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[Senate Report 107-349]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 771

107th Congress 
 2d Session                      SENATE                          Report
                                                                107-349
_______________________________________________________________________

TO AUTHORIZE APPROPRIATIONS FOR THE MERIT SYSTEMS PROTECTION BOARD AND 
         THE OFFICE OF SPECIAL COUNSEL, AND FOR OTHER PURPOSES

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                                S. 3070

TO AUTHORIZE APPROPRIATIONS FOR THE MERIT SYSTEMS PROTECTION BOARD AND 
         THE OFFICE OF SPECIAL COUNSEL, AND FOR OTHER PURPOSES

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

               November 19, 2002.--Ordered to be printed

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 FRED THOMPSON, Tennessee
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
RICHARD J. DURBIN, Illinois          SUSAN M. COLLINS, Maine
ROBERT G. TORRICELLI, New Jersey     GEORGE V. VOINOVICH, Ohio
MAX CLELAND, Georgia                 THAD COCHRAN, Mississippi
THOMAS R. CARPER, Delaware           ROBERT F. BENNETT, Utah
JEAN CARNAHAN, Missouri              JIM BUNNING, Kentucky
MARK DAYTON, Minnesota               PETER G. FITZGERALD, Illinois
           Joyce A. Rechtschaffen, Staff Director and Counsel
                       Lawrence B. Novey, Counsel
        Nanci E. Langley, Deputy Staff Director, Subcommittee on
       International Security, Proliferation and Federal Services
  Jennifer L. Tyree, Counsel, Subcommittee on International Security,
                   Proliferation and Federal Services
              Richard A. Hertling, Minority Staff Director
           Alison E. Bean, Minority Professional Staff Member
           Ann C. Fisher, Minority Professional Staff Member,
   Subcommittee on International Security, Proliferation and Federal 
                                Services
                     Darla D. Cassell, Chief Clerk

                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and Need for the Legislation..........................2
III. Legislative History.............................................27
 IV. Regulatory Impact Statement.....................................27
  V. Congressional Budget Office Cost Estimate.......................27
 VI. Section-by-Section Analysis and Discussion......................29
VII. Changes in Existing Law Made by the Bill, as Reported...........33

                                                       Calendar No. 771
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-349
======================================================================
 
TO AUTHORIZE APPROPRIATIONS FOR THE MERIT SYSTEMS PROTECTION BOARD AND 
         THE OFFICE OF SPECIAL COUNSEL, AND FOR OTHER PURPOSES

                                _______
                                

               November 19, 2002.--Ordered to be printed

                                _______
                                

 Mr. Lieberman, from the Committee on Governmental Affairs, submitted 
                             the following

                              R E P O R T

                         [To accompany S. 3070]

    The Committee on Governmental Affairs, to which was 
referred the bill (S. 3070) to authorize appropriations for the 
Merit Systems Protection Board and the Office of Special 
Counsel, and for other purposes, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                         I. Purpose and Summary

    The purposes of S. 3070 are to reauthorize appropriations 
for the Office of Special Counsel (OSC) and the Merit Systems 
Protection Board (MSPB) for five years, and to make 
clarifications and changes to strengthen the Whistleblower 
Protection Act (WPA). S. 3070 was introduced on October 9, 
2002, by Senators Akaka and Levin, building on earlier 
versions, S. 2829, introduced by Senator Akaka, and S. 995, 
introduced by Senators Akaka, Levin, and Grassley.\1\
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    \1\ Senator Leahy was added as a cosponsor of both S. 3070 and S. 
995, and Senator Durbin and Senator Bob Smith were added as cosponsors 
of S. 995.
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    The OSC and MSPB administer programs and procedures to 
safeguard the federal government's merit-based system of 
employment and protect federal employees against improper 
personnel practices, particularly those federal employees who 
step forward to disclose government waste, fraud, and abuse. 
The OSC's responsibilities include receiving and seeking 
resolution of allegations by employees of wrongdoing in federal 
agencies; investigating claims of improper personnel actions, 
including reprisal against whistleblowers; and applying to the 
MSPB for appropriate remedies for improper personnel actions. 
The MSPB's responsibilities include hearing and deciding 
appeals brought by federal employees from agency personnel 
actions, hearing and deciding cases brought by the OSC, and 
conducting studies and oversight of the civil service system.
    The sponsors, in introducing the predecessor bills, 
summarized the purposes of this legislation.\2\ As to 
reauthorizing appropriations for the OSC and MSPB, Senator 
Akaka explained: ``These two agencies safeguard the merit 
system principles and protect Federal employees who step 
forward to disclose government waste, fraud, and abuse. * * * 
Together, OSC and MSPB act as stalwarts of justice for the 
dedicated men and women who serve the public.'' \3\
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    \2\ 2147 Cong. Rec. S5970-S5975 (daily ed. June 7, 2001) 
(Statements of Senators Akaka, Levin, and Grassley) and 148 Cong. Rec. 
S7746 (daily ed. July 31, 2002) (Statement of Senator Akaka).
    \3\ 3148 Cong. Rec. S7746 (daily ed. July 31, 2002) (Statement of 
Senator Akaka).
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    Senator Akaka also explained why provisions clarifying and 
strengthening the WPA are needed: ``The right of federal 
employees to be free from workplace retaliation * * * has been 
diminished by a pattern of court rulings that have narrowly 
defined who qualifies as a whistleblower under the WPA, and 
what statements are considered protected disclosures. These 
rulings are inconsistent with congressional intent. * * * The 
bill we introduce today will restore congressional intent 
regarding who is entitled to relief under the WPA, and what 
disclosures are protected.'' \4\
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    \4\ 4147 Cong. Rec. S5970 (daily ed. June 7, 2001) (Statement of 
Senator Akaka).
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    Senator Levin also emphasized the role of Congress in 
whistleblower protection: ``We want Federal employees to 
identify problems in our programs so we can fix them, and if 
they fear reprisal for doing so, then we are not only failing 
to protect the whistleblower, but we are also failing to 
protect the taxpayer.'' He explained how the bill would clarify 
the law to prevent future misinterpretation, and also noted 
that the bill ``adds a provision to the Whistleblower 
Protection Act that provides specific protection to a 
whistleblower who discloses evidence of fraud, waste, and abuse 
involving classified information if that disclosure is made to 
the appropriate committee of Congress * * *'' \5\
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    \5\ 5147 Cong. Rec. S5973 (daily ed. June 7, 2001) (Statement of 
Senator Levin).
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    S. 3070 would strengthen the WPA by, among other things, 
clarifying the unrestricted meaning of ``any'' disclosure 
covered by the WPA, codifying an anti-gag provision to allow 
employees to come forward with disclosures of illegality, 
providing independent litigating authority for the OSC, and 
allowing whistleblower cases to be heard by all United States 
Courts of Appeals for a period of five years.

              II. Background and Need for the Legislation

           A. BACKGROUND ON THE OFFICE OF SPECIAL COUNSEL \6\
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    \6\ This description of the history of OSC and the developments 
since OSC's last reauthorization is based largely on briefings and 
documents provided by OSC to the Committee.
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History and purpose

    The position of Special Counsel was established on January 
1, 1979, by Reorganization Plan Number 2 of 1978.\7\ The Civil 
Service Reform Act (CSRA) of 1978, effective on January 11, 
1979, enlarged its functions and powers.\8\ The Special Counsel 
operated as the autonomous investigative and prosecutorial arm 
of the Merit Systems Protection Board (MSPB) until 1989, 
enforcing the laws concerning prohibited personnel practices, 
as well as the restrictions on the political activity of 
federal employees as governed by the Hatch Act.
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    \7\ 43 F.R. 36037, 92 Stat. 3783, Sec. 204 (June 19, 1978) (5 
U.S.C. App.).
    \8\ Pub. L. No. 95-454, 92 Stat. 1111 (1978).
---------------------------------------------------------------------------
    In March of 1989, Congress enacted the Whistleblower 
Protection Act (WPA) of 1989.\9\ The WPA established the Office 
of Special Counsel (OSC) as an independent agency within the 
Executive Branch, separate from the MSPB. Under the WPA, OSC 
kept its basic investigative and prosecutorial functions and 
its role in litigating cases before the MSPB. The WPA also 
substantially amended the CSRA to enhance protections against 
retaliation for those employees who disclose wrongdoing in the 
federal government and to improve the ability of OSC to enforce 
those protections.
---------------------------------------------------------------------------
    \9\ Pub. L. No. 101-12, 103 Stat. 16 (1989).
---------------------------------------------------------------------------
    Five years after passage of the WPA, Congress enacted the 
Office of Special Counsel Reauthorization Act of 1994.\10\ In 
response to widespread criticism concerning inordinate delays 
in the processing of complaints by OSC, Congress imposed a 240-
day time limit on agency action, within which OSC is required 
to determine whether there are reasonable grounds for believing 
that a prohibited personnel practice has been committed. The 
1994 legislation also added approximately 160,000 employees of 
the Veterans Administration and certain government corporations 
to coverage under the statutes administered by OSC and 
significantly broadened the definitions of the types of 
personnel actions covered under these statutes. Lastly, the 
1994 legislation made federal agencies explicitly responsible 
for informing their employees of available rights and remedies 
under the WPA, and directed that OSC play a consultative role 
in that process.\11\
---------------------------------------------------------------------------
    \10\ Pub. L. No. 103-424, 108 Stat. 4361 (1994).
    \11\ See 5 U.S.C. Sec. 2302(c).
---------------------------------------------------------------------------
    The mission of OSC is to protect federal employees and 
applicants, especially whistleblowers, from prohibited 
employment practices; to promote compliance by government 
employees with legal restrictions on political activity; and to 
facilitate disclosures of wrongdoing in the federal government. 
OSC carries out this mission by:
           Investigating complaints of prohibited 
        employment practices, especially reprisal for 
        whistleblowing and pursuing remedies for violations;
           Operating an independent and secure channel 
        for disclosure and investigation of wrongdoing in 
        federal agencies;
           Providing advisory opinions on and enforcing 
        the Hatch Act;
           Protecting the reemployment rights of 
        veterans under the Uniformed Services Employment and 
        Reemployment Rights Act (USERRA) by investigating 
        alleged violations of the Act by federal executive 
        agencies and prosecuting meritorious claims before the 
        MSPB on behalf of the aggrieved person; and
           Promoting greater understanding of the 
        rights and responsibilities of government employees 
        under the statutes enforced by OSC through public 
        outreach and education programs.\12\
---------------------------------------------------------------------------
    \12\ U.S. Office of Special Counsel, FY 2001 Annual Report, at 4.
---------------------------------------------------------------------------
    OSC maintains its headquarters in Washington, DC and has 
field offices in Texas and California. The Special Counsel and 
the Immediate Office of the Special Counsel (IOSC) are 
responsible for policy making and overall management of the 
agency. IOSC responsibilities include congressional relations, 
public affairs, and outreach. The outreach program director 
develops and coordinates proactive educational efforts by OSC 
and promotes compliance by federal agencies with the employee 
information requirement at Sec. 2302(c), as amended. Until June 
2001, OSC was organized into four operating divisions: 
Complaint and Disclosure Analysis, Investigation, Prosecution, 
and Planning and Advice. A restructuring in early June of that 
year led to the consolidation of OSC's investigative and 
prosecutorial functions and the creation of three parallel 
Investigation and Prosecution Divisions. Since that 
reorganization, agency functions are organized as follows:
     The Complaints and Disclosure Analysis Division 
consists of OSC's two intake units for new matters received by 
the agency--the Complaints Examining Unit (CEU) and the 
Disclosure Unit (DU).
    The CEU serves as the intake point for all complaints 
alleging prohibited personnel practices and other violations of 
civil service law, rule, or regulation. The attorneys and 
personnel management specialists in CEU conduct an initial 
review of complaints to determine whether they are within OSC's 
jurisdiction and whether further investigation is warranted. 
CEU refers any such matter to one of the Investigation and 
Prosecution Divisions.
    The DU is responsible for reviewing information submitted 
by federal whistleblowers and for advising the Special Counsel 
on the appropriate disposition of the matter (including 
possible referral to the head of the relevant agency for 
investigation and a report to OSC, referral to the agency 
Inspector General, or closure). DU attorneys also analyze 
agency reports of investigation to determine whether they 
appear reasonable and meet statutory requirements before the 
Special Counsel sends them to the President and appropriate 
congressional oversight committees.
     The Investigation and Prosecution Divisions (IPDs) 
consist of three parallel investigative and prosecutorial 
units--IPD I, II, and III. These divisions investigate 
complaints referred after a preliminary inquiry by CEU. Each 
unit conducts investigations to review pertinent records and to 
interview complainants and witnesses with knowledge of the 
matters alleged. Matters not resolved during the investigative 
phase undergo legal review and analysis to determine whether 
the matter warrants corrective action, disciplinary action, or 
both. If a negotiated resolution with the agency involved 
cannot be reached, division attorneys conduct the litigation of 
any enforcement proceedings filed by OSC with the U.S. Merit 
Systems Protection Board. They also represent the Special 
Counsel when OSC intervenes or otherwise participates in other 
proceedings before the MSPB.
     The Hatch Act Unit (HAU), located in IPD I, is 
responsible for enforcing Hatch Act restrictions on the 
political activities of federal and certain state and local 
government employees. HAU attorneys receive and review 
complaints alleging Hatch Act violations and, when warranted, 
prosecute violations before the MSPB. The unit also issues 
advisory opinions to individuals seeking information about the 
provisions of the Act.
     The Alternative Dispute Resolution (ADR) Unit was 
established by the Special Counsel in FY 2000. It is located in 
IPD III and operates OSC's Mediation Program. In selected cases 
that have been referred for further investigation, it contacts 
the complainant and the employing agency to invite their 
participation in voluntary mediation. If both parties agree, 
OSC conducts a mediation session, led by OSC staff who have 
extensive training in mediation and experience in federal 
personnel law. When mediation resolves the complaint, the 
parties execute a written and binding settlement agreement. If 
mediation does not result in a resolution, the case is referred 
for further investigation, as it would have been had the 
parties not tried mediation.
     The Planning and Advice Division provides legal 
advice and support on general management and administrative 
matters; engages in planning and policy development; conducts 
the statutorily required annual survey program; and manages the 
agency's Freedom of Information/Privacy Act and ethics 
programs. OSC also has two administrative support units: the 
Human and Administrative Resources Management Branch and the 
Information Systems Branch. Their functions include 
administrative operations, personnel, procurement, information 
technology, and records management services.\13\
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    \13\ U.S. Office of Special Counsel, FY 2001 Annual Performance 
Report, at 2-4.
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OSC developments

