Grassley Law Recovers Another $3.3 Billion of Taxpayer Money Otherwise Lost to Fraud

$35 billion has been recovered since 1986 thanks to federal False Claims Act

WASHINGTON – Senate Judiciary Committee Ranking Member Chuck Grassley today said that the federal False Claims Law has recovered an additional $4.9 billion to the U.S. Treasury.  Grassley is the author of the 1986 qui tam amendments to the law as well as an update to the False Claims Act in 2009.  According the U.S. Department of Justice, the qui tam amendments alone recovered $3.3 billion of taxpayer money.  The total amount recovered through the False Claims Act since Grassley’s 1986 provisions were signed into law is now $35 billion.

“The federal False Claims Act is an unsung hero in the fight to root out fraud against the federal treasury.  It’s proven to be the most powerful tool in recovering taxpayer dollars.  The law has recouped tens of billions of taxpayers’ dollars that would otherwise have been lost, and it’s deterred even more,” Grassley said.  “Whistleblowers are the key to the recoveries.  They put their careers forever at risk to expose wrongdoing.  Our 1986 qui tam amendments have empowered these people to come forward and risk their livelihoods to do what is right.”

The amendments Grassley championed 25 years ago along with Rep. Howard Berman of California strengthened the Civil War-era False Claims Act which was originally signed into law by President Abraham Lincoln.  The 1986 Grassley-Berman qui tam amendments empowered individual citizens to file suit on behalf of the United States against those who fraudulently claim federal funds, including Medicare, Medicaid, contract payments, disaster assistance and other benefits, subsidies, grants and loans.

According to the Justice Department, since the 1986 Grassley-Berman qui tam amendments were signed into law, whistleblowers have filed nearly 8,500 actions under the qui tam provisions, including a peak of 647 this past year.

In 2008 Grassley introduced legislation that would further update the federal False Claims Act.  Many provisions of this legislation were included in the Fraud Enforcement Recovery Act that was signed into law in 2009.  The legislation overturned several court decisions that threatened to limit the scope and applicability intended by Congress in the 1986 update.  Grassley said the update helps ensure that no fraud will go unpunished because of legal loopholes.  

Fraudulent claims by defense contractors during the 1980s prompted Grassley’s initiative.  Today the qui tam amendments also recoup billions that would otherwise be lost to health care fraud and mortgage fraud.  

“Just think of how much money could be recovered if the Justice Department focused its efforts and went after the big fish who committed mortgage fraud and other financial crimes that helped cause the financial crisis.  It would also boost recoveries if the Justice Department followed the advice of career attorneys and didn’t fritter away opportunities to go after fraud like in St. Paul,” Grassley said.

Grassley said that while the numbers are very positive, he’s disappointed that the Justice Department could have done even more.  Grassley has learned that the department declined to intervene in two False Claims Act cases, over the concerns of career department employees, in exchange for St. Paul, Minn. dropping a case before the Supreme Court (Magner v. Gallagher) that could have had negative repercussions against a policy favored by the Justice Department’s Civil Rights Division.