Panel prepares to move bill to bolster False Claims Act (our dems in action)

[The Straight Story]

Panel prepares to move bill to bolster False Claims Act
By Dan Friedman CongressDaily February 27, 2008

The Senate Judiciary Committee is set to advance a bill that makes changes to the False Claims Act that would have significant effect on federal contractors, whistleblowers and trial lawyers.
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Under the False Claims Act, a whistleblower can file "qui tam" claims against a federal contractor for defrauding the government. The Justice Department then must decide whether to join the case. Whistleblowers share a portion of recovered claims, a big financial incentive to expose fraud.

From 1987-2005, recoveries under the act totaled $15 billion, with whistleblowers getting settlements worth $1.6 billion, according to GAO.

But Grassley and House Judiciary Courts Subcommittee Chairman Howard Berman, D-Calif., who backed the original bill in the House, argue the law is being gutted by federal court rulings limiting the circumstances in which whistleblowers can collect claims.

The new bill, and a companion measure sponsored by Berman, makes four main changes to the act. Taking aim at a 2004 D.C. Circuit Court of Appeals decision, it eliminates a requirement that false claims must be presented to a government employee. It loosens a requirement strengthened last year by the Supreme Court that says only claimants who are the original source of whistle-blower charges can recover money.

The bill also clarifies, due to concerns raised by the U.S. District Court for the Eastern District of Virginia, that false claims dealing with non-U.S. government funds under the control of the government can be recovered under the act. In addition, the bill addresses a disagreement among the courts by stating that federal employees can act as qui tam whistleblowers when they have reported fraud up the chain of command and no action occurred for one year.

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