In Defense of the False Claims Act

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. - Senator Chuck Grassley (R-IA)
You catch the crooks, that's what you do. - Rep. Steve Cohen (D-TN)

False Claims Acts seem like no-brainers to the average person: if a company commits fraud on the government, it should be punished and have to repay that money. The truth is, the False Claims Act probably isn't severe enough, as often major corporations pay millions of dollars in fines and damages to settle claims resulting from billions of dollars in fraud. But the government, quite reasonably, is willing to accept these "a bird in the hand is worth two in the bush" settlements, since it has so many cases and so few resources with which to prosecute them. And so fraudsters, in turn, are incentivized to continue committing fraud, and the circle of fraud continues. (Blog Post: False Claims Act Repeat Offenders - More Common Than You'd Think)

Nevertheless, corrupt corporations are more than happy to spend some of their remaining ill-gotten gains on lobbying Congress to narrow or weaken the False Claims Act, or lobby state legislatures to not pass their own False Claims Acts. This is why only 29 states and D.C. have these common sense statutes, and many of those are limited to Medicaid or in other ways. Alabama, for example, has a Medicaid Fraud Control Unit, but no state statute through which private relators can bring qui tam actions, much to the chagrin of the state's own attorney general. Wisconsin repealed its False Claims Act without any discussion in a last minute addition to a state budget.

And so the False Claims Act is regularly under attack by well-funded corporate lobbyists such as the Chamber of Commerce, declaring that the statute is too harsh and that the corporations are doing the best they can. And the arguments keep changing. Recently, corporate lobbyists argued to Congress that whistleblowers should have to report fraud internally before they can file qui tam actions, and that corporations with "gold standard" compliance departments should be exempt from the statute. For the sake of comparison, imagine a world in which BP was excused from spilling more than 3 million barrels of oil into the Gulf of Mexico because its environmental impact program was certified as meeting certain standards.

Unfortunately, the pockets of the corporations are considerably deeper than the pockets of whistleblowers or their attorneys. This is why we are supporters of Taxpayers Against Fraud, one of the only non-profit organizations fighting back on behalf of the country. Whereas the corporate lobbyists have billions of dollars to play with, we have justice, logic, and integrity on our side. We will continue to fight the fight on behalf of the taxpayers and United States of America.