Coronavirus Crisis Fraud and Accountability: What NWC Has To Say

As the United States faces the growing threat of coronavirus, the unfortunate reality is that people will likely try to profit off this disaster through fraudulent misconduct. The National Whistleblower Center launched a campaign to ensure accountability in federal coronavirus spending in response. Read what NWC leadership has said to weigh in on the crisis.

Published on June 29, 2020

Coronavirus Crisis Fraud and Accountability: What NWC Has To Say

With an unprecedented amount of federal funding being put towards the fight against the coronavirus crisis, the potential for fraudulent actors to attempt to profit off this crisis is at an all-time high.

National Whistleblower Center executive director, John Kostyack, and co-founders, David Colapinto and Stephen Kohn, have weighed in on the crisis discussing the potential for fraud and the ways in which the federal government can steel itself against wrongdoers through whistleblowers and their protections and ensure accountability in federal coronavirus spending.

Read the interviews, articles, and news pieces where NWC features:

Federal News Network: Whistleblower advocates worried about IG firings from Federal Drive with Tom Temin on July 1, 2020.

The firings and shufflings of inspectors general that have occurred recently in the Trump administration have worried a related community. Namely, the whistleblowers and those who advocate on their behalf. For a take on the temperature, Federal Drive with Tom Temin checked in with the executive director of the National Whistleblowers Center, John Kostyack.

OCCRP: Whistleblower Exposes Cronyism at Trump’s Health Department from Eli Moskowitz on May 5, 2020.

“We need whistleblowers more than ever,” John Kostyack, Executive Director of the National Whistleblower Center, told OCCRP last month, which appears prescient after the publication of this recent whistleblower report.

“Given the vast amount of money running through the federal government, with its head displaying authoritarian tendencies, it appears as though these funds are highly vulnerable to fraud and abuse”.

The Hill: Fix the gaping hole in whistleblower protections: Public health and patient safety from Stephen M. Kohn on April 23, 2020.

The coronavirus pandemic has exposed a gaping hole in private sector whistleblower laws: There are none covering the disclosure of violations of patient safety or threats to public health. It often takes a crisis for Congress to recognize the need to enact effective whistleblower laws. We are in such a crisis today. The need is urgent…

Federal News Network: Whistleblower advocates caution dangers of recent actions against IGs from Federal Drive with Tom Temin on April 21, 2020.

Recent forced departures of the Intelligence Community inspector general Michael Atkinson, and the shuffling aside of Defense acting IG Glenn Fine haven’t sat well with one group. Namely the defenders of whistleblowers. For one view of what this all might mean, Federal Drive with Tom Temin spoke to the executive director of the National Whistleblower Center, John Kostyack.

Read the organization’s full statement here.

National Law Review: Can OSHA Protect Coronavirus Whistleblowers? from Stephen M. Kohn on April 21, 2020.

As the nation debates when millions of employees should return to work despite the risk being infected with COVID-19, the grim reality of worker safety laws must be addressed.   The primary law requiring a safe working environment is the Occupational Safety and Health Act (OSHA). As reported by the Washington Post, thousands of OSHA complaints are already pouring into OSHA triggered by the coronavirus pandemic.  However, despite its mandate to protect worker safety, for years the OSHA whistleblower law has been highly criticized as “dysfunctional,” or worse.  The time to ensure that employees can report workplace hazards, or refuse to perform life-threatening work without proper protections, is now….

OCCRP: Trump Fires Head of Oversight Committee for Coronavirus Relief Bill from Eli Moskowitz from April 10, 2020.

“The Inspector General Act, which was adopted in the late 1970’s after President Nixon was found to have lied to Congress and the general public, was set up in order to appoint semi-independent officials with a direct line to Congress that could hold the executive branch accountable under these sorts of circumstances,” John Kostyack, Executive Director of the National Whistleblower Center, told OCCRP.

This system, he explained, has worked fairly well over the following decades, and the country has never seen a U.S. President attempt to fire or publicly intimidate an inspector general.

“What President Trump is embarking upon here is pretty unprecedented,” he said, explaining that this action is more than about the firing of one or two individuals.