    For years, the backlog of prohibited personnel practice 
cases has been a significant problem for the OSC. To address 
this problem, Congress amended the WPA in 1994 to set a 240-day 
deadline for OSC to make a determination as to whether a 
prohibited personnel practice occurred.\14\ To meet this 
statutory requirement, OSC has sought and Congress has granted 
the agency additional resources. During FY 2000 and 2001, 
Congress appropriated funds for 15 additional full-time 
employees. OSC also redirected two full-time-equivalents (FTEs) 
to program functions as a result of internal reforms. The 
provision of additional resources seemed to help. On June 1, 
2001, there were 477 prohibited personnel cases more than 240 
days old. Just one year later, the number of cases was reduced 
nearly 53 percent with only 226 cases more than 240 days old.
---------------------------------------------------------------------------
    \14\ 5 U.S.C. Sec. 1214(b)(2)(A)(i).
---------------------------------------------------------------------------
    In addition to the increase in staff, OSC implemented its 
most significant reorganization in over 15 years by merging 
investigative and prosecutorial functions that had been housed 
in two separate divisions. The reorganization joined 
investigators and attorneys in three teams (IPDs--Investigation 
and Prosecution Divisions), each of which reports to a single 
Associate Special Counsel. The reorganization eliminated 
several layers of management review to which cases referred for 
investigation had previously been subject. It also permits 
closer, more effective, and more efficient coordination of 
strategy between investigators and attorneys. This enhanced 
coordination is expected to reduce case processing times, 
permit OSC to make better decisions about allocation of 
investigative resources, and improve the quality of OSC's 
investigative and legal work.\15\
---------------------------------------------------------------------------
    \15\ U.S. Office of Special Counsel, supra note 13 at 8.
---------------------------------------------------------------------------
    As a result of the FY 2001 reorganization, the number of 
cases pending at the end of the fiscal year was 733, down 
substantially from the 1,114 cases that were pending at the end 
of FY 2000. There were also significant gains in the number of 
cases referred for investigation that OSC resolved. Thus, in FY 
2001, OSC resolved 410 cases that were referred for 
investigation, which represented a 79 percent increase over FY 
2000's 228 cases resolved. Productivity also increased at OSC 
by 38 percent as a result of the reorganization.
    In addition to the backlog problem, OSC continues to face a 
public information problem as many employees in the federal 
government are unaware of the role of the OSC and the laws it 
enforces.\16\ To address this problem, the Special Counsel 
hired an Outreach Specialist and has established an outreach 
and training program. The Outreach Program was established to 
assist agencies in meeting their statutory mandate under 5 
U.S.C. Sec. 2302(c), which Congress imposed in 1994. Under that 
provision, federal agencies are responsible ``for ensuring (in 
consultation with the Office of Special Counsel) that agency 
employees are informed of the rights and remedies available to 
them'' under chapters 12 and 23 of title 5. Because of this 
clear statutory mandate, OSC considers outreach to federal 
managers and employees to be an essential part of its 
mission.\17\
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    \16\ See OPM Merit System Principles Questionnaire, FY 2002 
Governmentwide Results.
    \17\ U.S. Office of Special Counsel, FY 2000 Annual Report, at 26.
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    A chief focus of the Outreach Program is to work 
proactively with federal agencies to design employee education 
programs. A significant step towards achieving that goal came 
in FY 2000 with an OSC survey of federal agency efforts to 
comply with Sec. 2302(c). The results of that survey found that 
the majority of federal agencies do not comprehensively inform 
or educate their employees regarding prohibited personnel 
practices or whistleblower retaliation. Half of the responding 
agencies did not provide any type of in person training on 
prohibited personnel practices.\18\ However, the survey caused 
many agencies to implement stepped-up measures to inform their 
employees of their rights.\19\
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    \18\ Summary of Findings from 2000 OSC Survey on Implementation of 
5 U.S.C. Sec. 2302(c).
    \19\ U.S. Office of Special Counsel, supra note 17.
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    During FY 2000, OSC also established its Alternative 
Dispute Resolution Unit, which directs OSC's Mediation Program. 
As the program matured during the second half of FY 2001, two 
significant program design modifications were implemented. 
First, the scope of cases in which OSC offers mediation was 
substantially broadened. Among the factors that determine 
``mediation-appropriate'' cases are the relationship of the 
parties, the complexity of the issues, and the relief sought by 
the complainant. Consequently, the rate at which OSC offers 
mediation to parties doubled from 15 percent in FY 2000 to 30 
percent in FY 2001.

                                    SUMMARY OF OSC ACTION FOR 1997-2001 \20\
----------------------------------------------------------------------------------------------------------------
                                                                       1997     1998     1999     2000     2001
----------------------------------------------------------------------------------------------------------------
Prohibited personnel practices:
    Favorable actions..............................................       56       42       52       75       74
    Negotiated stays...............................................       12        8       12        7       13
    Litigated stays................................................        0        8        3        2        1
Hatch Act:
    Advisory opinions issued.......................................    1,700    2,124    2,063    2,810    2,806
    Warning letters issued.........................................       24       20       21       21       59
    Enforcement actions filed......................................        3        0        3        4        8
    Disciplinary actions obtained..................................        3        5        1        2        8
Disclosure Unit:
    Matters referred to agency head for investigation..............       14        2       15        8       15
    Matters referred to IGs for investigation......................       72       65       71      106      119
----------------------------------------------------------------------------------------------------------------

                                               BUDGET AND STAFFING
----------------------------------------------------------------------------------------------------------------
                                 FY 1997       FY 1998       FY 1999       FY 2000       FY 2001       FY 2002
----------------------------------------------------------------------------------------------------------------
Budget......................    $8,116,000    $8,450,000    $8,720,000    $9,740,000   $11,147,000   $11,891,000
FTEs........................          83.5         87.17         87.80         90.86        104.66         105.5
----------------------------------------------------------------------------------------------------------------

        B. BACKGROUND ON THE MERIT SYSTEMS PROTECTION BOARD \21\

History and purpose

    The U.S. Merit Systems Protection Board is an independent, 
quasi-judicial agency in the Executive Branch that serves as 
the guardian of Federal merit system principles. The MSPB was 
established by Reorganization Plan No. 2 of 1978, which was 
codified by the Civil Service Reform Act of 1978 (CSRA).\22\ 
The CSRA, which became effective January 11, 1979, replaced the 
Civil Service Commission with three new independent agencies: 
the Office of Personnel Management (OPM), which manages the 
federal work force; the Federal Labor Relations Authority, 
which oversees Federal labor-management relations; and the 
MSPB.
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    \20\ FY 2002 information not yet available from OSC.
    \21\ This description of the history of MSPB and the developments 
since MSPB's last reauthorization is based largely on briefings and 
documents provided by MSPB to the Committee.
    \22\ Pub. L. No. 95-454, 92 Stat. 1111 (1978).
---------------------------------------------------------------------------
    The Board assumed the employee appeals function of the 
Civil Service Commission and was given the new responsibilities 
to perform merit systems studies and to review the significant 
actions of OPM. The MSPB carries out its statutory mission 
principally by:
           Adjudicating employee appeals of personnel 
        actions over which the Board has jurisdiction, such as 
        removals, suspensions, furloughs, and demotions;
           Adjudicating employee complaints filed under 
        the Whistleblower Protection Act, the Uniformed 
        Services Employment & Reemployment Rights Act (USERRA), 
        and the Veterans Employment Opportunities Act;
           Adjudicating cases brought by the Special 
        Counsel, principally complaints of prohibited personnel 
        practices and Hatch Act violations;
           Adjudicating requests to review regulations 
        of the Office of Personnel Management (OPM) that are 
        alleged to require or result in the commission of a 
        prohibited personnel practice or reviewing such 
        regulations on the Board's own motion;
           Ordering compliance with final Board orders 
        where appropriate; and
           Conducting studies of the federal civil 
        service and other merit systems in the Executive Branch 
        to determine whether they are free from prohibited 
        personnel practices.\23\
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    \23\ U.S. Merit Systems Protection Board, FY 2001 Annual 
Performance Report, at 5.
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    The Board is composed of a Chairman, Vice Chairman, and 
Member who adjudicate the cases brought to the Board. The 
Chairman, by statute, is the chief executive and administrative 
officer of the Board. Office heads report to the Chairman 
through the Chief of Staff. The MSPB consists of the following 
offices:
     The Office of Regional Operations oversees the 
five MSPB regional offices (including five field offices), 
which receive and process initial appeals and related cases. 
Administrative judges in the regional and field offices are 
responsible for adjudicating assigned cases and for issuing 
fair and well-reasoned initial decisions.
     The Office of the Administrative Law Judge 
adjudicates and issues initial decisions in Hatch Act cases, 
corrective and disciplinary action complaints brought by the 
Special Counsel, proposed agency actions against administrative 
law judges, MSPB employee appeals, and other cases assigned by 
the Board.
     The Office of Appeals Counsel conducts legal 
research and prepares proposed decisions for the Board in cases 
where a party petitions for review of a judge's initial 
decision and in all other cases decided by the three-member 
Board, except for those cases assigned to the Office of the 
General Counsel. The office also conducts the Board's petition 
for review settlement program, processes interlocutory appeals 
of rulings made by judges, makes recommendations on reopening 
cases on the Board's own motion, and provides research and 
policy memoranda to the Board on legal issues.
     The Office of the Clerk of the Board receives and 
processes cases filed at Board headquarters, rules on certain 
procedural matters, and issues the Board's Opinions and Orders. 
The office serves as the Board's public information center, 
coordinates media relations, produces public information 
publications, operates the Board's library and on-line 
information services, and administers the Freedom of 
Information Act and Privacy Act programs. The office also 
certifies official records to the courts and federal 
administrative agencies, and manages the Board's records and 
directives system, legal research programs, and the Government 
in the Sunshine Act program.
     The Office of the General Counsel, as legal 
counsel to the Board, provides advice to the Board and MSPB 
offices on matters of law arising in day-to-day operations. The 
office represents the Board in litigation, prepares proposed 
decisions for the Board on assigned cases, and coordinates the 
Board's legislative policy and congressional relations 
functions. The office also conducts the Board's ethics program 
and plans and directs audits and investigations.
     The Office of Policy and Evaluation carries out 
the Board's statutory responsibility to conduct special studies 
of the civil service and other merit systems. Reports of these 
studies are directed to the President and the Congress and are 
distributed to a national audience. The office also conducts an 
outreach program and responds to requests from federal agencies 
for information, advice, and assistance on issues that have 
been the subject of Board studies.
     The Office of Equal Employment Opportunity plans, 
implements, and evaluates the Board's equal employment 
opportunity (EEO) programs. It processes complaints of alleged 
discrimination and furnishes advice and assistance on 
affirmative action initiatives to the Board's managers and 
supervisors.
     The Office of Financial and Administrative 
Management administers the budget, procurement, property 
management, physical security, and general services functions 
of the Board. It develops and coordinates internal management 
programs and projects, including review of internal controls 
agency-wide. It also administers the agency's cross-servicing 
arrangements with the U.S. Department of Agriculture's National 
Finance Center (NFC) for accounting and payroll services and 
with ABS (APHIS Business Services) for human resources 
management services.
     The Office of Information Resources Management 
develops, implements, and maintains the Board's automated 
information systems in order to help the Board manage its 
caseload efficiently and carry out its administrative and 
research responsibilities.

MSPB developments

    Over the past five years, the Board made a number of 
amendments to its regulations governing the processing of 
cases, most of them aimed at assisting parties in pursuing 
their cases before the Board. Perhaps the most significant was 
the issuance of a new Part 1208 of 5 CFR, setting forth the 
requirements for processing USERRA and Veterans Employment 
Opportunities Act (VEOA) appeals.\24\ The Board also finalized 
two proposed rules it had issued in 1999. To assist appellants 
in obtaining adequate legal representation, it amended its 
regulations on an award of attorney fees to permit 
reimbursement at the attorney's customary billing rate in the 
community where the attorney normally practices.\25\ In order 
to assist appellants in understanding the consequences of an 
election between appealing to MSPB or filing a grievance, the 
Board amended its requirements for the notice an agency must 
give when it takes an appealable action against an employee who 
has both a right to appeal to MSPB and a right to grieve the 
matter under a negotiated grievance procedure.\26\
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    \24\ Interim rule at 65 Fed. Reg. 5410, February 4, 2000; final 
rule at 65 Fed. Reg. 49895, August 16, 2000; conforming amendment to 5 
CFR Part 1201 at 65 Fed. Reg. 5409, February 4, 2000.
    \25\ 65 Fed. Reg. 24381, April 26, 2000.
    \26\ 65 Fed. Reg. 25623, May 3, 2000.
---------------------------------------------------------------------------
    Other amendments to the regulations in FY 2000 clarified 
the procedures for obtaining copies of hearing tapes and 
transcripts,\27\ made address changes to reflect the relocation 
of the MSPB headquarters office,\28\ and corrected a citation 
in the rules governing the Board's review of regulations of the 
Office of Personnel Management.\29\
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    \27\ 65 Fed. Reg. 19293, April 11, 2000.
    \28\ 65 Fed. Reg. 48885-48886, August 10, 2000.
    \29\ 65 Fed. Reg. 57939, September 27, 2000.
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    In FY 2001, the Board also launched two pilot projects 
aimed at improving case processing. In November 1999, the Board 
implemented its suspended case pilot project, which allows 
appellants and agencies up to 60 days additional time to pursue 
discovery and settlement efforts in their pending appeals. If 
the parties mutually request a 30-day suspension, the presiding 
administrative judge will grant it, without requiring the 
parties to provide evidence and argument to support the 
request. A second 30-day suspension will be granted if the 
parties agree that further time is necessary. By the end of FY 
2000, judges had granted 319 initial 30-day suspensions and 98 
additional 30-day suspensions.\30\
---------------------------------------------------------------------------
    \30\ U.S. Merit Systems Protection Board, FY 2001 Annual Report, at 
3.
---------------------------------------------------------------------------
    In June 2000, the Board also launched an expanded pilot 
program at headquarters to expedite the processing of certain 
petitions for review (PFRs) of administrative judges' initial 
decisions. The purpose of the program is to identify non-
meritorious PFRs that can be disposed of quickly so that the 
three-member Board can focus its resources on complex and 
precedential cases.\31\ If a PFR meets one of the eight 
criteria established for expedited processing (e.g., clearly 
not within the Board's purview, no attempt to meet the criteria 
for Board review), the Office of the Clerk prepares a proposed 
decision and forwards it to the Board, rather than transferring 
the case to the Office of Appeals Counsel for preparation of a 
decision. A senior attorney detailed from the Office of Appeals 
Counsel to the Office of the Clerk of the Board conducts the 
reviews. In the first six months of the expedited PFR pilot 
program, approximately eight percent of the 724 PFRs reviewed 
were expedited. The average time for processing the expedited 
cases--from receipt of the PFR to issuance of the decision--was 
60 days.
---------------------------------------------------------------------------
    \31\ Id.
---------------------------------------------------------------------------
    In a further effort to improve case processing times at 
headquarters, the Board targeted its enforcement cases during 
the latter half of FY 2000. These cases arise after the Board 
issues a final order in a case and a party subsequently 
petitions the Board to enforce its order. If the judge to whom 
the petition for enforcement is assigned determines that there 
is noncompliance with the Board's order, the case is referred 
to the 3-member Board for enforcement. Because enforcement 
cases cannot be closed until compliance is achieved, they 
frequently take longer to complete than other cases. By 
focusing on enforcement cases that had been pending at 
headquarters for more than 300 days, the Board was able to 
reduce the number of such cases substantially. One of the 
methods employed to reduce the processing time was to hold 
meetings with agencies that process the payment of judgments, 
such as the Defense Finance & Accounting Service (DFAS), the 
National Finance Center, and the U.S. Postal Service, to 
develop mutually beneficial systems for achieving full 
compliance with Board orders in a timely manner. One of the 
impediments identified was that responsible agency managers and 
personnel officials thought they had taken the steps necessary 
to comply with a Board order, but the payroll office lacked all 
the information necessary to process payments required by the 
order. As a result of those meetings, the agencies have 
developed checklists and other tools that advise agencies and 
appellants of the information required to process payments 
agreed upon in settlements or as ordered by the Board. The DFAS 
and NFC checklists are available on the MSPB Web site. The USPS 
is developing a compliance handbook.
    In addition, the MSPB has accomplished the following over 
the past five years:
           Made Office of Policy and Evaluation study 
        reports available on the Internet;
           Began a major initiative to design and 
        develop an integrated document management and workflow 
        system that will include support and maintenance of 
        imaged and electronic case records;
           Saved money through the significant increase 
        in the number of video conferences used for hearings, 
        settlements and conferences related to cases before 
        MSPB, focus groups and related studies activities, and 
        for other activities related to MSPB business; and
           Developed an Alternative Dispute Resolution 
        (ADR) Working Group.
    The Civil Service Reform Act also authorized the Board to 
conduct studies of the civil service and other merit systems in 
the Executive Branch and report to the President and Congress 
on whether the public interest in a civil service free of 
prohibited personnel practices is being adequately 
protected.\32\ Since 1997, the Board has published 15 reports 
by the Office of Program and Evaluation (OPE) staff as well as 
20 editions of the Issues of Merit newsletter.\33\
---------------------------------------------------------------------------
    \32\ 5 U.S.C. Sec. 1204(a)(3).
    \33\ Merit Systems Protection Board (visited Nov. 4, 2002) /
www.mspb.gov/studies/studies.html>.
---------------------------------------------------------------------------
    The OPE staff also serves as a valuable resource for the 
Board in meeting internal agency research needs. For example, 
during FY 2001, OPE conducted a survey of appellants and their 
representatives, agency representatives, and MSPB 
administrative judges who participated in the pilot projects 
testing the use of video conferencing for hearings and the 
issuance of bench decisions by MSPB judges. The subsequent 
report of the survey results provided information that the 
Board and senior managers can use to evaluate these projects.
    In addition, as the following two tables show, the Board 
has issued an average of 9,000 decisions (regions and 
headquarters) annually for the past five years while 
maintaining an average case processing time of less than 100 
days. The percentage of Board decisions affirmed or otherwise 
left unchanged by the Court of Appeals for the Federal Circuit, 
which has sole jurisdiction over MSPB appeals, has exceeded 90 
percent.\34\
---------------------------------------------------------------------------
    \34\ Merit Systems Protection Board (visited Nov. 4, 2002) /
www.mspb.gov/offices/famd/2001__budget.html>.

