Congress Takes Testimony on Effectiveness of False Claims Act: Chairman Discusses Major Issues

Late last month, Congress convened a panel of experts in its first False Claims Act oversight hearing in nearly six years. The purpose of the hearing, which was called by the Committee on Judiciary through its Subcommittee on the Constitution and Civil Justice, was to enlist the opinions of several experts on both the benefits of the FCA, and potential areas needing improvement.

The witness panel consisted of several learned experts in the field, including:

• The Honorable Charles F. Grassley (U.S. Senate);
• Dr. Rachakonda D. Prabhu, M.D., of the Red Rock Medical Group;
• Dr. Patricia J. Harned, Ph.D., President of the Ethics Resource Center;
• Mr. John E. Clark, Of Counsel, Goode Casseb Jones Riklin Choate & Watson, Taxpayers Against Fraud, and
• Mr. David W. Ogden, U.S. Chamber Institute for Legal Reform.

In today’s post, we review some of the possible issues surrounding the False Claims Act as described by the oversight committee’s chairman. Tomorrow, we explore ideas and opinions offered by proponents of the False Claims Act, including the various reasons given why it should either remain in its current form or be further fortified with incentives for relators. In Part Three, we will take a look at some of the detractors of the FCA, including Attorney David Ogden, who testified to the unfairness faced by large corporations having incurred massive fines and penalties due to fraud and intentional false claims.

Introduction by Committee Chairman

The oversight hearing was commenced by committee chairman Congressman Trent Franks (R-AZ) who made several statements as to the effectiveness of the FCA in the current environment of widespread fraud. Mr. Franks pointed to a study that revealed the true extent of the waste, fraud, and abuse of taxpayer money actually falls somewhere near the $100 billion mark, making the $3 billion recovered by the FCA last year seem paltry by comparison. Franks further reiterated that it appears the FCA fails to prevent massive losses of taxpayer money to fraud and abuse, and the government has recovered only a fraction.

The chairman further framed the issue surrounding the FCA by pointing out that self-reporters willing to come forward and expose fraud (of which they may be involved) face the same penalties as those who are caught “red-handed.” Franks remarked that it seems self-evident they will uncover even more waste, fraud, and abuse by allowing self-reporters to share in recovery, or at least receive some sort of incentive for coming forward. Otherwise, the threat of facing possible retaliation or adverse workplace treatment could prove too great for the employee with inside knowledge, and the fraud would continually go undetected.

From there, Representative Franks turned the floor over to Iowa Senator Charles F. Grassley, who reiterated his support of the Act and admonished the attempts by the Chamber of Commerce to push an agenda wherein corporations would be given a 180-day window to self-report prior to allowing a whistleblower to come forward with an individual lawsuit.

Contact Berger Montague Today

If you are considering a whistleblower lawsuit but are unsure how the False Claims Act applies to your case, we encourage you to contact us right away for more information. To speak with a knowledgeable and reputable whistleblower attorney, call Berger Montague today.