When the state Legislature passed the Texas Whistleblower Act in 1983, lawmakers and citizens lauded it as an important step in protecting those who risk their careers, families and sometimes their lives to expose government waste and corruption.
Now, more than 30 years after the law’s passage, legal experts say weaknesses in the state law prevent it from protecting employees and taxpayers. Discrepancies between the state whistleblower law and city procedures, experts say, make it even more difficult for municipal employees to report wrongdoing.
“The basic philosophy of any whistleblower statute is to encourage and protect public employees who see wrongdoing to report it,” said Bill Aleshire, who represented former Killeen Finance Director Barbara Gonzales in her original whistleblower suit. “Texas is utterly failing in that because it provides such limited whistleblower protection at all levels of the law, state and local governments.”
A review by the Herald’s investigative team found these flaws with the state’s law.
The reporting chain: Whistleblowers are protected from retaliation only when they report problems to a law enforcement officer. That often is not reflected in cities’ policies, which have in-house reporting structures.
The type of offense: The problem reported must be a violation of the law for a Texas whistleblower to be protected from retaliation. That may not include reports of questionable spending or misuse of funds.
Documentation: There’s no form to properly document an official complaint and little information about how to file one.
Oversight: No Texas agency oversees the law or helps a person who is reporting possible government abuse.
Gonzales spent thousands of dollars and put her family through a high amount of stress, but still lost her whistleblower case against the city.
Gonzales, who has 23 years of governmental accounting experience, became Killeen finance director in 2007. She previously served as finance director in Copperas Cove, comptroller at Belton ISD and as an assistant finance director for Killeen for four years.
“There needs to be clarification about who you report to about any type of illegal activity from the municipalities,” Gonzales said. “Which agency do you report that to? There is no clarity for the municipalities and (that) allows them to do whatever they want to.”
In 2011, Gonzales began to notice what she considered to be questionable expenses and possible violations of state procurement laws, she said.
During the next two years, Gonzales said, she repeatedly notified City Manager Glenn Morrison when she thought the city inappropriately issued contracts or misspent money. Her notifications, she said, were something the city’s personnel policies and procedures direct employees to do.
In 2012, while Gonzales said she continued to question Morrison’s decisions, the city placed her on administrative leave after it initiated an investigation into its fleet services division.
The city’s audit of fleet services identified a culture of theft in the division Gonzales oversaw, and Morrison fired her, citing a “lack of confidence” in her termination letter. The city’s Personnel Review Board recommended reinstating Gonzales, ruling that while Gonzales had oversight of the division, she did not steal anything and did not know any thefts had occurred.
“We ruled in her favor because of the evidence that came to us and the witnesses who came forward,” said Brockley Moore, a member of the review board at the time. “We weren’t lawyers, but the internal and external audits didn’t find anything wrong with her. It was not Ms. Gonzales’ actions that caused the problems (in fleet services).”
Morrison, who had final say in the matter as the city manager, rejected the board’s decision.
“The decision-maker is the city manager,” said Rosa Hereford, another review board member. “I think the board is there just to show the person has rights. Our recommendation doesn’t make a whole lot of difference, and we were never told what the final decision was.”
After Morrison’s decision to fire her, Gonzales decided to file a lawsuit against the city under the Texas Whistleblower Act.
Raised in a Roman Catholic home with a father who worked as an investigator for the U.S. Department of Agriculture, Gonzales said her parents taught her to be honest and always “do the right thing.”
“I was brought up to always remember that if things don’t seem right, then don’t do them,” Gonzales said.
The case came with emotional and financial price tags, according to Gonzales, who estimates she spent about $250,000 and dipped into her retirement funds. She also could not completely cover the cost of her oldest daughter’s college education.
“It has taken a toll on the family because it has gone from one extreme to the other,” Gonzales said. “At the same time, I have prayed and felt like it’s what I had to do because things weren’t right. I wanted to do it because I wanted to make sure the taxpayers understood what was taking place with their funding.”
The city filed a motion to dismiss the case, but the 146th District Court ruled in Gonzales’ favor in May 2014. The city appealed that decision. It took more than a year for the Texas Third District Court of Appeals to make a decision, when it ruled on Nov. 3, 2015, in the city’s favor and effectively ended the case.
Throughout the year, Gonzales’ sisters said, they saw her suffer with stress. Her parents offered to help pay bills, but she declined.
Randall “Buck” Wood, an Austin attorney who often represents governmental entities in front of the Texas Supreme Court, filed one of the first whistleblower suits in Texas soon after the law’s passage. Wood said the law’s original purpose was to make public and private entities think twice about firing an employee who reports fraud or waste of taxpayer funds.
“When it was passed, it was very, very difficult to get anybody to report anything because you automatically got fired,” Wood said. “There wasn’t really any statutory redress so you could get some relief. So, it’s been effective in deterring retaliation, and it’s been effective in getting information that otherwise would never have been exposed.”
Wood said, however, the Texas Supreme Court has weakened the act in the years since its passage.
Professor Michael Maslanka of the University of North Texas Law School said that even the most solid whistleblower cases are often dismissed simply because the problem is reported to the wrong person.
“Even if you are dead right, even if you are absolutely right and something is going wrong and there’s unlawful activity — none of it matters if you don’t report it to a law enforcement agency,” Maslanka said.