                                                  CASES DECIDED
----------------------------------------------------------------------------------------------------------------
                                                    Regional &     HQ appellate     HQ original
                   Fiscal year                     field offices   jurisdiction    jurisdiction        Total
----------------------------------------------------------------------------------------------------------------
1997............................................           8,314           1,740             100          10,154
1998............................................           8,442           1,887              47          10,376
1999............................................           7,670           2,037             106           9,813
2000............................................           7,489           1,827              58           9,374
2001............................................           7,174           1,357              28           8,559
----------------------------------------------------------------------------------------------------------------

                                    SELECTED CASE PROCESSING STATISTICS \35\
----------------------------------------------------------------------------------------------------------------
                                                                                                      Average
                                                    Percent of        Average         Average       processing
                                                       final        processing      processing       time for
                   Fiscal year                    decisions left     time for        time for       enforcement
                                                  unchanged upon      initial      petitions for   cases in the
                                                      review         decisions        review            OGC
----------------------------------------------------------------------------------------------------------------
1997............................................              96             108             183             202
1998............................................              92             108             205             163
1999............................................              92             100             222             206
2000............................................              96              89             176             206
2001............................................              96              92             214             224
----------------------------------------------------------------------------------------------------------------

    The time for case processing has been an issue at the MSPB. 
While the case processing time for initial decisions has 
decreased over the past five years, the processing time for 
decisions on petitions for review issued by the Board has once 
again increased. In addition, the processing time for 
enforcement cases in the Office of General Counsel has 
increased. From 1995 to 2000, the average processing time for 
enforcement cases in OGC ranged from 163 days to 206 days, with 
results at the high end of that range in both FY 1999 and FY 
2000. MSPB explains that the increase from 206 to 224 reflects 
a significant achievement by OGC in closing a substantial 
number of overage enforcement cases during the fiscal year.\36\
---------------------------------------------------------------------------
     \35\Id.
    \36\ Merit Systems Protection Board, FY 2001 Performance Report, 
/www.mspb.gov/foia/forms-pubs/2001__performance-rpt.html>.

                                               BUDGET AND STAFFING
----------------------------------------------------------------------------------------------------------------
                                 FY 1997       FY 1998       FY 1999       FY 2000       FY 2001       FY 2002
----------------------------------------------------------------------------------------------------------------
Budget......................   $23,923,000   $27,720,000   $25,780,000   $27,481,000   $29,372,000   $33,075,000
FTE.........................           259           238           237           226           222           228
----------------------------------------------------------------------------------------------------------------

               C. PAST REAUTHORIZATIONS FOR OSC AND MSPB

    When the Civil Service Reform Act created the MSPB and the 
OSC in 1979, the MSPB, of which OSC was a part, was granted a 
permanent authorization of appropriations.\37\ With enactment 
of the WPA in 1989, appropriations for the OSC and the MSPB 
were for the first time authorized for a limited time period. 
MSPB was authorized for the fiscal years 1989-1994, while the 
OSC was authorized for fiscal years 1989-1992.\38\ According to 
the Senate committee report, this was done to require Congress 
to take affirmative action to continue funding for the two 
agencies.\39\ Legislative history on the Act suggests that the 
shorter authorization for OSC resulted from the negative 
perception many in Congress had of the agency.\40\
---------------------------------------------------------------------------
    \37\ Civil Service Reform Act, Pub. L. No. 95-454, 92 Stat. 1111 
Sec. 903 (1978) (stating ``There are authorized to be appropriated, out 
of any moneys in the Treasury not otherwise appropriated, such sums as 
may be necessary to carry out the provisions of this Act.'').
    \38\ Pub. L. No. 101-12, 103 Stat. 16 (1989).
    \39\ S. Rep. No. 100-413, at 36 (1988).
    \40\ See Whistleblower Protection Act of 1987: Hearing on S. 508 
before the Subcomm. on Federal Services, Post Office and Civil Service 
of the Senate Comm. on Governmental Affairs, 100th Cong., at 234-35, 
260-64 (1987); Hearings on Whistleblower Protection Act of 1986 Before 
the House Subcomm. on Civil Service of the House Comm. on Post Office 
and Civil Service, 99th Cong 151 (1986).
---------------------------------------------------------------------------
    The OSC was reauthorized for fiscal years 1993-1997 with 
enactment of the Office of Special Counsel Reauthorization Act 
\41\ on October 29, 1994--two years after the agency's 
authorization had expired. At the same time, the MSPB was 
reauthorized through 1997. A 1994 committee report stated that 
the change was necessary to place the two agencies on the same 
authorization cycle and to maintain close congressional 
oversight over OSC and the MSPB and ensure that improvements in 
the operations of both agencies in fact take place.\42\ The 
Omnibus Consolidated Appropriations Act for FY 1997 extended 
the authorization of appropriations for the OSC and the MSPB 
through FY 2002.\43\ (Although the conference report stated 
that Congress intended to extend the authorization of 
appropriations for both MSPB and OSC, a drafting error caused 
the OSC's reauthorization not to be actually enacted into 
statute.) As the authorization for these two agencies expired 
on October 1, 2002, S. 3070 reauthorizes OSC and MSPB for five 
additional years, through the end of the 2007 fiscal year.
---------------------------------------------------------------------------
    \41\ Pub. L. No. 103-424 (1994).
    \42\ S. Rep. No. 103-358 (1994).
    \43\ Pub. L. No. 104-208 (1996).
---------------------------------------------------------------------------

 D. AMENDMENTS TO CLARIFY AND STRENGTHEN THE WHISTLEBLOWER PROTECTION 
                                  ACT

Background

    The Civil Service Reform Act of 1978 (CSRA) created 
statutory protections for federal employees to encourage 
disclosure of government illegality, waste, fraud, and abuse. 
As stated in the Senate Report concerning the whistleblowing 
provisions of the civil service reform legislation:

          Often, the whistleblower's reward for dedication to 
        the highest moral principles is harassment and abuse. 
        Whistleblowers frequently encounter severe damage to 
        their careers and substantial economic loss. Protecting 
        employees who disclose government illegality, waste, 
        and corruption is a major step toward a more effective 
        civil service. In the vast federal bureaucracy it is 
        not difficult to conceal wrongdoing provided that no 
        one summons the courage to disclose the truth. Whenever 
        misdeeds take place in a federal agency, there are 
        employees who know that it has occurred, and who are 
        outraged by it. What is needed is a means to assure 
        them that they will not suffer if they help uncover and 
        correct administrative abuses. What is needed is a 
        means to protect the Pentagon employee who discloses 
        billions of dollars in cost overruns, the GSA employee 
        who discloses widespread fraud, and the nuclear 
        engineer who questions the safety of certain nuclear 
        plants. These conscientious civil servants deserve 
        statutory protection rather than bureaucratic 
        harassment and intimidation.\44\
---------------------------------------------------------------------------
    \44\ S. Rep. No. 95-969, at 8 (1978).

    The CSRA established the Office of Special Counsel to 
investigate and prosecute allegations of prohibited personnel 
practices or other violations of the merit system and the Merit 
Systems Protection Board to adjudicate such cases. However, in 
1984, the MSPB reported that in practice the Act had no effect 
on the number of whistleblowers and that federal employees 
continued to fear reprisals. The Senate Governmental Affairs 
Committee subsequently reported that employees felt that OSC 
engaged in apathetic and sometimes detrimental practices toward 
employees seeking its assistance. The Committee also found that 
restrictive MSPB and federal court decisions had hindered the 
ability of whistleblowers to win redress.\45\
---------------------------------------------------------------------------
    \45\ S. Rep. No. 100-413, at 6-16 (1988).
---------------------------------------------------------------------------
    In response, Congress in 1989 unanimously passed the 
Whistleblower Protection Act, Public Law No. 101-12. The stated 
congressional intent of the WPA was to strengthen and improve 
protection for the rights of federal employees, to prevent 
reprisals, and to help eliminate wrongdoing within the 
government by (1) mandating that employees should not suffer 
adverse consequences as a result of prohibited personnel 
practices; and (2) establishing that while disciplining those 
who commit prohibited personnel practices may be used as a 
means to help accomplish that goal, the protection of 
individuals who are the subject of prohibited personnel 
practices remains the paramount consideration.\46\
---------------------------------------------------------------------------
    \46\ Whistleblower Protection Act of 1989 Sec. 2(b), Pub. L. No. 
101-12, 103 Stat. 16 (1989).
---------------------------------------------------------------------------
    Congress substantially amended the WPA in 1994, as part of 
legislation to reauthorize OSC and MSPB. The amendment was 
designed, in part, to address a series of actions by the OSC 
and decisions by the MSPB and the Federal Circuit that were 
found to be inconsistent with congressional intent of the 1989 
Act. Both the House and Senate committee reports accompanying 
the 1994 amendments specifically criticized these decisions, 
particularly those limiting the types of disclosures covered by 
the WPA.
    Specifically, this Committee explained that the 1994 
amendments were intended to reaffirm its long-held view that 
the plain meaning language of the Whistleblower Protection Act 
covers any disclosure:

          The Committee * * * reaffirms the plain language of 
        the Whistleblower Protection Act, which covers, by its 
        terms, ``any disclosure'', of violations of law, gross 
        mismanagement, a gross waste of funds, an abuse of 
        authority, or a substantial and specific danger to 
        public health or safety. The Committee stands by that 
        language, as it explained in its 1988 report on the 
        Whistleblower Protection Act. That report states: ``The 
        Committee intends that disclosures be encouraged. The 
        OSC, the Board and the courts should not erect barriers 
        to disclosures which will limit the necessary flow of 
        information from employees who have knowledge of 
        government wrongdoing. For example, it is inappropriate 
        for disclosures to be protected only if they are made 
        for certain purposes or to certain employees or only if 
        the employee is the first to raise the issue'' * * * 
        \47\
---------------------------------------------------------------------------
    \47\ S. Rep. No. 103-358 (1994), at 10 (quoting S. Rep. No. 100-
413, at 13 (1988)).

---------------------------------------------------------------------------
    Similarly, the House stated:

          Perhaps the most troubling precedents involve the 
        Board's inability to understand that ``any'' means 
        ``any.'' The WPA protects ``any'' disclosure evidencing 
        a reasonable belief of specified misconduct, a 
        cornerstone to which the MSPB remains blind. The only 
        restrictions are for classified information or material 
        the release of which is specifically prohibited by 
        statute. Employees must disclose that type of 
        information through confidential channels to maintain 
        protection; otherwise there are no exceptions.\48\
---------------------------------------------------------------------------
    \48\ H. Rep. No. 103-769, at 18 (1994).

Clarification of what constitutes protected disclosure under the WPA

    Despite the clearly stated intent of the 1994 amendments, 
it is necessary once again to state legislatively what 
constitutes protected disclosure under the WPA, because the 
Federal Circuit has continued to misinterpret the law, creating 
new hurdles for whistleblowers along the way. For example, in 
Horton v. Department of the Navy,\49\ the Federal Circuit ruled 
that disclosures to co-workers or to the wrong-doer, or 
disclosures to a supervisor are not protected by the Act. In 
Willis v. Department of Agriculture,\50\ the court ruled that 
disclosures to officials in the agency chain of command or 
those made in the course of normal job duties are not 
protected. And in Meuwissen v. Department of Interior,\51\ the 
Federal Circuit held that disclosures of information previously 
known do not qualify as ``disclosures'' under the WPA.
---------------------------------------------------------------------------
    \49\ Horton v. Dept. of Navy, 66 F. 3d 279 (Fed. Cir. 1995).
    \50\ Willis v. Dept. of Agriculture, 141 F. 3d 1139 (Fed. Cir. 
1998).
    \51\ Meuwissen v. Dept. of Interior, 234 F. 3d 9 (Fed. Cir. 2000).
---------------------------------------------------------------------------
    As both House and Senate reports explicitly noted, the 
plain language of the WPA extends to retaliation for ``any 
disclosure,'' regardless of the setting of the disclosure, the 
form of the disclosure, or the person to whom the disclosure is 
made. S. 3070 would further clarify the definition of ``any 
disclosure.'' The bill amends the WPA to cover any disclosure 
of information ``without restriction to time, place, form, 
motive or context, or prior disclosure made to any person by an 
employee or applicant, including a disclosure made in the 
ordinary course of an employee's duties.''
    It is also necessary to clarify the test that must be met 
to show that a Federal employee reasonably believed that his or 
her disclosure was evidence of wrongdoing. Under the WPA, an 
employee or applicant is protected for disclosures of 
information he or she reasonably believes evidences a violation 
of law, rule, or regulation, or gross mismanagement, a gross 
waste of funds, an abuse of authority, or a substantial and 
specific danger to public health and safety. However, Senator 
Levin explained:

          [T]he Federal Circuit * * * impose[d] a clearly 
        erroneous and excessive standard on the employee in 
        proving ``reasonable belief,'' requiring 
        ``irrefragable'' proof that there was gross 
        mismanagement. * * * The employee, under the clear 
        language of the statute, need only have ``a reasonable 
        belief'' that there is fraud, waste or abuse occurring 
        before making a protected disclosure. This bill will 
        clarify the law so this misinterpretation will not 
        happen again.\52\
---------------------------------------------------------------------------
    \52\ 147 Cong. Rec. S5973 (daily ed. June 7, 2001) (Statement of 
Senator Levin upon introduction of S. 995).

