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Now that Lance Armstrong has admitted that he doped, fans across the globe must be wondering what was he thinking?  Perhaps he surmised that breaking anti-doping rules is just a part of the game.

One thing that Lance Armstrong probably did not anticipate was a Federal statute known as the False Claims Act which encourages private citizen whistleblowers with monetary bounties when their efforts are successful. Undoubtedly, he also did not anticipate that his own teammate, Floyd Landis, would sue him under that statute as we now know because a copy of that lawsuit, filed under court seal, has leaked out.

As to whether breaking the rules of a sport is part of the game, the truth is that youth in sports leagues across the United States are actually schooled on the calculus of breaking the rules.  Young Squirt hockey players encased in equipment that makes them look like skating trolls are taught that it is OK to trip an opponent who is about to score a goal because the two-minute penalty is a reasonable cost to pay to keep a point off the board.  Pint-sized hoopsters learn that fouling an opponent is a reasonable part of a last ditch strategy to get the ball back with moments left in a close game.

Off the field of play, our youth revel in stories about professional athletes who pushed the edge of the envelope, even crossing the line, during the course of their careers. Didn’t Hall of Fame Pitcher Gaylord Perry write a book called “Me and the Spitter?”  In the 1972 hockey series where Team Canada played the Soviets, a turning point came when Canadian center Bobbie Clarke swung his stick, breaking the ankle of Soviet Star, Valarie Kharlamov.  The series turned quickly for the Canadians who eventually won it by a score of 4-3 with one tie.  Canada won the series 4-3 with one tie, and Clarke, who is actually a very nice guy, became a national hero and a member of the Hockey Hall of Fame.

Unfortunately, when our youth turn into adults and trade up their sports equipment for Neiman Marcus suits and their playing turf for corporate board rooms, they sometimes seem to have remembered the economic calculus they learned at a young age.  Will I be caught and what is the penalty?

Why not fire the worker who complains of national origin discrimination when the worst case scenario is a back pay award measured at $11 an hour?  Or why spend hundreds of thousands of dollars to make a workplace safe when most violations of the Occupational Safety and Health Act are never caught and OSHA fines rarely exceed five digits?  Or better yet, why not overstate a company’s earnings in order to inflate the stock price so executives can be paid large bonuses when the worst case scenario is that the corporation may be hit with a securities fraud class action that may be hard to prove and will be settled by the corporation anyway?  Alright, no one ever said the calculus works all the time.  Enron’s Jeffrey Skilling, who no longer has the luxury to get in a car and stop by a news stand to buy this paper, probably could tell you that.

Americans love to talk about how team sports builds character.  Perhaps for this reason our national obsession with the use of performance enhancing drugs is similarly bound up in the notion that fair play and sportsmanship is part of that character building thing.  Several baseball players, whose careers were in some ways tied to steroids, were recently denied entrance into the Hall of Fame.  Imagine placing these players in the same Hall with others who did not have such an unfair advantage.

Few noticed that at the same time, the gate to the Hall was opened for Jacob Ruppert, the one-time owner of the Yankees.  Ruppert, like other owners of his era, ran a segregated baseball team enforcing rules which actually violated federal anti-discrimination laws enacted after the Civil War. He must have correctly assumed that no one in the 1920’s would step forward and enforce, or at least successfully enforce, the Civil Rights Act of 1866.  Yet, as to the notion of a level playing field, I wonder how many home runs Babe Ruth would have hit had he faced some of the elite black pitchers of his time.

For athletes like Armstrong and the baseball players who have been tainted by charges of doping, their predicaments must be extremely frustrating.  How can breaking the rules of the game lead to so much trouble particularly where some of the corporate sponsors knew or should have known that doping may have played a role in repeated Tour De France wins or 70 home run years.  No doubt those same sponsors, which made millions off the endorsements, did the calculus they too learned as squirts.  Though they may complain now, did they really care if Armstrong was doping as long as consumers were buying Armstrong endorsed apparel?

