DOJ Sues Gallup For Overcharging On Contracts

The Justice Department has accused the Gallup Organization of cheating federal agencies out of millions of dollars by inflating the price of federal contracts. Gallup says in a statement that the case is "based on false allegations of a former disgruntled employee."

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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

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And I'm Melissa Block. The Justice Department is accusing the Gallup Organization of cheating federal agencies out of millions of dollars. It says they did it by inflating the price of federal contracts. Gallup is one of the most prestigious names in the polling industry, perhaps best known for its election polling. But it also makes millions by doing marketing research and polling for the government. NPR's Carrie Johnson reports on Gallup's bad year.

CARRIE JOHNSON, BYLINE: Gallup has roots that stretch all the way back to 1936 when the company correctly predicted that Franklin Roosevelt would defeat Alf Landon to win the U.S. presidency. Lately, Gallup's been making headlines for another reason. President Obama's advisers criticized the company for polls that showed his challenger, Mitt Romney, was leading late in the race.

Gallup editor-in-chief Frank Newport defended his methods in an interview with Fox News shortly before the election.

FRANK NEWPORT: People come at you from either side if they don't like the results, so I think our methodology is extremely solid.

JOHNSON: This week, Mr. Obama's Justice Department took issue with some more of Gallup's numbers. Federal lawyers said Gallup had submitted nearly 300 false claims to government agencies totaling nearly $13 million. Washington lawyer David Marshall.

DAVID MARSHALL: This is a company that has branded itself and has caused the American people to believe that it is the most trusted name in polling. But as this lawsuit shows, the company was involved in fraud against the U.S. government, against the taxpayers.

JOHNSON: Marshall represents a whistle-blower in the case named Michael Lindley. Lindley handled the company's billing records for contracts with the State Department and the U.S. Mint, which wanted Gallup to find out whether people would buy and use $1 coins. But Lindley soon came to believe the labor figures were inflated. Marshall describes what happened next.

MARSHALL: He went to his superiors and he said, you have to stop this. You told me that you were going to work on this. It hasn't changed. If you don't report this to the government and stop it now, I'm going to go to the Department of Justice and report this. The next day, he came into work and he was fired.

JOHNSON: Gallup didn't want to talk on tape, but vice president William Kruse sent NPR a statement that says, the government's case is, quote, "based on the false allegations of a former disgruntled employee." Kruse say Gallup looks forward to clearing its name in court. The legal process could grind on for a while, but the Justice Department, which is working with the Gallup whistle-blower, has signaled it's prepared for that.

Justice is asking for triple damages from Gallup if it wins the case. Carrie Johnson, NPR News, Washington.

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