“He’s sending a message to anyone working in the federal executive branch that if you speak truth to power, you get fired.”

Although the media has been covering these firings, Kostyack says that media scrutiny does not seem to be deterring the President. His organization is calling upon Congress to assert its Constitutional oversight authority.

“We need whistleblowers more than ever,” Kostyack added. “Given the vast amount of money running through the federal government, with its head displaying authoritarian tendencies, it appears as though these funds are highly vulnerable to fraud and abuse”.

The Hill: How the firing inspector general Atkinson impact the government’s ability to fight coronavirus from Stephen M. Kohn on April 6, 2020.

On Friday night, April 3, 2020, President Donald Trump sent a letter to Congress terminating the inspector general for the intelligence community, Michael Atkinson. Although this news story is primarily covered as one related to the president’s grudge emanating from impeachment, this termination will have a far greater impact. The integrity of the government’ oversight and accountability programs are called into question, as well as the ability of the government to respond honestly, ethically and effectively to the coronavirus pandemic…

Public News Service: Whistleblower Protection Group: Congress Must Reverse IG’s Termination from Roz Brown on April 6, 2020.

John Kostyack, executive director of the National Whistleblower Center, said retaliation against whistleblowers by the administration creates a hostile environment and damages the country’s system of checks and balances.

“It’s a very chilling message not just for those people but for all of us who believe in the rule of law and believe that oversight of the executive branch is pretty fundamental to make our democracy work,” Kostyack said.

The whistleblower advocacy group has mounted a campaign encouraging Congress to reverse the inspector general’s firing. Kostyack said he believes Atkinson was following the rule of law when he forwarded the complaint revealing Trump had asked the Ukrainian president to investigate Democratic presidential candidate Joe Biden and his son Hunter.

Several top Democrats have criticized the firing of Atkinson, and Republican Sen. Chuck Grassley argued that Congress has been “crystal clear that written reasons must be given when an inspector general is removed for a lack of confidence.”

Kostyack said it is in the institutional interests of Congress to say “no” when the president undercuts a system designed to help them perform their oversight function.

“They have the power of the purse. They have the power to block nominations. All of those steps are what Congress typically does when there’s a test of wills between the executive and the legislative branch,” he said. “And if there ever was a time for them to pull out those tools, this is it.”

Stars and Stripes: Fired USS Theodore Roosevelt commander has reportedly tested positive for coronavirus from Caitlin Doornbos on April 5, 2020.

Crozier’s removal may have violated protective disclosure laws, which would have permitted him to report “gross mismanagement” by the Navy, said whistleblower attorney Stephen Kohn in a statement emailed to Stars and Stripes on Friday.

Kohn co-founded the National Whistleblower Center in Washington, D.C., and has represented whistleblowers in the World Trade Center and Oklahoma City bombing cases.

“Military law permitted Captain Crozier to inform a wide range of officials of the life-threatening conditions aboard the USS Theodore Roosevelt, including any ‘substantial and specific danger to public health or safety,’” Kohn wrote.

Naval News: Removal Of CVN 71 Captain May Have Violated Military Whistleblower Law from Xavier Vavasseur on April 3, 2020.

The removal of Captain Crozier as commanding officer of the aircraft carrier USS Theodore Roosevelt may have violated whistleblower laws,” according to the national whistleblower law expert Stephen M. Kohn.

Military law permitted Captain Crozier to inform a wide range of officials of the life-threatening conditions aboard the USS Theodore Roosevelt, including any ‘substantial and specific danger to public health or safety,’” according to Kohn.  The whistleblower law also permitted Captain Crozier to report “gross mismanagement” committed by the U.S. Navy.

“Under legal precedent, the failure of the U.S. Navy to take immediate and effective steps to stop the spread of the Coronavirus on the USS Theodore Roosevelt could reasonably be viewed by Captain Crozier as ‘gross mismanagement.’ Furthermore, the life-threatening conditions on the carrier unquestionably constituted ‘substantial and specific danger to public health and safety. Consequently, Captain Crozier’s memorandum to the Navy was a protected disclosure under law,” Kohn said.