Unfortunately, Armstrong may have broken more than just the rules of the game if he made false representations to the United States Postal Service in order to secure $30 million in funding for his Postal Service Team.  Prosecutors have no doubt combed through documents to determine whether compliance with the rules of the game, including refraining from performance-enhancing drugs, was a condition of funding.  Did Armstrong make a false representation to the government either directly or indirectly to get funding?  Did he cause a false representation to be made to get federal money?

For his part, Armstrong probably never calculated the possibility that a whistleblower could step forward and initiate a lawsuit against him in the name of the government. The False Claims Act, which was passed by Congress in 1864, is at least one law of that era that is having an impact on sports.  The Act allows individuals with knowledge of activity which causes the wrongful expenditure of government dollars the standing to file a lawsuit in the name of the government. If the suit is successful, the whistleblower, known as a relator, can actually be awarded up to 30 percent of the recovery. These types of lawsuits remain under seal while the Department of Justice conducts an investigation.  For Armstrong, the stakes are high because the law requires the return of three times actual damages to the government which means a potential $90 million price tag for Armstrong if he loses. Worse yet, these suits often trigger parallel criminal investigations for mail or wire fraud or false statements to federal agents. A previous Justice Department inquiry was dropped early last year.

Yet, at the end of the day, the big issue is what we do about the age-old calculus which has sent the message to our youth that it is OK to break the rules if the price is worth it and there is even the possibility of not being caught.  Is it enough to say, as Lance Armstrong has learned, that sometimes it is not just about breaking the rules of the game — not to mention that even teammates can be whistleblowers?

Original blog post: https://www.statesman.com/article/20130128/NEWS/301289669

Whistleblowers have bagged US federal authorities a pile of recovered cash this year – and themselves some big reward money.  But Reuben Guttman’s hero is a man who received not a penny of bounty.

Depending on how you count it, the US government recovered more than $6 billion in 2012 as a result of whistleblowers crying foul.  Enticing them to pucker up are laws paying bounties to those who report wrongdoing that cheats the government out of tax dollars, violates federal securities laws, or leads to the wrongful payment of monies that in whole or in part came from the government.

In an age of statistics and superlatives, pundits will debate who should take the title of whistleblower of the year for 2012.

Was it the person whose efforts resulted in the highest recovery ever in the US?  Or, was it those individuals who brought the cases that resulted in blockbuster settlements with global pharmaceutical companies?  Was it the person – whose name remains anonymous – who received the first Dodd-Frank bounty for reporting securities fraud to the Securities and Exchange Commission?  Or, what about that fellow who reported tax fraud and bagged a $100 million bounty from the Internal Revenue Service but was in no position to run out to the mall and blow it because he was a guest of the US Bureau of Prisons?

Radiation leaks

Regardless of who bags the unofficial title this year, I vote to recognize Pat Tucker, a soft-spoken welding inspector who lived and worked in Tennessee.  Mr. Tucker died this year; he was just 63.

Mr. Tucker worked for a contractor producing equipment for US Department of Energy nuclear weapons facilities and was in charge of inspecting welds holding joints together.  He understood that errors in his work could lead to radiation leaks.

One day Mr. Tucker arrived at work and noticed that employees were using his inspection stamp to approve welds that had not been inspected.  He reported his concerns to the department and two nuclear weapons contractors were cited for fines totaling about $100,000, the details of which are included in a government statement on October 31, 2003.

Mr. Tucker did not receive a bounty for his efforts.  He did what he did because he thought it was right.  Over the years, Mr. Tucker worked zealously to make sure that the products he inspected met specifications and he was never afraid to share concerns with government investigators.

 Moral compasses

The US bounty system is a hot topic of discussion and mystery, especially in Europe.  It surely encourages individuals to come forward and report fraud and in 2012 it is a system that has shown some success.  But not everyone who blows the whistle is motivated by a bounty.  Some people step forward because it is just the right thing to do.

When it comes time to vote for whistleblower of the year, my vote goes to the countless Pat Tuckers who are hard wired with an unwavering moral compass, and are compelled to step forward because it is the only thing they know to do when confronted with wrongdoing.

Mr. Tucker — we will remember you for your persistence, integrity, and dignity in the face of adversity.

