GRASSLEY. Madam President, I often come to the floor to honor
whistleblowers but more importantly to talk about their very important
role in making government function.
On July 30, 1778, the Continental Congress passed the very first
whistleblower law in the United States. It read:
[I]t is the duty of all persons in the service of the
United States . . . to give the earliest
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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.
Probably for the last 6, 7 years, I have been referring to this
around the time of July 30.
Going back to 1778, we have had recognition of the important role
whistleblowers can play in making sure government is responsible.
Whistleblowers have always been crucial in helping Congress and the
Federal Government root out fraud and misconduct.
It is simple common sense to reward and protect whistleblowers who
report waste of taxpayers' money, fraudulent use of taxpayers' money,
and outright simple abuse. The False Claims Act does that. In fiscal
year 2014 alone, the Federal Government recovered nearly $6 billion
under the False Claims Act. That makes more than $22 billion since
January 2009 and more than $42 billion since I got the legislation
passed in 1986. These recoveries represent victories across a wide
array of industries and government programs. Those programs include
mortgage insurance, Federal student aid, Medicare and Medicaid, as well
as defense contracts.
The Department of Justice credits whistleblowers for their important
role in the success, for the money that has come back to the Federal
Treasury, and for the carrying out of the False Claims Act. According
to the Justice Department, whistleblowers accounted for $3 billion in
recoveries under that act in just fiscal year 2014. In fact, over 80
percent of False Claims Act cases are initiated by whistleblowers.
Clearly, the False Claims Act is working very well. Of course, the
act has no shortage of critics--typically in the groups where you find
perpetrators of fraud. But we have learned our lesson that a weak False
Claims Act is not in the taxpayers' best interests.
In 1943, Congress bowed to the pressure to undo the act's crucial qui
tam provisions. Amendments passed in that era of World War II barred
actions where the government already had knowledge of fraud. The result
was to block nearly all private actions. Congress assumed--and now we
can say assumed wrongly--that the Justice Department could do a good
job prosecuting fraud all by itself. As I said, they were wrong.
Between 1943 and 1986, when the False Claims Act was amended, fraud
against the government skyrocketed. Most of those accused went
unpunished.
A 1981 report by the Government Accountability Office said:
For those who are caught committing fraud, the chances of
being prosecuted and eventually going to jail are slim. . . .
The sad truth is that crime against the Government often does
pay.
So in 1986 I coauthored much needed amendments to the False Claims
Act. The 1986 amendments once again gave citizens the ability to help
the government go after fraud in a meaningful way. For example, the
amendments provided protection for whistleblowers and eliminated the
impossible government knowledge bar. Essentially, a relator's suit was
only barred where the fraud had been publicly disclosed. The amendments
also clarified that the act covers false claims made not just directly
to a government agency; it also covers fraud against grantees, States,
and other recipients of Federal funds, whether or not the fund
obligation is fixed.
These provisions and others were intended to give the False Claims
Act teeth again, and they did. However, as happens with a lot of
legislation Congress passes, the courts chipped away at the heart of
the False Claims Act and ignored the intent of Congress. The assault on
the act came to a head in the Supreme Court's erroneous opinions in the
well-known cases of Allison Engine and Totten. The Court held that the
act required proof of intent that the government itself pay a claim and
that a claim is presented directly to the government.
The problem with that logic is it creates a loophole big enough to
drive a truck through. A third party paid with government money would
get away with fraud because a contractor, not the government agency,
paid the claim. So in 2009 we passed the Fraud Enforcement and Recovery
Act and made very clear that was not consistent with the original
intent of the 1986 False Claims Act. The act reaches false claims for
government money or property, whether or not the wrongdoer deals
directly with the Federal Government. It was never the intent of
Congress to give a free pass to subcontractors or other parties
receiving government funds. In fact, those folks are some of the
biggest perpetrators of fraud today.
The inspector general for the Department of Health and Human Services
has reported a 134-percent increase in complaints against Medicare Part
D in just the last 5 years. By not stopping fraud against programs such
as Medicare Part D, the government is hemorrhaging funds. Taxpayer
money is taxpayer money. Fraud does not magically become OK just
because a third party is involved.
Of course, the issue of presentment to government officials is not
the only sticking point. There has been pushback in courts and from
lobbyists about all sorts of issues, such as the ``public disclosure
bar,'' settlement practices, and award shares for relators. Through it
all, Congress has had to stay vigilant in keeping courts and Federal
agencies generally true to our original legislative intent.
As an example, just recently the Justice Department tried to minimize
a relator award in a Medicare and Medicaid fraud case. The relator
contributed significantly to the case. The judge recognized that
Congress intended that ``the only measuring stick'' for an award is
``the contribution of the relator.'' Those are the words the judge use,
and that judge was right.
Congress intended to empower, to protect, and to reward relators who
identify fraud against the taxpayers. History teaches us that weakening
the relator's rights weakens the government's ability to fight fraud.
All that does is let wrongdoers off the hook, and it costs the
taxpayers money. That is not the result we intended with the False
Claims Act. And the Continental Congress, which was so concerned about
identifying misconduct, fraud, and misdemeanors, would not have wanted
those results I just talked about.
I want to remind my colleagues to stand strong for the effective tool
that we have to combat fraud.
