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US sues Gallup, alleging pollster overcharged on government contracts

WASHINGTON, D.C. -- The U.S. Justice Department on Wednesday accused Gallup Organization, the country's most venerable and best-known political polling firm, of bilking the U.S. government on millions of dollars in federal  contracts.

In a federal court filing, DOJ lawyers said they will pursue some of the claims first made in a lawsuit filed by a Gallup whistleblower who accused the polling organization of routinely inflating bills on  polling services for the U.S. Mint, the U.S. Passport Agency and the Federal Emergency Management Agency.

Gallup -- a Washington, D.C.,-based company that promotes itself as "the most trusted name in polling" -- did not immediately respond to a request for comment. The announcement comes at an awkward time for Gallup, in the middle of an election season when the company's polls are routinely cited in coverage of the presidential election. (In its latest tracking poll released Wednesday, Gallup has Mitt Romney ahead of  President Obama by a 47 to 45 percent margin. http://www.gallup.com/poll/154559/US-Presidential-Election-Center.aspx)

The whistleblower, Michael Lindley, served as director of client services for Gallup from February 2008 until  July 2009, when, according to his lawsuit, he was abruptly fired after complaining about the alleged overbillings and threatening to go to the Justice Department if they didn’t stop.

 "When you start talking about going to the Department of Justice, I don't trust you anymore," Lindley alleges he was told by the firm's top lawyer, according to a copy of his complaint obtained by NBC News.

In  a DOJ press release, Ronald Machen, the U.S. Attorney for the District of Columbia, said the decision to intervene shows "we will do all that we can to act against those who illegitimately bill the American taxpayers." 

Lindley filed his lawsuit under seal in October 2009 as a so-called "qui tam" case that allows private whistleblowers to recover a portion of fraudulent billings that they bring to the U.S. government's attention. HIs complaint, made public for the first time on Wednesday alleges a wide range of improprieties within Gallup -- not all of which were accepted by the Justice Department after a nearly three-year investigation.

According to Lindley's complaint, Gallup effectively kept two sets of books on its federal business -- one that inflated its costs that were  submitted to government agencies,  another internally that reflected the firm's real (and much lower) costs to perform the work.

As an example, Lindley alleges that Gallup received a $2 million a year sole source contract with the U.S. Mint to conduct surveys on the likely purchasers of newly minted coins, such as presidential coins. In its budget presented to the Mint, "Galllup would inflate the number of hours required to complete the work, usually by a multiple of two or three times," the complaint alleges.

Gallup also submitted "vastly inflated" budgets for its work for the U.S. Passport agency in support of a five year, $25 million sole-source contract for surveys aimed at predicting the number of passport applications that would be needed under new border control laws requiring travelers to Mexico and Canada to carry passports.

Those claims were adopted by Justice in its decision to intervene. In another part  of his complaint-- that was not adopted by Justice but remain outstanding against the company-- Lindley alleges that Gallup officials drafted large portions of a federal bid proposal by the U.S. Army for survey research in Iraq to insure that Gallup was the only polling firm that qualified. (The original bid proposal, he alleges, asked for a company that had 70 or more years of polling experience; it was later rewritten to say 10 or more years of experience and Gallup was awarded the $15 million contract.)

The lawsuit also alleges that Gallup violated "clear conflict of interest"  rules by offering a job to a high level FEMA employee who played a role in steering a $12 million, five-year contract to Gallup. Justice lawyers said in their filing they plan to assert  "additional claims" relating to the FEMA contract, but did not identify what they are.

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