NEWS24 August 2012
NEWS24 August 2012
US— A former director of the Gallup Organisation has filed a lawsuit against the firm, alleging that it defrauded the US government and sacked him when he threatened to report the matter to the Justice Department.
Michael Lindley, who served as director of client services at Gallup between 2008 and 2009, alleges that the firm submitted “exaggerated cost estimates” for research projects carried out on behalf of a number of government agencies while directing him to enter lower, more accurate figures into the firm’s internal management system.
Lindley accuses Gallup of sometimes more than doubling the estimated number of hours needed to complete a research project. He said that Gallup operates a pay-for-performance scheme that awards staff bonuses based on the “gross margin” of projects. According to Lindley, staff got higher bonuses when the contract prices were inflated but the actual costs were lower.
It is claimed that when Lindley noticed that some executives were engaged in the alleged practice, he reported the matter to the managing partner of Gallup’s Government Contracts Division, who dismissed his concerns and told him that “he did not understand government contracting”.
According to Lindley’s suit, when he told Gallup that he would report the firm unless the “misconduct” stopped, chief counsel Steve O’Brien “immediately” fired him and said: “When you start talking about going to the Department of Justice, I don’t trust you.”
The Justice Department has decided to intervene in the claims made against Gallup’s contracts with the US Mint and State Department, but declined to intervene in Lindley’s other allegations. The case was filed in 2009 and kept “under seal” until now.
Stuart Delery, acting assistant attorney general for the Justice Department’s civil division, said: “Contractors must understand that it is unlawful to use inflated estimates to obtain higher contract prices. The decision to join this civil lawsuit underscores the commitment of the Department of Justice to recover federal funds that are unlawfully claimed.”
Gallup has yet to respond to Research’s request for comment, however Gallup’s chief council Steve O’Brien told the Associated Press: “We believe that the allegations and the legal theory that the Justice Department is using are entirely meritless”. He branded Lindley’s allegations as “a total and complete fabrication”.
Gallup sent the following statement late on Friday:
“Gallup believes that the claims filed by the US Department of Justice are wholly without merit. We intend to fight these baseless charges vigorously and look forward to resolving the matter in court.”