Whistleblower Protection Blog : Whistleblower Lawyer & Attorney : National Whistleblower Legal Defense and Education Fund : Whistleblower Protection, Fraud Claims : Washington DC

Today's Washington Post, Metro section, leads with a story by Rosalind Helderman called "Democrats try to curb Cuccinelli's powers." The story reports on an effort by some Virginia Commonwealth Senators to change state law so that the state Attorney General must get court approval before issuing a "civil investigative demand" (CID). The proposal is an obvious response to concerns that Virginia's current Attorney General, Ken Cuccinelli, is abusing the power to issue CIDs by focusing on a global warming scientist.

Mr. Cuccinelli's office issued a statement suggesting that the proposed limit on CIDs could lessen Virginia's share of recoveries for false claims actions. The article mentions an increased share for states "when they win fraud cases." This may be a reference to the Grassley Amendment to the Deficit Reduction Act. Under the Grassley Amendment, states that have their own "Little FCA" Acts that meet federal standards will get a bigger share of federal recoveries from fraud claims in their states. Virginia's law already meets these standards. (Maryland does not; read here about why.) The federal government is still working to get states to adopt their own Little FCAs, and has not excluded any state for limits on CIDs. For Mr. Cuccinelli to use the Grassley Amendment to deflect criticism of, or limits on, his use of CIDs is a misuse of the FCA.

"My general opinion is that this is what happens when political hacks in both parties step into the FCA arena -- good law gets hacked up," says Patrick Burns of Taxpayers Against Fraud. "The Civil Division at DoJ has never engaged in partisan politics or open-ended witch hunts, and what Cucineill is doing here feels very much like that."

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The National Employment Lawyers Association (NELA) has scheduled a webinar called Using New Developments In Whistleblower Laws To Your Client's Advantage.  It will be on March 10, 2011, 11:00 am Pacific, 2:00 pm Eastern. This 90-minute webinar will address new developments in whistleblower law, including recent decisions strengthening the rights of federal employee whistleblowers. Speakers will include Tom Devine of the Government Accountability Project, Reuben Guttman of Grant & Eisenhofer, and Stephen M. Kohn, Executive Director of the National Whistleblowers Center. The registration fee for members of the public is $125. The live program will provide audio and video connections via computer, or the audio portion only via telephone. Participants can ask questions, answer surveys, and post comments from their computer during the program.

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The Commodities Future Trading Commission (CFTC) has proposed a series of regulations to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. Members of the public are invited to comment on the proposed whistleblower regulations until February 4, 2011.

We can expect a replay of the conflict generated by the rulemaking of the Securities and Exchange Commission (SEC). Industry representatives wanted the SEC to establish exclusions, limits, reductions and hurdles for whistleblower rewards. They wanted to regulate the fees of whistleblower attorneys and threaten those attorneys with sanctions. You can read our prior blog posts about this controversy here and here. The National Whistleblowers Center prepared a report showing that whistleblower rewards encouraged the detection of fraud and did not hinder internal compliance programs. We also submitted comments on the SEC regulations. Hopefully, the CFTC will not be swayed by the SEC's proposed rules, and will take a fresh look at what regulations will actually encourage employees to come forward with information to assist in the detection of frauds and other violations.

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