The Military Whistleblower Law, which applies to the U.S. Navy, protects numerous whistleblower-related communications, even if they are made to hundreds of people,” according to Kohn.

Protected disclosures under the law include communications to:

“any person or organization in the chain of command;” “a Member of Congress;” “a member of a Department of Defense audit, inspection, investigation, or law enforcement organization;” and “any other person or organization designated pursuant to regulations or other established administrative procedures for such communications.”

“Secretary Modly’s justification for removing Captain Crozier raises the specter of illegal retaliation. There is no requirement that a military whistleblower must raise concerns using a “secured system,” or must limit the scope of his or her disclosures to “take care” that concerns are not “leaked.” The opposite is the case. The law permits military whistleblowers like Captain Crozer to send their memos to every single Member of Congress, with no restrictions on the ability of Congress to immediately release the memo to the press. Secretary Modly’s admissions constitute evidence of possible retaliatory motive,” Kohn said.

Under military law, whistleblower disclosures made by Captain Crozier would only lose their protection if they were “unlawful.” The Navy has not alleged that any of Captain Crozier’s communications violated the law.

“There is an even bigger issue here than whether Captain Crozier is protected under military law. Removing Captain Crozier from his duties sends the wrong message. It creates a chilling effect on others who are trying to save lives by taking prompt and aggressive action to alert the public to health and safety threats. During this crisis, disclosures like those made by Captain Crozier should be rewarded, not punished,” Kohn said.

“Attempts to censor or stop public disclosures of truthful and important health concerns during the coronavirus pandemic does not serve the public interest,” Kohn added.

Bloomberg Law: Sweeping Stimulus Law Is Golden Opportunity for Scam Artists from Daniel Seiden on March 31, 2020.

“Wherever there is federal money, there is a potential for fraud,” David Colapinto of Kohn, Kohn & Colapinto LLP, a law firm that represents whistleblowers, said. “When trillions of dollars are involved, the potential for fraud is almost endless. We’ve never seen this much money pumped in at one time.”

Colapinto specializes in representing whistleblowers under the False Claims Act, a federal law that allows those who report fraud to get a share of any funds recovered by the government from unscrupulous contractors. The Justice Department recovered more than $3 billion in False Claims Act cases last year.

The FCA became law during the Civil War because contractors were supplying the Army with inferior weapons and horses. The rush to get medical supplies to hospitals to combat the novel coronavirus now will likely involve unscrupulous vendors behaving the same way, Colapinto said.

NBC News THINK: Coronavirus scam alert: From fake Starbucks coupons to fraud, cons are going viral from Frank Figluizzi on March 21, 2020.

But the 9/11, TARP and Katrina relief debacles will seem like a mere head cold compared to the virulence of the fraud that’s about to plague the American taxpayer. Today’s high-speed digital con men will bilk us before we even knew what hit us. As detailed in a recent article in Mother Jones, Stephen Kohn, a lawyer who is chairman of the National Whistleblower Center, believes a veritable storm of fraud is on the horizon. Kohn sent a letter to Attorney General William Barr requesting that the Justice Department establish a task force “to monitor and investigate violations of the False Claims Act” in cases of coronavirus-related fraud.

Kohn is right. But the federal government’s delay in foreseeing and responding to the coronavirus has already taken a toll on our economy. While this virus will bring out the best of American resilience and benevolence, let’s not add to the damage by enabling further losses at the hands of the worst among us.

National Law Review: Government Watchdog on Alert for COVID-19 Fraud from Sarah K. diFrancesca on March 20, 2020.

As the impact of the coronavirus continues to grow and develop, government watchdogs are on high alert for fraud and scams that may arise.

The Chairman of the Board of Directors of the National Whistleblower Center sent a letter to Attorney General William Barr asking him to establish a nationwide task force to monitor and investigate fraud under the False Claims Act (FCA). The letter acknowledges the deterrent effect of the FCA, which will be critical to combat fraud associated with federal funding related to the coronavirus, including federal health care programs like Medicare and Medicaid. The letter suggests that the task force should (i) ensure a “prompt and aggressive federal response” to any allegations of fraud related to the coronavirus; (ii) initiate investigations based on a whistleblower’s “disclosure statement” rather than waiting until a formal complaint is filed in federal court; (iii) prioritize the investigation of cases related to the coronavirus; (iv) promptly prosecute cases with merit; and (v) promptly notify whistleblowers for cases lacking merit.

