Maryland "Little FCA" moving forward

Posted on March 12, 2010 by Richard Renner

WBAL-TV of Baltimore reports that the Maryland legislature is moving forward with a bill to create a "Little FCA" in Maryland.  Modeled on the federal False Claims Act (FCA), and looking for the benefits of the Grassley Amendment, Little FCAs provide financial rewards to whistleblowers who file sealed complaints against fraud by government contractors. Under the Grassley Amendment, state and local governments with Little FCAs receive a higher percentage of the fraud recoveries in their states. The WBAL story reports that Virginia has recovered $228 million a year since adopting their Little FCA.

Who can say no to free money for the state treasury? WBAL reports that medical providers and the Chamber of Commerce have opposed the bill.  However, none would speak to WBAL.  What would they say? "We should be able to get away with fraud"? WBAL says critics have previously claimed that the reward provision would encourage frivolous lawsuit and put pressure on businesses to settle. The $228 million Virginia gets every year does not sound frivolous to me.  The pressure to settle, though, sounds pretty good. Indeed, the FCA's reward provision is the most effective tool ever in the detection and proof of frauds against the government.

The administration of Gov. Martin O'Malley said the bill is likely to be amended.  My suggestion: don't limit the bill to medical fraud. Maryland deserves to get the enhanced recovery for all frauds in the state.

 

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Sen. Grassley proposes FCA fixes

Posted on February 15, 2010 by Richard Renner

Sen. Charles Grassley (R-Iowa) has introduced a bill that will make changes to the False Claims Act (FCA) in response to court decisions that limited the rights of whistleblowers.  The main features of S. 2964 (introduced January 28, 2010) would add administrative procedures designed to make it more difficult for crooks to set up phony medical providers to submit false bills to Medicare and Medicaid.  However, in a third branch of the bill, Sen. Grassley proposes to fix a writing error introduced last year to the anti-retaliation provision. Sen. Grassley also proposes a nationwide two-year statute of limitations for retaliation claims.  The national statute of limitations would address the Supreme Court's holding in Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U.S. 409 (2005). The Supreme Court said that the FCA's six-year statute of limitations did not apply to the FCA's whistleblower protection claims.  Whistleblowers would have to respect the statute of limitations in their home state instead. (Karen Wilson's retaliation claim was then dismissed because she missed North Carolina's three-year statute of limitations.) Sen. Grassley also proposes to expand the definition of "original source" so that a whistleblower can still receive rewards if he or she has, "knowledge that is independent of and materially adds to the publicly disclosed allegations or transactions, and has voluntarily provided the information to the Government before filing an action . . .." The Senate has referred S. 2964 to its Finance Committee.

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Obama Administration Supports The Fraud Enforcement and Recovery Act

Posted on April 23, 2009 by Lindsey Williams

Here is an update to our earlier posting on S. 386.

The Office of Management and Budget issued a Statement of Administration Policy to the Senate on Monday, April 20th stating that the Obama Administration “strongly supports enactment of S. 386.”  The statement explained that the Fraud Enforcement and Recovery Act of 2009 (S. 386) would “benefit U.S. taxpayers by both addressing existing fraud and deterring waste, fraud, and abuse of public funds.”  It also pointed out that the bill would “amend the False Claims Act (FCA) in several important respects so that the FCA remains a potent and useful weapon against the misuse of taxpayer funds.”

Notably, the statement supporting the Fraud Enforcement and Recovery Act is the only statement the Office of Management and Budget has sent to the Senate since the beginning of the Obama Administration.

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Senator Grassley Expresses Support For Stronger Anti-Fraud Legislation

Posted on April 22, 2009 by Lindsey Williams

On Monday, Senator Grassley (R-IA) expressed his support for the Fraud Enforcement and Recovery Act of 2009 (S. 386) saying “we simply cannot allow unscrupulous individuals to defraud the government and rip off taxpayers.” The bill provides new tools for the federal government to fight fraud and makes much needed amendments to the Federal False Claims Act.

