[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2041 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2041

                     To amend the False Claims Act.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 12, 2007

Mr. Grassley (for himself, Mr. Durbin, Mr. Leahy, Mr. Specter, and Mr. 
  Whitehouse) introduced the following bill; which was read twice and 
               referred to the Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
                     To amend the False Claims Act.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``False Claims Act Correction Act of 
2007''.

SEC. 2. FALSE CLAIMS GENERALLY.

    Section 3729 of title 31, United States Code, is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Liability for Certain Acts.--
            ``(1) In general.--Subject to paragraph (2), any person 
        who--
                    ``(A) knowingly presents, or causes to be presented 
                a false or fraudulent claim for Government money or 
                property for payment or approval;
                    ``(B) knowingly makes, uses, or causes to be made 
                or used, a false record or statement to get a false or 
                fraudulent claim for Government money or property paid 
                or approved;
                    ``(C) conspires to commit any substantive violation 
                set forth in this section or otherwise to defraud the 
                Government by getting a false or fraudulent claim for 
                Government money or property paid or approved;
                    ``(D) has possession, custody, or control of 
                Government money or property and, intending to defraud 
                the Government, to retain overpayment, or knowingly to 
                convert the money or property, permanently or 
                temporarily, to an unauthorized use, fails to deliver 
                or return, or fails to cause the return or delivery of 
                the money or property, or delivers, returns, or causes 
                to be delivered, or returned less money or property 
                than the amount due or owed;
                    ``(E) authorized to make or deliver a document 
                certifying receipt of property used, or to be used, by 
                the Government and, intending to defraud the 
                Government, makes or delivers the receipt without 
                completely knowing that the information on the receipt 
                is true;
                    ``(F) knowingly buys, or receives as a pledge of an 
                obligation or debt, public property from an officer or 
                employee of the Government, or a member of the Armed 
                Forces, who lawfully may not sell or pledge property; 
                or
                    ``(G) knowingly makes, uses, or causes to be made 
                or used, a false record or statement to conceal, avoid, 
                or decrease an obligation to pay or transmit money or 
                property to the Government,
        is liable to the United States Government for a civil penalty 
        of not less than $5,000 and not more than $10,000 plus 3 times 
        the amount of damages which the Government, its grantee, or 
        administrative beneficiary sustains because of the act of that 
        person.
            ``(2) Lesser penalty.--If the court finds that--
                    ``(A) the person committing the violation of this 
                subsection furnished officials of the United States 
                responsible for investigating false claims violations 
                with all information known to such person about the 
                violation within 30 days after the date on which the 
                defendant first obtained the information;
                    ``(B) such person fully cooperated with any 
                Government investigation of such violation; and
                    ``(C) at the time such person furnished the United 
                States with the information about the violation, no 
                criminal prosecution, civil action, or administrative 
                action had commenced under this title with respect to 
                such violation, and the person did not have actual 
                knowledge of the existence of an investigation into 
                such violation,
        the court may assess not less than 2 times the amount of 
        damages which the Government, its grantee or administrative 
        beneficiary sustains because of the act of the person.
            ``(3) Costs of civil actions.--A person violating this 
        subsection shall also be liable to the United States Government 
        for the costs of a civil action brought to recover any such 
        penalty or damages.''.
            (2) by striking subsections (b) and (c) and inserting the 
        following:
    ``(b) Definitions.--For purposes of this section--
            ``(1) the terms `known', `knowing', and `knowingly' mean 
        that a person, with respect to information--
                    ``(A) has actual knowledge of the information;
                    ``(B) acts in deliberate ignorance of the truth or 
                falsity of the information; or
                    ``(C) acts in reckless disregard of the truth or 
                falsity of the information,
        and no proof of specific intent to defraud is required;
            ``(2) the term `Government money or property' means--
                    ``(A) money or property belonging to the United 
                States Government;
                    ``(B) money or property the United States 
                Government provides, has provided, or will reimburse to 
                a contractor, grantee, agent or other recipient to be 
                spent or used on the Government's behalf or to advance 
                Government programs;
                    ``(C) money or property belonging to any 
                administrative beneficiary, as defined herein;
            ``(3) the term `claim' includes any request or demand, 
        whether under a contract or otherwise, for Government money or 
        property; and
            ``(4) the term `administrative beneficiary' means any 
        natural person or entity, including any governmental or quasi-
        governmental entity, on whose behalf the United States 
        Government, alone or with others, collects, possesses, 
        transmits, administers, manages, or acts as custodian of money 
        or property.'';
            (3) by redesignating subsections (d) and (e) as subsections 
        (c) and (d), respectively; and
            (4) in subsection (c), as redesignated, by striking 
        ``subparagraphs (A) through (C) of subsection (a)'' and 
        inserting ``subsection (a)(2)''.

