Whistleblowers Are Key to the DOJ’s Ability to Protect the Taxpayers from Fraud

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 3:

The need to protect the False Claims Act from hostile “reforms” was best stated in a bipartisan report issued on September 25, 2008, by the U.S. Senate Committee on the Judiciary. After studying the FCA, the Judiciary Committee endorsed none of the “reforms” urged by the Chamber of Commerce. Instead, the Committee recommended expanding its scope. 

The Judiciary Committee concluded: “The need for a robust FCA cannot be understated. . . . a great deal of fraud would go unnoticed absent the assistance of qui tam relator.” The Committee confirmed “the critical role that qui tam relators play in uncovering and prosecuting violations.”

The Committee endorsed the findings reported by Pamela Bucy, a Bainbridge Professor of Law at the University of Alabama School of Law:

“Complex economic wrongdoing cannot be detected or deterred effectively without the help of those who are intimately familiar with it. Law enforcement will always be outsiders to organizations where fraud is occurring.
They will not find out about such fraud until it is too late, if at all. When law enforcement does find out about such fraud, it is very labor intensive to investigate.”

Michael Hertz, Deputy Assistant Attorney General, Civil Division, of the Department of Justice, also testified at the hearing:

Whistleblowers are essential to our operation. Without them, we wouldn’t have cases.”

Mr. Hertz confirmed that the publicity surrounding FCA payouts greatly contributes toward the government’s enforcement efforts, and had a significant deterrent effect on those who may otherwise engage in fraud:

“In the wake of well-publicized recoveries attributable to the qui tam cases, those who might otherwise submit false claims to the Federal Government are more aware than ever of the ‘watchdog’ effect of the qui tam statute. We have no doubt that the Act has had the salutary effect of deterring fraudulent conduct.”

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