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Bay Area Whistleblower Denied Penalty Reward

by Shane Bond, published
Photo: Kim Komenich

Last week, a shipboard engineer who called out a container vessel that was dumping oil into the San Francisco Bay was ruled against by the federal magistrate regarding collecting a share of the ship owner’s $1.5 million penalty. The Bay Area whistleblower had alerted the Coast Guard to the illegal activity.

According to federal law, a judge can award as much as 50 percent of the violator’s penalty to a whistleblower. The captain of the ship in question was found guilty of two felonies, including falsifying records concerning the dumping of the waste; he was not, however, charged with the dumping itself. Due to this discrepancy in the charge, the engineer, Patrick Anderson, was unable to collect his share of the penalties.

Furthermore, the state of the law does not authorize private citizens to sue the government for “failing to provide a hearing or other procedures that might lead to compensation.” A whistleblower is protected against retaliation because of his or her free speech as mandated by the Constitution, allowing the individual to then report on corruption or crime in a workplace. They are also able to collect reward on penalties enacted against the guilty party, but Anderson has been unable to do so.

This isn’t the first time a whistleblower was refused his or her payment regardless of the whistleblower’s laws statues. In 2007 the IRS at first refused to pay a former bank executive, Joeseph A. Insignia, who whistle blew on Rabobank Group after they helped seven other companies avoid paying hundreds of millions of dollars in taxes through offshore partnerships. Insignia filed the claim just a year after Congress passed a law to encourage informants to whistle blow on tax cheats. The IRS has been known to be resistant to the new Congressional whistleblower law in rewarding tipsters.

In similar fashion, Anderson’s lawyer’s had sued for Anderson’s fair share and will continue to seek the reward by refilling the claim with the U.S. District Judge, Richard Seeborg, who recently said he was unaware of Anderson’s role when he imposed the fine on the ship’s captain.

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