SEC. 3. GOVERNMENT RIGHT TO DISMISS CERTAIN ACTIONS.

    Section 3730(b) of title 31, United States Code, is amended by 
adding at the end thereof the following:
            ``(6)(A) Not later than 60 days after the date of service 
        under paragraph (2), the Government may move to dismiss from 
        the action the qui tam relator that is an employee of the 
        Federal Government if--
                    ``(i) all the necessary and specific material 
                allegations contained in such action were derived from 
                an open and active fraud investigation by the 
                Government; or
                    ``(ii) the person bringing the action learned of 
                the information that underlies the alleged violation of 
                section 3729 that is the basis of the action in the 
                course of the person's employment by the United States, 
                and none of the following has occurred:
                            ``(I) In a case in which the employing 
                        agency has an inspector general, such person, 
                        before bringing the action--
                                    ``(aa) disclosed in writing 
                                substantially all material evidence and 
                                information that relates to the alleged 
                                violation that the person possessed to 
                                such inspector general; and
                                    ``(bb) notified in writing the 
                                person's supervisor and the Attorney 
                                General of the disclosure under 
                                division (aa).
                            ``(II) In a case in which the employing 
                        agency does not have an inspector general, such 
                        person, before bringing the action--
                                    ``(aa) disclosed in writing 
                                substantially all material evidence and 
                                information that relates to the alleged 
                                violation that the person possessed, to 
                                the Attorney General; and
                                    ``(bb) notified in writing the 
                                person's supervisor of the disclosure 
                                under division (aa).
                            ``(III) Not less than 12 months (and any 
                        period of extension as provided for under 
                        subparagraph (B)) have elapsed since the 
                        disclosure of information and notification 
                        under either subclause (I) or (II) were made 
                        and the Attorney General has not filed an 
                        action based on such information.
            ``(B) Prior to the expiration of the 12-month period 
        described under subparagraph (A)(ii)(III) and upon notice to 
        the person who has disclosed information and provided notice 
        under subparagraph (A)(ii) (I) or (II), the Attorney General 
        may file a motion seeking an extension of such 12-month period. 
        Such 12-month period may be extended by a court for not more 
        than an additional 12-month period upon a showing by the 
        Government that the additional period is necessary for the 
        Government to decide whether or not to file such action. Any 
        such motion may be filed in camera and may be supported by 
        affidavits or other submissions in camera.
            ``(C) For purposes of subparagraph (A), a person's 
        supervisor is the officer or employee who--
                    ``(i) is in a position of the next highest 
                classification to the position of such person;
                    ``(ii) has supervisory authority over such person; 
                and
                    ``(iii) such person believes is not culpable of the 
                violation upon which the action under this subsection 
                is brought by such person.
            ``(D) A motion to dismiss under this paragraph shall set 
        forth documentation of the allegations, evidence, and 
        information in support of the motion.
            ``(E) Any person bringing a civil action under paragraph 
        (1) shall be provided an opportunity to contest a motion to 
        dismiss under this paragraph. The court may restrict access to 
        the evidentiary materials filed in support of the motion to 
        dismiss, as the interests of justice require. A motion to 
        dismiss and papers filed in support or opposition of such 
        motion shall not be--
                    ``(i) made public without the prior written consent 
                of the person bringing the civil action; and
                    ``(ii) subject to discovery by the defendant.
            ``(F) If the motion to dismiss under this paragraph is 
        granted, the matter shall remain under seal.
            ``(G) No later than 6 months after the date of the 
        enactment of this paragraph, and every 6 months thereafter, the 
        Department of Justice shall report to the Committee on the 
        Judiciary of the Senate and the Committee on the Judiciary of 
        the House of Representatives relating to--
                    ``(i) the cases in which the Department of Justice 
                has filed a motion to dismiss under this paragraph;
                    ``(ii) the outcome of such motions; and
                    ``(iii) the status of false claims civil actions in 
                which such motions were filed.''.

SEC. 4. BARRED ACTIONS.