This case that Senator Levin referenced was Lachance v. 
White,\53\ in which the Office of Personnel Management (OPM) 
sought review of an MSPB order that found that White made 
protected disclosures resulting in a downgrade in position. OPM 
argued that White's belief that he uncovered gross 
mismanagement (an allegedly wasteful Air Force education 
program) was inadequate to support a violation of the WPA 
without an independent review of the reasonableness of the 
belief by MSPB. The Federal Circuit agreed and stated that MSPB 
must look for evidence that it was reasonable to believe that 
the disclosures revealed misbehavior by the Air Force described 
by 5 U.S.C. Sec. 2302(b)(8). The court said that the test is: 
``Could a disinterested observer with knowledge of the 
essential facts known to and readily ascertainable by the 
employee reasonably conclude that the actions of the government 
evidence gross mismanagement? A purely subjective perspective 
of an employee is not sufficient even if shared by other 
employees.'' \54\
---------------------------------------------------------------------------
    \53\ Lachance v. White, 174 F. 3d 1378 (Fed. Cir. 1999).
    \54\ Id. at 1381.
---------------------------------------------------------------------------
    However, the court went further in holding that the 
reasonableness review must begin with the--

        presumption that public officers perform their duties 
        correctly, fairly, in good faith, and in accordance 
        with the law and governing regulations. * * * And this 
        presumption stands unless there is ``irrefragable 
        proof'' to the contrary.\55\
---------------------------------------------------------------------------
    \55\ Id. at 1381 (quoting Alaska Airlines, Inc. v. Johnson, 8 F. 3d 
791, 795 (Fed. Cir. 1993)).

    By definition, irrefragable means impossible to refute.\56\ 
This imposes an impossible evidentiary burden on 
whistleblowers, and there is nothing in the law or legislative 
history that even suggests such a standard under the WPA.
---------------------------------------------------------------------------
    \56\ Merriam-Webster's Collegiate Dictionary (10th ed. 1999).
---------------------------------------------------------------------------
    To assure this misinterpretation does not happen again, S. 
3070 provides that any presumption that a public employee 
(i.e., the official whose misconduct the whistleblower is 
disclosing) acted in good faith may be rebutted by 
``substantial evidence.'' Substantial evidence has been defined 
by the Supreme Court as ``such relevant evidence as a 
reasonable mind might accept as adequate to support a 
conclusion.'' \57\ It consists of ``more than a mere scintilla 
of evidence but may be somewhat less than a preponderance.'' 
\58\ By establishing a substantial evidence test, the Committee 
intends to provide a standard that is consistent with the 
legislative history of the Act and will protect whistleblowers 
instead of creating a higher bar to protection as the Federal 
Circuit did in Lachance v. White.
---------------------------------------------------------------------------
    \57\ Richardson v. Perales, 402 U.S. 389, 401 (1971).
    \58\ Hays v. Sullivan, 907 F. 2d 1453, 1456 (4th Cir. 1990) 
(quoting Laws v. Celebrezze, 368 F. 2d 640, 642 (4th Cir. 1966)).
---------------------------------------------------------------------------

All-circuit review

    When the Civil Service Reform Act of 1978 was enacted, it 
gave employees an option of where to appeal final orders of the 
MSPB. The 1978 Act allowed a petition to be filed in either the 
Court of Claims, the U.S. Court of Appeals for the circuit 
where the petitioner resided, or the U.S. Court of Appeals for 
the D.C. Circuit.\59\ In 1982, when the Federal Circuit was 
created, Congress established that petitions for review of an 
MSPB order could be filed with the Federal Circuit only.\60\ 
(An exception applies to cases of discrimination before the 
MSPB, which are filed in district court under the applicable 
anti-discrimination law.\61\)
---------------------------------------------------------------------------
    \59\ Public Law No. 95-454, Sec. 205, 92 Stat. 1143 (Oct. 13, 1978) 
(adding 5 U.S.C. Sec. 7703).
    \60\ Public Law No. 97-164, Sec. 144 (April 2, 1982).
    \61\ 5 U.S.C. Sec. Sec. 7702, 7703(b)(2).
---------------------------------------------------------------------------
    Subject to a five year sunset, S. 3070 suspends the Federal 
Circuit's exclusive jurisdiction over whistleblower appeals. 
The Lachance v. White case is one in a long series of cases 
decided by the Federal Circuit that have misinterpreted the 
provisions of the WPA. Also, this bill represents the third 
time Congress has had to clarify the language of the WPA to 
overturn these misinterpretations. The five year period will 
allow Congress to evaluate whether decisions of other appellate 
courts in whistleblower cases are consistent with the Federal 
Circuit's interpretation of WPA protections and guide 
Congressional efforts to clarify the law if necessary.
    A number of Federal statutes already allow cases involving 
rights and protections of Federal employees, or involving 
whistleblowers, to be subject to multi-circuit review, i.e., 
they may be appealed to Courts of Appeals across the country. 
Decisions of the Federal Labor Relations Authority (FLRA) may 
be appealed to Court of Appeals for the Circuit where the 
petitioner resides or to the D.C. Circuit.\62\ In addition, in 
cases involving allegations of discrimination, cases decided by 
the MSPB may be brought in the United States District Courts. 
State or local government employees affected by the MSPB's 
Hatch Act decisions may also obtain review in the U.S. District 
Courts.\63\ Appeal from decisions of the District Courts in 
these cases may then be brought in the appropriate Court of 
Appeals for the appropriate Circuit.
---------------------------------------------------------------------------
    \62\ 5 U.S.C. Sec. 7123.
    \63\ 5 U.S.C. Sec. 1508.
---------------------------------------------------------------------------
    Moreover, a multi-circuit appellate review process of 
whistleblower claims already exists in many cases.
     Under the False Claims Act, as amended in 1986, 
whistleblowers who disclose fraud in government contracts can 
file a case in District Court and appeal to the appropriate 
Federal Court of Appeals.\64\
---------------------------------------------------------------------------
    \64\ 31 U.S.C. Sec. 3730(h).
---------------------------------------------------------------------------
     Congress passed the Resolution Trust Corporation 
Completion Act in 1993, which provided employees of banking 
related agencies the right to go to District Court and have 
regular avenues of appeal.\65\
---------------------------------------------------------------------------
    \65\ 12 U.S.C. Sec. 1441a(q).
---------------------------------------------------------------------------
     In 1991, Congress passed the Federal Deposit 
Insurance Corporation Improvement Act which provides district 
court review with regular avenues of appeal for whistleblowers 
in federal credit unions.\66\
---------------------------------------------------------------------------
    \66\ 12 U.S.C. Sec. 1790b(b).
---------------------------------------------------------------------------
     Department of Labor corporate whistleblower laws 
passed as part of the Energy Reorganization Act, as amended in 
1992,\67\ and the Clean Air Act, as amended in 1977,\68\ allow 
whistleblowers to obtain review of orders issued in the 
Department of Labor administrative process in the appropriate 
Federal Court of Appeals.
---------------------------------------------------------------------------
    \67\ 42 U.S.C. Sec. 5851(c).
    \68\ 42 U.S.C. Sec. 7622(c).
---------------------------------------------------------------------------
     The Wendell H. Ford Aviation Investment and Reform 
Act for the 21st Century (AIR 21),\69\ passed in 2000, allows 
whistleblowers to obtain review of their cases in the 
appropriate Federal Court of Appeals.
---------------------------------------------------------------------------
    \69\ 49 U.S.C. Sec. 42121(b)(4).
---------------------------------------------------------------------------
    Accordingly, subject to the five year sunset, the bill 
amends 5 U.S.C. Sec. 7703 to provide that a petition to review 
a final order or final decision of the MSPB may be filed in the 
United States Court of Appeals for the Federal Circuit or the 
U.S. Court of Appeals for the circuit where the petitioner 
resides.

Office of Special Counsel--Litigating authority and right to seek 
        review

    The bill would grant OSC authority to represent itself in 
court through its own lawyers and to seek judicial review of 
MSPB decisions in certain situations if the case will have an 
impact on the enforcement of the whistleblower statute. Senator 
Akaka explained:

          The measure also provides the Special Counsel with 
        greater litigating authority for merit system 
        principles that the office is responsible to protect. 
        Under current law, the OSC plays a central role as 
        public prosecutor in cases before the MSPB, but cannot 
        choose to defend the merit system in court. Our 
        legislation recognizes that providing the Special 
        Counsel this authority to seek such review, in 
        precedential cases, is crucial to ensuring the 
        promotion of the public interest furthered by these 
        statutes.\70\
---------------------------------------------------------------------------
    \70\ 147 Cong. Rec. S5971 (daily ed. June 7, 2001) (Statement of 
Senator Akaka upon introduction of S. 995).

    The OSC, initially established in 1979 as the investigative 
and prosecutorial arm of the MSPB, became an independent agency 
within the Executive Branch, separate from the MSPB, with 
passage of the WPA in 1989. The Special Counsel does not serve 
at the President's pleasure, but ``may be removed by the 
President only for inefficiency, neglect of duty, or 
malfeasance in office.'' \71\ The primary mission of OSC is to 
protect federal employees and applicants from prohibited 
employment practices, with a particular focus on protecting 
whistleblowers from retaliation. OSC accomplishes this mission 
by investigating complaints filed by federal employees and 
applicants that allege that federal officials have committed 
prohibited personnel practices.
---------------------------------------------------------------------------
    \71\ 5 U.S.C. Sec. 1211(b).
---------------------------------------------------------------------------
    When such a claim is filed by a federal employee, OSC 
investigates the allegation to determine whether there are 
reasonable grounds to believe that a prohibited personnel 
practice has occurred. If the Special Counsel determines there 
are reasonable grounds to believe that a prohibited personnel 
practice has occurred, a report is sent to the head of the 
employing agency, outlining OSC's findings and requesting that 
the agency remedy the illegal action. In the majority of cases 
in which the Special Counsel has found a violation, the 
agencies voluntarily take corrective action. If an agency does 
not do so, OSC is authorized to file a petition for corrective 
action with the MSPB.\72\
---------------------------------------------------------------------------
    \72\ 5 U.S.C. Sec. 1214(b)(2)(C).
---------------------------------------------------------------------------
    If the OSC does not send the whistleblower's disclosures to 
an agency head, it returns the information and any accompanying 
documents to the whistleblower explaining why the Special 
Counsel did not refer the information. In such a situation, the 
whistleblower may file a request for corrective action with the 
MSPB. This procedure is commonly known as an individual right 
of action (IRA). At proceedings before the MSPB, OSC is 
represented by its own attorneys while the employing agency is 
represented by the agency's counsel. In IRAs, OSC may not 
intervene unless it has the consent of the whistleblower.
    Under this system, however, OSC's ability to effectively 
enforce and defend whistleblower laws is limited. For example, 
the law provides the OSC with no authority to request that the 
MSPB reconsider its decision or to seek review of an MSPB 
decision by the Federal Circuit. Even when another party with 
authority to petition for a review of a MSPB decision does so, 
OSC has historically been denied the right to participate in 
those proceedings. Further, OPM, which typically is not a party 
to the case, can request that the MSPB reconsider its rulings, 
while OSC cannot. The problem with OSC's effectiveness is 
exacerbated since the majority of the MSPB's decisions arise in 
IRA cases where OSC is not a party. S. 3070 would remedy this 
situation by providing explicit authority for OSC to 
participate in such matters.
    Furthermore, the Department of Justice (DOJ) has recognized 
OSC's right to appear as an intervenor only in those few cases 
where OSC was a party before the Board and the case reaches the 
court of appeals on another party's petition for review. These 
cases usually involve agency officials' efforts to reverse 
Board decisions that have granted a petition by OSC to impose 
discipline for retaliating against a whistleblower. Because OSC 
lacks independent litigating authority, it must be represented 
by the Justice Department, rather than its own attorneys in 
such cases. DOJ's representation of an independent agency like 
OSC is a significant impediment to the effective enforcement of 
the WPA because DOJ routinely represents employing agencies and 
their officers or OPM on appeal in IRA cases. Indeed, DOJ 
itself could be the respondent in such cases.
    On July 25, 2001, the Subcommittee on International 
Security, Proliferation and Federal Services held a hearing on 
S. 995. DOJ submitted testimony opposing provisions that would 
grant OSC the authority to represent itself in litigation and 
to prosecute appeals. DOJ argued that granting independent 
litigating authority would ``erode centralized control over 
personnel litigation.'' According to DOJ's testimony, such 
centralized control furthers the goals of enabling the 
government to present uniform legal positions, providing for 
``objective'' litigation by attorneys unaffected by a single 
agency's concerns, and ``the facilitation of presidential 
supervision over Executive Branch policies.'' Authorizing OSC 
to prosecute appeals, according to the testimony, ``would 
disrupt this carefully crafted scheme'' under which the various 
appeal rights, if any, of employees, agencies, the Office of 
Personnel Management, and OSC are carefully delineated. 
``Moreover,'' argued the DOJ, granting independent litigating 
authority ``could result in the Special Counsel litigating 
against other Executive Branch agencies.'' \73\
---------------------------------------------------------------------------
    \73\ S. 955--Whistleblower Protection Act Amendments: Hearing on S. 
995 Before the Subcommittee on International Security, Proliferation, 
and Federal Services of the Committee on Governmental Affairs, S. Hrg. 
107-160 (2001).
---------------------------------------------------------------------------
    On balance, however, granting OSC these additional 
litigation authorities is justified. For example, in several 
kinds of cases that arise under the civil service laws, it is 
routine for there to be more than one government party in the 
federal courts. Both the MSPB \74\ and the FLRA \75\ possess 
the authority to represent themselves in the courts of appeals, 
often against other federal agencies that are represented by 
the Justice Department.
---------------------------------------------------------------------------
    \74\ 5 U.S.C. Sec. Sec. 1201-1206.
    \75\ 5 U.S.C. Sec. Sec. 7104 and 7105(d)-(e).
---------------------------------------------------------------------------
    Further, the OSC, like the MSPB and the FLRA, occupies a 
unique role in the Executive Branch because part of its job is 
to police other federal agencies' compliance with the civil 
service laws. Even under current law, OSC's mission routinely 
requires it to take positions adverse to other federal 
government agencies, albeit before an administrative agency, 
the MSPB. Denying OSC independent litigating authority in the 
context of the civil service scheme creates an exception to 
what is otherwise the rule, under which DOJ provides 
representation to employing agencies defending themselves 
against the independent litigating agencies (the FLRA, the 
MSPB) who are represented by their own counsel.
    Without independent litigating authority, OSC is blocked 
from participating in the forum in which the law is largely 
shaped: the U.S. Court of Appeals for the Federal Circuit (and, 
if this legislation were passed, the other Circuits). Should 
the OSC conclude that MSPB misinterprets one of the laws within 
OSC's jurisdiction, the OSC has no right to appeal that 
decision, even if it was a party before the MSPB. The 
limitation undermines both OSC's ability to protect 
whistleblowers and the integrity of the whistleblower law.
    Precedent exists for independent litigating authority for 
independent agencies. In the area of employment law, both the 
Equal Employment Opportunity Commission \76\ and the National 
Labor Relations Board,\77\ in addition to the MSPB and the 
FLRA, have such authority. OSC itself has the authority to 
appear before the Court of Appeals and represent complainants 
alleging that the MSPB has wrongfully rejected their complaints 
under the Uniformed Services Employment Restoration Rights Act 
(USERRA).\78\
---------------------------------------------------------------------------
    \76\ 42 U.S.C. Sec. Sec. 2000e-4, 2000e-5(f)(2).
    \77\ 29 U.S.C. Sec. Sec. 154(a) and 160(e).
    \78\ 38 U.S.C. Sec. 4324(d)(2).
---------------------------------------------------------------------------
    For these reasons, S. 3070 provides explicit authority for 
the Special Counsel to appear, through attorneys that he or she 
may designate, in any civil action brought in connection with 
the WPA. In addition, the bill provides OSC the authority to 
obtain court review of any MSPB order in a whistleblowing case 
if the OSC determines the Board erred and the case will have an 
impact on the enforcement of the whistleblower statute. 
According to Special Counsel Elaine Kaplan, these changes are 
``necessary, not only to ensure OSC's effectiveness, but to 
address continuing concerns about the whittling away of the 
WPA's protections by narrow judicial interpretations of the 
law.'' \79\
---------------------------------------------------------------------------
    \79\ Letter from Elaine Kaplan, Special Counsel, Office of Special 
Counsel, to Senator Carl Levin, (Sept. 11, 2002).
---------------------------------------------------------------------------

