$10,000 offer to whistle-blowers draws little interest

November 06, 1990

"Honesty pays up to $10,000," read the pamphlets handed out in front of the Internal Revenue Service district office at lunchtime yesterday by a whistle-blowers' group of current and former IRS employees.

It wasn't a social comment on the price of virtue, but a reward offered by the National Coalition of IRS Whistle-blowers for information leading to the arrest and conviction of "corrupt IRS officials."

Lunch-goers in Hopkins Plaza showed little apparent interest in collecting the bounty. Asked if they worked for IRS in the federal building, no one would admit to it.

"People don't want to give their names, and they don't want to let you know they have information, for fear of retaliation" by the IRS, said coalition spokesman Mike Lashaway. That's the reason the organization was founded, to provide employees with a safe place to blow the whistle on IRS misconduct confidentially, he explained.

The group was formed in 1985 by an arm of the Church of Scientology, which has been involved in two decades of legal battles with the IRS over its tax-exempt status. Members of the church hierarchy were convicted of conspiracy to steal IRS documents and bugging agency meetings.

The coalition, whose 5,000 members are said to be mostly current and former IRS employees, has produced several reports of agency misconduct that have been used by congressional investigators. Its president is Paul J. DesFosses of Pocatello, Idaho, a former 19-year agent with IRS.

The four-month reward offer has yet to result in an arrest, Mr. Lashaway admitted, but the campaign in several cities has sparked interest by IRS employees in reporting alleged irregularities. Congressional hearings on IRS abuses held a year ago have also encouraged more tips from agency employees, Mr. Lashaway said. A House subcommittee report cited the probability of at least 50 to 60 cases of serious senior-level misconduct in the agency, adding that wrongdoing by senior IRS managers has often been ignored by the service's own investigative arm.

The whistle-blowers' group also charged yesterday that black employees of the Baltimore IRS office have complained of unfair disciplinary practices and have filed complaints with the Equal Employment Opportunity Commission.

"Baltimore is one of the offices where this has been a particular problem, but it has happened across the country," Mr. Lashaway said.

The IRS and the National Treasury Employees Union earlier this year began a study of possible discriminatory discipline against minorities and a report is expected early next year.

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