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The legal framework protecting whistleblowers in the U.S.

The modern-day False Claims Act protects whistleblowers who point out fraud and abuse in government. John Phillips, who helped author the law, joins Hari Sreenivasan to discuss the rights whistleblowers have. Phillips is a founding partner at the law firm Phillips and Cohen and a former ambassador to Italy under the Obama administration.

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  • Hari Sreenivasan:

    At the heart of the impeachment inquiry facing President Trump is a report from a still-anonymous whistleblower. The president and many of his supporters are demanding a name and even threatening severe punishment. But what rights does a whistleblower have and how did the federal law that protects those who point out fraud and abuse in government come to be?

    Joining me now is John Phillips, a founding partner at the law firm Phillips and Cohen and a former ambassador to Italy in the Obama administration. He helped author the modern-day False Claims Act, which protects government whistleblowers. Thanks for joining us.

    So what was the design here when you came up with this act? If you saw fraud and abuse, that you would have a safe way to report it?

  • John Phillips:

    Yes. I mean the concern led to the enactment of this law, an amendment to this law back in 1986 was the rampant fraud being committed against the government in all areas where the government spends money and so little of it was being recovered. So Senator Grassley, Republican from Iowa, was a sponsor of this bill, I worked closely with him to encourage whistleblowers, people on the inside of these companies whether they're a defense contractor or a health care provider under Medicare or whatever, people who see and witness fraud against the government, which was rampant and commonplace because the odds of getting exposed were so small then, that if you come forward we'll protect you. And in this circumstance you'll even potentially get some compensation if it's successful at the end.

    And here we are 32 years later, it's been a spectacular success. The recoveries now through whistleblower complaints represent 85 percent of all the recoveries the Treasury gets every year — only 15 percent comes from investigations initiated by the Justice Department of the government itself. So this is an example of how reaching out to people who otherwise had no outlet who witnessed and experienced fraud against our government can take action because whistleblowers in our society have not come through it all that well all the time.

  • Hari Sreenivasan:

    Is there a distinction between whether you are whistleblowing on say a defense contractor or a tobacco company versus somebody in the intelligence community that's doing this inside the administration?

  • John Phillips:

    Well, that's why that law was passed in 1998 to deal with the intelligence community inside the National Security Association, inside the White House, because the concerns were there that there are abuses, actions being taken that are illegal, totally unethical whatever. There's no way, no easy way to report it.

    So Congress in 1998 passed this law, very specifically saying the steps that you must take in order to invoke this law and we will protect you, if you do this, we will protect your anonymity which is sometimes very hard to do and we'll protect you from any other actions taken against you, retaliatory actions. What frequently happens for people in the industries the defense industry or health care is that they may get fired, they may be sued by their own companies, they're called informers or spies and that's just a wrong nomenclature to use against these people but yet it surfaces.

    The idea that the president of the United States can label somebody as close to a spy that complies to the letter with the law that Congress enacted and presents in a very credible, serious, professional way, very serious allegations about improprieties by this administration and this president complied to the letter and to be called a spy, almost a spy by the president is just unbelievable.

  • Hari Sreenivasan:

    But the Department of Justice, William Barr has said there's no there there. By reading what are the notes from the phone call, he says this wasn't meriting any further investigation.

  • John Phillips:

    I find that just in reading now what's available to the public and that's reading this transcript, pretty preposterous statement in light of what it's like saying what's black is white. Look at what transpired. Look at all the bread crumbs leading up to that. This wasn't just the one phone call. It was a long process clearly undertaken by the administration to get Ukraine to participate in digging up dirt on his opponent and using the leverage of his office and taxpayer money to basically extort that. I mean there's no way you can read it otherwise.

    And William Barr, I think, his performance today has been very, very suspect in my experience and I've known him going back 30 years. And the acting director of National Intelligence was one of my obligations here, we heard his testimony this week. He is playing it totally by the book and he was even thwarted internally but fortunately because of his persistence the transcript did become public. He was worried about this idea of executive privilege. And as soon as they did release the transcript then they've waived the privilege and then he felt he could release the complaint itself and the accompanying letter.

  • Hari Sreenivasan:

    What about the definition of hearsay versus primary witness? Whether the whistleblower has firsthand knowledge or whether this is a compilation of things? Because he says about a half dozen people had given this information to him.

  • John Phillips:

    Hearsay is a technical term used in a court proceeding when you're trying to get a witness's testimony blocked because he's not the original source of that information. They want to hear from the original person to come in and say who, what can you tell us about your direct knowledge. But hearsay is often admitted in court.

    This has nothing to do with what's going on here. My perception of this, having represented — our firm thousands of whistleblowers the last 30 years, this is not just a single — I'm just speculating somewhat here — not a single person stepping forward but he does reference six people in the intelligence apparatus within the White House with whom he is or she has consulted. Clearly they were discussing in my view this together and he stepped forward to present their collective knowledge.

    I also — I'm guessing — that the inspector general that investigated this pursuant to the law did probably — it's not been reported yet — interview those six people because he would have provided the names under a confidentiality basis and those six people presumably corroborated what he said. I suspect there is an investigation that's written up already completed by the inspector general and based on that he represented that this is a matter of urgent concern and that it's credible, highly credible. That's based on his investigation not just reading a complaint.

    But the real test in terms of whether this law works or not works is not just this case but will it encourage others who see similar misconduct be willing to take a risk and step forward.

  • Hari Sreenivasan:

    All right. John Phillips who helped author the modern-day False Claims Act. Thanks so much for joining us today.

  • John Phillips:

    Thank you.

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