Victory for Bunny Greenhouse

Government Settles Halliburton Whistleblower Case That Exposed $7 Billion Contract Fraud

Washington, D.C. July 26, 2011. Today, the National Whistleblower Center announced that the United States District Court in Washington D.C. gave its final approval of a settlement between Bunnatine “Bunny” Greenhouse and the U.S. Army Corps of Engineers. After a six-year legal battle, the Army Corps of Engineers agreed to pay Ms. Greenhouse $970,000, representing full restitution for lost wages, compensatory damages, and attorneys fees. Ms. Greenhouse faced retaliation for her decision to blow the whistle when she was notified that she would be removed from her position as the Army Corps’ chief contracting and procurement executive after being demoted out of the Senior Executive Service. This happened when she strongly objected, during the award of a secret contract granting Halliburton subsidiary, Kellogg Brown & Root (“KBR”), to a no-compete, sole source, cost-plus $7 billion contract as the invasion of Iraq was about to commence.

Ms. Greenhouse blew the whistle on two issues: KBR’s self-dealing, and the duration of the contract. Greenhouse objected to allowing KBR to prepare its own cost projections that were then used to grant KBR a five-year (2-years base and 3-one year options) no-bid contract, without competition.  Greenhouse rejected the “compelling emergency” justification because that there was no basis to claim the emergency would exist more than one year. As the then-Procurement Executive and the Competition Advocate for the Army Corps, Ms. Greenhouse’s signature was required on the final approval. With the invasion imminent, Ms. Greenhouse chose to hand-write directly above her signature, on the original approval document, a notation documenting her most pressing concern over the unprecedented duration of the contract before it was transmitted to the Department of the Army for award. Her objection was ignored and she was eventually disciplined for placing her hand-written note on the document.

When the seriousness of her concerns were made public the Bush Administration balked at removing Greenhouse and ordered that she remain in her position until a meaningful investigation of her allegations was completed by the DoD Inspector General (DoD IG). When no meaningful investigation was launched, Ms. Greenhouse agreed to testify before the Senate Democratic Policy Committee about the corrupt contracting environment surrounding the award of the KBR contracts. As she was about to appear the Army Corps’ acting general counsel met with Greenhouse advising that she did not have to testify before the Congressional Committee and it would not be in her best interests to testify. Undeterred, Ms. Greenhouse appeared and presented a powerful account of the contract abuse surrounding the Restore Iraqi Oil (RIO) awards and awards of other contracts to KBR. Her testimony helped usher in legislation outlawing all of the abuses Greenhouse witnessed, and the Army made a publicized decision not to award anymore “Sweetheart Contracts to KBR”.

The Army Corps swiftly retaliated by removing Ms. Greenhouse from her position and from the Senior Executive Service, and stripped her of her top-secret security clearance. From that point forward Ms. Greenhouse received inappropriately downgraded performance reviews and the Corps refused to recognize her achievements, including her willingness to take on the insurance industry’s overcharging Defense Base Act (DBA) Worker’s Compensation insurance premiums for contractor employees serving in war zones. Ms. Greenhouse single-handedly served as the Project Manager and established a two-year pilot program that ended up saving the government hundreds of millions of dollars. Her achievement went unrecognized and her performance for that period remained downgraded. Because of Ms. Greenhouse’s tenacity and insightful efforts, along with the enormous savings that were validated by the Congressional Budget Office, Congress enacted into Law, for all of DoD, the Risk-Pooling DBA Insurance Concept that was conceptualized and managed by Ms. Greenhouse.

Ms. Greenhouse contested the retaliatory actions against her in a lawsuit filed in U.S. District Court for the District of Columbia.  After extensive litigation, including filing for sanctions against the Army Corps for failure to produce documents in discovery, the government agreed to pay Ms. Greenhouse all of the monies she was entitled to under law.  The settlement totals $970,000.00, representing payment for lost wages, compensatory damages and attorney fees.   Ms. Greenhouse will also retire at age 67 with full benefits.

Ms. Greenhouse issued the following statement on her settlement:

Michael D. Kohn, President of the National Whistleblowers Center and attorney for Ms. Greenhouse responded to the settlement:

Bunny Greenhouse risked her job and career when she objected to the gross waste of federal taxpayer dollars and illegal contracting practices at the Army Corps of Engineers. She had the courage to stand-alone and challenge powerful special interests.  She exposed a corrupt contracting environment where casual and clubby contracting practices were the norm.  Her courage led to sweeping legal reforms that will forever halt the gross abuse she had the courage to expose. Bunny Greenhouse epitomizes what government service is all about. Bunny Greenhouse is an American hero.This is a victory for every federal worker.  We hope that it marks a turning point in Administration policy.  Whistleblowers serve the public interest, save the taxpayers hundreds of billions of dollars and are on the front line fighting fraud and corruption.  They need to be rewarded and supported.  Ms. Greenhouse was forced to fight for over six years, enduring continued discrimination and retaliation.  Under the settlement Ms. Greenhouse will receive the full salary that she was illegally denied by the Army Corps of Engineers and maximum amount of compensatory damages permitted under law. Ms. Greenhouse will now be able to retire from public service vindicated and with her full pension benefits.

Important Links:

• Bunnatine “Bunny” Greenhouse’s Meet the Whistleblowers Page 
• May 14, 2009 testimony before the House Committee on Oversight and Government Reform
• September 21, 2007 testimony before the Senate Democratic Policy Committee 
• “A Web of Truth: Whistle-blower or Troublemaker, Bunny Greenhouse Isn’t Backing Down,” Washington Post (October 19, 2005) 
• “Beyond the Call of Duty” TIME Magazine (October 24, 2004)