them – we need every person who reads this to TAKE ACTION, email or call your Senators and Representatives immediately! Tell them to keep the whistleblower provisions of H.R. 4040 IN!

We may only have hours or days until the conference committee convenes, and we must make our voices heard.

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