Former Employee Awarded Highest Whistleblower Honor

(Washington, DC) – GAP client Eileen Foster, a former high-ranking official at Countrywide Financial and then Bank of America (BofA) after its purchase of Countrywide in July 2008, has been awarded the 2012 Ridenhour Prize for Truth-Telling. This prize is widely considered the highest honor a whistleblower can receive in the United States.

Foster exposed systemic fraud at Countrywide Financial and the corrupt activities of company officials, both pre- and post-purchase. In September 2008, BofA terminated Foster. Six months ago, the Occupational Safety and Health Administration (OSHA) found that BofA was wrong to terminate her, ordering her reinstatement and damages. However, BofA appealed that order, and Foster’s fight continues with a hearing scheduled in late April. More on Foster’s case can be found below.

Foster’s actions go a long way in dispelling the false belief that it was borrowers lying on their applications – rather than fraud on the part of commission-hungry loan officers – that fuelled the growth of the toxic loans that gave rise to the economic crash.

“I am honored to be a recipient of this award and want to thank the Nation Institute for recognizing the plight of whistleblowers within the mortgage industry,” stated Foster. “I am proud to represent many others who had the determination to fight back, expose wrongdoing, and insist on corporate accountability.”

“This recognition of Eileen is important because it highlights the struggles that ethical fraud investigators, auditors, risk managers, and others often face within their corporations in their efforts to protect stockholders and investors,” stated Richard Condit, GAP Legal Director for Litigation Services, and counsel to Foster. “Eileen’s and other whistleblower’s stories of retaliation are the story of the Great Recession. Their disclosures must be used by regulators and prosecutors to pursue the arrests and prosecutions that, to date, have been few and far between.”

The annual Ridenhour Prizes, initiated in 2004, recognize acts of truth-telling that protect the public interest, promote social justice or illuminate a more just vision of society. These prizes memorialize the spirit of fearless truth-telling that whistleblower and investigative journalist Ron Ridenhour reflected throughout his extraordinary life and career. More can be found at

Previous winners of the Ridenhour Award for Truth-Telling include Joe Wilson, Thomas Tamm, and GAP clients Tom Drake and Rick Piltz. This year, the Ridenhour gave two Truth-Telling awards, the other going to Lt. Col. Daniel Davis. Additionally this year, Rep. John Lewis (D-Ga) won the Ridenhour Courage Prize, Ali H. Soufan was awarded the Ridenhour Book Prize (The Black Banners: The Inside Story of 9/11 and the War Against al-Qaeda), and the makers of Semper Fi won the Ridenhour Documentary Film Prize.

For more information on Foster’s case, contact GAP Communications Director Dylan Blaylock (information below). For more on the Ridenhour Prizes, or if you are a journalist and would like to attend the event, call Taya Kitman at 212.822.0252 or Jayati Vora at 212.822.0269.

Background on Foster’s Case

Countrywide Home Loans hired Foster in 2005 as a First Vice President overseeing borrower complaint risk in the Corporate Office of the President. Nine months later she was promoted to Senior Vice President, and in March 2007 to Executive Vice President of Fraud Risk Management. In that role, she supervised 30-40 staff responsible for investigating mortgage origination fraud. Foster was also responsible for reporting fraud and suspicious activity to regulators and the company’s Board of Directors.

Foster oversaw an investigation in the summer of 2007 of multiple branches in the Boston area of the subprime division. Investigators found massive evidence that employees had forged borrower signatures, altered and fabricated income and asset documentation, and manipulated the company’s automated underwriting and property valuation systems. The investigation was opened after receiving a tip from a former branch employee who had been fired after objecting to the fraudulent practices.

By February 2008, Foster had found equally shocking activities in investigations in Miami, Chicago, Cincinnati, San Diego, Las Vegas and Los Angeles. Foster believed that Countrywide Employee Relations and Lending Managers were colluding to circumvent fraud reporting channels in order to conceal the fraud perpetrated by high-producing loan officers and managers. Whistleblowing employees directed to report fraud and wrongdoing to Employee Relations were being transferred, demoted, harassed or terminated. In March of 2008, five employees of a branch in the Consumer Markets Division reported egregious levels of loan fraud, and in doing so pleaded with the investigator not to reveal their names to Employee Relations out of fear of retaliation.

When Foster asked Countrywide’s Internal Audit to investigate Employee Relations, the company not only chose to conceal Foster’s allegations from BofA, it directed Employee Relations to investigate Foster.

In the meantime, BofA was identifying Countrywide employees for roles in the newly merged entity. In July 2008, after an intense vetting process, BofA offered Foster the position of Senior Vice President (SVP), Mortgage Fraud Investigations Division Executive.

Foster eventually learned of the investigation and that Countrywide’s Employee Relations managers had been questioning her staff and using coercion and intimidation in an attempt to obtain derogatory characterizations. Soon after that, Foster was interviewed by an SVP of Employee Relations and an SVP of Internal Audit. Although Foster’s manager raised concerns of retaliation to Countrywide executives prior to her interview, and Foster complained of the retaliatory acts during her interview, those allegations were ignored. Instead, Countrywide’s Employee Relations convinced BofA managers to terminate Foster, which occurred on September 8, 2008.

Case Status

Instead of accepting a payment of almost $228,000 for her silence, Foster wanted to ensure the corrupt practices at Countrywide were exposed and that the wrongdoers were held accountable. Foster filed a Sarbanes-Oxley Act whistleblower complaint with OSHA challenging the legality of her firing. In September 2011, OSHA ruled that Foster had been retaliated against in violation of the employee protection provision of the Sarbanes Oxley Corporate and Criminal Fraud Accountability Act of 2002. The Department of Labor ordered her reinstatement and $930,000 in damages.

OSHA Assistant Secretary Dr. David Michaels stated, “It’s clear from our investigation that Bank of America used illegal retaliatory tactics against this employee. This employee showed great courage reporting potential fraud and standing up for the rights of other employees to do the same.”

BofA has challenged OSHA’s ruling. A hearing has been set for late April in Los Angeles.

Read the OSHA press release about the decision here.

Contact: Dylan Blaylock, Communications Director
Phone: 202.457.0034, ext. 137
Email: [email protected]

Government Accountability Project
The Government Accountability Project is the nation’s leading whistleblower protection organization. Through litigating whistleblower cases, publicizing concerns and developing legal reforms, GAP’s mission is to protect the public interest by promoting government and corporate accountability. Founded in 1977, GAP is a non-profit, non-partisan advocacy organization based in Washington, D.C.