Bobby Maxwell Verdict Is Thrown Out

The federal judge presiding over the whistleblower qui tam case brought by Bobby Maxwell has thrown out a 7.6 million dollar jury verdict in his favor on the basis that in oder for him to properly bring the case he must have “voluntarily” disclosed the fraud. In determining that Mr. Maxwell, as a government auditor, had a duty to disclose the fraud to his superiors at the Department of the Interior the court ruled that he could not be both a required reporter and a “voluntary” reporter at the same time.

This decision will no doubt be appealed and may find its way to the Supreme Court. The judge did not challenge the fact that Mr. Maxwell had only sued as a private citizen after the government had ordered him to abandon his findings that Kerr-McGee was cheating the government out of millions of dollars in oil and gas royalties it owed for resources it was pumping from public coastal waters.

This court’s decision will have a chilling effect on efforts to uncover government fraud. It should come to no one’s surprise that our government is oftentimes too close to the industries it is regulating. Indeed, in recent years we have learned that many regulatory agencies are run and staffed not by regulators but industry profiteers that continue to have deep seated interests with the companies they are regulating.

If the lower court decision in Bobby Maxwell’s case stands, it will be another blow to the efforts of citizens of this country to hold corporate wrongdoers accountable.