Happy 237th Birthday to Whistleblower Law!

Senator Chuck Grassley

Senator Chuck Grassley

To help celebrate the 237th anniversary of the first whistleblower law passed by the Continental Congress back in 1778, United States Senator Chuck Grassley of Iowa prepared a stirring statement recounting the law’s history and the obstacles it has had to overcome to become the effective tool for recovering taxpayer money that it is today.

Grassley first acknowledged that “Whistleblowers have always been crucial in helping Congress and the federal Government route out fraud and misconduct,” and as proof cited that since 1986 the federal Government has recovered $42 billion from whistleblower cases – $6 billion in the Fiscal Year 2014 alone.

Unfortunately, the path to recovery has not always been a smooth one. As Grassley recounted, the False Claims Act was essentially gutted in 1943 when Congress bowed to outside pressure to protect those who commit fraud. In 1981, the GAO reported that the “sad truth is that crime against the Government often does pay.”

Fortunately for taxpayers, Grassley co-authored much needed amendments to the False Claims Act in 1986 and acted again in 2009 to combat various courts’ efforts to create loopholes in the law that allowed subcontractors to get away with fraud because ether the Government was not directly presented with the false claims or the relator hadn’t proven a judicially-constructed “intent” requirement relating to whether the Government itself paid the false claims.

Grassley emphasized the importance of Congress staying vigilant over the application of the False Claims Act since government agencies and even courts can be swayed by the lobby groups and powerful corporate defendants who would stand to benefit from the weakening of laws designed to recover taxpayers’ money.

As an example of an agency working against Congress’s intent, Grassley cited the Department of Justice’s recent attempt to minimize a relator award in a Medicare and Medicaid fraud suit brought by a James Hoyer client that resulted in a $197 million settlement with Endo Pharmaceuticals. Fortunately the Court in our case recognized that our client had contributed significantly to the Government’s investigation and was a key component to achieving the massive recovery. The Judge observed that Congress intended that “the only measuring stick” for an award be “the contribution of the relator.”

Grassley concurred with the Court, explaining:

That Judge was right. Congress intended to empower, protect, and 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 cost the taxpayers money.

In sum, Grassley urged his “colleagues to stand strong for the most effective tool we have to combat fraud.”

Happy Birthday Whistleblower Law!

You can read the entire statement here.

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