By Reuben

Marvin Miller, the one-time Steelworkers Union economist and the man behind the modern baseball player’s union — and perhaps indirectly all North American professional athletes’ unions — died last month aged 95.

In 1966, Mr. Miller went to work as the executive director of a fledgling Major League Baseball players’ association, which, over the course of two decades, he transformed into a powerhouse of a real labour union.

Sometime ago, I was at a dinner with Dick Moss, the association’s general counsel that Martin Miller brought with him from the Steelworkers Union. He told me the story of Mr. Miller’s initial retention by the players. Out of concern for the prospect of placing the players in the hands of a traditional trade unionist, there was a discussion of offering Mr. Miller the job of executive director if he accepted as general counsel a New York-based lawyer named Richard Nixon. The two men met but Mr. Miller told the association he wanted Mr. Moss for the job. Of course, two years later, Richard Nixon secured the Republican Party’s nomination for president and the rest is history.

When Mr. Miller was campaigning for the baseball association job in 1966, he traveled to spring training venues to arrange meetings with players. Once appointed as executive director, one of his first tasks was to negotiate an agreement with Topps — the baseball card company — which paid players modest sums for the right to use their pictures. Revenue from that deal helped to fund the association.

Over the years, through a series of strikes that led to labor agreements with arbitration clauses, Mr. Miller exponentially enhanced player remuneration and benefits. And it was the arbitration clauses that lead to the undoing of the famous ‘reserve clause’, which precluded players — once their personal contracts were over — from offering their services to the highest bidder. An arbitrator’s decision — which freed players from the restraints of that clause — changed the fortunes of teams such as the New York Yankees, which were willing to bid with big dollars. Players became multi-millionaires and newspaper sport pages turned into financial reports.

A few years back when I joined the board of the Peggy Browning Fund, an organization named after a union member of the National Labor Relations Board, which held a reception honoring Marvin Miller. Many of the players that Mr. Miller had first met during his early spring training tours attended. Brooks Robinson, the great third baseman for the Baltimore Orioles, whose glove sucked baseballs with the efficiency of a vacuum cleaner, and Jim Bouton, the former Yankee pitcher who exposed the allegedly drunken and drug-fuelled exploits of fellow players in his seminal 1970 book, “Ball Four”, were among the notable.

In his speech, Mr. Miller talked about preparing for his remarks by researching Peggy Browning, who was appointed by President Clinton to the labor relations board in 1994. He said he was surprised to learn that since the passage of the National Labor Relations Act in 1935, Peggy Browning was the first trade union lawyer appointed to the board. (Of course since 1994 there have been several more, including Sara Fox, Wilma Liebman, Craig Becker, and the board’s current chairman, Mark Pearce.)

Mr. Miller opined that this was a signal that in the political sphere, labor really was not being adequately recognized as an entity to be reckoned with. And for him, the answer was that labor would not have complete political strength without there being a labor party. While strong labor parties exist in other countries, there is no strong labor party in the US.  The late Tony Mazzochi, a great labor leader with the Oil, Chemical & Atomic Workers Union, tried to start one, but his efforts fizzled after two conventions.  Both Mr. Miller and Tony Mazzochi understood the importance of organizing workers at the grassroots. In some respects, while the idea of a labour party is a grand idea, it is more of a metaphor for a need to go back to basics and generate grassroots support for collective employee action.

After President Obama was first elected in 2008, organized labor pinned its future on passage of a proposed Employee Free Choice Act, which it hoped would enable the expeditious organization of workers. But those efforts were fruitless, as the legislation died in congress. This was no surprise. The truth is that the US Congress, as it did in 1935, has historically passed legislation to curtail the power of labour, not to enhance it. Indeed, as Marvin Miller understood, workers only secure benefits — including contracts with arbitration clauses — if they are organized at the grassroots.

While American labor unions have, for some time, contemplated legislation that would enable them to organise and increase their ranks and market share, there is less talk these days of that strategy as a means of securing enhanced worker empowerment. As leaders like Marvin Miller and Tony Mazzochi understood, power comes from the floor of the workplace, or in Mr. Miller’s case, the playing field. Whether that will ever happen again in the US as it did in the spring of 1966 is another story.