Information Technology Reference
In-Depth Information
Aircraft had violated the False Claims Act by falsifying records in order to defraud the
government. This civil suit was put on hold until the end of the criminal trial.
The inspector general's criminal investigation led to a trial in 1992. The jury found
Hughes Aircraft guilty of conspiring to defraud the government. Hughes Aircraft ap-
pealed the verdict, but the verdict was upheld. Since a criminal conviction can be used
as evidence in a civil trial, the verdict nearly assured that Goodearl and Aldred would
prevail in their civil suit. Hughes Aircraft began negotiating a settlement in the civil suit.
Four years later, Hughes Aircraft was ordered to pay $4.05 million in damages.
Goodearl and Aldred received 22 percent of the settlement, or $891,000. In addition,
Hughes Aircraft was required to pay their legal fees, which amounted to $450,000 [7, 11].
Goodearl and Aldred paid a high price for whistle-blowing. Both were unemployed
for an extended period of time. Aldred and her husband went on welfare until they
could find work. Goodearl and her husband had to file for bankruptcy, and they even-
tually divorced. Despite these hardships, both whistle-blowers said they “would do it all
again” [12].
Whistle-blowers are usually punished for disclosing information that organizations have
tried to keep under wraps. If they do not lose their jobs outright, they have probably lost
all chances for future advancement within the organization. Whistle-blowers and their
families typically suffer emotional distress and economic hardship.
Nevertheless, whistle-blowers often serve the public good. For this reason the US
government has passed two pieces of legislation to encourage whistle-blowing: the False
Claims Act and the Whistleblower Protection Act of 1989.
The False Claims Act was first enacted by Congress in 1863 in response to massive
fraud perpetrated by companies providing supplies to the Union Army during the Civil
War. The law allowed a whistle-blower to sue, on behalf of the government, a person
or company that was submitting falsified claims to the government. If the organization
was found guilty and forced to pay a settlement to the government, the whistle-blower
received half the settlement.
In 1943 Congress amended the False Claims Act, drastically reducing the share of
the settlement a whistle-blower would receive and limiting the evidence or information
a whistle-blower could use in the lawsuit. As a result, the law fell into disuse.
In the mid-1980s, the media carried numerous stories about defense contractors
perpetrating fraud against the government. Congress responded by amending the False
Claims Act once again, making it easier for people to put together a successful lawsuit
and allowing whistle-blowers to receive between 15 and 30 percent of settlements. The
False Claims Act also provides certain protections to whistle-blowers against retaliation
by their employers.
The Whistleblower Protection Act of 1989 establishes certain safeguards for federal
employees and former employees who claim negative personnel actions have been taken
against them for whistle-blowing. Whistle-blowers can appeal to the US Merit Systems
Protection Board.