Burden of proof in OSC disciplinary actions

    Current law authorizes the OSC to pursue disciplinary 
action against managers who retaliate against whistleblowers. 
More generally, if the Special Counsel determines that 
disciplinary action should be taken against an employee for 
having committed a prohibited personnel practice or other 
misconduct within OSC's purview, the Special Counsel shall 
present a written complaint to the MSPB, and then the Board may 
issue an order taking disciplinary action against the 
employee.\80\
---------------------------------------------------------------------------
    \80\ 5 U.S.C. Sec. 1215.
---------------------------------------------------------------------------
    However, under MSPB case law, OSC bears the burden of 
demonstrating that protected activity was the ``but-for cause'' 
of an adverse personnel action against a whistleblower--in 
other words, if the whistleblowing activity had not occurred, 
then that manager would not have taken the adverse personnel 
action.\81\ This is a heavy burden to meet. In 1989, Congress 
had lowered the burden of proof for whistleblowers to win 
corrective action when they were retaliated against. The 1989 
Act eliminated the relevance of employer motives, eased the 
standard to establish a prima facie case (showing that the 
protected speech was a contributing factor in the action), and 
reversed the burden for agencies who must now provide 
independent justification for the personnel action at issue by 
clear and convincing evidence.\82\ However, the 1989 statutory 
language only established burdens for defending against 
retaliation. It failed to address disciplinary actions. As a 
result, the Board has on many occasions ruled that 
whistleblower reprisal had been proven for purposes of 
providing relief to the employees, but rejected OSC's claim for 
disciplinary action against the managers in the same case.
---------------------------------------------------------------------------
    \81\ Special Counsel v. Santella, 65 M.S.P.R. 452 (1994).
    \82\ 5 U.S.C. Sec. Sec. 1214 and 1221. See also 135 Cong. Rec. 
4509, 4517, 5033 (1989).
---------------------------------------------------------------------------
    The Special Counsel has written that MSPB case law relating 
to OSC's disciplinary authority should be overturned. She 
explained: ``change is necessary in order to ensure that the 
burden of proof in these [disciplinary] cases is not so onerous 
as to make it virtually impossible to secure disciplinary 
action against retaliators.'' \83\
---------------------------------------------------------------------------
    \83\ Kaplan, supra note 79.
---------------------------------------------------------------------------
    The bill addresses the burden of proof problem in OSC 
disciplinary action cases by employing the same burden-of-proof 
as was set forth by the Supreme Court in Mt. Healthy v. 
Doyle.\84\ Under the Mt. Healthy test, if it were made 
applicable in a disciplinary case, OSC would have to show that 
protected whistleblowing was a ``significant, motivating 
factor'' in the decision to take or threaten to take a 
personnel action. If OSC made such a showing, the MSPB would 
order appropriate discipline unless the official showed, ``by a 
preponderance of evidence,'' that he or she would have taken or 
threatened to take the same personnel action even if there had 
been no protected whistleblower disclosure.
---------------------------------------------------------------------------
    \84\ Mt. Healthy City School District Board of Education v. Doyle, 
429 U.S. 274 (1977).
---------------------------------------------------------------------------

Other provisions

            Anti-gag provisions
    In 1988, Senator Grassley attached an appropriations rider 
to the Treasury, Postal and General Government bill, which has 
been referred to as the ``anti-gag'' provision. This provision 
has been included in spending legislation every year since 
then. The annual anti-gag provision states that no appropriated 
funds may be used to implement or enforce agency non-disclosure 
policies or agreements unless there is a specific, express 
statement informing employees that the disclosure restrictions 
do not override their right to disclose waste, fraud, and abuse 
under the WPA, to communicate with Congress under the Lloyd 
Lafollette Act, and to make appropriate disclosures under other 
particular laws specified in the addendum. This bill would 
institutionalize the anti-gag provision by codifying it and 
making it enforceable.
    Specifically, S. 3070 would require that every 
``nondisclosure policy, form, or agreement of the Government 
shall contain'' the specific addendum set forth in the 
legislation informing employees of their rights. A 
nondisclosure policy, form or agreement that does not contain 
the required statement ``may not be implemented or enforced to 
the extent * * * inconsistent with that statement.''
    Furthermore, the bill makes it a prohibited personnel 
practice for any manager to ``implement or enforce any 
nondisclosure policy, form, or agreement'' that does not 
contain the specific statement mandated in the bill. Making it 
a prohibited personnel practice means that the anti-gag 
requirement is enforceable by the OSC and the MSPB, and any 
employee can seek protection from these agencies against a 
personnel action taken in violation of the anti-gag 
requirement.
            Board review of actions relating to security clearance
    At the Subcommittee's hearing on S. 955, Senator Grassley 
testified about his concern that a whistleblower's security 
clearance can be used as a means of retaliation. He stated:

          I am aware of several instances where a 
        whistleblower's security clearance has been pulled as a 
        means of retaliation. The pulling of a security 
        clearance effectively fires employees. A whistleblower 
        does not have rights to a third-party proceeding in 
        these instances. I think this matter needs to be 
        reviewed and it should be possible to find a balance 
        between the legitimate security concerns of the 
        government and ensuring that pulling a security 
        clearance is not used as a back door to get 
        whistleblowers.\85\
---------------------------------------------------------------------------
    \85\ Hearing, supra note 73.

    In 2000, the Federal Circuit held that the MSPB lacks 
jurisdiction over an employee's claim that his security 
clearance was revoked in retaliation for whistleblowing.\86\ It 
held that the MSPB may neither review a security clearance 
determination nor require the grant or reinstatement of a 
clearance, and that the denial or revocation of a clearance is 
not a personnel action.
---------------------------------------------------------------------------
    \86\ Hesse v. State, 217 F. 3d 1372 (Fed. Cir. 2000).
---------------------------------------------------------------------------
    As a result of this decision, an employee's security 
clearance can be suspended or revoked in retaliation for making 
protected disclosures, the employee with a suspended or revoked 
clearance can be terminated from his or her federal government 
job, and MSPB may not review the revocation. According to the 
OSC, revocation of a security clearance is a way to camouflage 
retaliation. At the hearing on S. 955, Senator Levin asked the 
Special Counsel about ``a situation where a federal employee 
can blow the whistle on waste, fraud or abuse, and then, in 
retaliation for so doing, have his or her security clearance 
withdrawn and then be fired because he or she no longer has a 
security clearance.'' The Special Counsel, as part of her 
response, said:

          It is sort of Kafkaesque. If you are complaining 
        about being fired, and then one can go back and say, 
        ``Well, you are fired because you do not have your 
        security clearance and we cannot look at why you do not 
        have your security clearance,'' it can be a basis for 
        camouflaging retaliation.\87\
---------------------------------------------------------------------------
    \87\ Hearing, supra note 73, at 24 (testimony of Hon. Elaine 
Kaplan).

    To address this situation, S. 3070 makes it a prohibited 
personnel practice for a manager to suspend, revoke or take 
other action with respect to an employee's security clearance 
in retaliation for the employee blowing the whistle. The bill 
specifies that the MSPB, or a reviewing court, may issue 
declaratory and other appropriate relief. But the legislation 
is clear that the MSPB or a reviewing court may not direct the 
President to restore a security clearance.
    Appropriate relief may include back pay, an order to 
reassign the employee, attorney fees, and any other relief the 
Board or court is authorized to provide for other prohibited 
personnel practices. In addition, if the Board finds the action 
illegal, it may bar the agency from directly or indirectly 
taking any other personnel action based on the illegal security 
clearance action. The bill also requires agencies to issue a 
report to Congress detailing the circumstances of the agency's 
security clearance decision and provides for expedited review 
of whistleblower cases by the OSC, the MSPB and the reviewing 
court where a security clearance was revoked or suspended. The 
latter is important because a person whose clearance has been 
suspended or revoked, and whose job responsibilities require 
clearance, may be unable to work while his or her case is being 
considered.
    In drafting this provision, the Committee has worked with 
the Administration to produce a fair and balanced approach to 
solving this problem. Despite the Committee's efforts, the 
Administration still has some concerns over this provision. In 
particular, the Administration asserts that this provision is a 
substantial intrusion into Executive Branch prerogatives to 
control national security information and those who have access 
to it. It is important to note, however, that in Department of 
Navy v. Egan, the Supreme Court, while expressing a reluctance 
to intrude on its own initiative upon military and national 
security affairs, explicitly acknowledged the role of the 
Congress in national security issues, stating that ``unless 
Congress has specifically provided otherwise, courts 
traditionally have been reluctant to intrude upon the authority 
of the Executive in military and national security affairs.'' 
\88\
---------------------------------------------------------------------------
    \88\ Dept. of Navy v. Egan, 484 U.S. 518, 530 (1988) (citations 
omitted).
---------------------------------------------------------------------------
    The Administration has also averred that inclusion of this 
protection would induce more employees to challenge and 
litigate security clearance determinations and, as a result, 
will deter managers from making their best judgments on these 
sensitive issues.
    The Committee, however, believes that the language in this 
provision strikes the right balance and would not chill a 
manager's willingness to deny or revoke a clearance. It bears 
repeating that, under this bill, the Executive Branch retains 
the authority to ignore the MSPB's recommendations--there is no 
authority under this bill to direct that a security clearance 
be restored.
    The Administration has also claimed that MSPB has no 
expertise in making decisions on clearances. However, under 
this bill, the MSPB would not be making decisions relative to 
clearances. Rather, the decisions would relate to whether a 
disclosure is protected and whether there exists the proper 
nexus between the disclosure and the personnel action of 
denying or revoking a clearance. Such a determination is 
analogous to MSPB's current duties and is squarely within its 
expertise. For this reason, the provision is also consistent 
with U.S. Supreme Court precedent in Department of Navy v. 
Egan, which held that the Board does not have statutory 
authority to review the substance of an underlying security-
clearance determination in the course of reviewing an adverse 
action, and that such review cannot be presumed merely because 
the statute does not expressly preclude it.\89\
---------------------------------------------------------------------------
    \89\ Id.
---------------------------------------------------------------------------
            Compensatory damages
    When the Board imposes corrective action, the statute now 
expressly authorizes ``reimbursement * * * for reasonable and 
foreseeable consequential damages,'' but it does not make 
express reference to ``compensatory damages.'' \90\ The 1978 
Civil Service Reform Act gives the Board broad authority to 
impose appropriate corrective action, but the law does not 
specify traditional terms such as compensatory damages, which 
are explicit in equivalent civil rights remedial statutes 
providing ``make whole'' relief.\91\ This was not a particular 
problem, because the 1978 legislative history made clear the 
statute provides for a comprehensive ``make whole'' remedy: A 
prevailing employee is entitled ``to be made whole for any of 
the losses found to have been suffered by the employee.'' \92\ 
The Board also reaffirmed its authority to order that an 
employee be ``made whole'' for any damages incurred as a result 
of a prohibited personnel practice.\93\
---------------------------------------------------------------------------
    \90\ 5 U.S.C. Sec. 1214(g).
    \91\ See, e.g., 42 U.S.C. Sec. 1981a.
    \92\ S. Rep. No. 95-969, at 114-15 (1978), reprinted in 1978 USCCAN 
2723, 2837.
    \93\ In re Frazier, 1 M.S.P.R. 259, 268 and n.4 (1979) (stating 
``Clearly, the Board ultimately has the power under its broad 
corrective action authority to order a federal employee made whole if 
it is found on appeal that the employee has been subject to a 
prohibited personnel practice. See 5 U.S.C. Sec. 1206(c)(1)(B)).
---------------------------------------------------------------------------
    A dispute arose, however, concerning litigation costs for 
prevailing appellants. The Federal Circuit and Board permitted 
reimbursement for items like attorney time and photocopying, 
but not deposition transcript costs, printing costs and witness 
fees. In addition, reimbursement for telephone charges for 
witnesses depended on whether the attorney or the client made 
the call.\94\ In the 1994 amendments, Congress sought to close 
remaining loopholes and provide relief for ``back pay and 
related benefits, medical costs incurred, travel expenses, and 
any other reasonable and foreseeable consequential changes.'' 
\95\ The legislative history for this provision again stressed 
that employees are to be made whole. During debate over the 
1994 amendments, Congressman Frank McCloskey said that ``the 
expanded provisions for consequential damages and attorney fees 
are intended to provide a realistic expectation that employees 
who prevail will recover their costs, the same as if a merit 
system reprisal had not occurred. Too many employees who win 
their cases find their victories to be pyrrhic.'' \96\ In 
addition, the Senate Report accompanying the 1994 amendments 
stated that ``the Board [could] order corrective action [to] 
make, as nearly as possible, the individual whole.'' \97\ 
Despite Congressional intent, MSPB and the Federal Circuit have 
narrowed the scope of relief--finding that nonpecuniary 
damages, such as pain and suffering or emotional distress are 
not included.\98\ However, compensatory damages are already 
authorized for federal employees under the civil rights acts 
\99\ and for environmental and nuclear whistleblowers, among 
others, under other federal statutes.\100\ Accordingly, the 
bill would clarify that whistleblowers are eligible to receive 
``compensatory'' damages, as well as the consequential damages 
that are already stated in the statute.
---------------------------------------------------------------------------
    \94\ See Bennett v. Dept of Navy, 699 F.2d 1140 (Fed. Cir. 1983); 
O'Donnell v. Dept. of Interior, 2 M.S.P.R. 445 (1980); and Wiatr v. 
Dept. of Air Force, 50 M.S.P.R. 441 (1991).
    \95\ 5 U.S.C. Sec. 1221(g)(1)(A)(ii).
    \96\ 140 Cong. Rec. H11421 (daily ed. Oct. 7, 1994).
    \97\ S. Rep. No. 103-358, at 11 (1994).
    \98\ Kinney v. Dept. of Agriculture, 82 M.S.P.R. 338 (1999). See 
also Bohac v. Dept. of Agriculture, No. 99-3306 (Fed. Cir. 2001).
    \99\ See the Civil Rights Act of 1991 42 U.S.C. Sec. 1981a; 
Fitzgerald v. VA, 121 F.3d 203, 207 (5th Cir. 1997); Martin v. 
Department of Air Force, 73 M.S.P.R. 590, 594-96 (1997); Callagan v. 
Dept. of Agriculture, 74 M.S.P.R. 4, 6 (1997).
    \100\ See the Clean Air Act, 42 U.S.C. Sec. 7622(b)(2)(B); Safe 
Drinking Water Act, 42 U.S.C. Sec. 300j-9(ii); and Toxic Substances 
Control Act, 15 U.S.C. Sec. 2622(b)(2)(B).
---------------------------------------------------------------------------
            Classified disclosures to Congress
    The bill amends 5 U.S.C. Sec. 2302(b)(8) to provide 
whistleblower protections for certain disclosures of classified 
information to Congress. A whistleblower must limit the 
disclosure to a member of Congress who is authorized to receive 
the information disclosed or congressional staff who holds the 
appropriate security clearance and is authorized to receive the 
information disclosed. In order for a disclosure of classified 
information to be protected, the employee must possess a 
reasonable belief that the disclosure is direct and specific 
evidence of a violation of law, rule or regulation, gross 
mismanagement, a gross waste of funds, an abuse of authority, a 
substantial and specific danger to public health or safety, or 
a false statement to Congress on an issue of material fact.
    The language in this bill is very similar to a provision 
ordered reported by the Senate Armed Services Committee in 1997 
as section 1068 of S. 924, the National Defense Authorization 
bill for FY 1998. In 1998, another similar measure, containing 
provisions affecting the Intelligence Community, was reported 
by the Intelligence Committee and passed the Senate by a vote 
of 93 to 1, as section 501 of S. 2052, the Intelligence 
Authorization bill for FY 1999. The Senate provision was not 
contained in the enacted legislation, which instead 
incorporated a modified version of provisions that passed the 
House. Those enacted provisions established a secure process by 
which a whistleblower in the Intelligence Community intending 
to disclose wrongdoing to Congress may initially report to the 
appropriate inspector general, and then, if the information is 
not transmitted to the Intelligence Committees through that 
process, may contact the Intelligence Committees directly.\101\ 
The conferees explained that this measure ``establishes an 
additional process to accommodate the disclosure of classified 
information of interest to Congress,'' and emphasized that the 
new provision ``is not the exclusive process by which an 
Intelligence Community employee may make a report to 
Congress.'' \102\
---------------------------------------------------------------------------
    \101\ Intelligence Authorization Act for FY 1999, Pub. L. No. 105-
272, title VII (1998) (``Intelligence Community Whistleblower 
Protection Act of 1998'').
    \102\ H.R. Rep. No. 105-760 (1998) (emphasis added).
---------------------------------------------------------------------------
    The Senate Intelligence Committee had held hearings and 
reported out legislation in 1998 containing these same 
provisions, S. 1668. In its report, the Intelligence Committee 
described its consideration of constitutional and other 
ramifications of the legislation. That Committee was persuaded 
that the regulation of national security information, while 
implicit in the command authority of the President, is equally 
implicit in the national security and foreign affairs 
authorities vested in Congress by the Constitution. The 
Intelligence Committee was further persuaded that the provision 
was constitutional because it did not prevent the President 
from accomplishing his constitutionally assigned functions, and 
because any intrusion upon his authority is justified by an 
overriding need to promote objectives within the constitutional 
authority of Congress.\103\
---------------------------------------------------------------------------
    \103\ S. Rep. No. 105-165 (1998).
---------------------------------------------------------------------------
    The provision in S. 3070 is intended to ensure that 
Congress receives the information necessary to fulfill its 
constitutional oversight responsibilities, while protecting 
employees from adverse actions based on what was considered an 
unauthorized disclosure to Congress, and also retaining 
appropriate security-related restrictions in defining the 
individuals to whom classified information may be disclosed.
            Ex post facto agency loophole amendment
    The WPA provides that certain employees and agencies are 
exempt from the Act. Employees excluded from the Act include 
those in positions exempted from the competitive service 
because of their confidential, policy-determining, policy-
making, or policy advocating character and those employees 
excluded by the President if necessary and warranted by 
conditions of good administration.\104\ Certain agencies are 
also excluded from the Act. They include the General Accounting 
Office, the Federal Bureau of Investigation the Central 
Intelligence Agency, the National Security Agency, and other 
agencies determined by the President to have the principal 
function of conducting foreign intelligence or 
counterintelligence activities.\105\
---------------------------------------------------------------------------
    \104\ 5 U.S.C. Sec. 2302(a)(2)(B).
    \105\ Id.
---------------------------------------------------------------------------
    In 1994 Congress amended the WPA to block agencies from 
designating particular positions as confidential policymaker 
exceptions after the employees filed prohibited personnel 
practice complaints. As a result, Congress restricted this 
jurisdictional loophole to positions designated as exceptions 
``prior to the personnel action.'' \106\ Unfortunately, a 
similar practice has occurred again, in a context with far 
broader consequences. An agency was exempted from the Act over 
a year into whistleblower litigation, and only after the Board 
had overturned an Administrative Judge's decision to order a 
hearing.\107\ S. 3070 would close the loophole for agencies in 
the same manner as Congress did for positions in 1994, by 
specifying that an agency may be excluded under the Act only 
prior to the personnel action taking place.
---------------------------------------------------------------------------
    \106\ Id.
    \107\ See Czarkowski v. Dept. of Navy, Docket No. DC-1221-99-0547-
B-1. The agency invoked the exemption after the Board rejected an 
earlier effort to avoid litigation on a different basis and ordered a 
hearing, Czarkowski v. Dept. of the Navy, 87 M.S.P.R. 107 (2000).
---------------------------------------------------------------------------

