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Justice joins suit against Gallup

By Lisa Rein,August 26, 2012

The Justice Department has joined a lawsuit against the Gallup Organization, alleging that the polling company inflated prices for contracts with the U.S. Mint, the State Department and other federal agencies.

The lawsuit was brought by a former Gallup employee, Michael Lindley, who became a whistleblower. Lindley alleges that shortly after he went to work for Gallup, he discovered that the company was defrauding the government.

The lawsuit was filed close to three years ago and was unsealed in federal court Wednesday. It claims that Gallup routinely submitted inflated cost estimates for work that allowed the company to reap outsized profits from its government business.

Gallup, in addition to polling work, does consulting for governments and corporate clients.

Justice said last week it was supporting the lawsuit’s allegations about contracts with the Mint and State Department.

In a statement, Gallup called the claims “wholly without merit.”

“We intend to fight these baseless charges vigorously and look forward to resolving the matter in court,” the company said.

Lindley was honored by Gallup in 2009 as “Rookie of the Year,” but he claims in the lawsuit that he was fired six months later for threatening to report the alleged overbilling practices to the government if the company did not.

Gallup general counsel Steve O’Brien, who is named in the lawsuit, told the Associated Press that the government work involved contracts that were fixed price, competitively bid and paid for as agreed. Now, O'Brien said, the government is saying "the price should have been something else,” the AP reported.

According to Lindley, when he asked O’Brien why he had been fired, O’Brien said "When you start talking about going to the Department of Justice, I don't trust you anymore,” the AP said.

O’Brien called Lindley’s assertion “a total and complete fabrication.”

The lawsuit claims that Gallup inflated the hours it would take to complete work on a $2 million-a-year sole-source contract with the Mint, by a multiple of two or three times the number that came in for similar contracts. The Mint hired Gallup to do market research on newly issued coins.

The State Department work involved a $25 million, sole-source contract for the U.S. Passport Agency, the lawsuit alleges.

During negotiations, Gallup allegedly submitted detailed budgets with vastly inflated hours on the time it would take to complete the work. Gallup’s role was conducting surveys to predict the level of passport applications that would result from changes in border laws governing travel to Mexico and Canada.

In other claims, Lindley says Gallup inflated prices on a $15 million contract with the Army’s Joint Contracting Command in Iraq, a $10 million contract with a Health and Human Services Department agency, and a $2 million-a-year contract with the National Highway Traffic Safety Administration.