Grassley Seeks Detailed Accounting of IRS Whistleblower Office Obstacles

 

WASHINGTON - Sen. Chuck Grassley of Iowa has asked the Internal Revenue Service and the Treasury Department to answer a detailed series of questions aimed at understanding why the IRS whistleblower office has been so slow in processing cases and making rewards.  Grassley expressed his "extreme disappointment in the management of the program" in a letter to the agency.

 

"The IRS does not have a problem attracting whistleblowers," Grassley said.  "The IRS has a problem processing whistleblower information and compensating whistleblowers in a timely manner.  I'm hearing frustration from whistleblowers, and my worst fears are coming true.  The lack of progress is demoralizing whistleblowers, and they might stop coming forward.  That would be a bad outcome for the taxpayers."

 

Grassley's latest inquiry was prompted in part by revelations that the director of the IRS whistleblower program was a panelist at the Offshore Alert Conference at the Ritz-Carlton in Miami Beach.  "It seems the whistleblower office director's time might be better spent reviewing hundreds of existing cases instead of attending a conference that isn't directed at potential whistleblowers," Grassley said.

 

Grassley wrote to IRS Commissioner Douglas Shulman and Treasury Secretary Timothy Geithner to seek a status update on several benchmarks that would indicate progress in the whistleblower program.  The letter is the latest step in Grassley's oversight of the whistleblower office.

 

Grassley wrote the 2006 law improving the IRS whistleblower office.  He modeled the improvements after the successful 1986 whistleblower amendments to the federal False Claims Act, which have brought back more than $30 billion to the federal treasury and deterred even more fraudulent activity.

 

The text of Grassley's latest letter is available here.

 

The text of Grassley's September 2011 letter to the IRS is available here.  The IRS' November 2011 response is available here.

 

The text of Grassley's letter to the Treasury secretary in June 2010 is available here.

 

-30-

Grassley Concerned that Fraudulent Practices May be Used to Circumvent Protections of H-1B Visa

WASHINGTON - Senator Chuck Grassley is pressing the U.S. Departments of State and Homeland Security to look into possible improper use of B-1 visas by certain companies looking to import cheaper foreign labor.

In a letter to Department of State Secretary Hillary Clinton and Department of Homeland Security Secretary Janet Napolitano, Grassley cited a Seattle Times story that outlined questionable practices by The Boeing Company in using the B-1 visa instead of the H-1B visa to bring in workers from Moscow.  The story said that officials from U.S. Customs and Border Protection interviewed several arriving individuals and found that their stories about what they would do in the country did not correspond with the terms of their visas.  The Customs and Border Protection agents turned away these workers, but it has been reported that despite Boeing not changing its practices an additional 250 Russian contract engineers have entered the United States to work with the company.

In his letter, Grassley reiterated his concern that the "B-1 in Lieu of H-1B" program was being abused to bring in foreign workers without the protections of the H-1B visa program.  Grassley first raised questions about the program to Clinton and Napolitano on April 14, 2011.  The State Department indicated it was working with Homeland Security to "consider removing or substantially amending" the Foreign Affairs Manual.  The Department of Homeland Security suggested it would work to "develop guidance clarifying the scope of activities permissible in the B-1 business visitor classification."  At this time, nothing official has been done to remedy the situation.

Here's a copy of the text of Grassley's letter.  A signed copy can be found here.

 

April 30, 2012

The Honorable Hillary Rodham Clinton

Secretary

U.S. Department of State

2201 C Street NW

Washington, D.C. 20520

 

The Honorable Janet Napolitano

Secretary

U.S. Department of Homeland Security

245 Murray Lane, Mailstop 0150

Washington, D.C. 20528-0150

 

Dear Secretary Clinton and Secretary Napolitano:

I write again to express my concerns about the B-1 visa program, particularly the so-called "B-1 in lieu of H-1B" policy, and seek your cooperation to determine if some companies are abusing this avenue to bring in cheaper foreign labor.

Last April, I wrote to both of you about the "B-1 in lieu of H-1B" policy, and asked that the policy, which is included in the State Department Foreign Affairs Manual but omitted in Homeland Security guidance, be reconsidered.  To date, nothing on this issue has been done, despite a fairly positive response from the State Department that they were working on "removing or substantially amending the FAM."

I remain concerned about fraudulent actions that some companies may be taking in order to get around the requirements and U.S. worker protections of the H-1B visa program.  While my previous letter on this issue focused on a lawsuit pending against Infosys, it has come to my attention that The Boeing Company ("Boeing") may have employed similar tactics to bring in foreign workers.

