A Win for Whistleblowers

| Thu Aug. 5, 2010 4:13 PM EDT

Whistleblowers scored a win yesterday when the U.S. Court of Appeals for the District of Columbia overturned a previous court decision that had significantly limited the ability of the government watchdogs at the Project on Government Oversight to defend themselves on the stand.

The case actually dates all the way back to 1997, when POGO worked with a whistleblower at the Minerals Management Service (now the Bureau of Ocean Energy Management, Regulation and Enforcement). The whistleblower brought to light a number of problems with the royalty in kind program, which basically allows companies driling on federal land to pay the government with oil rather than the royalties owed. POGO filed a False Claims Act lawsuit against the 15 biggest oil and gas companies for underpaying the government for drilling on public lands. POGO won, returning $440 million to the federal government, and shared the proceeds of a settlement from that lawsuit, $383,600, with the whistleblower who helped bring the fraud to light. The DOJ then went after POGO and the whistleblower, claiming that it violated federal law for a government employee to accept the award.

In the 2008 trial, testimony to the jury on why the money had been offered was barred, which POGO says made it impossible to defend themselves. (They weren't even allowed to use the word "whistleblower" on the stand.) Yesterday's ruling overturned that court decision, making it clear that the defendant's intent is crucial to determining whether the law was violated (more background here). This means POGO could now offer a more adequate defense should the Department of Justice decide to take up the case again.

"This is a total acknowledgment of the arguments we've been making for over a decade on this," said Danielle Brian, executive director of POGO. "Justice has been trying to demonize POGO's recognition of a whistleblower. We are hoping this is the end of this incredibly long ordeal."

As POGO points out, while the DOJ has been going after them on this issue, the department has declined to prosecute the two key players in the 2008 MMS corruption scandal, Greg Smith and Lucy Denett—even though the Interior Department Inspector General blamed the pair for some of the worst ethics violations in the sex, drugs, and oil scandals at the agency. (Regular readers will recall that years of corruption at MMS have come back to haunt the Obama administration in the wake of the Deepwater Horizon disaster.)

"We really are hoping that Department of Justice does look again at the decision not to prosecute those cases," said Brian. "It's demoralizing to the good guys at the agency to let them get away with it."

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