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Whistleblower alleges Booz Allen was overcharging U.S. taxpayers for losses
- djohnston 3y agonice work devil dog :)
- spamizbad 3y ago> Because she discovered the alleged fraud and filed a complaint under the Civil War-era False Claims Act, Feinberg and her lawyers received an eye-popping $69 million from the settlement. Her share — around $40 million before taxes, hit her family bank account last week, said Feinberg, 39. This is so awesome. Good work and well deserved!
- deleted 3y ago[deleted]
- vwcx 3y agoAgreed. It's a phenomenal incentive to help pressure adherence to law. Now if we could just get this applied to issues of political insider trading and conflicts of interest!
- stuff4ben 3y agoMaybe I've seen too many movies, but I'd be worried about retaliation if I were her. But then again maybe $300 million is chump change to Booz.
- dylan604 3y agoFrom the TFA: "that holds annual contracts valued at $6.5 billion with nearly every U.S. government agency." 4.6%, maybe not a rounding error, but definitely cost of doing business area
- briffle 3y ago> Booz Allen last month admitted no wrongdoing while paying a $377 million settlement I wish I could get away with that, but i'm middle class.
- skyyler 3y agoI hear that term a lot, but what does "middle class" mean to you? When you say you are "middle" what do you mean?
- rescripting 3y agoIt means that paying a settlement of hundreds of thousands to millions of dollars to make legal troubles disappear is out of reach.
- skyyler 3y agoThat's true of whatever class is lesser than the middle class, as well. I was just curious what separates the "middle" from the "bottom".
- dylan604 3y agoyou gotta be in the upper middle at least to even come close to racking up $377 million of anything, right?
- skyyler 3y agoSure. But what separates the middle from the lower?
- JumpCrisscross 3y ago> what separates the middle from the lower Property. Historically, this meant land. Today, it means assets. Savings of any kind. The poor live pay check to pay check; the middle class could survive a bad harvest.
- datavirtue 3y agoNo amount is too much to shield the management class from their consequences. It didn't put one dent in the managers finances to pay that out. Plus they don't have to go to prison. It reads like your typical story where a Kennedy family member kills some girl and gets away with it (one of them went to prison once until the supreme court overturned the conviction).
- toyg 3y agoThe difference is that one (the post's) is systemic, "by design"; the other is episodic.
- vlovich123 3y agoHer share for blowing the whistle is $40M. I think she’s set for life unless your implying retaliation in the form of harassment.
- krisoft 3y ago> unless your implying retaliation in the form of harassment I think they implied retaliation in the form of assassination.
- johndhi 3y agolol... if they retaliate against her she gets to file another case and win even more money. I'm not sure what to make of the assassination intimation; I mean... so far as I know there's no history of corporate whistleblowers being killed or having their lives threatened physically. Government whistleblowers, of course, is a different story.
- deleted 3y ago[deleted]
- 0cf8612b2e1e 3y agoThere is a long history of intimidating people who dare speak out against corporations. Maybe not overt threats, but hard to know what is real when you are in the hot seat. Are they just stalking you or are things going to get worse? If you are Jeffrey Wigand and some goons steal your computer, what do you do?
- johndhi 3y agoand for this reason, there are extremely harsh laws against whistleblower retaliation.
- empath-nirvana 3y agoI'm just trying to picture anyone at Booz Allen trying to get a hit squad together, lol. It'd be like a bunch of 20 year old kids out of a two-week American Ninja Warrior bootcamp.
- nova22033 3y agoMaybe I've seen too many movies, but I'd be worried about retaliation if I were her. She's worked at BAH. I'm sure she's not worried about them sending a hit squad to take her out....but only because she knows that if they did, the mission would turn into a 200 person engagement that would end up overbudget and overdue..and the end result would be one mean comment on her facebook page.
- oxfordmale 3y agoLesson learnt....bla bla...selected scape goats disciplined. We promise we won't get caught doing this again....
- dylan604 3y ago"Touting itself as one of “the world’s most ethical companies,” Booz Allen..." Isn't Booz Allen the same place another infamous whistleblower worked for? Not really sure how ethical this place can really be
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- philipwhiuk 3y agoIn fairness they've had a good culture of whistleblowing.
- dylan604 3y agookay, that made me smile. i'd love to see that on a slide in a pitch deck
- ketzo 3y agoThe SEC rewards whistleblowers very handsomely — you could call it part of total compensation!
- dylan604 3y agoWhere was the SEC's payment to Edward?
- scrum-treats 3y ago.... The ones it likes.
- dogman144 3y agoThat is one way to refer to Snowden lol
- jonhohle 3y agoThat quote gets even more oxymoronic if you continue: > … Booz Allen has counted former senior U.S. intelligence officials among its corporate officers.
- cm2187 3y ago> Feinberg and her lawyers received an eye-popping $69 million from the settlement. Her share — around $40 million before taxes, hit her family bank account last week, said Feinberg, 39. “I’ve got three kids, and I tell them, ‘Doing the right thing is the right thing, no matter what the outcome is,’” said Feinberg As JP Morgan said, a man always has two reasons to do something, a good reason, and the real reason.
