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Back to Past Press Main A Watchdog Follows the Money in Iraq
By Erik Eckholm Published: November 15, 2004 Key Senators Urge SEC to Criminally Prosecute Wall Street Corporations that Retaliate Against Whistleblowers. Washington, DC., November 15, 2004. In a letter to the Chairman of the Securities and Exchange Commission (SEC), the principal sponsors of the Sarbanes-Oxley (SOX) whistleblower protection laws encouraged the SEC to criminally investigate Wall Street whistleblower cases. These criminal penalties were incorporated into the SOX in order to address the "corporate culture" which prevents employees from reporting wrongdoing. The SOX law broadly authorizes the SEC to investigate whistleblower cases, and provides strong penalties against corporations which illegally retaliate against their employees, including steep fines ($5,000,000.00 per violation) and criminal sanctions (up to twenty years imprisonment) against corporations which illegally retaliate against whistle blowers. The two Senators asked that the SEC formally advise the Senate regarding the actions it has taken to enforce the law. In their letter, Senator Patrick Leafy (D-VT) and Charles Grassley (R-IA) urged the SEC to utilize its broad enforcement powers to protect whistleblowers: "In order for Sarbanes-Oxley to be effective, it must be vigorously enforced and subject to vigorous oversight." Senator Leahy and Senator Grassley's efforts were sparked by findings made by the Department of Labor (DOL) in the case of Lawrence Hogan v. Check Free Corporation. On July 16, 2004, the DOL issued preliminary findings against Check Free, finding that Hogan made protected disclosures regarding Check Free's deceptive business practices, improper recognition of revenues, and fraud against shareholders. Thereafter, on October 7, 2004 the DOL concluded that Check Free violated the SOX whistleblower laws when it illegally terminated Hogan. Hogan was awarded special damages and all legal fees. Check Free appealed this order. Kris Kolesnik, the Executive Director of the National Whistleblower Center (NWC) stated: "The Senator's letter constitutes a major step forward in enforcing ethical standards on Wall Street. The SEC must properly fulfill its duties under Sarbanes-Oxley and fully investigate documented cases of retaliation." "The best way to prevent another Enron scandal is to fully enforce the law, including criminal prosecutions against corporate officials who illegally attempt to hide misconduct by harassing and intimidating their own employees," Kolesnik added. The following documents may viewed in pdf format by clicking the links: The November 9, 2004 letter from Senators Leahy and Grassley to SEC Chairman William H. Donald son and the July 16, 2004 and October 7, 2004 DOL determinations. Related articles: Senators Want Whistle-Blower Law Enforced
DOD Inspector General to Investigate Top Army Contracts Officer Blows the Whistle Washington, DC October 24, 2004: The top civilian contracting officer of the Army Corps of Engineer -- with the protocol of a one star general has disclosed high level misconduct concerning the review and approval of major Iraqi reconstruction contracts (including the "RIO" and "RIO II" contracts) that were awarded to Halliburton subsidiary Kellogg Brown & Root (KBR). Ms. Greenhouse is the highest ranking federal employee to disclose misconduct pertaining to KBR. The Department of Defense has announced that its Office of Inspector General will investigate these allegations. The whistleblower, Bunnatine ("Bunny") Greenhouse, is employed as the Principal Assistant Responsible for Contracting ("PARC") for the Army Corps. She is a member of the federal government's Senior Executive Service. A statement released today by Ms. Greenhouse's attorneys, Michael D. Kohn and Stephen M. Kohn, of the National Whistleblower Center stated as follows: Ms. Greenhouse's allegations go to the highest levels of the government. The investigation into the allegations she has raised must not end at the Defense Department. The role of current and former Halliburton and DOD employees must also be fully investigated. Army staffer: Halliburton case 'worst abuse' Pentagon Probes Halliburton Bid Halliburton contract inquiry demanded
FBI to Probe No-Bid Halliburton Deal Justice Department Opposition Holds Up Whistle-Blower Measures Beyond the Call of Duty Civil Rights Tax Fairness Act Signed by President Washington, DC., October 22, 2004. The American Jobs Creation Act (H.R. 4520) was signed into law today, by President Bush. The Civil Rights Tax Relief Act,(CRTRA) Section 703, was preserved in the JOBS bill. CRTRA bars the double taxation of attorneys' fees. The attorneys’ fees provision is prospective only, and applies to fees and costs paid AFTER October 22, 2004 on judgments or settlements occurring after that date.