Richard Carlson, a professor at the South Texas College of Law, said whistleblowers have a number of law enforcement agency options to report to in addition to the police department.
“We are talking about a law enforcement agency that actually enforces the law in the fashion of a police force — it could also be the IRS (Internal Revenue Service), the SEC (Securities and Exchange Commission), or the EPA (Environmental Protection Agency),” Carlson said.
Texas has a weaker law than other states and the federal government, Carlson said.
According to the National Whistleblower Center, at least 30 states have piecemeal whistleblower legislation while 16 have state whistleblower protection acts. Texas is among those with piecemeal legislation, according to the whistleblower center.
“(Texas) employees are getting caught in the trap,” Carlson said. “They feel like they could actually get fired for going to the outside. That’s precisely what they should do — strangely, the only way you can get protection under the Texas law is to violate your employer’s own policies.”
Aleshire said an employee who reports abuse or misuse of funds to a company auditor does not get protection under the act because the Supreme Court has interpreted that an auditor does not count as an appropriate law enforcement authority.
Gonzales said she thinks city employees face particularly difficult circumstances because the city’s policy for reporting fraud contradicts the state whistleblower law. Under the city’s policy, employees report to the city auditor and city manager instead of a law enforcement official.
According to the city’s personnel policies and procedures manual:
“It is the responsibility of the City Auditor to immediately notify the City Manager of complaints received unless the complaint directly involves allegations concerning fraudulent activities of the City Manager. In such case, the Mayor will be notified immediately. The City Auditor has the primary responsibility of investigating all suspected fraudulent activities as defined in the policy. If an investigation substantiates that fraudulent activities have occurred, then the City Auditor will issue reports to appropriate designated personnel to include the City Manager and the Audit Committee.”
The city policy also notes “the appropriate law enforcement agency” will further investigate and prosecute substantiated fraudulent activity.
Killeen spokeswoman Hilary Shine said the city considers state whistleblower laws as entirely separate from its own personnel policies and procedures.
“Our policies have no effect on state law and in no way prohibit or discourage employees from reporting suspected criminal activity to law enforcement if they so choose,” she said.
Shine said the city complies with the Texas Whistleblower Act by posting a notice about the law “at various locations accessible to employees.”
The city has its own internal procedure through which employees may report fraud, which mirrors the fraud policy used by the Texas Attorney General’s Office, Shine said.
The city’s policy includes a provision protecting employees who make “good faith reports” from retaliation, she said.
“Our city attorney’s office and our outside counsel do not believe that any revision to the city’s fraud policy is needed to provide adequate protection to employees,” Shine said.
Gonzales disagreed and said both the city and state need to clarify their laws and procedures to help city employees understand who they need to report to as a whistleblower.
“The city’s policy conflicts with the state law. I think that it definitely hinders the employee,” Gonzales said. “I think (the city and state) need to clarify that. There needs to be clarification about who you report to about any type of illegal activity from the municipalities.”
There could be a solution for the whistleblower reporting loophole, Maslanka said, if Texas develops an oversight agency similar to the federal whistleblower process.
“Federal law often has an agency that you complain to and that does the investigation such as the Department of Labor,” he said. “Here in Texas there is not an agency that you can go to file a complaint with.”
At the state level, if lawmakers do not take action to strengthen the Texas Whistleblower Act, Carlson said it would behoove whistleblowers and their attorneys to use the federal whistleblower law and First Amendment protections.
“Sometimes state and local government whistleblowers are protected by the First Amendment,” Carlson said. “Not always — the First Amendment is not perfect protection but I think in the future, state and local whistleblowers and their attorneys are more likely to sue in federal court under the First Amendment rather than under the state whistleblower law.”
Experts Carlson, Maslanka and Aleshire expressed discontent with the Texas Legislature and Texas Supreme Court for watering down what is supposed to protect those who seek to blow the whistle on behalf of Texas taxpayers. Aleshire said Killeen’s state representative should step up and act to strengthen the law.
“This is a good time considering it’s more than a year before the next legislative session, for some legislator — might as well be from Killeen — to take an interest in this and ask the legislative council to compare the Texas statute to others to see what suggestions might be made to give broader protection to whistleblowers, because that gives broader protection to taxpayers,” Aleshire said. “That’s the link that is often missed. They look at whistleblowers like they’re money hungry people trying to get something for nothing from the government. That’s not the case in true whistleblower cases. True whistleblowers are trying to protect taxpayers and the law ought to protect whistleblowers, but it doesn’t.”
Carlson said ultimately, the public must hold its elected officials accountable for protecting whistleblowers.
“I think that maybe when the public becomes more aware of how bad our whistleblower act has become maybe there will be a greater outcry for reform,” Carlson said.
Just a few weeks after the appeals court’s decision, Gonzales joined her parents and sisters for Thanksgiving dinner. Instead of dwelling on the past, Gonzales and her sisters said they remained thankful for what they have and enjoyed being together for the holidays.
On Dec. 12, the family finished decorating its Christmas tree. Gonzales said she remains disappointed about losing her case, but she has moved forward with her life and has found a new job.
“There are other things that are more critical,” Gonzales said. “I had been blackballed, but now it’s a different environment. Despite all that has happened, God provides. We have other things to support. You are always going to have another challenge in life.”