                        III. Legislative History

    S. 3070 was introduced by Senator Daniel Akaka and Senator 
Carl Levin on October 8, 2002, and was referred to the 
Committee on Governmental Affairs. The bill builds on 
provisions of S. 2829, which was introduced by Senator Akaka on 
July 31, 2002, to reauthorize appropriations for the MSPB and 
OSC and make changes to the WPA, and of S. 995, which was 
introduced by Senators Akaka, Levin, and Grassley on June 7, 
2001, to make amendments to the WPA. S. 2829 and S. 995 were 
referred to the Subcommittee on International Security, 
Proliferation and Federal Services. A hearing on S. 995 was 
held before the Subcommittee on July 25, 2001. The witnesses 
included Senator Grassley, Special Counsel Elaine Kaplan, Merit 
Systems Protection Board Chair Beth Slavet, and Thomas Devine 
of the Government Accountability Project. The Department of 
Justice was invited to testify, but declined. Written testimony 
was submitted by the Department.
    On September 23, 2002, representatives from the MSPB and 
OSC met with Governmental Affairs Committee staff to discuss 
the reauthorization of OSC and MSPB. Tim Hannapel, Deputy 
Special Counsel, and Jane McFarland, Director of Congressional 
and Public Affairs, represented the OSC. MSPB was represented 
by Chief of Staff Richard Banchoff, General Counsel Lynn 
Jennings, Legislative Counsel Rosalyn Wilcots, Budget Officer 
Doug Wade, and Steve Nelson, the Director of the Office of 
Policy and Evaluation.
    On October 8, 2002, the Subcommittee on International 
Security, Proliferation, and Federal Services favorably polled 
out the language of S. 3070. On October 9, 2002, the Committee 
met in open session and ordered favorably reported the bill, S. 
3070, without amendment unanimously by rollcall vote. Present 
and voting in the affirmative were Senators Akaka, Levin, 
Durbin, Torricelli, Cleland, Carnahan, Carper, Dayton, and 
Lieberman.

                    IV. Regulatory Impact Statement

    Paragraph 11(b)(1) of rule XXVI of the Standing Rules of 
the Senate requires that each report accompanying a bill 
evaluate the ``regulatory impact which would be incurred in 
carrying out this bill.'' The Committee has determined that the 
enactment of this legislation will not have significant 
regulatory impact.

              V. Congressional Budget Office Cost Estimate

    In compliance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate and with section 403 of the 
Congressional Budget Act of 1974, 2 U.S.C. Sec. 653, the 
Committee sets forth the following cost estimate with respect 
to S. 3070 submitted to the Committee by the Congressional 
Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 18, 2002.
Hon. Joseph I. Lieberman,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 3070, a bill to 
authorize appropriations for the Merit Systems Protection Board 
and the Office of Special Counsel, and for other purposes.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 3070--A bill to authorize appropriations for the Merit Systems 
        Protection Board and the Office of Special Counsel, and for 
        other purposes

    Summary: S. 3070 would authorize appropriations for the 
Merit Systems Protection Board (MSPB) and the Office of Special 
Counsel (OSC) for fiscal years 2003 through 2007. The bill also 
would make several amendments to the laws governing the MSPB 
and the OSC and would clarify the employment protections and 
rules that apply to employees who disclose government waste, 
fraud, and abuse.
    Based on the amounts appropriated for these agencies in 
2002 and assuming adjustments for anticipated inflation, CBO 
estimates that implementing this legislation would cost $242 
million over the 2003-2007 period. Enacting S. 3070 would not 
affect direct spending or revenues. The bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would not affect the 
budgets of state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 3070 is shown in the following table. 
The costs of this legislation fall within budget function 800 
(general government).

----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2003     2004     2005     2006     2007
----------------------------------------------------------------------------------------------------------------
                                CHANGES IN SPENDING SUBJECT TO APPROPRIATION \1\
Merit Systems Protection Board:
    Estimated Authorization Level..................................       32       33       34       34       37
    Estimated Outlays..............................................       31       31       33       34       36
Office of Special Counsel:
    Estimated Authorization Level..................................       12       13       13       14       14
    Estimated Outlays..............................................       12       13       13       14       14
Compensatory Damage Awards:
    Estimated Authorization Level..................................        1        2        2        2        2
    Estimated Outlays..............................................        1        2        2        2        2
Total Changes:
    Estimated Authorization Level..................................       45       48       49       50       53
    Estimated Outlays..............................................       44       48       48       50       52
----------------------------------------------------------------------------------------------------------------
\1\ A full-year appropriation has not yet been enacted for the MSPB and the OSC. In fiscal year 2002, MSPB
  received an appropriation of $31 million and OSC received an appropriation of $12 million.

    Basis of Estimate: For this estimate, CBO assumes that the 
bill will be enacted in fiscal year 2003 and that the amounts 
necessary to operate the MSPB and OSC at the same level 
provided in 2002 will be appropriated for each fiscal year, 
including adjustments for anticipated inflation. Outlay 
estimates are based on historical spending patterns for the 
agencies.
    When implementing corrective actions to settle an 
employment dispute between the federal government and its 
employees regarding prohibited personnel practices, federal 
agencies are required to spend appropriated funds to pay for an 
employee's attorney's fees, back pay, and any associated travel 
and medical costs. Under S. 3070, federal employees would be 
authorized to receive additional compensatory damages, 
including pain and suffering, for employment disputes brought 
under the Whistleblower Protection Act.
    CBO cannot estimate the cost of compensatory damage awards 
in such cases because the amount awarded would depend on the 
particular circumstances of each case and the frequency of 
cases involving such damages. The OSC is involved in settling 
an average of 75 disputes under the Whistleblower Protection 
Act each year. Settlement amounts range from about $20,000 to 
$200,000. While it is uncertain how often compensatory damages 
would be awarded in such cases, the OSC expects such awards 
could more than double the cost of some settlements. Hence, CBO 
expects this provision would add a few million dollars each 
year to the cost of agency settlements, which are paid from 
individual agency appropriations.
    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Matthew Pickford; 
Impact on State, Local, and Tribal Governments: Susan Sieg 
Tompkins; and Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

             VI. Section-by-Section Analysis and Discussion

                               SECTION 1

    Reauthorizes appropriations for the Office of Special 
Counsel and the Merit Systems Protection Board through fiscal 
year 2007.

                               SECTION 2

    Removes the requirement for OSC to return all documents to 
the whistleblower in all disclosure cases that are closed 
without referral to an agency head. OSC currently devotes 85 
hours of monthly full-time-equivalent employee time to meet 
this statutory requirement which could otherwise be devoted to 
processing. In addition, OSC spends almost $5,000 a year on 
paper and mailing costs associated with the requirement. Added 
to the salary costs, this provision would save more than 
$20,000 annually. OSC would still be required to return all 
documentation provided by the whistleblower, if requested, 
under the Freedom of Information Act.

                               SECTION 3

Clarification of disclosures covered

    The bill reaffirms and codifies the WPA's fundamental 
principle that ``any'' lawful disclosure that the employee or 
applicant reasonably believes is credible evidence of waste, 
fraud, abuse, or gross mismanagement is covered by the WPA. The 
bill amends 5 U.S.C. Sec. Sec. 2302(b)(8)(A) and 2302(b)(8)(B) 
to cover any disclosure of information ``without restriction to 
time, place, form, motive or context, or prior disclosure made 
to any person by an employee or applicant, including a 
disclosure made in the ordinary course of an employee's duties 
that the employee or applicant reasonably believes is credible 
evidence of any violation of any law, rule, or regulation, or 
other misconduct specified in section 2302(b)(8).''
    This section also amends 5 U.S.C. Sec. 2302(b)(8) to 
subject certain disclosures of classified information to 
whistleblower protections. In order for a disclosure of 
classified information to be protected, the employee must 
possess a reasonable belief that the disclosure is evidence of 
a violation of law, rule or regulation, gross mismanagement, a 
gross waste of funds, an abuse of authority, a substantial and 
specific danger to public health or safety, or a false 
statement to Congress on an issue of material fact. A 
whistleblower must also limit the disclosure to a member of 
Congress or staff holding the appropriate security clearance 
who is authorized to receive the information disclosed.

Covered disclosures

    This section clarifies the meaning of ``disclosure'' to 
mean a formal or informal communication or transmission.

Rebuttable presumption

    The U.S. Court of Appeals for the Federal Circuit has 
imposed a clearly erroneous standard on federal whistleblowers. 
Under the clear language of the statute, an employee need only 
have ``a reasonable belief'' that he or she is providing 
evidence of fraud, waste or abuse before making a protected 
disclosure. However, the Court of Appeals for the Federal 
Circuit ruled that reasonable belief was insufficient and held 
that ``irrefragable proof'' was needed for a whistleblower to 
overcome the ``presumption that a public officer performed 
their duties correctly, fairly, in good faith, and in 
accordance with the law and governing regulations.'' \108\ 
Irrefragable means ``undeniable, incontestable, 
incontrovertible, incapable of being overthrown.'' The 
irrefragable standard is nearly impossible to meet. Further, 
there is nothing in the law or the legislative history that 
suggests such a standard with respect to the WPA. The amendment 
to 2302(b) provides that a whistleblower can rebut the 
presumption with ``substantial evidence.''
---------------------------------------------------------------------------
    \108\ Lachance v. White, 174 F.3d 1378 (Fed. Cir. 1999).
---------------------------------------------------------------------------

Nondisclosure policies, security clearances, and retaliatory 
        investigations

            Personnel actions
    This section amends 5 U.S.C. Sec. 2302(a)(2)(A) to add 
three new personnel actions. The amendment makes--

        the enforcement of any nondisclosure policy, form or 
        agreement; the suspension, revocation, or other 
        determination relating to a security clearance; and an 
        investigation of an employee or applicant for 
        employment--

illegal if taken because a whistleblower makes a protected 
disclosure.

