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Charles G.
Republican IA

About Sen. Charles
  • Hire More Heroes Act of 2015—Continued

    by Senator Chuck Grassley

    Posted on 2015-07-29

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    Read More about Hire More Heroes Act of 2015--Continued

    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 [[Page S6103]] 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.

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