The U.S. Justice Department sued the Gallup Organization on Wednesday, saying the company submitted $13 million in false claims to federal agencies by inflating the cost of work it would provide under contracts.
Gallup attorney William Kruse said he couldn’t comment on the details of the complaint and Gallup would respond in court.
“Now that Gallup has finally been served this complaint, we look forward to clearing Gallup’s name in court,” he said. “Now we can actually answer the charges and vindicate Gallup’s name and move on.”
The Justice Department had said in August it would join a “whistleblower” lawsuit filed in 2009 by former Gallup employee Michael Lindley, who said Gallup made false claims for payment under contracts for polling services with the U.S. Mint, the State Department and other agencies.
Lindley amended his complaint Wednesday, adding that he was fired from Gallup the day after he told management that he intended to report the firm’s alleged misconduct. Lindley worked in 2008 and 2009 as director of client services for Gallup’s government division, preparing budgets used in cost proposals for government contracts.
The Justice Department’s complaint, filed in Washington D.C., says Gallup maintained a double set of records, one with higher costs it charged government agencies, and another kept in-house, reflecting the true, lower cost of the work.
Gallup’s headquarters is in Omaha, with polling operations in Princeton, N.J., and other executive offices in Washington, D.C., where Lindley had worked.
Lindley and the Justice Department also accuse Gallup of negotiating to hire a then-Federal Emergency Management Agency official who was responsible for awarding a contract while at the same time seeking more money under the contract. The official is charged as a co-defendant in the Justice Department’s complaint.
The Justice Department cites internal Gallup emails in which Gallup Chairman and CEO Jim Clifton and another official discuss their plans to hire the official if he can get FEMA to award Gallup a contract. The complaint says Gallup extended a written offer after the official helped secure the contract, and he then announced his retirement from FEMA while falsely certifying that he had no post-government employment.
Gallup allegedly post-dated a second employment offer to support the false claim, but later rescinded the job offer when it became apparent the deal could harm future business prospects with FEMA.
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