ACLU: 'Secret courts' conceal fraud by military contractors
Muriel Kane
Published: Thursday January 15, 2009

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A law originally intended to encourage whistleblowers may have been used by the Bush Justice Department to cover up allegations of fraud by contractors such as Halliburton spin-off KBR.

In 2007, David Rose's "The People vs. the Profiteers" described a "scandal of epic proportions" involving the alleged suppression of dozens of lawsuits against KBR for alleged massive fraud in Iraq.

Those and similar charges are the basis for a complaint (pdf) filed on Thursday by the American Civil Liberties Union and the ACLU of Virginia, which alleges that secrecy provisions added to the False Claims Act (FCA) in 1986 have been used to keep complaints under seal indefinitely and gag whistleblowers who might otherwise speak out.

"Secret courts and secret proceedings have no place in this country," stated ACLU attorney Chris Hansen. "There are plenty of procedures Congress or the courts could adopt to preserve the interest of privacy when it is warranted without enlisting the courts in a blanket scheme that automatically gags people who have information about possible abuse of taxpayer dollars."

The complaint seeks a ruling that the secrecy provisions violate both the public's First Amendment rights and the inherent power of the courts to determine proceedings on a case-by-case basis.

Under the 1986 provisions, FCA complaints are automatically filed under seal until the Justice Department decides whether to pursue them, which can take anything from 60 days to several years. This practice was adopted in order to avoid tipping off defendants who might already be under criminal investigation, but is mandatory even when there is no such need for secrecy.

Meanwhile, the whistleblower who filed the claim is also under a gag order and prohibited from speaking out, leaving the public with no way of knowing that a case has even been filed. There were about a thousand FCA cases under seal as of 2007, and some cases have been sealed for as long as nine years.

FCA gag orders may have also been used to cover up cases involving public safety. "There are circumstances where a confidentiality seal is essential, but Justice has used it as a blanket gag order under threat of criminal prosecution to lock in secrecy sometimes for years," explained Tom Devine of the Government Accountability Project.

"That is defensible for cases solely concerned with financial recovery," Devine continued, "but disastrous when a whistleblower challenges fraud that threatens health and safety, such as toxic dumping. As a result, we must warn those whistleblowers that by filing a False Claims Act lawsuit, they may seal a cover up until it is too late to protect the public."