Organized Crime and Corruption Reporting Project: US Whistleblower Center Calls for Coronavirus Fraud Task Force from Will Neal on March 20, 2020.

The head of America’s national whistleblowing watchdog has called for a dedicated task force to fight coronavirus-related fraud and corruption among government contractors.

Stephen Kohn, the lawyer who chairs the National Whistleblower Center, asked Attorney General William Barr on Wednesday to set up a unit specifically “to monitor and investigate violations of the False Claims Act related to allegations of fraud committed in federal programs related to the Coronavirus outbreak.”

 Otherwise known as the Lincoln Law, the US Senate introduced the False Claims Act in 1863, during the American Civil War, to protect the Union Army from defective products that might endanger the lives of its troops. It has since become the federal government’s primary means of combatting fraud and corruption in abuse of its spending programs, according to The Leagle, a directory of US court decisions.

In an open letter to the head of the US Justice Department (DOJ), Kohn said that it was imperative the government “take prompt and effective action to ensure that no money is defrauded from any program designed to combat the Coronavirus.”

He further asked that investigation of cases of fraud related to the pandemic should take priority, given that it can sometimes take over a year for the DOJ to investigate cases brought under the False Claims Act.

Previous investigations under the act have probed federal contractors for stealing from disaster sites, selling defective body armor to police, and providing patients with deficient healthcare, according to Kohn’s letter.

Mother Jones: Whistleblower Lawyer Calls for Coronavirus Fraud Task Force from Matt Cohen on March 18, 2020.

As the federal government works to stop the spread of COVID-19 and mitigate the grave economic disaster it has caused, one lawyer is urging the Department of Justice to set up a task force to stop potential fraudsters who might try to illegally profit from the crisis….

Bloomberg Law: Coronavirus False Claims Task Force Urged at Justice Department from Lydia Wheeler on March 17, 2020.

A whistleblower attorney and advocate is calling on Attorney General William Barr to warn health-care providers against using the new coronavirus to pad their pockets.

Stephen Kohn, founding partner of Kohn Kohn & Colapinto LLP who chairs the National Whistleblower Center’s board of directors, asked Barr in a letter Monday to create a task force at the Justice Department to monitor and investigate False Claims Act allegations related to the Covid-19 outbreak.

“There is a group of people who will profit from disasters illegally and they’re despicable, but they’re out there,” Kohn told Bloomberg Law.

Kohn said in the letter that the DOJ should take “prompt and effective action” to protect against fraud in Medicare, Medicaid, and other government sponsored health-care programs.

Establishing a task force and aggressively investigating fraud claims “can send a message to all persons involved in fighting the coronavirus that they must act honestly and ethically in their administration of these critical programs,” he told Barr.

President Trump said Saturday the emergency declaration he issued last week will free up more than $50 billion in disaster relief funds. Congress already enacted legislation to provide $8.3 billion in emergency funds to combat the new cases of Covid-19. Medicare alone was authorized to spend $500 million on telehealth programs.

If health-care workers on the front lines see a provider manipulating the billions of dollars coming into the system to fight the pandemic, Kohn said they have the right to report it.

The old saying is “if you see something, say something,” he said. “Well guess what? The law backs that up.”

National Law Review: Whistleblowing and The Coronavirus Crisis from Stephen M. Kohn on March 16, 2020.

Fraudsters take advantage of a crisis, even when lives are at stake.  This type of misconduct is why America’s first two whistleblower laws were born during national emergencies.  Conduct that undermined the war effort during the American Revolution sparked the passage of the first whistleblower law. Likewise, the False Claims Act, now viewed as America’s most successful whistleblower law, was signed into law by President Abraham Lincoln during the height of the U.S. Civil War…

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