Federal inspector urges nonprofit to eliminate its 'gag provisions'

WASHINGTON — A federal inspector general said Thursday that more than half of the separation agreements signed by departing employees of a nonprofit that received hundreds of millions of tax dollars to work in Iraq and Afghanistan contain provisions that violate whistleblower-protection laws.

In a letter delivered to International Relief and Development, the special inspector general for Afghanistan reconstruction said the agreements contain "unacceptable gag provisions" and asked that they be declared "null and void."

"I remain concerned that IRD is acting improperly to limit the rights of potential whistleblowers to report instances of waste, fraud, and abuse," Special Inspector General John Sopko wrote.

Sopko told IRD — one of the largest grant recipients among nonprofits funded by the U.S. Agency for International Development — to "take immediate steps to comply with federal laws and policies protecting whistleblowers." Those steps include notifying the former employees of their rights under whistleblower protection laws and informing them that they can cooperate with government officials.

IRD, based in Arlington, Virginia, said it is engaging with the special inspector general's office to resolve the issue.

"Compliance and transparency are integral attributes at IRD," Kris Manos, interim chief executive of the nonprofit, said in a statement. "We have taken several steps to enhance and communicate our compliance with whistleblower and related protections. We've made changes and continue to evaluate our processes and culture as we address these issues."

The separation agreements came to light in May when The Washington Post published an examination of IRD and its operations. Most of IRD's funding — 82 percent of $2.4 billion since 2007 — was provided by USAID to run relief and development projects in the war zones. The Washington Post found that numerous IRD executives received substantial salaries and bonuses and that several of its key projects were sharply criticized by federal auditors and former employees.

The separation agreements warned employees that they could face legal action if they made disparaging remarks about IRD, including comments to "funding agencies" or "officials of any government." Whistleblower lawyers said those agreements violate provisions of the federal False Claims Act and other laws designed to protect whistleblowers who want to report abuse and fraud.

At first, IRD officials said the agreements did not violate the law because the employees were not prevented from cooperating with investigators. But after consulting with several outside lawyers, IRD reversed itself. The company announced that it was changing the agreements "to ensure that our policies conform to the latest developments in employment law."

Sopko said his office reviewed 81 agreements signed by IRD employees since 2004 and found that 48 of them contained "unacceptable gag provisions." He had previously asked IRD to inform its employees that those provisions were in violation of the law, but he said in the letter delivered Thursday that those notifications were insufficient.

He said that the emails sent to former IRD employees failed to inform them of their rights under the False Claims Act and that they did not mention that whistleblower protections hade been expanded under U.S. laws covering public contracts. Moreover, he said, IRD neglected to tell the former employees that they could contact government investigators about fraud allegations before the initiation of a formal investigation.

"Given IRD's persistent resistance to notifying its former employees of their rights as potential whistleblowers, I request that IRD send a letter to the 48 former employees it compelled to sign separation agreements with gag provisions and inform them of their rights," Sopko wrote.

He also directed IRD to disclose copies of documents relating to its code of business ethics and conduct and to produce the results of an internal review of whether IRD had ever enforced the confidentiality provisions of its separation agreements.

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