Under the False Claims Act, whistleblowers bring lawsuits against companies who defraud the federal government. As a reward for their courageous actions, whistleblower receive a portion of the amount the federal government recovers.  As Senator Grassley correctly pointed out in his floor statement,  “we would not have the case or the money returned if it wasn’t for the information of the whistleblower.”  This law has been used to recover more than $22 billion since 1986 and has deterred an incalculable amount of fraud.  

The amendments to the False Claims Act correct loopholes created by recent court decisions, including the Allison Engine case, which allow companies to avoid liability for fraud.  These amendments are absolutely necessary to protect taxpayer dollars – especially in light of the billions of dollars spent in the economic stimulus and TARP legislation.  However, Senator Grassley reminds us “you’re going to find those same special interests that have been around for the last 20 years, trying to gut the legislation. Why? Because it’s one of the most effective tools against fraud.”  We will be following this legislation and will keep you updated on its progress.  

In addition to the amendments to the False Claims Act, the bill authorizes funding for law enforcement and prosecutors, makes changes to federal criminal laws, redefines “financial institution” to include mortgage lending businesses, and adds commodities futures to the securities fraud statute.  The bill also makes it illegal to make false statements on mortgage applications and appraisals and ensures that economic relief funds and TARP funds are included in criminal law prohibiting fraud against the government.
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Senator Grassley Calls For FDA Clarification On Whistleblower Rights

Posted on March 26, 2009 by Sam Dratch


On Tuesday, Senator Charles Grassley asked the Acting Commissioner of the Food and Drug Administration to clarify the Agency’s position on the rights of employees to communicate with Congress and the Inspector General.  Grassley was responding to a memo issued last week that warned FDA employees about releasing information.

In the letter, Grassley stated, ““Federal laws protect whistleblowers and allow people who work in the federal bureaucracy to discuss what’s happening inside an agency with other officials.  Attempts to silence whistleblowers are illegal.  If the memo sent last week was intended to have a chilling effect on FDA employees who want to speak up about problems, then that memo is contrary to the President’s call for open and transparent government, and the Acting Commissioner needs to set the record straight.”

We applaud Senator Grassley’s continued commitment to protecting federal employees and hope other Senators follow his lead.   All federal employees, including FDA employees, need adequate whistleblower protection.

To read the Senator Grassley’s letter click here.

 

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The "Skunks" are Getting Together Again

Posted on February 28, 2009 by Marshall Chriswell

The National Whistleblowers Center, along other good government groups will be hosting the 2009 National Whistleblower Assembly from March 8-12. This event, which brings scores of public and private sector whistleblowers to Washington, DC, has been extremely successful in getting the attention of Congress over the past three years.


Back in 2007, when the whistleblower community held the first such event (it was called "Whistleblower Week in Washington"), one of the major events that week was an award ceremony at which representatives from approximately 30 public interest groups presented Senator Charles Grassley with an achievement award for all that he has done for whistleblowers. During his acceptance speech, Senator Grassley explained to us his support for whistleblowers, and there are two lines of that speech that I will never forget. 


First, the Senator expressed his view that "Whistleblowers are treated like a skunk at a picnic." While this statement is somewhat humorous, we know it's true. Whistleblowers who risk their livelihood to expose wrongdoing are often seen as breaking up the party of greed and corruption. Senator Grassley realizes that whistleblowers are heroes, and they deserve our respect. That brings me to the second thing that I remember from that speech: the Senator calling for the President of the United States to hold nothing less than a Rose Garden ceremony honoring whistleblowers. At the time, Grassley said that "this would send a message from the very top of the bureaucracy about the importance and value of whistleblowers."


As we know, the Bush Administration was for the most part not friendly toward whistleblowers, and this idea never got off the ground. In recent weeks, though, Senator Grassley has  proposed this idea to President Obama, who has long supported whistleblower rights. Hopefully this becomes a reality! 


This year's National Whistleblower Assembly is sure to be as exciting, informative, and successful as in the past. I encourage anyone in the DC area to check it out! For more information, and to RSVP for events, click here.

 

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