Extension of whistleblower protections to State-administered Federal funds

Subpart F of part III of title 5, United States Code, is amended by inserting after chapter 75 the following new chapter: 76 Protection of Whistleblowers in Federally Funded State Programs Sec. 7601. Definitions. 7602. Prohibited personnel practices. 7603. Criminal penalties for retaliation. 7604. Referral for criminal prosecution. 7605. Federal funding condition. 7601. Definitions In this chapter: (1) Covered individual The term covered individual means any employee, contractor, subgrantee, or agent of a State or local government, or of a non-Federal entity, administering or receiving Federal financial assistance. (2) Covered official The term covered official means any officer, employee, or agent of a State or local government acting in connection with the administration, distribution, or oversight of Federal financial assistance. (3) Protected disclosure The term protected disclosure means any lawful disclosure of information that the covered individual reasonably believes evidences— (A) misuse, waste, fraud, or abuse of Federal funds; (B) a violation of Federal law relating to a federally funded program; or (C) gross mismanagement of a program receiving Federal financial assistance. 7602. Prohibited personnel practices (a) A covered official may not take or fail to take a personnel action against a covered individual because of a protected disclosure. (b) For purposes of this section, personnel action includes— (1) termination, suspension, demotion, or reassignment; (2) reduction in pay or benefits; (3) significant change in duties or responsibilities; (4) intimidation, threats, or harassment; or (5) any other materially adverse action. 7603. Criminal penalties for retaliation (a) Offense Any covered official who knowingly retaliates against a covered individual for making a protected disclosure under this chapter shall be subject to criminal penalties under this section. (b) Penalty structure Penalties shall be imposed according to the level of culpability: (1) Negligent retaliation A covered official who engages in retaliation due to negligence shall be fined not more than $50,000. (2) Knowing retaliation A covered official who knowingly engages in retaliation shall be fined not more than $100,000, imprisoned not more than 1 year, or both. (3) Intentional retaliation for personal gain or concealment A covered official who retaliates with the intent to conceal misuse of Federal funds or to obtain personal benefit shall be fined not more than $250,000, imprisoned not more than 5 years, or both. 7604. Referral for criminal prosecution If a Federal agency or Inspector General determines that there is reasonable cause to believe that retaliation prohibited under this chapter has occurred, the agency may refer the matter to the Attorney General for investigation and criminal prosecution. 7605. Federal funding condition (a) As a condition of receiving Federal financial assistance, each State or local government shall certify compliance with this chapter. (b) Failure to comply may result in— (1) corrective action requirements; (2) suspension of Federal funds; (3) termination of Federal funding for the affected program..