Whistleblowers Recover Tax Dollars

This year, whistleblower legislation I got passed in 1986, recovered almost $2 billion for taxpayers that would otherwise have been lost to fraud.  That brings the total for my now 23-year old law to more than $24 billion recovered for taxpayers.  The law started out fighting fraud by defense contractors.  Today it’s the government’s best weapon against health care fraud.

Plenty of special interests continue to try to undermine my whistleblower amendments and the False Claims Act.  And, in recent years, federal court decisions eroded some its power.  But I keep fighting back, and this year I worked with the Chairman of the Senate Judiciary Committee and Senator Dick Durbin of Illinois to get passed updates to beef up and buttress this fraud-fighting phenomenon.  Our bipartisan legislation was signed into law by President Obama on May 20, 2009.

The whistleblower provisions in the False Claims Act allow private citizens who know about fraud by government contractors to file suit on behalf of the United States.  The Justice Department is able to use this inside information to recover settlements of hundreds of millions, and in some cases billions, of dollars.  On top of recoveries, the power of the False Claims Act acts as a deterrent against billions of additional dollars in fraud because those who would try to scam the system know there are private citizens who can call them out.

The whistleblowers who step up, “speak truth,” and risk their livelihoods are American heroes.

I worked with Representative Howard Berman of California in 1986 to first win passage of these “qui tam” amendments to the False Claims Act, and they were signed into law by President Ronald Reagan.  The amendments were a natural extension of the False Claims Act that was originally signed into law by President Abraham Lincoln to fight fraud by Civil War contractors.  It had been weakened substantially over time, especially during the 1940s.

During the last year, the largest health care recoveries came from the pharmaceutical and medical device industries, which accounted for $866.7 million in settlements, according to the Department of Justice.  In addition to federal recoveries, these pharmaceutical and medical device fraud cases returned $402 million to state Medicaid programs.  This straightforward good-government law will be at work fighting fraud against all government programs, especially health care programs like Medicare and Medicaid, for years to come.