It’s not always easy to say something when you see something. But when you work in national security, it’s important to make sure that rules are followed as intended. When one former defense contractor thought her employer was lying about the completeness of its high-level security clearance background investigations, she reported it.
In her complaint, whistleblower Julie Reed accused federal contractor, KeyPoint Government Solutions, of misrepresenting its highest-level security clearance investigations, which she believes failed to meet strenuous government requirements. She described her growing concern, which she reported internally, that dozens of KeyPoint investigators were failing to report negative investigatory information — and that KeyPoint managers weren’t conducting reviews that would have caught such failures.
But following the litigation journey, Reed will now receive a 29% share of a payment to the U.S. government that resolves her claims that KeyPoint defrauded taxpayers and endangered national security by failing to conduct proper high-level security clearance investigations. The payout amount isn’t public. KeyPoint has also agreed to cover Reed’s legal fees.
KeyPoint has changed ownership several times since the original complaint; it is now called Peraton Risk Decision Inc. and is a subsidiary of Northern Virginia-based Peraton Inc. (owned by Veritas Capital). The long-running lawsuit included a two-year spell at the U.S. Court of Appeals for the Tenth Circuit, which granted Reed a favorable ruling and ordered the case to proceed. In light of the settlement, a federal judge today dismissed Reed’s complaint in the U.S. District Court for the District of Colorado.
Back in 2014, Reed began the process by filing a complaint under the federal False Claims Act, a statute signed into law by President Abraham Lincoln. The U.S. federal government takes fraud very seriously – especially when there’s financial gain from taxpayer money. Under the FCA, whistleblowers have a “qui tam” provision that allows them to file a legal complaint on behalf of the government. If the whistleblower wins the case like Reed did, they are to receive a share of the proceeds. The statutory maximum for whistleblowers is 30%, and the DOJ opted to reward Reed with a high reward due to her contribution to the eight-year case.
“Julie fully deserves this reward for her integrity,” said Janel Quinn, a principal of The Employment Law Group, one of the whistleblower attorneys who represented Reed. “She held KeyPoint accountable for delivering proper value to taxpayers, and she knew that the impact of substandard investigations wasn’t just financial — she was standing up for national security.”
“Being a whistleblower was never my aim, but it became my duty because of the oath I took to protect the public trust,” said Reed. “I continue to believe that KeyPoint and the United States Government have an obligation to protect access to classified information. When contractors like KeyPoint don’t take that responsibility seriously, it puts us all at risk. Unfortunately, the industry has failed to make improvements since 2016 and I fear there is additional wrongdoing yet to be discovered.”
“We are proud to have helped Julie in her battle to ensure the quality of security clearance investigations,” said Richard Condit, a partner at Mehri & Skalet who also represented Reed. “She spoke out to protect national security and feels it was her patriotic duty to do so. We hope that other whistleblowers will follow her example.”
