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Chamber of Horrors

The Chamber of Commerce issued a “report” on the Federal False Claims Act last month that has most of the lawyers who represent whistleblowers headed for anger management classes.

Some attorneys have already analyzed the report and explained why it amounts to a manifesto against whistleblowers and a hypocritical communist creed.

I concur with Brett Joshpe writing in Forbes Magazine when he says:

“The U.S. Chamber of Commerce has ceased to be an advocate for the kind of free market, entrepreneurial ideals it was founded to embody.”

As Mr. Joshpe points out, it is strange, if not perverse, to see the Chamber of Commerce arguing that the profit motive—the basis for capitalism and as it happens a foundation for the success of the False Claims Act—should be severely limited.

The Chamber believes in limiting financial rewards when it comes to people who might sue their biggest constituents. One would be hard pressed to find another instance in which it would limit financial rewards to private citizens.

The whistleblowers and their lawyers (private sector individuals) who file False Claims Act cases only make money when they achieve results.  What could be more capitalistic than that?

What is truly aggravating about this “report” is not the tired arguments used to attack whistleblowers, those can be and will be taken apart. What’s truly aggravating is the cognitive dissonance with which the Chamber unapologetically operates. If the Chamber said they wanted to make their constituents immune from fraud prosecution, then their arguments would be hurtful but logical. Instead we are treated to a continual set of reason turned upside down.

First the report calls the False Claims Act, “the government’s most important tool to uncover and punish fraud against the United States.” The report then complains the False Claims Act is, “ineffective in preventing fraud.” Italics supplied by the Chamber. The Chamber then makes its specific recommendations to gut the law provision by provision.

Following this logic the laws against murder should be abolished, weakened, or removed because, since the beginning of time, they apparently have not been effective in completely preventing the practice.

In fact, the False Claims Act has been instrumental not only in uncovering fraud, not only in collecting billions of dollars for the government when the government would otherwise have lost that money to fraud forever, but also in improving the business practices of many industries.  Some pharmaceutical companies may continue to get caught committing fraud, but the false claims cases prosecuted thus far have made everyone in the industry aware that it is not acceptable to rip off Medicare. Many companies have changed and improved their practices due to such cases.  Of course, there is still fraud, but how would gutting the best law available to fight fraud against the government improve the situation?

To take another example of the Chamber of Tortured Logic, let’s look at the way the report phrases one of its recommendations:

“In order to create incentives for employees to report alleged misconduct internally, an employee who failed to report internally at least 180 days before filing a qui tam action would face dismissal of the action.”

Read it again. The Chamber’s idea of how to “create incentives for employees” is to punish employees. To take away an employee’s right is now an “incentive.”  This is the logic of the report. Of course, the whistleblower who reports fraud internally will most likely next be reporting to the unemployment line, but that is not a matter of concern to the Chamber.

The idea that this report is in any way an attempt to help fight or prevent fraud committed against the government is in itself fraudulent.