Rester, however, found it difficult to find work. He was known in the pipe-making industry as a whistleblower and a rabble-rouser. He sought help from one of the most commonly used whistleblower protections, a federal law called the False Claims Act.
This law is intended to allow private individuals to sue companies they allege have defrauded the government, and protect them from retaliation once the suit is made public. Healthcare corporations accused of fraudulent billing for Medicare and Medicaid are some of the most common targets of these suits, followed by defense contractors who overcharge or substitute cheap parts while billing for more expensive ones. The False Claims Act provides for a type of lawsuit known as qui tam
, which roughly translates to "on behalf of the king." Whistleblowers file qui tam
suits on behalf of the government and, as a reward, they get between 15 and 30 percent of any money recovered--the U.S. Treasury gets the rest. The law was passed during the Civil War when President Lincoln discovered that defense contractors were selling the same horse to the Union cavalry many times over, and padding gunpowder with sawdust. Because of the financial motivation, qui tam
suits have become a popular partnership between government and citizens. In 2006 alone, 382 qui tam actions were filed in the federal courts, according to statistics published by the Justice Department's Civil Division. That year, the U.S. government recovered more than $1.4 billion and whistleblowers, collectively, received a cut of more than $197 million.
But as Robert Rester discovered, qui tam
suits do not always go as planned. Rester filed a qui tam
suit against McWane, claiming the company defrauded the government by selling it defective pipe and by covering up violations of safety and environmental laws, thus failing to pay the penalties and fines they should have incurred. He also sought severance pay, his retirement benefits and health insurance under the law's wrongful termination clause. The government declined to join Rester's case and McWane eventually won. The judge ruled that while Rester's testimony may have been helpful to the Department of Justice, his allegations were not specific enough, nor did they come with enough hard evidence, to win a qui tam
Indeed, in the guide Courage Without Martyrdom
, GAP warns that the chances of winning a qui tam suit are like those of winning the lottery. "The odds of a painful and protracted reprisal, on the other hand, are a good bet," says the guide. Not only that, the government, more often than not, declines to join whistleblowers in their cases, leaving individuals to go it alone. Still, the government takes most of the money recovered.
Nevertheless, whistleblowing can be worth the risk. Whistleblowers from the government and the private sector alike have likely saved tens of thousands of lives, and helped keep companies and public officials honest. Consider these cases:
- Douglas Keeth filed a qui tam suit in 1989 against his employer, the United Technologies Corporation, alleging inflated billing in the company's Sikorsky Aircraft division. UTC had to pay the U.S. Government $150 million and Keeth took home $22.5 million as a reward.
- Dr. Peter Rost was a vice president at the drug maker Pfizer when he blew the whistle on the company's illegal marketing practices, among other things. He lost his job, but a Pfizer subsidiary pleaded guilty in 2007 to a kickback scheme and promoting "off-label" uses of the drug Genotropin.
- Cynthia Cooper was a WorldCom insider who helped blow the whistle on the communication provider's cover up of $3.8 billion in losses. Cooper kept her job and a WorldCom executive was indicted on charges of securities fraud.
- Shawn Carpenter was an employee of Sandia National Laboratory who blew the whistle on his employer's cover up of a hacker getting into top-secret computer systems. He was fired and in 2007 was awarded $4.7 million in damages.
Blowing the whistle will invariably become a defining career move with its own risks and rewards. As GAP explains, "the only thing that you can count on is personal satisfaction that you did the right thing, and that you lived your values instead of stopping at lip service," they say. "If you approach whistleblowing with the idea that this is all you will receive, any other benefits will be a bonus."
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