Dozens of the State Department’s top contractors force their employees to sign confidentiality agreements that may silence potential whistleblowers or hamstring government investigations.
Some of the confidentiality policies, which are imposed by each of the department’s top 30 contractors, may spark a “chilling effect on employees who are considering whether to report fraud, waste or abuse to the government,” the agency’s inspector general said.
All 30 companies told the watchdog they had never enforced any of the provisions against employees who stepped forward with reports of wrongdoing, although the State Department watchdog didn’t independently confirm whether that was true.
However, one of the companies singled out for its potentially restrictive confidentiality agreements, International Relief and Development, was the subject of scrutiny from a different inspector general due to allegations that its employees were being stifled by just such policies.
John Sopko, the Special Inspector General for Afghanistan Reconstruction, wrote to IRD’s then-CEO Arthur Keyes in May 2014 to inquire about the contractor’s confidentiality agreements following a series of unflattering media reports.
Jason Matechak, IRD’s legal counsel, responded by assuring Sopko 49 former employees who were bound by such policies had been emailed to “clarify” that the agreements didn’t prevent staff from cooperating with the government in an investigation and that the company wouldn’t attempt to enforce the agreement “in a manner that would run afoul of the False Claims Act.”
Also known as the Lincoln Law, the False Claims Act combats fraud and allows individuals who identify wrongdoing to share in the government’s winnings.
But Sopko fired back a day later by saying Matechak’s response did nothing to alleviate his concerns about the use of confidentiality agreements to muzzle would-be whistleblowers before any formal inquiry under the False Claims Act took place.
The most troubling effect of the policy was to discourage staff from coming forward in the first place, not from testifying after wrongdoing had already been discovered, Sopko explained.
Even after IRD submitted dozens of documents defending the legitimacy of its confidentiality policies, Sopko criticized the contractor for dodging the central issue.
“I remain concerned that IRD is acting improperly to limit the rights of potential whistleblowers to report instances of waste, fraud and abuse,” Sopko wrote in late July of last year.
“IRD failed to inform its former employees that they have the right to make proactive disclosures of information to government officials prior to the initiation of a formal government inquiry,” he continued.
The watchdog hit IRD for its “persistent resistance to notifying its former employees of their rights as potential whistleblowers.” A SIGAR spokesman said IRD later amended its confidentiality policies and followed up with past employees to inform them of their rights.
The State Department inspector general expressed concerns about a policy at 13 of its top contractors that compelled employees to alert their supervisors if contacted by a government auditor or investigator.
Such provisions could paralyze employees who want to blow the whistle but don’t want to break a rule requiring them to report that contact with a federal official to their bosses, the watchdog said.
Even so, all of the companies in question had implemented policies designed to encourage staff to come forward, such as internal hotlines for anonymous tips and sections in employee handbooks spelling out available whistleblower protections.
None of the 30 companies had confidentiality agreements similar to IRD’s, the inspector general said, “because they did not specifically mention disclosures to a government agency nor were they specifically tied to an investigation of fraud or a violation of the company’s code of business ethics.”
IRD came under fire after the U.S. Agency for International Development, one of its largest patrons, suspended the firm due to allegations of serious misconduct, the Washington Examiner reported in January.
Both SIGAR and USAID are investigating the contractor’s past performance managing taxpayer-funded projects.