According to a report in the Seattle Times, 18 Russian engineers arrived in Seattle on October 14, 2011, with B-1 visas.  Officials from U.S. Customs and Border Protection (CBP) interviewed the arriving individuals and found that their stories about what they would do in the country did not correspond with the terms of their visas.  Records provided by the Seattle Times to my office reveal the following notes between the foreign nationals and CBP officials (who took statements under oath in a sworn affidavit):

·         One individual admitted that, prior to her trip, she was told by her company (Nik, Ltd.) that she would perform the same work in the United States as she did in Russia.  This person admitted that she would be working alongside Boeing employees.  She also said she was instructed by her company not to state that she would be working in the United States.

·         One individual stated that he was invited by Boeing and presented an invitation letter to attend training, but admitted that it "was not the whole truth."

·         Several individuals admitted that they intended to work at Boeing five days a week, eight hours a day.

·         One individual stated that the letter he presented to the U.S. Consulate in Moscow was not entirely correct in its context, and that he would be working, not training.  When asked by the CBP officer if an American could perform the work, he stated that "Boeing needs to hire one" and that "it was his belief that it was cheaper to hire Russian engineers."

·         One individual told officers that he would not do any hands-on work at the Boeing plant in Everett, Washington, but later, under oath, he admitted that he would.

It was apparent to CBP officers that these foreign nationals were not traveling to the United States to receive or provide training; attend a conference, meeting or trade show; be a speaker, lecturer, or researcher; or perform sales or sign contracts; which are the types of activities appropriate for a B-1 visa.  It's my understanding that all 18 B-1 visa holders were turned away on October 14, 2011.  In light of the report and the CBP documentation, I was dismayed to read earlier this month a follow-up story in the Seattle Times stating that Boeing has not changed its practices, and that about 250 additional Russian contract engineers have entered the country to work with Boeing.

Given these reports and my ongoing concern about this issue, I ask for your help in answering the following questions about Boeing and the use of B-1 visas:

1.      How many B-1 visas has Boeing petitioned for in the last five years?  How many have been approved and how many denied?

2.      How many B-1 visa holders, other than those encountered by CBP on October 14, have been turned away at a port of entry in the last five years?

3.      What other previous trips had each of the 18 workers (from October 14, 2011) made to the United States?  Under what visa classification and for how long were their previous stays in the United States?

4.      How often, if at all, does the Department of Homeland Security conduct site visits of companies that regularly receive B-1 visitors?  Has or will the Department of Homeland Security conduct an on-site review or I-9 audit of Boeing?  If not, why not?

5.      In light of the recent reports about certain companies using B-1 visas to circumvent other employment visa programs, are CBP officers receiving updated guidance on how to handle B-1 visa entries?  Are consular officers receiving guidance or training to detect fraud by B-1 visa applicants?

It's my hope that your Departments will provide as much information to my office as possible about this matter, including any other relevant information not requested in this letter.  In doing so, we can work together to ensure that companies are abiding by the law and not ignoring American workers at home who may be able to do these high skilled jobs.

I look forward to hearing from you.

Sincerely,

Charles E. Grassley

United States Senator

Sen. Chuck Grassley of Iowa today made the following statement on his inquiry of the Federal Communications Commission's handling of the LightSquared wireless project.  Today is the one-year anniversary of Grassley's first letter to the agency on its decision-making regarding the project.

"Exactly one year ago today, I wrote my first letter to the FCC on LightSquared.  At that time, headlines were describing interference concerns between LightSquared and Global Positioning System devices.  LightSquared's primary backer was in the news over having attracted the Securities and Exchange Commission's attention.  I wondered why the FCC had given expedited preliminary approval to a project led by someone under SEC investigation and with seemingly serious interference concerns.  I began seeking the FCC's insight into its decision-making on this project.  The agency turned out to be among the least responsive I've ever come across in 30 years of conducting constitutional oversight of the executive branch of government.  The commission suggested my staff go through the Freedom of Information Act and said it would take two years to get a response.  The commissioner told me the commission responds only to the chairmen of the two House and Senate committees of jurisdiction.  In effect, that leaves 99.6 percent of Congress out of luck if we have questions about the agency's decision-making.

"As I began my investigation, facts came to light that raised more questions about the FCC's actions.  E-mails showed that LightSquared's CEO sought meetings with the White House while mentioning attendance at fundraisers for President Obama.  Then, news reports showed the White House pressured a four-star general to downplay the threat LightSquared posed to GPS.

