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The U.S. Office of Special Counsel has faced questions about its relevancy since its founding three decades ago, but the agency charged with protecting federal whistle-blowers received the ultimate insult in 2008 when federal agents raided its Washington, D.C., headquarters and the home of its leader, Scott Bloch. By October of last year, after a stormy tenure, Bloch had submitted his resignation amid accusations that he violated the law by, ironically, retaliating against his own employees.

Almost a year later, the office is still trying to recover.

President Barack Obama has yet to nominate a successor to Bloch, delaying any internal changes. The office faces more uncertainty in Congress, where legislation threatens to turn the office into a mere way station by allowing most whistle-blowers to request jury trials in federal district court.

Lawyers who represent whistle-blowers say they've all but given up hope for the special counsel's office, which currently is the only place that federal workers can go to report alleged personnel violations. They say that without a leader confirmed by the U.S. Senate, the office has shied away from aggressive enforcement for the past year, preferring to settle cases quietly.

"OSC could play a very vital role if it were actually to attempt to live up to its mission," says David Colapinto, general counsel of the National Whistleblowers Center and a name partner at D.C.'s Kohn, Kohn & Colapinto. But, he says, it hasn't done so. "Every good-government group in town is for making it a stronger and effective office," he adds.

Established in 1979, the office has responsibilities that require its employees to be investigators, prosecutors, and advocates. It has no authority to resolve a dispute between a federal employee and an agency. It can only try to negotiate between them or, if it sides with the employee, file a complaint with the Merit Systems Protection Board, which can order a resolution.

William Bransford, a name partner at Shaw, Bransford, Veilleux & Roth in Washington, says the office has been quieter than it was under Bloch—and not just because Bloch stirred controversy by, among other things, making it more difficult for gays and lesbians to pursue discrimination claims. "When I send a case over there or have a client raise an issue over there, you just don't hear much," says Bransford, who frequently represents government managers who are defendants in whistle-blower cases. Citing conversations with people in the office, he says investigators are making a greater effort to work out agreements between employees and the agencies they've complained about.

The acting head of the office, associate special counsel William Reukauf, said in a speech last month to the Federal Dispute Resolution Conference that the office has received a record number of complaints this fiscal year involving prohibited personnel practices, including nepotism and politicalization, as well as retaliation against whistle-blowers. Reukauf declined an interview request; however, in a letter to The National Law Journal , he said criticism of his office was "misguided." Critics assume it's best to litigate, he wrote, but settling is often a fast, cheap, more effective resolution.

In its most recent annual report, the office said it received 2,089 complaints of violations of personnel laws in the fiscal year that ended September 30, 2008, an increase of 6 percent from a year earlier. It referred 135 cases for investigation, and in 33 matters it negotiated some kind of agency action that was favorable to the employee. It has a budget this year of $17.5 million.

Any major changes at the office will likely have to wait for a presidentially appointed, Senate-confirmed leader. Whistle-blower lawyers and federal employee unions have rallied around Washington solo practitioner Elizabeth Slavet, a former chairwoman of the Merit Systems Protection Board. Peter Broida, a solo practitioner in Alexandria, Virginia, has also expressed interest.

OSC is independent of any other federal agency. Its head, who can be removed only for malfeasance, has a fixed five-year term. Yet whistle-blower advocates say the office faces major obstacles because its 117 employees lack the authority and resources to conduct in-depth investigations. Complaints about violations of personnel law have routinely piled up. In 2005 some of the office's employees alleged that Bloch reduced the backlog only by ordering the dismissal of incomplete complaints—rather than asking whistle-blowers to provide more information. Bloch, who pointed to the reduction with pride in his last annual report, has said he's done nothing wrong.

One of the office's other major roles is to be a secure place for federal employees to go when they have information about waste, fraud, abuse, or safety problems. But the office does not have subpoena power, and the office's procedures call for the agency involved to investigate itself. The office of special counsel can then weigh in on whether the investigation was adequate. The office also enforces the Hatch Act, which restricts the political activities of federal employees, and laws designed to prevent employment discrimination against veterans.

Under Bloch's tenure, whistle-blower advocates became so distraught that they have largely ignored the office as they push for a major overhaul of whistle-blower protections. "It used to be that people cared about the office, and now it's sort of a backwater because it's just totally ineffective," says Lynne Bernabei, a partner at Washington's Bernabei & Wachtel, who specializes in representing federal employees. (Bernabei's former law firm represented OSC employees who filed a complaint against Bloch.)

Advocates want to give greater protections to whistle-blowers within agencies that deal with national security, which would further reduce the special counsel's role. A House version of the legislation would give most whistle-blowers access to federal courts, and a Senate committee that had opposed that idea is warming up to it, voting in July for a limited right to file in court.

The White House is adding momentum to the negotiations. When he was a senator, Obama sponsored legislation designed to protect whistle-blowers, and Obama's special counsel for ethics issues, former Zuckerman Spaeder partner Norman Eisen, has been trying to broker a deal between the House and Senate, lobbyists and other advocates say. A White House spokesman declined to comment on the negotiations or on the lack of a nominee to be special counsel, but none of the competing bills would significantly bolster the office.

Bloch's troubles as special counsel began shortly after his confirmation to a five-year term in 2003. The former Kansas employment lawyer caused a storm of criticism from Congress and gay rights advocates after he reinterpreted the law that previously prohibited discrimination based on sexual orientation. Bloch initially backtracked after the Bush White House sided with the prior interpretation, but he was back in front of Congress in 2005 to argue that he did not have the legal authority to enforce a ban on such discrimination.

Other controversies popped up, including the involuntary reassignment of 12 career employees in the special counsel's D.C. headquarters to field offices in other parts of the country. Critics charged he dismissed whistle-blower disclosures without investigating and mishandled enforcement of the Hatch Act. A criminal investigation of Bloch was launched after Bloch hired Geeks on Call, a private company that provides computer help, and it wiped files from office computers.

As various agencies looked into the complaints, Bloch raised his profile further by launching investigations that were unusual for the office, including an inquiry into the firings of nine U.S. attorneys in 2006. Bloch said he wanted to know whether White House adviser Karl Rove, among others, had violated the Hatch Act. But in May 2008, the Federal Bureau of Investigation raided Bloch's office and his home in Northern Virginia, and he submitted his resignation in October after a meeting with White House officials.

The criminal probe of Bloch is being led by the U.S. Attorney's Office for the District of Columbia. A spokesman for acting U.S. attorney Channing Phillips declined to comment.

Bloch, who received a District of Columbia bar license in November 2008 and is now practicing employment law at Tarone & McLaughlin, declined an interview request. But, in an e-mail, he wrote that he performed his job as special counsel "to the best of my ability" and is "committed to continued support for whistle-blowers." 

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