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National Whistleblower Day Celebrated with Chamber Assault on FCA

In celebration of National Whistleblower Day the House held a hearing on July 30 regarding the False Claims Act.  The point of the hearing was to present the so-called reform and improvements to the law promoted by the U.S. Chamber of Commerce (pdf copy here).

You can watch a digital recording of the hearing, including the testimony of David Ogden in his role representing the Chamber of Commerce, here. A pdf copy of the prepared testimony of Sen. Charles Grassley (R-Iowa), the senator most responsible for bringing the law back to life in 1986, can be found here.

Ogden is the former DOJ official who thinks the False Claims Act needs reforming because it is effective.  Oh wait, what he says is it is not effective enough, but then he proposes ways to eviscerate it. Sen. Grassley is justifiably proud of the law. Several others testified and John Clark deserves mention for doing the heavy lifting.

Reading Ogden and Grassley’s testimony you may think you are talking about two different judicial systems.

In a sense you are.  In one the primary concern is doing something about fraud. In the other the primary concern is protecting companies and in so doing punishing whistleblowers.  Since actually saying that might offend people, side issues and absurd vignettes are required.

Ogden wants to force whistleblowers to report to their bosses and then wait 180 days prior to reporting anything externally to be eligible for any reward. That’s 180 days for the company to come up with any other pretext to fire the whistleblower and conduct some kind of inquiry designed to exert privilege over any evidence that might be obtained. That is the starting point of his proposal.

As Grassley puts it, the proposal is designed to take a stick to whistleblowers.

Ogden also proposes a so-called certified compliance system to replace and or provide immunity from false claims liability.

There is nothing on the record as to who would create such a system and who would provide such certification.  Who would pay for the new certification system? I thought the Chamber of Commerce was against regulation, are they now proposing a new set of regulations to create such a certification system? No they are not. They are proposing to call something a certified compliance system and thereby avoid liability.

There is nothing in the False Claims Act that prevents a well-run company from having the kind of compliance program that actually prevents fraud and therefore shields the company from liability by not conducting fraud.

As I said, the testimony presents two parallel judicial systems. One in which the entire worry is that the whistleblower should have to go through more hoops than merely risking their entire career on everyone’s behalf to expose fraud and injustice.

What the polite talk always misses is that fraud is not an accident. Somebody in a company makes a decision to commit it. When it goes on in a manner large enough to make a successful case under the FCA, more than one company official is involved in supporting it.

There are companies who are in business to commit fraud. That is what they do. Since it is a profitable business, the more we protect such companies the more they will succeed at the expense of companies that actually want to provide a service to the United States.

Keep a watch on this action from the Chamber. They will hold more hearings. Our response will be to show the facts of the cases the False Claims Act has exposed. Not just the money collected on behalf of the United States, which is considerable, but also the harm to patients exposed by Medicare fraud cases and the harm to the military caused by defense contracting cases, just to name a few examples. Without a strong whistleblower law those kinds of harms will go on with impunity.