DOD Responds to NWC’s Whistleblower Concerns Washington, DC September 13, 2004: The Department of Defense Inspector General's Office (DOD IG) has responded the May 6, 2004, request of the National Whistleblower Center to immediately take appropriate action to protect Army Specialist Joseph M. Darby, the soldier who disclosed the photographs documenting prisoner abuse in the Abu Ghraib prison in Iraq. The NWC also had also requested that members of the armed forces be immediately informed of the protections afforded to them under the Armed Forces Protected Communications Act, 10 USC 1034. The DOD IG responded to the NWC's request via a letter stating the protections and procedures the DOD has in place for whistleblowers. Leahy-Grassley letter to Secretary Rumsfeld Labor Department Issues Final Washington, DC., August 25, 2004: Yesterday, the US. Department of Labor (DOL) issued final rules governing Corporate Whistleblower Procedures under the Sarbanes-Oxley Act of 2003 (SOX). In implementing the final regulations, the DOL rejected a request by the US. Chamber of Commerce that would have seriously undermined the protections afforded employees under this Corporate Whistleblower Law. The Chamber of Commerce unsuccessfully attempted to undermine the preliminary reinstatement provisions contained in the SOX. Under the SOX, a whistleblower can obtain a Preliminary Reinstatement Order (PRO) within sixty days of filing his or her complaint. The final regulations provide OSHA with the authority to order immediate reinstatement on the basis of its investigation. The preliminary reinstatement remains effective while the claim is awaiting a trial on the merits. Consequently, an employee can be back at work, earning a full salary, during the years of delay which often arises in civil litigation. The Chamber proposed severely limiting OSHA's ability to order the Pros of employees. The Chamber requested that OSHA's authority to order such relief after an investigation be eliminated, and that an employee be forced to wait until after the trial on-the-merits to obtain his or her job back. The Chamber also attempted to limit Pros to cases in which such an order would cause "minimal disruption" to a company and that the evidence of wrongdoing was "overwhelming." The DOL rejected these proposals, explaining its position as follows: [T]he Chamber commented that the regulatory exceptions to preliminary reinstatement should be broadened. They further commented that preliminary reinstatement should become effective only after the administrative adjudication has been completed . . . . The statute, however, explicitly provides that a preliminary order of reinstatement shall be issued upon the conclusion of an investigation that determines that there is reasonable cause to believe that a violation has occurred. Moreover, the purpose of interim relief, to provide a meritorious complainant with a speedy remedy and avoid a chill on whistleblowing activity, would be frustrated if reinstatement did not become effective until after the administrative adjudication. "The Chamber's proposals were clearly counter to Congress" intent. The Department of Labor correctly rejected this blatant attempt to misuse the rule making process and undermine a major federal whistleblower law," said Stephen M. Kohn, Chairman of the National Whistleblower Center (NWC). According to Kohn, the SOX provision permitting OSHA to order the immediate reinstatement of a wrongfully discharged employee is an "essential and critical protection" afforded corporate whistleblowers: "The immediate reinstatement provision ensures that whistleblowers will not have to wait years for their case be heard in court. This provision will make every publicly traded corporation think twice before they attempt to fire an employee such as Sharron Watkins or Cynthia Cooper. The Chamber's attempt to gut this aspect of the law was disappointing and very troublesome. We sincerely hope that the Chamber will work cooperatively with whistleblowers in order to promote confidence and honesty in publicly traded corporations."
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©1997-2007 National Whistleblower Center & NWLDEF P.O. Box 3768, Washington, DC 20027 |
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| [Press 2004] |