The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“FALSE CLAIMS ACT” mentioning the U.S. Dept. of Justice was published in the Senate section on pages S6226-S6227 on Dec. 1, 2014.
The publication is reproduced in full below:
FALSE CLAIMS ACT
Mr. GRASSLEY. Just before our August recess, this body passed S. Res. 525.
I thank Senator Wyden, the vice chair of the Whistleblower Protection Caucus I am starting next year, for being an original cosponsor of the resolution.
S. Res. 525 recognized July 31 as National Whistleblower Appreciation Day. On that day way back in 1778, the Continental Congress passed the first whistleblower law in the United States. I would like to quote it:
Resolved,
That it is the duty of all persons in the service of the United States . . . to give the earliest information to Congress or other proper authority of any misconduct, frauds or misdemeanors committed by any officers or persons in the service of these states, which may come to their knowledge.
This resolution was passed by the Continental Congress in 1778 without a recorded dissent.
Then and now, Congress's control of the purse strings has given us an obligation to guard against wasteful and fraudulent spending.
On this past July 31, whistleblower groups met to honor some of our colleagues on the Hill for their support of whistleblowers who report waste or fraud. I was not able to be there because the House of Representatives Judiciary Committee held a hearing on oversight of the False Claims Act. I am always wary when I hear the biggest violators of a law hire people to talk about ``strengthening'' the False Claims Act. So at the House of Representatives, I had an opportunity to comment on a chamber of commerce release of a report on the False Claims Act. It claims the act ``plainly is not getting the job done'' since ``the government has recovered only $35 billion since 1987.'' The current number as of today is actually $42 billion that has been recovered under the False Claims Act of 1986, and that surely is nothing to sneeze at--at least where I come from it is not.
The fact is that since 1986 no other law on the books has been more effective in battling fraud. Before the 1986 amendments, the False Claims Act only brought in about $40 million a year. At that rate it would have recovered only $1 billion in the past 25 years. So thanks to the 1986 amendments, it brought back 42 times as much.
Clearly, I say to the U.S. Chamber of Commerce, the False Claims Act is working, and it is working fantastically. The chamber's report says the law is ``ineffective at preventing fraud.'' Yet my staff have met with some of the authors of that chamber report, and I have to say to you that the chamber had no concrete proposals for preventing fraud more effectively than the False Claims Act.
Now, the chamber people meeting with my staff talked about ``a gold-
standard compliance certification program,'' but to me and my staff it is just a pie-in-the-sky idea with no specifics. They told my staff,
``We deliberately left this vague.'' So that is the problem. They lack details on who would create the program, who would enforce the program. Basically, they lacked details about everything. But they want this Senate to believe that once this pipe dream is in place, it will magically increase the amount of taxpayer dollars the government recovers.
In exchange, the report proposes hefty concessions for its big corporate sponsors. For starters, they want to eliminate the use of exclusion or debarment. These happen to be some of the government's strongest tools in deterring fraud. The chamber report would require whistleblowers to report internally 180 days before any whistleblower can file a False Claims Act suit. Yet, in most corporations, reporting internally just puts a huge target on the back of the employee blowing the whistle, just as it does on the back of a Federal whistleblower within the Federal bureaucracy. We should trust whistleblowers to use their common sense to know the safest place to report. Internal reporting and a 6-month head start on retaliation before the whistleblower gets a chance to be heard in court is a recipe guaranteed to reduce disclosures of fraud.
I have long advocated companies developing strong internal compliance programs, so I see nothing wrong with having those compliance programs. However, having one of these programs is not a reason to get a ``get out of jail free'' pass. I am skeptical that companies will self-report violations. Certification of a compliance program will not turn up the cold hard facts on whether they do or do not self-report. Even when a corporation does come forward, the company line is never going to be the complete picture. That is why the False Claims Act incentivizes whistleblowers, and, in fact, it has worked.
Further, some corporations have actually been using compliance programs as a trap for muzzling whistleblowers. By making their compliance program an arm of their legal department, anything a whistleblower reports is protected as confidential information covered under the attorney-client privilege. Many corporations also require employees who provide tips to their compliance departments to then sign nondisclosure agreements. This has a major chilling effect on whistleblowers contemplating filing a False Claims Act suit. Whistleblowers brave enough to file then find themselves the subject of legal action claiming they have violated attorney-client privilege or nondisclosure agreements. Now, a very simple question: Is this how we ought to treat whistleblowers?
This report's recommendations contradict its assertion that the False Claims Act has failed by not recovering enough money. The report proposes to limit government recoveries across the board, regardless of participation in any compliance certification program. That makes no sense.
In the last 5 years the Federal Government has grown larger and larger and spending has gotten more and more out of control. The Federal Government now spends about $1 trillion in contracts and grants each year. Inspectors general, the Government Accountability Office, and congressional oversight committees simply have not been able to keep up. Whistleblowers using the False Claims Act have played a very key role in checking fraud and wasteful spending. Annual recoveries under the False Claims Act have increased dramatically in just the past 5 years. Last year the Justice Department recovered $2.6 billion in just health care fraud through the False Claims Act. The False Claims Act is clearly doing exactly what we intended it to do, and that is to recover taxpayers' money being lost to fraud.
State attorneys general around the country have used State false claims acts to successfully recover billions of dollars for their States. I will give some examples.
Last October--that is, October of 2013--then-Virginia attorney general Ken Cuccinelli recovered $37 million for the State of Virginia from a drug company that was inflating its prices to scam taxpayer dollars from Medicare. The next month, in 2013, Cuccinelli recovered
$21 million in two health care fraud settlements with multinational pharmaceutical giant Johnson & Johnson, which was paying millions of dollars in kickbacks to the Nation's largest pharmacy. Yet, just days before Cuccinelli announced the settlements, Health and Human Services Secretary Kathleen Sebelius also made an announcement. She revealed that this administration did not intend to treat ObamaCare as a Federal health care program, exempting it from antikickback laws. Precisely because of the fraud opportunities under ObamaCare, one provision Congress added to the law made a violation of antikickback law an automatic violation of the False Claims Act. This administration has chosen to ignore that part of ObamaCare.
Congress must step forward and reiterate that ObamaCare is no less subject to the antikickback law and False Claims Act than other Federal health care programs. Congress should strongly consider strengthening the False Claims Act's connection with suspension and debarment. That would keep repeat offenders away from the taxpayer dollars they have defrauded in the first place.
This issue, then, is really one about law and order. If we really want to improve the False Claims Act--not go the direction of the U.S. Chamber of Commerce--we should make a judgment or settlement under the law result in an automatic review for suspension or debarment. That would capitalize on the success of the law while increasing its deterrent effect.
The False Claims Act has already provided a crucial check during a time of growing government and outofcontrol Federal spending. Whistleblowers have been the key to the government finding out about fraud when it happens. We have to do all we can to honor them for the patriotic service they provide to the taxpayers and protect them from those who resist the role they play.
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