Prohibited personnel practice

    This section amends 2302(b), adding two prohibited 
personnel practices to the whistleblower law. Congress 
repeatedly has reaffirmed its intent that employees should not 
be forced to sign disclosure agreements or be subjected to 
nondisclosure rules or policies that supercede an employee's 
rights under good government statutes. Moreover, Congress has 
consistently supported the concept that federal employees 
should not be subject to prior restraint from disclosing 
wrongdoing nor suffer retaliation for speaking out. This 
section first codifies an ``anti-gag'' provision that Congress 
has passed annually since 1988 as part of the appropriations 
process. It bans agencies from implementing or enforcing any 
nondisclosure policy, form or agreement that does not contain 
specified language preserving open government statutes such as 
the WPA, the Military Whistleblower Protection Act, and the 
Lloyd Lafollette Act, which prohibits discrimination against 
government employees who communicate with Congress.
    Second, this section makes it illegal for a manager to 
initiate an investigation of an employee or applicant for 
employment because they engaged in a protected activity 
(including whistleblowing) under the statute.
            Board and court review of actions relating to security 
                    clearance
    By adding ``the suspension, revocation, or other 
determination relating to a security clearance'' to the list of 
personnel actions in 2302(a)(2)(A), the amendment makes it a 
prohibited personnel practice for a manager to suspend, revoke 
or take other action with respect to an employee's security 
clearance in retaliation for the employee blowing the whistle. 
However, the amendment limits the relief that the MSPB and 
reviewing court can order if it is demonstrated that such 
retaliation has occurred. The amendment adds a new section 
after 5 U.S.C. Sec. 7702 stating that the MSPB or the reviewing 
court may issue declaratory and other appropriate relief, but 
may not direct the President to restore a security clearance. 
In cases where the MSPB or court declares that a security 
clearance decision was made in retaliation for an employee 
blowing the whistle, the agency must issue a report to Congress 
detailing the circumstances of the agency's security clearance 
decision. The amendment also provides for expedited review of 
whistleblower cases where a security clearance was revoked or 
suspended.

Exclusion of agencies by the President

    Certain employees are not covered by the WPA, including 
those who hold ``confidential policy-making positions.'' In 
1994 Congress amended the WPA to stop agencies from designating 
employees confidential policymakers after the employees filed 
whistleblower complaints. Under the WPA, the President has the 
authority to designate agencies that are outside WPA 
protections. Section 2302(a)(2)(C) allows the President to 
exclude from WPA jurisdiction ``any agency or unit thereof the 
principal function of which is the conduct of foreign 
intelligence or counterintelligence activities.'' The amendment 
maintains that authority but clarifies that the designation 
must be made prior to a personnel action being taken against a 
whistleblower. This ensures that agencies cannot argue that an 
employee is exempt from whistleblower protections after the 
employee files a claim that they were retaliated against.

Attorney fees

    The amendment would require the employing agency, not the 
OSC, to reimburse the prevailing party for attorney fees in a 
disciplinary proceeding brought by the OSC.

Compensatory damages

    In the 1994 WPA amendments, Congress attempted to expand 
relief for whistleblowers by providing that whistleblowers 
could receive all direct or indirect consequential damages. 
Despite Congressional intent, the Board and the Federal Circuit 
have narrowed the scope of relief. The amendment would clarify 
5 U.S.C. Sec. 1214(g)(2) to provide whistleblowers relief for 
``compensatory or consequential damages.''

Disciplinary action

    The WPA authorizes the OSC to pursue disciplinary action 
against managers who retaliate against whistleblowers. This 
section establishes a reasonable burden of proof for such 
actions. It amends 5 U.S.C. Sec. 1215 to require the OSC to 
demonstrate in disciplinary cases that the whistleblower's 
protected disclosure was a ``significant motivating factor'' in 
the decision by a manager to take or threaten to take a 
personnel action against them. If OSC makes such a showing, 
appropriate disciplinary action could be ordered unless the 
official showed, by a preponderance of the evidence, that he or 
she would have taken, or threatened to take, the same personnel 
action even if there had been no disclosure.

Disclosures to Congress

    This section amends 5 U.S.C. Sec. 2302 to require agencies 
to establish a process to provide confidential advice to 
employees on how to lawfully make a protected disclosure of 
classified information to Congress.

Authority of Special Counsel relating to civil actions

            Representation of Special Counsel
    Current law provides the Office of Special Counsel with no 
authority to request the MSPB to reconsider one of its 
decisions or to seek review of an MSPB decision by the U.S. 
Court of Appeals for the Federal Circuit. Even when another 
party with authority to petition for a review of a MSPB 
decision does so, OSC has historically been denied the right to 
participate in those proceedings. This section amends 5 U.S.C. 
Sec. 1212 to provide explicit authority for the Office of 
Special Counsel to appear in any civil action brought in 
connection with the whistleblower law.
            Judicial review of Merit Systems Protection Board decisions
    When the OSC believes that MSPB misinterprets one of the 
laws within OSC's jurisdiction, the OSC has no right to appeal 
that decision, even if it was one of the parties before the 
MSPB. Under current law, while the OPM can request that the 
MSPB reconsider its rulings, OSC cannot. The limitation 
undermines both OSC's ability to protect whistleblowers and the 
integrity of the whistleblower law. This section provides OSC 
with the authority to obtain review in the U.S. Court of 
Appeals for the Federal Circuit or a court of competent 
jurisdiction of any MSPB order in a whistleblowing case where 
the OSC determines the MSPB erred and the case will have an 
impact on the enforcement of the whistleblower statute.

Judicial review

    Subject to a five year sunset, this section suspends the 
exclusive jurisdiction of the U.S. Court of Appeals for the 
Federal Circuit over whistleblower appeals. It amends 5 U.S.C. 
Sec. 7703 to provide that a petition to review a final order or 
final decision of the MSPB may be filed in the U.S. Court of 
Appeals for the Federal Circuit or the United States Court of 
Appeals where the petitioner resides.

             NONDISCLOSURE POLICIES, FORMS, AND AGREEMENTS

    This section requires agencies to include in their 
nondisclosure policies, forms and agreements a statement that 
informs employees of their statutory obligations and rights 
with regards to disclosing information. It also institutes a 
government-wide ban on agency implementation or enforcement of 
any nondisclosure policy, form or agreement that does not 
contain the specified language preserving open government 
statutes such as the WPA, the Military Whistleblower Protection 
Act, and the Lloyd Lafollette Act, which prohibit 
discrimination against government employees who communicate 
with Congress. The ban is limited to those instances where the 
implementation or enforcement conflicts with the enumerated 
open government statutes. This section also requires that 
nondisclosure agreements with persons who are not federal 
employees but who are connected with intelligence related 
activities must contain language barring the person from 
disclosing any classified information unless they are 
specifically authorized to do so by the United States 
Government. The nondisclosure agreements must also make it 
clear that the agreement does not bar disclosures of a 
substantial violation of law to Congress, an authorized 
executive agency, or the Department of Justice.

       VII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 12 of rule XXVI of the Rules of 
the United States Senate, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italics, existing law in which no change is proposed 
is shown in roman):

WHISTLEBLOWER PROTECTION ACT OF 1989

           *       *       *       *       *       *       *

(5 U.S.C. 5509 note, Public Law 101-12; 103 Stat. 34)

           *       *       *       *       *       *       *

SEC. 8. AUTHORIZATION OF APPROPRIATIONS; RESTRICTION RELATING TO 
                    APPROPRIATIONS UNDER THE CIVIL SERVICE REFORM ACT 
                    OF 1978; TRANSFER OF FUNDS

    (a) Authorization of Appropriations.--There are authorized 
to be appropriated, out of any moneys in the Treasury not 
otherwise appropriated--
          (1) for each of fiscal years [1998, 1999, 2000, 2001, 
        and 2002] 2003, 2004, 2005, 2006, and 2007 such sums as 
        necessary to carry out subchapter I of chapter 12 of 
        title 5 United States Code (as amended by this Act); 
        and
          (2) for each of fiscal years [1993, 1994, 1995, 1996, 
        and 1997] 2003, 2004, 2005, 2006, and 2007 such sums as 
        necessary to carry out subchapter II of chapter 12 of 
        title 5, United States Code (as amended by this Act).

           *       *       *       *       *       *       *

   TITLE 5, UNITED STATES CODE: GOVERNMENT ORGANIZATION AND EMPLOYEES

         PART II--CIVIL SERVICE FUNCTIONS AND RESPONSIBILITIES

CHAPTER 12--MERIT SYSTEMS PROTECTION BOARD, OFFICE OF SPECIAL COUNSEL, 
                      AND EMPLOYEE RIGHT OF ACTION

              Subchapter I--Merit Systems Protection Board

SEC. 1204. POWERS AND FUNCTIONS OF THE MERIT SYSTEMS PROTECTION BOARD.

           *       *       *       *       *       *       *

    (m)(1) Except as provided in paragraph (2) of this 
subsection, the Board, or an administrative law judge or other 
employee of the Board designated to hear a case arising under 
section 1215, may require payment by the [agency involved] 
agency where the prevailing party is employed or has applied 
for employment of reasonable attorney fees incurred by an 
employee or applicant for employment if the employee or 
applicant is the prevailing party and the Board, administrative 
law judge, or other employee (as the case may be) determines 
that payment by the agency is warranted in the interest of 
justice, including any case in which a prohibited personnel 
practice was engaged in by the agency or any case in which the 
agency's action was clearly without merit.

                Subchapter II--Office of Special Counsel

SEC. 1213. PROVISIONS RELATING TO DISCLOSURES OF VIOLATIONS OF LAW, 
                    GROSS MISMANAGEMENT, AND CERTAIN OTHER MATTERS.

           *       *       *       *       *       *       *

    (g)(1) If the Special Counsel receives information of a 
type described in subsection (a) from an individual other than 
an individual described in subparagraph (A) or (B) of 
subsection (c)(2), the Special Counsel may transmit the 
information to the head of the agency which the information 
concerns. The head of such agency shall, within a reasonable 
time after the information is transmitted, inform the Special 
Counsel in writing of what action has been or is being taken 
and when such action shall be completed. The Special Counsel 
shall inform the individual of the report of the agency head. 
[If the Special Counsel does not transmit the information to 
the head of the agency, the Special Counsel shall return any 
documents and other matter provided by the individual who made 
the disclosure.]
    (2) If the Special Counsel receives information of a type 
described in subsection (a) from an individual described in 
subparagraph (A) or (B) of subsection (c)(2), but does not make 
a positive determination under subsection (b), the Special 
Counsel may transmit the information to the head of the agency 
which the information concerns, except that the information may 
not be transmitted to the head of the agency without the 
consent of the individual. The head of such agency shall, 
within a reasonable time after the information is transmitted, 
inform the Special Counsel in writing of what action has been 
or is being taken and when such action will be completed. The 
Special Counsel shall inform the individual of the report of 
the agency head.
    [(3) If the Special Counsel does not transmit the 
information to the head of the agency under paragraph (2), the 
Special Counsel shall--(A) return any documents and other 
matter provided by the individual who made the disclosure; and 
(B) inform the individual of--(i) the reasons why the 
disclosure may not be further acted on under this chapter; and 
(ii) other offices available for receiving disclosures, should 
the individual wish to pursue the matter further.] (3) If the 
Special Counsel does not transmit the information to the head 
of the agency under paragraph (2), the Special Counsel shall 
inform the individual of--
          (A) the reasons why the disclosure may not be further 
        acted on under this chapter; and
          (B) other offices available for receiving 
        disclosures, should the individual wish to pursue the 
        matter further.

SEC. 1212. POWERS AND FUNCTIONS OF THE OFFICE OF SPECIAL COUNSEL.

    (a) The Office of Special Counsel shall--

           *       *       *       *       *       *       *

    (h) Except as provided in section 518 of title 28, relating 
to litigation before the Supreme Court, attorneys designated by 
the Special Counsel may appear for the Special Counsel and 
represent the Special Counsel in any civil action brought in 
connection with section 2302(b)(8) or subchapter III of chapter 
73, or as otherwise authorized by law.

SEC. 1214 INVESTIGATION OF PROHIBITED PERSONNEL PRACTICES; CORRECTIVE 
                    ACTION.

           *       *       *       *       *       *       *

    (g) If the Board orders corrective action under this 
section, such corrective action may include--
          (1) that the individual be placed, as nearly as 
        possible, in the position the individual would have 
        been in had the prohibited personnel practice not 
        occurred; and
          (2) reimbursement for attorney's fees, back pay and 
        related benefits, medical costs incurred, travel 
        expenses, and any other reasonable and foreseeable 
        compensatory or consequential damages.

SEC. 1215. DISCIPLINARY ACTION.

           *       *       *       *       *       *       *

          [(3) A final order of the Board may impose 
        disciplinary action consisting of removal, reduction in 
        grade, debarment from Federal employment for a period 
        not to exceed 5 years, suspension, reprimand, or an 
        assessment of a civil penalty not to exceed $1,000.]
          (3)(A) A final order of the Board may impose 
        disciplinary action consisting of removal, reduction in 
        grade, debarment from Federal employment for a period 
        not to exceed 5 years, suspension, reprimand, or an 
        assessment of a civil penalty not to exceed $1000.
          (B) In any case in which the Board finds that an 
        employee has committed a prohibited personnel practice 
        under section 2303(b) (8) or (9), the Board shall 
        impose disciplinary action if the Board finds that 
        protected activity was a significant motivating factor 
        in the decision to take, fail to take, or threaten to 
        take or fail to take a personnel action, unless that 
        employee demonstrates, by preponderance of evidence, 
        that the employee would have taken, failed to take, or 
        threatened to take or fail to take the same personnel 
        action, in the absence of such protected activity.

                          PART III--EMPLOYEES

                     Subpart A--General Provisions

                  CHAPTER 23--MERIT SYSTEM PRINCIPLES

SEC. 2302. PROHIBITED PERSONNEL PRACTICES.

