Back in 1986, Congress faced an unpleasant fact: government coffers were
being drained by fraud and cheating before the money could be spent on
programs that benefit U.S. citizens. Today we celebrate the anniversary
of Congress' decision to take a bold steps to stop fraud; Congress
breathed new life into the False Claims Act (FCA). Originally passed under
Lincoln, the Act had been gutted in the 1940's.
Less than thirty years later, thanks to the FCA and also the whistleblowers
who bring suit under the FCA, the Government has reclaimed more than $40
billion dollars taken by fraud.
As taxpayers, we fork over hard-earned money every year to keep the government
afloat. When we hear someone stole money from the Government by fraud,
we get incensed. The cheaters stole parts of our lives – the time we spent
working to earn the money that we gave the Government.
Congress passed the FCA to encourage whistleblowers to come forward to
stop fraud. And taxpayers, like the Government, love the False Claims
Act and the billions it has recovered. I'm a lawyer who has the honor
of representing these men and women who
blow the whistle because they refuse to turn a blind eye to fraud and cheating.
What's not to like about getting back more than $40 billion dollars
stolen from you by fraud?!
Believe it or not, some business groups have opposed the FCA. Perhaps it
has something to do with what Assistant Attorney General
Stuart Delery said in a speech to the American Bar Association: "the False Claims
Delery was speaking to lawyers gathered at the ABA's 10th National
Institute on the Civil False Claims Act and Qui Tam Enforcement in 2014.
He noted that relators – also known as whistleblowers – and their lawyers
had "been central to our record-setting recoveries."
The False Claims Act Gets Money Back for Taxpayers
Delery said that during the five years he had worked at DOJ, the government
had recovered more
than $17 billion thanks to the FCA. Two years ago the FCA had a record
year, pulling in $5 billion that had been taken from it by fraud. Last
year was nearly as good: the FCA recovered another $3.8 billion.
Delery rightfully touted DOJ's two hugest financial successes under
the False Claims Act. In 2013 Johnson & Johnson paid $2.2 billion
to resolve fraud claims, and in 2012 GlaxoSmithKline paid $3 billion.
The False Claims Act Stops Bad Behavior
But Delery said that some of the most important cases don't have big
dollar signs at the end.
Delery traced the False Claims Act from its origins, when Abraham Lincoln
pushed Congress to enact it to stop fraud going on during the Civil War.
"But during World War II," he noted, "a series of fundamental
changes narrowed the FCA ' s scope and rendered it significantly less
Gutting the FCA proved to be disastrous, though: "[b]y the early 1980s,
the result was a virtual epidemic of scandals that rocked the defense
The pendulum having swung back, Congress strengthened the Act in 1986.
In 2009, Congress strengthened the Act again in the Fraud Enforcement
and Recovery Act, and it acted again in again in 2010 in the Affordable Care Act.
Today is the anniversary
of those 1986 Amendments. All of us – including the reluctant business
groups – should celebrate what the FCA has meant for taxpayers. In a less
tangible way, the Act is also a reminder of how we want to live as a society,
as a culture. We want to be a country that does business fairly. If you
earned the Government's money, then you take it gladly; but if you
didn't earn it, you don't try to take it, anyway. That's not
who we are – it's
Happy Birthday, False Claims Act!