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.” The purpose of this blog series is to combat the Chamber’s misinformation, and explain why the False Claims Act must be protected.

Fact Number 18:

The Chamber proposed a blanket ban on the right of federal employees to use the FCA.  The problem with this approach is twofold.  First, in the nearly 30 years since the law was amended, federal employees have not used the law.  The few instances cited to by the Chamber resulted in either the dismissal of the claim or, in one case, a well deserved, modest recovery.  Of the billions and billions of dollars in fraud uncovered by whistleblowers under the FCA, the Chamber pointed to just one case in which a whistleblower obtained a modest reward of  $408,000. In that case the employee had reported the fraud for nearly four years prior to filing her claim.  She had reported it to managers, postal inspectors and the Inspector General.  This was not the case of an employee gaming the system.  It was the case of an employee trying to do the right thing. 

The real problem has been the lack of federal employee involvement in the FCA.  Federal employees are perfectly positioned to identify fraud by government contractors.  However, it is well known that the Department of Justice opposes efforts by federal employees to use the law, and has argued in court that these employees should be blocked from obtaining rewards.

In 2008, the Senate Judiciary Committee carefully studied this problem and proposed a constructive amendment to the FCA.  In a bipartisan proposal, the Judiciary Committee suggested a special procedure for encouraging federal employee use of the FCA.  Under this procedure, federal employees would be required to report all allegations of fraud to the appropriate Inspector General (IG).  Only if the IG failed to take action within one year, could the employee then independently pursue a FCA claim.  This compromise was fully accepted by all parties, and thus, should be implemented.

The blanket gag promoted by the Chamber would only result in massive amounts of fraud going unreported.  The bipartisan Senate proposal would encourage federal employees to report fraud to the Inspector General, encourage IGs to fully investigate these allegations, and only if the IG process failed to work, permit employees to go forward.  Given the unique status of federal employees, this is a workable compromise.

The blanket gag promoted by the Chamber would only result in massive amounts of fraud going unreported.

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.