The Dept. of Justice announced Thurs. that Sprint had agreed to pay $5.6 million to settle claims that it had defrauded the General Services Administration (GSA) for 2 years as part of a govt. telecom contract. The payment resolves allegations that between 2000 and 2002 the company knowingly passed through to the govt. costs associated with access charges that were in excess of the amounts Sprint was allowed to assess under the Federal Technology Service (FTS) 2001 contract. At issue are Presubscribed Interexchange Carrier Charges (PICCs) that long distance carriers pay to local telephone companies to reimburse them for the cost of linking into the local phone network to complete calls. The allegations arose from a lawsuit filed by independent telecom specialist John Russo under the whistle-blower provisions of the False Claims Act, which allows private individuals to sue on behalf of the U.S. govt. Russo didn’t work for Sprint or the GSA, according to sources. A Sprint spokesman said the suit stemmed from a disagreement about how the PICC should have been collected and charged back. He said the settlement emphasized that Sprint acknowledged no wrongdoing in agreeing to settle. There were 2 conflicting contract provisions and Sprint followed one and the govt. said the other should have been followed, he said. DoJ said the lawsuit was unsealed Thurs. in L.A. The investigation and settlement were handled by the U.S. Attorney’s Office in L.A. and the Civil Div. of the Dept. of Justice, with assistance from GSA.
The Dept. of Justice (DoJ) announced that Northrop Grumman Space & Missions Systems would pay $111.2 million to the govt. to settle lawsuits against TRW, which Northrop Grumman acquired. TRW’s former dir. of financial control at TRW Space & Technology, Richard Bagley, filed suit on behalf of the govt. under the whistleblower law and will receive more than $27 million under terms of the settlement, the DoJ said. The suits, filed in 1994 and 1995 and later consolidated, alleged TRW had overcharged the govt. for products and services, Justice said. Five separate schemes were alleged, the DoJ said, including mischarges associated with TRW’s attempt to enter the space launch vehicle business, the testing and fabricating of a prototype satellite solar array wing and the development of a proposal for a satellite telecom program, Odyssey. Northrop Grumman said it denied any liability for violating the False Claims Act.
Legislation introduced in the Senate Wed. would restore some of the Freedom of Information Act (FOIA) changes instituted in the Homeland Security Act (HSA). Senate Judiciary Ranking Democrat Leahy (Vt.) introduced the bill he said would bring more balance to FOIA law. FOIA is considered important for cybersecurity and critical infrastructure protection since industry has said it needs FOIA protections if it’s to communicate potential weaknesses to the govt. Leahy said his proposed Restoration of FOIA bill would: (1) Clarify FOIA exemption to be more consistent with established law. (2) Remove the restrictions on the govt.’s ability to act as it sees fit in response to the information it receives. (3) Preserve whistleblower protections by removing unnecessary criminal penalties. Leahy said the FOIA exemptions in HSA were “extraordinarily broad.” His bill would limit FOIA exemption to “relevant” documents submitted by the private sector. Leahy said industry was given a “free pass” by being allowed to label information as “critical infrastructure.” The bill has Sens. Levin (D-Mich.), Jeffords (Ind.-Vt.), Lieberman (D-Conn.) and Byrd (D-W.Va.) as co-sponsors. Leahy said it used the same bipartisan language as was developed last year by the Senate Govt. Affairs Committee. The bill also is supported by the Center for Democracy & Technology, the Electronic Frontier Foundation, the Electronic Privacy Information Center, Privacy Times and the Radio/TV News Directors Assn. (RTNDA)
Key network security personnel and equipment must be retained in National Infrastructure Protection Center (NIPC) if and when unit is transferred from FBI to proposed Dept. of Homeland Security (DHS), Sen. Grassley (R-Ia.) said Mon. Senate version of DHS bill (HR-5005), which continued to be debated on Senate floor Mon. afternoon, would meld NIPC and several other federal entities into cabinet-level department, including separate divisions for critical infrastructure protection and intelligence analysis. Grassley introduced amendment late last week that would ensure FBI didn’t interfere with transition of its cybersecurity experts and related technology to DHS. If FBI isn’t specifically instructed to bring such assets to DHS, “the transfer of important institutional knowledge” to department could be thwarted, he said.
Cal. Assembly passed bill (SB-783) that would punish corporate officials who knew about financial misdeeds such as WorldCom’s financial misstatements but kept silent about them. Bill was returned to Senate for concurrence with many changes Assembly made, including turning measure into pure whistleblower act by stripping out sections that dealt with crime lab funding. As passed by Assembly, bill would make directors, executives and upper level managers with finance responsibility personally liable for fines of up to $100,000 for covering up accounting fraud. It would impose fine of up to $1 million on corporations that withheld or concealed information about financial fraud. It also would expand legal protections for employees who blew whistle on illegal financial activity or other unlawful conduct at their company by making employer or supervisor who retaliated against whistleblower personally liable for fine up to $10,000. It would require Attorney Gen. to establish whistleblower hotline for confidential tips about unlawful corporate conduct. Meanwhile, resolution introduced in Cal. Assembly (HR-92) would encourage Cal. telephone companies to give hiring preference to Cal. residents. Resolution says that in face of state’s poor economic climate and high unemployment rate, state’s telecom carriers should employ Californians in preference to employment of non-Californians.