    (a) Provisions Relating to Actions Barred.--Section 3730(b)(1) of 
title 31, United States Code, is amended by adding at the end the 
following: ``No claim for a violation of section 3729 may be waived or 
released by any action of any person, except insofar as such action is 
part of a court approved settlement of a false claim civil action 
brought under this section. Nothing in this section shall be construed 
to limit the ability of the United States to decline to pursue any 
claim brought under this subchapter.''.
    (b) Dismissal.--Section 3730(e)(4) of title 31, United States Code, 
is amended to read as follows:
    ``(4)(A) Upon timely motion of the Attorney General, a court shall 
dismiss an action or claim brought under section 3730(b) if the 
allegations relating to all essential elements of liability of the 
action or claim are based exclusively on the public disclosure of 
allegations or transactions in a Federal criminal, civil, or 
administrative hearing, in a congressional, Federal administrative, or 
Government Accountability Office report, hearing, audit or 
investigation, or from the news media.
    ``(B) In this paragraph:
            ``(i) The term `public disclosure' includes only 
        disclosures made on the public record or that have otherwise 
        been disseminated broadly to the general public.
            ``(ii) The person bringing the action does not create a 
        public disclosure by obtaining information from a Freedom of 
        Information Act request or from information exchanges with law 
        enforcement and other Government employees if such information 
        does not otherwise qualify as publicly disclosed.
            ``(iii) An action or claim is based on a public disclosure 
        only if the person bringing the action derived his knowledge of 
        all essential elements of liability of the action or claim 
        alleged in his complaint from the public disclosure.''.
    (c) Qui Tam Awards.--Section 3730(d)(3) of title 31, United States 
Code, is amended to read as follows:
    ``(3)(A) Whether or not the Government proceeds with the action, 
the court may, to the extent the court considers appropriate, reduce 
the share of the proceeds of the action which a person would otherwise 
receive under paragraph (1) or (2) of this subsection (taking into 
account the role of that person in advancing the case to litigation and 
any relevant circumstances pertaining to the violation), if the court 
finds that person--
            ``(i) planned and initiated the violation of section 3729 
        upon which the action was brought; or
            ``(ii) derived the knowledge of the claims in the action 
        primarily from specific information relating to allegations or 
        transactions (other than information provided by the person 
        bringing the action) that the Government publicly disclosed, as 
        that term is defined in subsection (e)(4)(A), or that the 
        Government disclosed privately to the person bringing the 
        action in the course of its investigation into potential 
        violations of this subchapter.
    ``(B) If the person bringing the action is convicted of criminal 
conduct arising from the role of that person in the violation of 
section 3729, that person shall be dismissed from the civil action and 
shall not receive any share of the proceeds of the action. Such 
dismissal shall not prejudice the right of the United States to 
continue the action, represented by the Department of Justice.''.

SEC. 5. RELIEF FROM RETALIATORY ACTIONS.

    Section 3730(h) of title 31, United States Code, is amended to read 
as follows:
    ``(h) Relief From Retaliatory Actions.--
            ``(1) In general.--Any employee, government contractor, or 
        agent shall be entitled to all relief necessary to make that 
        employee, government contractor whole, if that employee, 
        government contractor, or agent is discharged, demoted, 
        suspended, threatened, harassed, or in any other manner 
        discriminated against in the terms and conditions of employment 
        because of lawful acts done by the employee, government 
        contractor, or agent on behalf of the employee, government 
        contractor, or agent or associated others in furtherance of 
        other efforts to stop 1 or more violations of this subchapter.
            ``(2) Relief.--Relief under paragraph (1) shall include 
        reinstatement with the same seniority status that employee, 
        government contractor, or agent would have had but for the 
        discrimination, 2 times the amount of back pay, interest on the 
        back pay, and compensation for any special damages sustained as 
        a result of the discrimination, including litigation costs and 
        reasonable attorneys' fees. An action under this subsection may 
        be brought in the appropriate district court of the United 
        States for the relief provided in this subsection.''.

SEC. 6. STATUTE OF LIMITATIONS.

    Section 3731(b) of title 31, United States Code, is amended to read 
as follows:
    ``(b)(1) A civil action under section 3730 may not be brought more 
than 10 years after the date on which the violation of section 3729 or 
3730 is committed.
    ``(2) Upon intervention, the Government may file its own complaint 
in intervention or amend the complaint of a person who has brought an 
action under section 3730(b) to clarify or add detail to the claims in 
which the Government is intervening and to add any additional claims 
with respect to which the Government contends it is entitled to relief. 
For statute of limitations purposes, any such Government pleading shall 
relate back to the filing date of the complaint of the person who 
originally brought the action, to the extent that the claim of the 
Government arises out of the conduct, transactions, or occurrences set 
forth, or attempted to be set forth, in the prior complaint of that 
person.''.

SEC. 7. CIVIL INVESTIGATIVE DEMANDS.

    Section 3733(a)(1) of title 31, United States Code, is amended--
            (1) in the matter preceding subparagraph (A), by inserting 
        ``, or a designee (for purposes of this section),'' after 
        ``Whenever the Attorney General''; and
            (2) in the matter following subparagraph (D), by--
                    (A) striking ``may not delegate'' and inserting 
                ``may delegate''; and
                    (B) adding at the end the following: ``Any 
                information obtained by the Attorney General or a 
                designee of the Attorney General under this section may 
                be shared with any qui tam relator if the Attorney 
                General or designee determine it is necessary as part 
                of any false claims act investigation.''.
                                 <all>