The Chamber of Commerce has commenced a well-financed and aggressive lobbying campaign to undermine America’s most effective whistleblower law, the False Claims Act. To justify its anti-whistleblower campaign the Chamber published a report entitled, “Fixing the False Claims Act: the Case For Compliance-Focused Reforms.” This is the first posts in a series the purpose of which is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.
Whistleblowers and their supporters are strongly urged to read this blog series and share it with friends. In addition, an Action Alert has been issued by the National Whistleblower Center so members of the public inform their representatives that the False Claims Act should not be “reformed” as proposed by the Chamber.
Fact Number 1:
As demonstrated in the graph below, the FCA’s reward provisions have worked, causing even the Chamber of Commerce to concede that the FCA is the “most important tool to uncover and punish fraud against the United States.” In the graph (source), the qui tam recoveries (represented in orange) are those exclusively derived from whistleblower FCA disclosures. The recoveries obtained by the government that are not directly and explicitly tied to whistleblowers are represented in blue, (i.e. the “Non-Qui Tam” recoveries). As can be seen, the amount of actual recoveries obtained on behalf of the taxpayers from dishonest government contractors has grown significantly over the years, as employees have become aware of the FCA and utilized its qui tam procedures.
Significantly, the bare numbers set forth in the chart undervalue the effectiveness of the FCA’s whistleblower recoveries. These numbers do not capture most of the criminal fines and penalties collected in FCA triggered prosecutions, the benefits obtained to the taxpayer through jailing notoriously corrupt contractors, the unquantifiable deterrent value of the FCA or fraud uncovered as an indirect result of whistleblower disclosures. The threat of detection triggered by large FCA penalties and rewards is a powerful motivator for companies to ensure compliance with the law. The Chamber’s proposals would undermine twenty-five years of progress in combating fraud against the taxpayer.