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Has the False Claims Act Been Successful?

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There is no doubt that fraud against the government is a serious problem. Many companies have contracts with the government, and many companies and healthcare providers work directly and indirectly with government programs. When these companies violate regulations or government contracts, they can put lives at risk. For example, Medicare fraud can involve healthcare providers performing unnecessary procedures, or sending lab tests out to untrained technicians; defense contractor fraud can involve providing defective bullet proof vests.  And in almost all cases, fraud against the government is costly for taxpayers.

Many rules and laws have been passed to help stop fraud against the government. Chief among these is the False Claims Act. The act makes it illegal to defraud the government and also provides protections for whistleblowers. Under the terms of the act, whistleblowers can sue on behalf of the government and may be eligible for part of the award.

Senator Chuck Grassley, a longtime champion of strong whistleblower programs, recently issued a statement outlining the strengths and importance of the False Claims Act in preventing fraud and protecting whistleblowers.

A summary of why the False Claims Act remains one of our strongest defenses against government fraud including key points from Senator Grassley’s recent statement are outlined below:

1. It Allows Whistleblowers to Act When They See Fraud

The False Claims Act encourages whistleblowers to act swiftly, without having to first go through internal channels at their employer, increasing the risks of retaliation. Senator Chuck Grassley of Iowa, who is chairman of the Senate Judiciary Committee, summed up the power of the legislation, and rejected the proposal from opponents of the False Claims Act to require whistleblowers to first report fraud internally:

“The False Claims Act works. … Whistleblowers are the indisputable key to protecting taxpayer money against fraud. They must be protected. They will not be protected if they are required to report internally before making any protected external disclosure. This is one of several topics I covered at length at the 2014 hearing. Like numerous other proposals I have heard over and over again to ‘strengthen’ or ‘fix’ the False Claims Act, this one is just as nonsensical today as it has always been.”

As Senator Grassley pointed out, many managers and employers simply turn a blind eye to internal reports of fraud, rendering internal compliance programs meaningless.  “In a perfect world, organizations would value input from their employees, work to fix the problems they identify and go about their business. We do not live in a perfect world.” The False Claims Act recognizes that we do not live in a perfect world. 

2) It Protects Whistleblowers From Retaliation

When fraud occurs, a culture of silence and fear of retaliation can keep honest employees quiet. Whistleblowers are courageous in the face of these challenges, and the False Claims Act encourages and protects them by specifically prohibiting retaliatory action against them.

While opponents of a strong False Claims Act contend that the rewards offered to whistleblowers result in spurious allegations, Senator Grassley explained that the rewards and protections provided to whistleblowers are necessary because, “for every allegation of a potentially overzealous plaintiff, there is a whistleblower threatened with severe retaliation for raising concerns. These kinds of toxic environments do not magically disappear in the face of the almighty compliance program.”

3) It Rewards Whistleblowers and Enjoys Widespread Support

Both Democrats and Republicans support the False Claims Act and have done so for the more than 30 years the Act has been in place. One reason it is so widely supported is because it aims to stop costly fraud against the government by giving whistleblowers a voice.

Rather than requiring the government to ferret out every fraudulent scheme on its own, the False Claims Act encourages whistleblowers to work on behalf of the government to do so by providing an incentive for people to come forward. Senator Grassley summed it up:

“The modern-day False Claims Act is now 30 years old. It is the most successful piece of antifraud legislation in U.S. history, and it has always enjoyed strong bipartisan support. That is because it works, by nurturing that public-private partnership with whistleblowers and by incentivizing integrity.”

If you have information or a potential claim under the False Claims Act, contact Goldberg Kohn for a free, confidential consultation.

 

Attorneys at Law

55 East Monroe Street
Suite 3300
Chicago, Illinois 60603-5792
Tel: 312-863-7222
Fax: 312.332.2196

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