[Congressional Record Volume 151, Number 32 (Wednesday, March 16, 2005)]
[Senate]
[Pages S2849-S2850]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY:
  S. 636. A bill to direct the Inspector General of the Department of 
Justice to submit semi-annual reports regarding settlements relating to 
false claims and fraud against the Federal Government; to the Committee 
on Homeland Security and Governmental Affairs.
  Mr. GRASSLEY. Mr. President, today I am re-introducing a bill 
directing the Inspector General of the Department of Justice to submit 
semi-annual reports regarding settlements relating to false claims and 
fraud against the United States.
  The False Claims Act, 31 U.S.C. Sec. 3729 et seq., is the 
government's single most effective program for recouping money 
improperly obtained from the United States by false claims and fraud. 
Initially passed during the Civil War at President Abraham Lincoln's 
request to suppress fraud against the Union Army, the FCA was 
modernized and updated in 1986. Since President Ronald Reagan signed 
the 1986 amendments into law, settlements and judgments in FCA cases 
have exceeded $13 billion. No other anti-fraud program of the Federal 
Government can match this result.
  Despite the significance of these results, the Congress does not have 
a way to evaluate the performance of the FCA program. While the 
program, which is overseen by the Civil Division of the Department of 
Justice, appears to be doing well, it is not known at this time how the 
program is performing as compared to its potential. What percentage of 
the various frauds perpetrated against the United States is recouped in 
False Claims Act cases? How effectively does DoJ capture the multiple 
damages and penalties provided for by the act? How quickly does DoJ 
move FCA cases? How effectively does DoJ use the tools provided to it 
by the FCA, such as civil investigative demands? How effectively does 
DoJ use relators and how well does it reward them?
  The purpose of this bill is to answer these questions. The bill 
requires DoJ to submit certain information that will allow Congress to 
evaluate the Department's performance in managing FCA cases. Thus, 
under this bill the Department of Justice will be required to describe 
its settlements of FCA cases. The report to Congress shall include a

[[Page S2850]]

description of the estimated damages suffered by the United States, the 
amount recouped, the multiplier used to calculate the settlement 
amount, the criminal fines collected and whether the defendants were 
held liable in previous cases. The report will also inform Congress as 
to whether the defendants have been required to enter into corporate 
integrity agreements.
  In addition, in order to understand how the program is working, the 
Department of Justice will be required to inform Congress as to whether 
civil investigative demands were issued. The Department will also be 
required to provide certain information about the conduct of qui tam 
cases initiated by whistleblowers. For example, Congress will receive 
information about the length of time cases are under seal, whether 
whistleblowers (technically termed ``relators'') sought a fairness 
hearing regarding a settlement and what share of the settlement they 
received. The Congress would also receive information about whether the 
agency that suffered from the fraud involved participated in the 
settlement.
  In regard to cases involving Medicaid Fraud, the report will provide 
Congress with the details of how much money was returned to each state 
participating in the settlement. In a time when many states are 
struggling with their Medicaid budgets, the Congress needs to know how 
effectively DoJ is in suppressing Medicaid fraud and returning money to 
the states.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 636

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

     SECTION 1. FALSE CLAIMS SETTLEMENTS.

       Section 8E of the Inspector General Act (5 U.S.C. App.) is 
     amended by adding at the end the following:
       ``(e)(1) In preparing the semi-annual report under section 
     5, the Inspector General of the Department of Justice shall 
     describe each settlement or compromise of any claim, suit, or 
     other action entered into with the Department of Justice 
     that--
       ``(A) relates to an alleged violation of section 1031 of 
     title 18, United States Code, or section 3729 of title 31, 
     United States Code (including all settlements of alternative 
     remedies); and
       ``(B) results from a claim of damages in excess of 
     $100,000.
       ``(2) The descriptions of each settlement or compromise 
     required to be included in the semi-annual report under 
     paragraph (1) shall include--
       ``(A) the overall amount of the settlement or compromise 
     and the portions of the settlement attributed to various 
     statutory authorities;
       ``(B) the amount of actual damages estimated to have been 
     sustained and the minimum and maximum potential civil 
     penalties incurred as a consequence of the defendants that is 
     the subject of the settlement or compromise;
       ``(C) the basis for the estimate of damages sustained and 
     the potential civil penalties incurred;
       ``(D) the amount of the settlement that represents damages 
     and the multiplier or percentage of the actual damages 
     applied in the actual settlement or compromise;
       ``(E) the amount of the settlement that represents civil 
     penalties and the percentage of the potential penalty 
     liability captured by the settlement or compromise;
       ``(F) the amount of the settlement that represents criminal 
     fines and a statement of the basis for such fines;
       ``(G) the length of time involved from the filing of the 
     complaint until the finalization of the settlement or 
     compromise, including--
       ``(i) the date of the original filing of the complaint;
       ``(ii) the time the case remained under seal;
       ``(iii) the date upon which the Department of Justice 
     determined whether or not to intervene in the case; and
       ``(iv) the date of settlement or compromise;
       ``(H) whether any of the defendants, or any divisions, 
     subsidiaries, affiliates, or related entities, had previously 
     entered into 1 or more settlements or compromises related to 
     section 1031 of title 18, United States Code, or section 
     3730(b) of title 31, United States Code, and if so, the dates 
     and monetary size of such settlements or compromises;
       ``(I) whether the defendant or any of its divisions, 
     subsidiaries, affiliates, or related entities--
       ``(i) entered into a corporate integrity agreement related 
     to the settlement or compromise; and
       ``(ii) had previously entered into 1 or more corporate 
     integrity agreements related to section 3730(b) of title 31, 
     United States Code, and if so, whether the previous corporate 
     integrity agreements covered the conduct that is the subject 
     of the settlement or compromise being reported on or similar 
     conduct;
       ``(J) in the case of settlements involving medicaid, the 
     amounts paid to the Federal Government and to each of the 
     States participating in the settlement or compromise;
       ``(K) whether civil investigative demands were issued in 
     process of investigating the case;
       ``(L) in qui tam actions, the percentage of the settlement 
     amount awarded to the relator, and whether or not the relator 
     requested a fairness hearing pertaining to the percentage 
     received by the relator or the overall amount of the 
     settlement;
       ``(M) the extent to which officers of the department or 
     agency that was the victim of the loss resolved by the 
     settlement or compromise participated in the settlement 
     negotiations; and
       ``(N) the extent to which relators and their counsel 
     participated in the settlement negotiations.''.
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