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 25:
In its historic and massive whistleblower rulemaking proceeding, the SEC came to the conclusion that a robust rewards system was essential to protect honest businesses and promote fair market competition. After rejecting many of the proposals now being rehashed by the Chamber of Commerce to a different body, the SEC concluded:
We do not believe the final rules will impose undue burdens on competition and, indeed, we believe the rules may have a potential pro-competitive effect. Specifically, by increasing the likelihood that misconduct will be detected . . . the rules should reduce the unfair competitive advantages that some companies can achieve by engaging in undetected violations.
The Chamber’s proposals will have a perverse effect on the markets. Honest contractors will be placed at a competitive disadvantage to those who are willing to break the rules. Under the Chamber’s proposal, almost all instances of fraud will never be reported to the government. For the few that would be, the Chamber wants an insurance policy that they will not be held accountable for breaking the rules and outbidding honest companies. The Chamber’s proposals would require that the company’s lawyers and managers (including those directly responsible for breaking the law) learn that these crimes were uncovered by whistleblowers before the government learns of the criminal activity. Thus, the fraudsters would be positioned to cover them up, shift the blame, or mitigate their liability before they are properly sanctioned.