- deleted 3y ago[deleted]
- jstarfish 3y agoI like that quote but JP Morgan may well have been projecting his own motivations onto others. You don't get to be JP Morgan without engaging in some amount of duplicity. There is big money in whistleblowing, if your claim makes it through the gauntlet-- otherwise it's just a career-ending humiliation. It's a lot of risk for a mother of three to assume; I'm sure she expected something (the DoD posters in the breakroom suggest as much) but I doubt she knew what the eventual payout would be from the start.
- feoren 3y agoAs Jeffrey Dahmer (probably) once said: we all sure do love eating other humans. Amiright guys? Guys? We all want to do that, right? Guys?
- Whinner 3y ago"Alleges"? That's not the title of the article. They were caught and agreed to pay a fine. Although they were able to not admit any wrongdoing.
- dylan604 3y agoIf there's no admission of guilt, there's always plausible deniability. That's why that part of these agreements are so important to those allegedly doing something. People settle out of court all of the time when they realize that the settlement paid out will be much cheaper than paying attorneys to fight and possibly win a court case. It also gets it out of the news cycle much faster as a one time story vs possible weeks to months of trials. "Look, we're not saying we did anything wrong here, but after crunching the numbers, it'll be cheaper for us to settle than to fight to prove we did nothing wrong" sounds like good business. Only an evangelist would sacrifice money to prove a point. Not defending Booz Brothers at all, but alleging is all that happened
- saalweachter 3y agoI wonder how a settlement affects internal accountability. If this went to trial and it were proven that the company did XYZ, or even individuals in the company did X, Y, Z, presumably the company would in turn fire/discipline the employees (nominally) responsible for doing X, Y and Z. Now, someone at the company probably knows if someone did X, Y, Z, even if there was no admission of wrongdoing. Do these employees still get disciplined, or does this mean the company doesn't acknowledge it happened internally (if it did), or do the employees get bonuses if doing XYZ netted more money than the settlement cost?
- dylan604 3y agoJust look at Wall St and the ramifications of 2008 when you starting thinking in terms of your post. How many people/companies were held accountable?
- deleted 3y ago[deleted]
- onewheeltom 3y agoEffing crooks at Booz Allen
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- FirmwareBurner 3y agoFirst time you're seeing evidence of coporate-taxpayer corruption? Buddy I got news for you and you're not gonna like it.
- CyberDildonics 3y agoFirst time you're seeing evidence of coporate-taxpayer corruption? Where did they say that?
- FirmwareBurner 3y agoIt was a joke
- deleted 3y ago[deleted]
- whatisfraud 3y ago>“I discovered that our commercial and international practices were very unprofitable,” she said. “And in order to keep the company profitable, they were passing those costs onto the U.S. government contracts.” >At that moment, Feinberg told NBC News, “I realized that this was a very intentional setup. And it wasn’t just that there was the potential to overcharge the government; the rates were built to overcharge the government. If we should have been charging $100 to the government for an hour of work, we were charging $120 for that hour of work, so that that $20 could go to subsidize the international business.” How is this fraud? In that line of work, it’s common to not charge customers the same price. Each contract is individually negotiated. And work for the US government is not necessarily even comparable to work for another entity. US government contracts are notoriously complex and fraught with red tape and legal risks. Without knowing more, I’m kind of sympathetic to Booz Allen here. Settlement doesn’t mean admission of guilt. It just means they thought there was a risk of losing + risk of reputational loss + cost of litigation that it was worth paying $377 million to avoid.
- deleted 3y ago[deleted]
- matthewmcg 3y agoThe DOJ statement has more detail on the fraud: >Under government contracting rules, there must be a nexus between the costs charged to a government contract and the objective of the contract. Thus, a contractor may charge to a government contract costs directly related to that contract, as well as indirect costs that benefit multiple contracts including the government contract. A contractor may not charge costs to a government contract, however, that have no relationship to that contract. This prohibition prevents government contractors from using taxpayer funds to subsidize non-government related work.
- whatisfraud 3y agoIf I charge more from client A than client B, I’m not necessarily subsidizing B with A. My price for doing the same work for the government is higher than the same work for a private party. It literally costs more and has higher risk. This honestly feels like this lady went digging around looking for things that would be arguable under vague accounting standards.
- charles_f 3y ago> she believes the firm overcharged taxpayers by at least $500 million > Booz Allen last month admitted no wrongdoing while paying a $377 million settlement Sounds like a cool way to wash $123M of theft. I wish I could steal stuff, give back 2/3 of that, and walk away Scott free. Also we're missing half of the story there, because there's no way they sent $Bs worth of invoice with overpriced rates without at least an accountant noticing, and being shutoff by some chain of command.
- deleted 3y ago[deleted]
- gilleain 3y ago> Scott free It is 'scot-free' apparently, and interestingly has nothing to do with the Scottish, it seems: > Etymology From Middle English scotfre, from Old English scotfrēo (“scot-free; exempt from royal tax or imposts”), equivalent to scot (“payment; contribution; fine”) + -free.[1] https://en.wiktionary.org/wiki/scot-free https://en.wiktionary.org/wiki/scot-free
- charles_f 3y agoThanks, I actually wondered if that were the right spelling, so I stand corrected!