    (a)(1) For the purpose of this title, ``prohibited 
personnel practice'' means any action described in subsection 
(b).
    (2) For the purpose of this section--
          (A) ``personnel action'' means--
                  (i) an appointment;
                  (ii) a promotion;
                  (iii) an action under chapter 75 of this 
                title or other disciplinary or corrective 
                action;
                  (iv) a detail, transfer, or reassignment;
                  (v) a reinstatement;
                  (vi) a restoration;
                  (vii) a reemployment;
                  (viii) a performance evaluation under chapter 
                43 of this title;
                  (ix) a decision concerning pay, benefits, or 
                awards, concerning education or training if the 
                education or training may reasonably be 
                expected to lead to an appointment, promotion, 
                performance evaluation, or other action 
                described in this subparagraph;
                  (x) a decision to order psychiatric testing 
                or examination; [and]
                  (xi) the implementation or enforcement of any 
                nondisclosure policy, form, or agreement;
                  (xii) a suspension, revocation, or 
                determination relating to a security clearance;
                  (xiii) an investigation of an employee or 
                applicant for employment because of any 
                activity protected under this section; and
                  [(xi)] (xiv) any other significant change in 
                duties, responsibilities, or working 
                conditions; with respect to an employee in, or 
                applicant for, a covered position in an agency, 
                and in the case of an alleged prohibited 
                personnel practice described in subsection 
                (b)(8), an employee or applicant for employment 
                in a Government corporation as defined in 
                section 9101 of title 31;

           *       *       *       *       *       *       *

          (C) ``agency'' means an Executive agency and the 
        Government Printing Office, but does not include--
                  (i) a Government corporation, except in the 
                case of an alleged prohibited personnel 
                practice described under subsection (b)(8);
                  [(ii) the Federal Bureau of Investigation, 
                the Central Intelligence Agency, the Defense 
                Intelligence Agency, the National Imagery and 
                Mapping Agency, the National Security Agency, 
                and, as determined by the President, any 
                Executive agency or unit thereof the principal 
                function of which is the conduct of foreign 
                intelligence or counterintelligence activities; 
                or]
                  (ii)(I) the Federal Bureau of Investigation, 
                the Central Intelligence Agency, the Defense 
                Intelligence Agency, the National Imagery and 
                Mapping Agency, the National Security Agency; 
                and
                  (II) as determined by the President, any 
                Executive agency or unit thereof the principal 
                function of which is the conduct of foreign 
                intelligence or counterintelligence activities, 
                if the determination (as that determination 
                relates to a personnel action) is made before 
                that personnel action; or
                  (iii) the General Accounting Office.
    (b) Any employee who has authority to take, direct others 
to take, recommend, or approve any personnel action, shall not, 
with respect to such authority--

           *       *       *       *       *       *       *

          (8) take or fail to take, or threaten to take or fail 
        to take, a personnel action with respect to any 
        employee or applicant for employment because of--
                  (A) any disclosure of information by an 
                employee or [applicant which the employee or 
                applicant reasonably believes evidences,] 
                without restriction to time, place, form, 
                motive, context, or prior disclosure made to 
                any person by an employee or applicant, 
                including a disclosure made in the ordinary 
                course of an employee's duties, that the 
                employee or applicant reasonably believes is 
                evidence of--
                          (i) [a violation] any violation of 
                        any law, rule, or regulation, or
                          (ii) gross mismanagement, a gross 
                        waste of funds, an abuse of authority, 
                        or a substantial and specific danger to 
                        public health or safety, if such 
                        disclosure is not specifically 
                        prohibited by law and if such 
                        information is not specifically 
                        required by Executive order to be kept 
                        secret in the interest of national 
                        defense or the conduct of foreign 
                        affairs; or
                  (B) any disclosure to the Special Counsel, or 
                to the Inspector General of an agency or 
                another employee designated by the head of the 
                agency to receive such disclosures, of 
                information [which the employee or applicant 
                reasonably believes evidences,] without 
                restriction to time, place, form motive, 
                context, or prior disclosure made to any person 
                by an employee or applicant, including a 
                disclosure made in the ordinary course of an 
                employee's duties, to the Special Counsel, or 
                to the Inspector General of an agency or 
                another employee designated by the head of the 
                agency to receive such disclosures, of 
                information that the employee or applicant 
                reasonably believes is evidence of--
                          (i) [a violation] any violation 
                        (other than a violation of this 
                        section) of any law, rule, or 
                        regulation, or
                          (ii) gross mismanagement, a gross 
                        waste of funds, an abuse of authority, 
                        or a substantial and specific danger to 
                        public health or safety;
                  (C) a disclosure that--
                          (i) is made by an employee or 
                        applicant of information required by 
                        law or Executive order to be kept 
                        secret in the interest of national 
                        defense or the conduct of foreign 
                        affairs that the employee or applicant 
                        reasonably believes is direct and 
                        specific evidence of--
                                  (I) any violation of any law, 
                                rule, or regulation;
                                  (II) gross mismanagement, a 
                                gross waste of funds, an abuse 
                                of authority, or a substantial 
                                and specific danger to public 
                                health or safety; or
                                  (III) a false statement to 
                                Congress on an issue of 
                                material fact; and
                          (ii) is made to--
                                  (I) a member of a committee 
                                of Congress having primary 
                                responsibility for oversight of 
                                a department, agency, or 
                                element of the Federal 
                                Government to which the 
                                disclosed information relates 
                                and who is authorized to 
                                receive information of the type 
                                disclosed;
                                  (II) any other Member of 
                                Congress who is authorized to 
                                received information of the 
                                type disclosed; or
                                  (III) an employee of Congress 
                                who has the appropriate 
                                security clearance and is 
                                authorized to receive the 
                                information disclosed.

           *       *       *       *       *       *       *

          (11)(A) knowingly take, recommend, or approve any 
        personnel action if the taking of such action would 
        violate a veterans' preference requirement; or
          (B) knowingly fail to take, recommend, or approve any 
        personnel action if the failure to take such action 
        would violate a veterans' preference requirement; [or]
          (12) take or fail to take any other personnel action 
        if the taking of or failure to take such action 
        violates any law, rule, or regulation implementing, or 
        directly concerning, the merit system principles 
        contained in section 2301 of this title[.];
          (13) implement or enforce any nondisclosure policy, 
        form, or agreement, if such policy, form, or agreement 
        does not contain the following statement: ``These 
        provisions are consistent with and do not supersede, 
        conflict with, or otherwise alter the employee 
        obligations, rights, or liabilities created by 
        Executive Order No. 12958; section 7211 of title 5, 
        United States Code (governing disclosures to Congress); 
        section 1034 of title 10, United States Code (governing 
        disclosure to Congress by members of the military); 
        section 2302(b)(8) of title 5, United States Code 
        (governing disclosures of illegality, waste, fraud, 
        abuse, or public health or safety threats); the 
        Intelligence Identities Protection Act of 1982 (50 
        U.S.C. 421 et seq.) (governing disclosures that could 
        expose confidential Government agents); and the 
        statutes which protect against disclosures that could 
        compromise national security, including sections 641, 
        793, 794, 798, and 952 of title 18, United States Code, 
        and section 4(b) of the Subversive Activities Control 
        Act of 1950 (50 U.S.C. 783(b)). The definitions, 
        requirements, obligations, rights, sanctions, and 
        liabilities created by such Executive order and such 
        statutory provisions are incorporated into this 
        agreement and are controlling.''; or
          (14) conduct, or cause to be conducted, an 
        investigation of an employee or applicant for 
        employment because of any activity protected under this 
        section.
    [This subsection] This subsection shall not be construed to 
authorize the withholding of information from the Congress or 
the taking of any personnel action against an employee who 
discloses information to the Congress. In this subsection, the 
term ``disclosure'' means a formal or informal communication or 
transmission.
    For purposes of paragraph (8), any presumption relating to 
the performance of a duty by an employee who has authority to 
take, direct others to take, recommend, or approve any 
personnel action may be rebutted by substantial evidence.

           *       *       *       *       *       *       *

    (f) Each agency shall establish a process that provides 
confidential advice to employees on making a lawful disclosure 
to Congress of information that is specifically required by law 
or Executive order to be kept secret in the interest of 
national defense or the conduct of foreign affairs.

           Subpart F--Labor Management and Employee Relations

CHAPTER 77--APPEALS

           *       *       *       *       *       *       *

SEC. 7702A. ACTIONS RELATING TO SECURITY CLEARANCES.

    (a) In any appeal relating to the suspension, revocation, 
or other determination relating to a security clearance, the 
Merit Systems Protection Board or a court--
          (1) shall determine whether section 2302 was 
        violated;
          (2) may not order the President to restore a security 
        clearance; and
          (3) subject to paragraph (2), may issue declaratory 
        relief and any other appropriate relief.
    (b)(1) If, in any final judgment, the Board or court 
declares that any suspension, revocation, or other 
determination with regards to a security clearance was made in 
violation of section 2302, the affected agency shall conduct a 
review of that suspension, revocation, or other determination, 
giving great weight to the Board or court judgment.
    (2) Not later than 30 days after any Board or court 
judgment declaring that a security clearance suspension, 
revocation, or other determination was made in violation of 
section 2302, the affected agency shall issue an unclassified 
report to the congressional committees of jurisdiction (with a 
classified annex if necessary), detailing the circumstances of 
the agency's security clearance suspension, revocation, or 
other determination. A report under this paragraph shall 
include any proposed agency action with regards to the security 
clearance.
    (c) An allegation that a security clearance was revoked or 
suspended in retaliation for a protected disclosure shall 
receive expedited review by the Office of Special Counsel, the 
Merit Systems Protection Board, and any reviewing court.

SEC. 7703. JUDICIAL REVIEW OF DECISIONS OF THE MERIT SYSTEMS PROTECTION 
                    BOARD.

    (a)(1) Any employee or applicant for employment adversely 
affected or aggrieved by a final order or decision of the Merit 
Systems Protection Board may obtain judicial review of the 
order or decision.

           *       *       *       *       *       *       *

    [(b)(1) Except as provided in paragraph (2) of this 
subsection, a petition to review a final order or final 
decision of the Board shall be filed in the United States Court 
of Appeals for the Federal Circuit. Notwithstanding any other 
provision of law, any petition for review must be filed within 
60 days after the date the petitioner received notice of the 
final order or decision of the Board.]
    (b)(1)(A) Except as provided in subparagraph (B) and 
paragraph (2) of this subsection, a petition to review a final 
order or final decision of the Board shall be filed in the 
United States Court of Appeals for the Federal Circuit. 
Notwithstanding any other provision of law, any petition for 
review must be filed within 60 days after the date the 
petitioner received notice of the final order or decision of 
the Board.
    (B) During the 5-year period beginning on February 1, 2003, 
a petition to review a final order or final decision of the 
Board shall be filed in the United States Court of Appeals for 
the Federal Circuit or the United States Court of Appeals for 
the circuit in which the petitioner resides. Notwithstanding 
any other provision of law, any petition for review must be 
filed within 60 days after the date the petitioner received 
notice of the final order or decision of the Board.

           *       *       *       *       *       *       *

    [(d) The Director of the Office of Personnel Management may 
obtain review of any final order or decision of the Board by 
filing, within 60 days after the date the Director received 
notice of the final order or decision of the Board, a petition 
for judicial review in the United States Court of Appeals for 
the Federal Circuit if the Director determines, in his 
discretion, that the Board erred in interpreting a civil 
service law, rule, or regulation affecting personnel management 
and that the Board's decision will have a substantial impact on 
a civil service law, rule, regulation, or policy directive. If 
the Director did not intervene in a matter before the Board, 
the Director may not petition for review of a Board decision 
under this section unless the Director first petitions the 
Board for a reconsideration of its decision, and such petition 
is denied. In addition to the named respondent, the Board and 
all other parties to the proceedings before the Board shall 
have the right to appear in the proceeding before the Court of 
Appeals. The granting of the petition for judicial review shall 
be at the discretion of the Court of Appeals.]
    (d)(1) Except as provided under paragraph (2), this 
paragraph shall apply to any review obtained by the Director of 
the Office of Personnel Management. The Director of the Office 
of Personnel Management may obtain review of any final order or 
decision of the Board by filing, within 60 days after the date 
the Director received notice of the final order or decision of 
the Board, a petition for judicial review in the United States 
Court of Appeals for the Federal Circuit if the Director 
determines, in his discretion, that the Board erred in 
interpreting a civil service law, rule, or regulation affecting 
personnel management and that the Board's decision will have a 
substantial impact on a civil service law, rule, regulation, or 
policy directive. If the Director did not intervene in a matter 
before the Board, the Director may not petition for review of a 
Board decision under this section unless the Director first 
petitions the Board for a reconsideration of its decision, and 
such petition is denied. In addition to the named respondent, 
the Board and all other parties to the proceedings before the 
Board shall have the right to appear in the proceeding before 
the Court of Appeals. The granting of the petition for judicial 
review shall be at the discretion of the Court of Appeals.
    (2) During the 5-year period beginning on February 1, 2003, 
this paragraph shall apply to any review obtained by the 
Director of the Office of Personnel Management. The Director of 
the Office of Personnel Management may obtain review of any 
final order or decision of the Board by filing, within 60 days 
after the date the Director received notice of the final order 
or decision of the Board, a petition for judicial review in any 
appellate court of competent jurisdiction as provided under 
subsection (b)(2) if the Director determines, in his 
discretion, that the Board erred in interpreting a civil 
service law, rule, or regulation affecting personnel management 
and that the Board's decision will have a substantial impact on 
a civil service law, rule, regulation, or policy directive. If 
the Director did not intervene in a matter before the Board, 
the Director may not petition for review of a Board decision 
under this section unless the Director first petitions the 
Board for a reconsideration of its decision, and such petition 
is denied. In addition to the named respondent, the Board and 
all other parties to the proceedings before the Board shall 
have the right to appear in the proceeding before the court of 
appeals. The granting of the petition for judicial review shall 
be at the discretion of the Court of Appeals. 
    (e)(1) Except as provided under paragraph (2), this 
paragraph shall apply to any review obtained by the Special 
Counsel. The Special Counsel may obtain review of any final 
order or decision of the Board by filing a petition for 
judicial review in the United States Court of Appeals for the 
Federal Circuit if the Special Counsel determines, in the 
discretion of the Special Counsel, that the Board erred in 
deciding a case arising under section 2302(b)(8) or subchapter 
III of chapter 73 and that the Board's decision will have a 
substantial impact on the enforcement of section 2302(b)(8) or 
subchapter III of chapter 73. If the Special Counsel was not a 
party or did not intervene in a matter before the Board, the 
Special Counsel may not petition for review of a Board decision 
under this section unless the Special Counsel first petitions 
the Board for reconsideration of its decision, and such 
petition is denied. In addition to the named respondent, the 
Board and all other parties to the proceedings before the Board 
shall have the right to appear in the proceedings before the 
Court of Appeals. The granting of the petition for judicial 
review shall be at the discretion of the Court of Appeals.
    (2) During the 5-year period beginning on February 1, 2003, 
this paragraph shall apply to any review obtained by the 
Special Counsel. The Special Counsel may obtain review of any 
final order or decision of the Board by filing a petition for 
judicial review in the United States Court of Appeals for the 
Federal Circuit or any court of appeals of competent 
jurisdiction if the Special Counsel determines, in the 
discretion of the Special Counsel, that the Board erred in 
deciding a case arising under section 2302(b)(8) or subchapter 
III of chapter 73 and that the Board's decision will have a 
substantial impact on the enforcement of section 2302(b)(8) or 
subchapter III of chapter 73. If the Special Counsel was not a 
party or did not intervene in a matter before the Board, the 
Special Counsel may not petition for review of a Board decision 
under this section unless the Special Counsel first petitions 
the Board for reconsideration of its decision, and such 
petition is denied. In addition to the named respondent, the 
Board and all other parties to the proceedings before the Board 
shall have the right to appear in the proceedings before the 
court of appeals. The granting of the petition for judicial 
review shall be at the discretion of the court of appeals. 

                                
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