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Importance of the False Claims Act

Here’s a video clip that is worth reviewing from C-SPAN.

I am indebted to the good people at Taxpayers Against Fraud and colleagues in the bar for bringing it to my attention.

On the Senate Floor Charles Grassley (R-Whistleblowers) recounts the history of the False Claims Act. Since he is responsible for the modern history of the False Claims Act he’s pretty authoritative on the topic. Courts should take his opinion under advisement if they need to consider Congressional intent of the 1986 amendments to the law.

It is inspiring to hear Grassley remind the Senate of the importance of the law and the reason it exists – to create a way to fight fraud against the government as well as this law’s success in doing so. Often the whistleblower is attacked, but here Grassley points out the whistleblower is the heroic American, when fighting fraud against the government.

Grassley addresses some troubling arguments presented as the Courts have worked to interpret the law. He draws from the history of the Act and its amendments in a way, really only he could.

He addresses the history of the Government Knowledge Bar, which was officially wiped out by the 1986 Amendments and which supposedly does not exist, but nonetheless kills a lot of cases under seal and is now being revived through back door interpretations of the Defendant’s knowledge of their actions.

It’s especially pleasing to hear him point out that the Escobar case upholds implied certification theory, a fact lost by Defense counsel interpretations.

Then he takes on the Defense over-reach arguments interpreting the case. He points out that Justice Thomas materiality argument is being much more broadly construed by some, than Justice Thomas himself wrote it to be in the Supreme Court decision.

“The False Claims Act does not require the government to jump through administrative hoops to preserve its rights, ” says the Senator. His concern is with protecting the government’s right to pursue fraud when bureaucrats make mistakes in payment or when for many other legitimate reasons a government payment has to be made, but fraud is still committed. He notes correctly that Thomas never said anything like the idea now being espoused that any government decision to pay any bill after there is an accusation of fraud means there was no fraud. Thomas said only if the government has “actual knowledge of the fraud” would that be “evidence” of the government’s willingness to pay and therefore evidence as to whether it was material fraud. Actual knowledge, Grassley points out is not the same thing as one bureaucrat paying or rumors or even a half-concluded investigation. Grassley also points to health care situations in which a payment might have to be made because of life threatening situations in which fraud might still be committed say higher costs for a drug, still needed by the patient. Why should that be used as a way to bar the government from recovering from fraud?

I personally think there is a tendency to hold the government to a standard we would not hold any other victim of fraud and whistleblowers to a standard we would not hold any other person seeking a reward. It is important to remember that when fraudsters take advantage of the government, it is our government.

While individual whistleblowers are often celebrated by one group or another, depending on the issue they bring up at a particular moment, Grassley has consistently maintained that whistleblowers are the most effective source for information needed to protect the people from fraud. That position is supported by mountains of evidence including the success of the modern False Claims Act.

It is hard to believe we still have to make these points, but we do. It was great to see Senator Grassley doing so yet again.