"I continued to seek the information on the general principle that the public's business ought to be public.  The FCC continued to stonewall, so I placed a hold on two FCC commissioner nominees in an effort to get the information I requested.  Still, the agency stonewalled.

"House Energy and Commerce Committee Republicans made a comprehensive document request of the FCC on LightSquared and are giving me access to the documents as the agency provides them.  I appreciate the access.

"At first, the documents were evasively superficial.  The submissions contained thousands of pages of already public information, including news clips.  The FCC played games to inflate its page count, which is not the mark of a responsive agency.  Gradually, the document submissions began to include some substantive information.

"So far, the documents I have seen begin to give some answers about why the FCC gave such fast preliminary approval to LightSquared.  The documents show that rather than being an objective arbiter, the commission appeared to be enthusiastic about the LightSquared project and wanted to see it materialize.  The prospect of a new broadband provider that could challenge current providers was appealing to the FCC, according to the documents.  It's impossible to draw a complete picture of the FCC's considerations in green-lighting LightSquared because the documents available so far do not offer a comprehensive view.  However, it appears the FCC wanted LightSquared to succeed.

"It may be that the FCC was so intrigued by the prospect of a new broadband provider that it overlooked technical concerns or the financial implications if the project's chief investor were to undergo SEC sanctions.  I can't say for sure because I don't have enough information to make a determination.

"However, the documents raise an important question.  Is the FCC a neutral arbiter weighing all public interests in each case, or is it a cheerleader for favored projects?  If it is a cheerleader, which is inappropriate, why was such an obviously flawed project selected?

"The documents I've seen so far raise more questions than I had before.  However, since there is now a process in place to obtain all of the relevant documents from the FCC, I intend to lift my hold on the two FCC nominees.  But my inquiry is not over.  I'm told there are 11,000 more pages of documents from the FCC on LightSquared that will be forthcoming to the House Energy and Commerce Committee.  I look forward to receiving access to those documents.

"The public deserves definitive answers on why the FCC handled LightSquared the way it did.  Ultimately, the agency decided the GPS interference concerns were too great and withdrew LightSquared's waiver.  LightSquared's primary investor continues to receive intense scrutiny from the SEC.  Now, LightSquared might sue the government.  Investment is lost, and future investors might be reluctant to approach the FCC with projects.

"The FCC badly mishandled LightSquared.  Finding out exactly what went wrong is key toward preventing future debacles.  I hope the pending nominees, and the rest of the commission, will use the LightSquared situation as a case study in what not to do.

"The FCC controls a valuable public resource in the spectrum.  Its decisions affect consumers, companies, and jobs.  It should be fair, neutral, and above all, transparent.  Transparency brings accountability, which the FCC desperately needs."

Thursday, April 26, 202

Senator Chuck Grassley, a member of the Senate Agriculture Committee, made the following statement after the committee passed "The Agriculture Reform, Food, and Jobs Act of 2012."  Grassley is one of the only working family farmers in the United States Senate.  Grassley voted for the bill.

The Chairwoman's legislation that was debated in the Agriculture Committee contained the most important parts of Grassley's efforts to limit farm program payments to small- and mid-size farmers.  The legislation that cleared the committee will limit farm payments under the proposed new commodity program to $50,000 for individuals and $100,000 for married couples.  The bill also includes a provision to begin closing the loopholes that allow people who aren't involved in farming to collect farm payments.  The provision prevents non-farmers from being able to use the management loophole in current law.  A person who doesn't provide labor for the farming operation will still be able to qualify for farm payments by helping manage the farm.  However, there can only be one individual per farming operation qualifying for payments based solely on their providing management.  This provision will help the Department of Agriculture crack down on the general partnerships that have multiple non-farmers trying to qualify for farm payments by exploiting the management loophole.  This will end some of the most egregious abuses of the farm program.

"Today, progress was made in one of the most important areas needed for reform in the farm programs.  I've been pushing to limit farm program payments to those who need it most for many years.  The farm program was never meant to give 10 percent of the farmers 70 percent of the benefits.  We needed a fix that keeps the farm program focused on helping small- and medium-sized farmers get through the ups and downs of farming, all while understanding the fiscal situation the country is in.  This bill takes a meaningful step in the right direction.  There are still areas of improvement that I'll be pushing for, but I appreciate Senator Stabenow and Senator Roberts including this important reform in the bill."