The FCA Does Not Need to be Amended in Order for Companies to Adopt Effective Rules for Internal Compliance

The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” The purpose of this blog series is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.

Fact Number 9:

The Chamber’s report is predicated on a false and illogical dichotomy. The Chamber claimed that there was a need to weaken the FCA in order to strengthen corporate compliance. The opposite is true.

There is no need to weaken the FCA in order to have the business community implement effective fraud detection programs. There is no need to establish a government-sponsored agency to “accredit” compliance programs. Compliance professionals and fraud examiners have researched what it takes to implement effective compliance programs. These best practices are not a secret.

The Association of Certified Fraud Examiners created a highly respected “Fraud Prevention Checklist.” This checklist is based on input from the association’s 60,000 members. The ACFE checklist consists of eleven general categories of programs, including a total of 28 sub-categories.

Corporations can adopt these recommendations, without having government-sponsored accreditation and without destroying the False Claims Act.

In fact, any weakening of the FCA would be counterproductive and lessen the incentive for institutions to self-regulate.

Moreover, nothing in the Fraud Prevention checklist supports a finding that whistleblower protection laws should be weakened. Instead of gutting the highly effective FCA, the ACFE now looks at corporations that voluntarily pay whistleblower rewards as part of a comprehensive “Anti-Fraud Control.”Corporate trade associations, such as the Chamber of Commerce, should play a leading role in urging their members to implement the checklist.

Based on years of experience, the current weaknesses in corporate compliance programs have been well documented by leading professionals within the compliance community. For example, the RAND Center for Corporate Ethics and Governance published “Perspectives of Chief Ethics and Compliance Officers on the Detection and Prevention of Corporate Misdeeds: What the Policy Community Should Know.”

As part of this program, RAND published a paper by Donna Boehme, a highly respected compliance professional and the former Chief Compliance officer of two multinational corporations, including BP Oil. Ms. Boehme explained many problems experienced by compliance programs, why these programs fail, and what steps need to be taken in order to make compliance programs more effective.

The complex, costly, and ultimately absurd proposals put forward by the Chamber to create a best practices model is simply not needed. Compliance professionals and experts have already set forth the models needed for success. The Chamber has simply ignored this research.


* “Report to the Nations on Occupational Fraud and Abuse” Report by the Association of Certified Fraud Examiners. p.19 (2012).

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