Reporting cases of misconduct in the context of federal science funding can be a daunting task. But mechanisms to support whistleblowers do exist.
[This article first appeared on The Scientist, written by Joseph Gentile.]
In the midst of a global pandemic and unprecedented attacks on science itself, protecting research and scientists is more important than ever. The law’s most powerful tool in aid of this protection is the False Claims Act (FCA). Whistleblowers, insiders who see misconduct and report it to the government, are critical to making this law work as intended.
The US invests heavily in a wide range of research and development projects. The federal government alone pours more than $100 billion into research grants each year. This is in addition to billions of dollars in tax credits to encourage private research efforts in the corporate sector.
These tax dollars flow through a number of different groups and agencies—the Department of Defense, the Department of Health and Human Services (HHS), the National Science Foundation, etc.—and they fund many different types of research programs, from basic and applied research to large-scale development projects.
This massive annual investment has resulted in significant and tangible returns. On its own, The National Institutes of Health (NIH) , which receives tens of billions of dollars a year in federal funding, distributes upwards of 60,000 research and training grants to more than 300,000 scientists nationwide, aiding in breakthroughs in vaccines and precision medicines, and in providing funding for 148 Nobel laureates.
But this funding process is susceptible to fraud. Such misconduct includes noncompliance with stipulated rules and regulations; falsified grant applications, progress reports, or results; overcharging for time, costs, and other grant-related expenses; misuse of grant funds for unrelated or personal matters; and undisclosed or improper conflicts of interest, including not disclosing grants from foreign governments.
Honest scientists and grant recipients who witness or are pressured to take part in such wrongdoing face a difficult predicament. Is it best to take a stand or look the other way?
Doing nothing may seem like the safest course of action. If would-be whistleblowers keep quiet, their institution may continue to get much needed funding. Perhaps the violation will cease on its own or another employee might take the necessary corrective action. However, at some point, a witness’s silence or cooperation may make them legally responsible for the fraud.
Taking some form of action also has risks. If whistleblowers decide to act, they could be marginalized, falsely accused of poor performance, harassed, fired, or even blackballed.
Most people who find themselves in the unenviable position of witnessing or being asked to participate in fraud will want to do the right thing and report it, but will be understandably concerned about the effect of doing so on their careers.
In many situations like this, the FCA can provide a solution. The FCA is a powerful statute that allows a whistleblower to report illegal activity to the government and, under certain circumstances, share in the monetary recoveries the government obtains. This is accomplished through what’s called a Qui Tam lawsuit. Such suits are initially filed confidentiality, or “under seal,” so the federal government can investigate the claims without the target’s knowledge. While under seal, whistleblowers are prohibited from discussing the case with anyone.
The whistleblower’s share of any recovered proceeds can be substantial, usually between 15 and 30 percent of the government’s recovery. Given the size of most government grants and the harsh penalties levied against the offending parties for violating the FCA, the financial rewards available to whistleblowers are frequently in the millions of dollars. In addition to providing this financial incentive to bringing these violations to the government’s attention, the FCA also provides whistleblowers with legal protection.
The government understands that retaliation is a legitimate fear employees have when weighing whether to report wrongdoing. That’s why the FCA has specific antiretaliation rules, which protect whistleblowers from being “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment by his or her employer” because of their whistleblowing.
The FCA’s dual incentives—lucrative financial rewards and antiretaliation protections—have compelled whistleblowers in the real world. For example, as a result of these incentives a former Duke University employee was encouraged to step forward in 2017 and inform the government about how Duke submitted grant applications and progress reports containing falsified research to the NIH and US Environmental Protection Agency. As a result, Duke paid the US a fine of more than $112 million and the whistleblower received more than $33 million.
More recently, in September 2020, a whistleblower was awarded nearly $2 million for reporting how the Scripps Research Institute improperly charged NIH-funded grants for time researchers spent on other activities. Specifically, the government alleged that Scripps failed to have a system in place for its faculty to properly account for time spent on activities that cannot be charged to NIH-funded grants. Consequently, the government argued that Scripps improperly charged time spent by faculty on developing, preparing, and writing new grant applications to existing NIH-funded projects. The government also alleged that Scripps improperly charged NIH-funded projects for time spent by its faculty on other activities entirely unrelated to the funded projects, such as teaching, Scripps committee work, and other administrative tasks.
The government has also imposed sanctions on grant recipients who failed to disclose receipt of foreign government grants. NIH policy requires grant applicants to disclose all financial supports—including other research grants from foreign governments—that are available to researchers and other key research personnel in support of their research endeavors. Nondisclosures and false statements to the NIH distorts competition, disadvantages applicants who fully comply with the disclosure requirements, undermines the NIH’s decision-making on the use of the limited tax dollars that have been allocated to it, and are violations of the FCA.
Rooting out these violations and recouping the misused tax dollars involved will likely intensify as a result of the government’s continued COVID-19–related expenditures. Indeed, in March 2020, just days after Congress began pouring trillions of dollars into the economy, the Justice Department announced its dedication to fighting any COVID-19–related fraud, and said it was already prosecuting one such case of fraud. Given that billions of dollars in research grants have already been spent this year on Operation Warp Speed to accelerate the development, manufacturing, and distribution of COVID-19 therapeutics, not to mention other COVID-19–focused projects, it is very likely that the Department of Justice will continue to police these funds and recoup improperly used or fraudulently obtained government grants.
These types of cases are factually and legally complex and the decision to act (or not) in the face of illegal behavior can have tremendous impacts on a whistleblower’s career and life. The financial rewards available to whistleblowers is usually limited to the first person who reports the wrongdoing. This “first-to-file” rule means that those who decide to pursue a Qui Tam lawsuit should do so without delay.
Given the weight and complexity of these decisions, it’s prudent to consult an attorney about choosing the best course of action. Prospective whistleblowers can rely on their institution’s internal reporting systems (or ombudsman), but without consulting with an attorney familiar with the FCA, the protections and financial awards available under the FCA may be lost.
This is also a highly specialized area of law, so it’s best to find an attorney with a high degree of familiarity and experience—someone who has worked with whistleblowers before and knows how to navigate the system of government agencies and lawyers that are involved in FCA litigation. Many suitable attorneys take these cases on a contingency basis, which means clients don’t pay any fees unless they are successful.
With the need for science-based solutions greater than ever, even while science itself is undermined for political gain and subject to politically motivated attacks, the credibility and integrity of scientific research warrants special protection. Whistleblowers are on the front line of this defense and the FCA is their most powerful weapon.
Joseph Gentile is an attorney in New York. He has represented whistleblowers in several cases. The views, thoughts, and opinions expressed in this article do not constitute legal advice.