The Gallup Organization will pay $10.5 million to settle allegations that it violated the False Claims Act and the Procurement Integrity Act for conduct involving several of its federal government contracts and subcontracts.
Gallup is a polling and market research firm headquartered in Washington, D.C.
Gallup was represented by Robert Rhoad of Crowell & Moring in Washington, D.C.
The whistleblower was represented by Vogel Slade & Goldstein in Washington, D.C.
The settlement resolves allegations in a complaint filed by the United States in November 2012.
Federal officials alleged that Gallup knowingly overstated its true estimated labor hours in proposals to the U.S. Mint and State Department for contracts and task orders that were to be awarded without competition.
Because of Gallup’s conduct, the two federal agencies awarded Gallup contracts and task orders at falsely inflated prices.
The settlement also resolves allegations that Gallup engaged in improper employment negotiations with a then Federal Emergency Management Agency (FEMA) official, Timothy Cannon, in order to obtain a FEMA subcontract at an inflated price and additional FEMA funding after the subcontract had been awarded.
In April 2013, Cannon agreed to pay $40,000 to the United States to resolve allegations that he violated the Procurement Integrity Act by improperly negotiating for and accepting an offer of employment from Gallup while being personally and substantially involved in Gallup’s subcontract with FEMA.
In related criminal proceedings, on January 15, 2013, Cannon pled guilty to a violation of 18 U.S.C. § 208, a federal conflict of interest statute, and was subsequently sentenced to probation.
“This case exposed a cozy arrangement between a contractor and a government employee where nobody was looking out for the American taxpayer,” said Ronald C. Machen Jr., U.S. Attorney for the District of Columbia. “With this settlement, we have held the contractor accountable for overbilling the government and returned $10.5 million to the federal treasury. This significant corporate settlement and the related criminal prosecution should send a clear message that contractors and government officials alike must operate with honor and integrity.”
The False Claims Act allegations against Gallup were originally brought in a lawsuit filed under the whistleblower provisions of the Act by Michael Lindley, Gallup’s former Director of Client Services.
As a result of the settlement with Gallup, Lindley will receive $1,929,363 as his share of the government’s recovery.
In contemplation of resolving the criminal and civil investigations, Gallup recently entered into an Administrative Agreement with DHS, under which Gallup agreed to enhance its corporate compliance and ethics programs.
As a result, DHS lifted the suspension of Gallup.
Contemporaneous with the civil settlement, Gallup has entered into a non prosecution agreement related to the FEMA conflict of interest allegations, in which Gallup agreed to strengthen its corporate compliance and ethics programs and to pay a penalty of $50,000.