Legislation Would Strengthen False Claims Act

WASHINGTON–On Sept. 12, Sen. Chuck Grassley, R-Iowa, introduced
legislation that would amend the False Claims Act to make it easier
for whistleblowers to bring lawsuits.

Called the False Claims Correction Act of 2007, Grassley said
the legislation is in response to recent court decisions that
threaten to limit Congress’ 1986 update of the False Claims Act,
which has recovered $20 billion for the government.

The 1986 amendments empowered “qui tam relators,” or
whistleblowers, to bring false claims complaints.

“It’s been proven time and again that without the courage and
willingness of these individual citizen whistleblowers, the federal
government would not have known what was going on or been able to
pursue successful cases against those who defrauded the government,
including contractors and state and local governments. These
settlements have returned tens of billions of dollars that would
otherwise be lost and gone forever,” Grassley said in a
statement.

“Our new legislation works to make sure recent court decisions
won’t weaken the government’s ability to recover tax dollars lost
to fraud, whether it’s in health care, defense or another [area] of
spending.”

One provision of the bill would remove a requirement that false
claims be presented directly to a government employee. This problem
arose following the D.C. Circuit Court of Appeals decision in
U.S. ex rel. Totten v. Bombardier Corp., which barred
government recovery of funds because the false claims were
submitted to employees of a government grantee (Amtrak) and not a
direct government employee.

“This correction ensures that any government money lost to
fraud, waste or abuse can be recovered using the FCA regardless of
whether the individual making the false claim directly represents
such a claim to a government employee,” Grassley said.

Another measure in the bill would strengthen the FCA after a
Supreme Court decision in Rockwell International Corp. et al.
v. United States held that the whistleblower in the case could
not share in any recoveries unless that person was the original
source of all claims ultimately settled.

“The feds recoup millions of dollars every year from
whistleblower activity. In recent years, the [Office of Inspector
General] and [the Department of Justice] have taken a hard line
with their interpretation of the False Claims Act, which governs
rewards to whistleblowers. Grassley’s bill is an effort to broaden
the scope of the whistleblower law by removing some of the
justification the feds have used to deny whistleblower payments,”
commented health care attorney Neil Caesar of the Health Law
Center, Greenville, S.C.

“This legislation would result in more whistleblower activities.
It is important for home care companies to remember that the people
who work for them and with them can be their best allies or their
worst enemies,” Caesar continued.

According to Caesar, “most of the time” whistleblowers only go
to the government after they have tried to get any problems
addressed within the company. “The best way to minimize this danger
is to have effective lines of communication, to encourage personnel
to point out problems and to investigate and act on problems
effectively,” Caesar said.

The bill, S. 2041, is cosponsored by Sens. Dick Durbin, D-Ill.;
Patrick Leahy, D-Vt.; Arlen Specter, R-Pa.; and Sheldon Whitehouse,
D-R.I. Companion legislation will be introduced in the House of
Representatives by Rep. Howard Berman, D-Calif. Grassley and Berman
were the sponsors of the 1986 amendments to the False Claims
Act.

“President Lincoln signed the False Claims Act into law in 1863
to prevent war profiteers and others from defrauding the government
and the nation’s taxpayers. Sadly, 144 years later, ‘Lincoln’s Law’
is still needed,” Durbin said. “This bipartisan bill modernizes and
strengthens the False Claims Act, and will help “Lincoln’s Law”
continue to serve as an effective tool against fraud.”

To read the full text of the bill, visit the Congressional Web
portal at thomas.loc.gov.