Department of Justice slaps Gallup with $10.5 MILLION fine

Department of Justice slaps Gallup with $10.5M fine
http://images.politico.com/global/20...uters_6051.jpgDOJ is resolving a complaint brought by a former Gallup director of client services. | Reuters

By TAL KOPAN | 7/15/13 11:45 AM EDT Updated: 7/15/13 11:58 AM EDT

Gallup Organization has agreed to pay the government $10.5 million to settle a false claims case against the company for allegedly inflating cost estimates in government contracts.

The Justice Department announced the settlement Monday, resolving a complaint originally brought under the Whistleblower Protection Act by a former Gallup director of client services.

Gallup, a research and analytics company known especially for its political polling, admitted no wrongdoing in the settlement.

According to the original complaint filed in 2009, Gallup allegedly inflated estimates of labor hours required for market research contracts with the U.S. Mint and U.S. Passport Agency to drive up costs.

The complaint alleges that Gallup had a $2 million-per-year contract with the Mint to “to conduct market research to identify likely purchasers of newly issued coins and how best to reach them.”

Gallup had a $2.7 million contract with the Passport Agency to conduct surveys to predict how a change in border laws would increase passport applications, according to the complaint.

Additionally, Monday’s settlement resolves allegations that Gallup improperly negotiated to hire a FEMA official while trying to secure a contract with the agency, which the official was involved in awarding.

The contract was for human resources consulting, according to an announcement of that official’s guilty plea, though Justice officials did not mention Gallup by name while prosecuting him separately.

“This case exposed a cozy arrangement between a contractor and a government employee where nobody was looking out for the American taxpayer,” U.S. A

Attorney Ronald C. Machen Jr. said in a statement about Monday’s settlement.

“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.”

When the U.S. civil complaint was filed in 2012, the Department of Homeland Security suspended Gallup from receiving contracts, according to DOJ, but after Gallup agreed to beef up its compliance and ethics programs the suspension has been lifted.

Gallup said the settlement allows it to move forward.

“By ending this civil action with no admission of wrongdoing, Gallup can avoid further distraction and focus on serving its customers. The company continues its dedication to the highest standard of ethics in business,” the company said in a statement.

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