- thakoppno 3y ago> has nothing to do with the Scottish, it seems Unlicensed Internet detective here, this suggests scot descends from scratch and Macbeth. https://www.theguardian.com/notesandqueries/query/0,5753,-2732,00.html https://www.theguardian.com/notesandqueries/query/0,5753,-27...
- gruez 3y ago>Sounds like a cool way to wash $123M of theft. I wish I could steal stuff, give back 2/3 of that, and walk away Scott free. Settlements are often used when the case is complex and both parties aren't sure of the outcome. Rather than spend millions in legal fees fighting it out, they meet in the middle and settle for the expected value of the lawsuit. A toy example would be if the plaintiff thought the defendant owed them $100M worth of damages, but also thinks there's also a 50% chance of winning. Rather than spending millions on legal bills and possibly winning, they settle for $50M, which is better for everyone involved. Yes, it's not satisfying to think "bad guy got away with it and only paid 50%", but keep in mind that victory isn't assured, and it's very possible that the outcome if it went to trial was "bad guy got away with it and paid 0%". The reason why this doesn't happen with thefts is that they're simple cases that don't require drawn out legal battles. A far better example that people would understand are car accidents. Someone rear-ends you and causes $10k worth of damage. The other driver therefore owes you $10k, right? But no, the other person alleges that you cut him off, and therefore you're partially at fault. Rather than battling it out in court racking up billable hours @ >$200/hr for both sides, you (or your insurance) meet in the middle and settle for $5k. Yet, nobody would characterize this as "Sounds like a cool way to wash $10k of damage. I wish I could wreck stuff, give back 1/2 of that, and walk away Scott free.".
- low_key 3y agoThey shouldn't be allowed to settle without admission of wrongdoing. This should affect them getting future contracts, but now it won't.
- not_your_vase 3y agoWith having $6.5B/year contract with the government only, possibly they can litigate longer than the government. Unfortunately.
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- vlovich123 3y ago> Justice Department officials disagree, saying they got the best settlement they could. They noted in a statement to NBC News that Feinberg signed off on it, agreeing in writing that it was “fair, adequate and reasonable.” Well sure, when there’s 40M (her share of the 300M fine paid) on the line, there’s a lot of incentive to sign and be done with things.
- deleted 3y ago[deleted]
- 93po 3y agoLaughed out loud at the use of "adequate" there
- paganel 3y agoI’m reading a book on Soviet vs US relations that was mentioning this exact thing, meaning defense contractors/companies over-charging the US Government. The book was written at the end of the ‘80s and was presenting facts that had been happening just before that, meaning the early to mid-‘80s, so it looks like nothing much has changed since then. Maybe the powers that be should really think about nationalizing this type of companies, if you’re getting the great majority of the your revenues from the Government that looks like a better way to keep things under more direct control.
- empath-nirvana 3y agoAs someone who worked in government contracting _everyone_ knows this game, and the people on the government side of the contract aren't stupid. This kind of fraud is on literally every cost-plus contract. There's a revolving door between government work and contract work, where government employees overseeing a contract will go to work for the contractor they were supposed to be overseeing for a large bonus and for doing very little work.
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- AStellersSeaCow 3y agoI chuckled at the implication that BAH's work has any value to begin with.
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- jesuspiece 3y agoBooz Allen and Whistleblowers: name a better combo
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- rolandog 3y agoOooh, that's the type of patriotism that should be promoted!
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- misiti3780 3y ago"After a yearslong investigation, Booz Allen last month admitted no wrongdoing while paying a $377 million settlement, what DOJ officials said was the third largest contract fraud settlement in history." We will continue to witness this scenario in the USA as long as deferred prosecution agreements remain in place. Observe how no individuals face jail time; instead, substantial fines are levied, and business continues as usual. The company benefits, often reflected in a rise in stock price, while prosecutors add another accomplishment to their résumés. Contemplating an extreme measure, if such infractions were punishable by the death penalty, one wonders how many top-tier executives would risk such behavior.
- perfectritone 3y agoWhat reason did they have for continuing unprofitable work? I can see waiting out a contract, but after continuously having to offset costs you'd think someone would suggest simply sticking with governmental contracts.
- londons_explore 3y agoI suspect some contracts were probably done as favours to the US government.
- alfalfasprout 3y agoAlmost certainly some people were getting kickbacks for the work. With stuff like this it's rare there's not abundant personal incentives for those involved to continue the fraud.
- recursivecaveat 3y agoIt's unclear to me from the article, but if the unprofitable work was required in order to generate costs that could plausibly be attributed to a cost+ contract, then they could still be coming out ahead. Another reason might be just empire building. Better to be in charge of a big pie with good profit than small pie with great profit.
- rvba 3y ago> admitted no wrongdoing while paying a $377 million settlement It is a joke on "justice" that this is legal.