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 whistleblowers 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 wholesale internal changes. The office faces more uncertainty in Congress, where legislation threatens to turn the office into a mere weigh station by allowing most whistleblowers to request jury trials in federal district court.

Lawyers who represent whistleblowers say they’ve all but given up hope for the special counsel’s office, which currently is the only place 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,” said David Colapinto, general counsel of the National Whistleblowers Center and a name partner at D.C.’s Kohn, Kohn & Colapinto. But, he said, it hasn’t done so. “Every good-government group in town is for making it a stronger and effective office,” he said.

Established in 1979, the Office of Special Counsel has various responsibilities that require its employees to be investigators, prosecutors and advocates. The office has no authority to resolve a dispute between a federal employee and an agency. Instead, it can only try to negotiate between them or, if it decides to side with the employee, file a complaint with the Merit Systems Protection Board, which does have authority to order a resolution.

William Bransford, a name partner at Shaw, Bransford, Veilleux & Roth in Washington, said 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,” said Bransford, who frequently represents government managers who are defendants in whistleblower cases. Citing conversations with people in the office, he said 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, which include nepotism and politicization as well as retaliation against whistleblowers. “We continue to thoroughly investigate allegations and resolve prohibited activity that offends the federal merit system,” he said, according to a copy of the speech provided by a spokesman.

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 Sept. 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. Through the first 11 months of this fiscal year, the office said it has received about 2,100 complaints, or about the same as it received in all of fiscal 2008. A spokesman said that no statistics were available on the number of agency actions it has negotiated so far this year. Reukauf declined an interview request.

WAITING FOR LEADERSHIP

Any major changes at the office will likely have to wait for a presidentially appointed, Senate-confirmed leader. Whistleblower 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, Va., has also expressed interest.

The Office of Special Counsel is independent of any other federal agency. Its head, who can be removed only for malfeasance, has a fixed five-year term. Yet whistleblower 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 whistleblowers to provide more information. Bloch, who pointed to the reduction with pride in his last annual report, has said he’s done nothing wrong. The legislation does not address what the changes in law would mean for OSC employees, except to say that the office could file amicus briefs in whistleblower litigation.

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. It has a budget this year of $17.5 million.

DOWNCAST ADVOCATES

Under Bloch’s tenure, though, whistleblower advocates became so distraught with the state of the Office of Special Counsel that they have largely ignored the office as they push for a major overhaul of whistleblower 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,” said Lynne Bernabei, a name 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 whistleblowers within agencies that deal with national security, but the special counsel would not have a major role. A version of legislation in the House would give most whistleblowers access to federal district courts, and a Senate committee that opposed that idea in the past 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 whistleblowers, 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 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 whistleblower disclosures without investigation 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 that 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, 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, which is being led by the U.S. Attorney’s Office for the District of Columbia, is ongoing. 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 whistleblowers.”

Although the number of people willing to defend the Office of Special Counsel has shrunk, one lawyer who is still rooting for it is Debra Katz. A name partner in Washington’s Katz, Marshall & Banks, she is a former law partner of Bloch’s predecessor Elaine Kaplan and represents whistleblowers from within the Office of Special Counsel. The work environment there “is tremendously improved” since Bloch left, she said, and it remains “a crucial avenue” for federal employees.