[Congressional Record Volume 160, Number 144 (Monday, December 1, 2014)]
[Senate]
[Pages S6226-S6227]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FALSE CLAIMS ACT
Mr. GRASSLEY. Just before our August recess, this body passed S. Res.
525.
I thank Senator Wyden, the vice chair of the Whistleblower Protection
Caucus I am starting next year, for being an original cosponsor of the
resolution.
S. Res. 525 recognized July 31 as National Whistleblower Appreciation
Day. On that day way back in 1778, the Continental Congress passed the
first whistleblower law in the United States. I would like to quote it:
Resolved,
That it is the duty of all persons in the service of the
United States . . . to give the earliest information to
Congress or other proper authority of any misconduct, frauds
or misdemeanors committed by any officers or persons in the
service of these states, which may come to their knowledge.
This resolution was passed by the Continental Congress in 1778
without a recorded dissent.
Then and now, Congress's control of the purse strings has given us an
obligation to guard against wasteful and fraudulent spending.
On this past July 31, whistleblower groups met to honor some of our
colleagues on the Hill for their support of whistleblowers who report
waste or fraud. I was not able to be there because the House of
Representatives Judiciary Committee held a hearing on oversight of the
False Claims Act. I am always wary when I hear the biggest violators of
a law hire people to talk about ``strengthening'' the False Claims Act.
So at the House of Representatives, I had an opportunity to comment on
a chamber of commerce release of a report on the False Claims Act. It
claims the act ``plainly is not getting the job done'' since ``the
government has recovered only $35 billion since 1987.'' The current
number as of
[[Page S6227]]
today is actually $42 billion that has been recovered under the False
Claims Act of 1986, and that surely is nothing to sneeze at--at least
where I come from it is not.
The fact is that since 1986 no other law on the books has been more
effective in battling fraud. Before the 1986 amendments, the False
Claims Act only brought in about $40 million a year. At that rate it
would have recovered only $1 billion in the past 25 years. So thanks to
the 1986 amendments, it brought back 42 times as much.
Clearly, I say to the U.S. Chamber of Commerce, the False Claims Act
is working, and it is working fantastically. The chamber's report says
the law is ``ineffective at preventing fraud.'' Yet my staff have met
with some of the authors of that chamber report, and I have to say to
you that the chamber had no concrete proposals for preventing fraud
more effectively than the False Claims Act.
Now, the chamber people meeting with my staff talked about ``a gold-
standard compliance certification program,'' but to me and my staff it
is just a pie-in-the-sky idea with no specifics. They told my staff,
``We deliberately left this vague.'' So that is the problem. They lack
details on who would create the program, who would enforce the program.
Basically, they lacked details about everything. But they want this
Senate to believe that once this pipe dream is in place, it will
magically increase the amount of taxpayer dollars the government
recovers.
In exchange, the report proposes hefty concessions for its big
corporate sponsors. For starters, they want to eliminate the use of
exclusion or debarment. These happen to be some of the government's
strongest tools in deterring fraud. The chamber report would require
whistleblowers to report internally 180 days before any whistleblower
can file a False Claims Act suit. Yet, in most corporations, reporting
internally just puts a huge target on the back of the employee blowing
the whistle, just as it does on the back of a Federal whistleblower
within the Federal bureaucracy. We should trust whistleblowers to use
their common sense to know the safest place to report. Internal
reporting and a 6-month head start on retaliation before the
whistleblower gets a chance to be heard in court is a recipe guaranteed
to reduce disclosures of fraud.
I have long advocated companies developing strong internal compliance
programs, so I see nothing wrong with having those compliance programs.
However, having one of these programs is not a reason to get a ``get
out of jail free'' pass. I am skeptical that companies will self-report
violations. Certification of a compliance program will not turn up the
cold hard facts on whether they do or do not self-report. Even when a
corporation does come forward, the company line is never going to be
the complete picture. That is why the False Claims Act incentivizes
whistleblowers, and, in fact, it has worked.
Further, some corporations have actually been using compliance
programs as a trap for muzzling whistleblowers. By making their
compliance program an arm of their legal department, anything a
whistleblower reports is protected as confidential information covered
under the attorney-client privilege. Many corporations also require
employees who provide tips to their compliance departments to then sign
nondisclosure agreements. This has a major chilling effect on
whistleblowers contemplating filing a False Claims Act suit.
Whistleblowers brave enough to file then find themselves the subject of
legal action claiming they have violated attorney-client privilege or
nondisclosure agreements. Now, a very simple question: Is this how we
ought to treat whistleblowers?
This report's recommendations contradict its assertion that the False
Claims Act has failed by not recovering enough money. The report
proposes to limit government recoveries across the board, regardless of
participation in any compliance certification program. That makes no
sense.
In the last 5 years the Federal Government has grown larger and
larger and spending has gotten more and more out of control. The
Federal Government now spends about $1 trillion in contracts and grants
each year. Inspectors general, the Government Accountability Office,
and congressional oversight committees simply have not been able to
keep up. Whistleblowers using the False Claims Act have played a very
key role in checking fraud and wasteful spending. Annual recoveries
under the False Claims Act have increased dramatically in just the past
5 years. Last year the Justice Department recovered $2.6 billion in
just health care fraud through the False Claims Act. The False Claims
Act is clearly doing exactly what we intended it to do, and that is to
recover taxpayers' money being lost to fraud.
State attorneys general around the country have used State false
claims acts to successfully recover billions of dollars for their
States. I will give some examples.
Last October--that is, October of 2013--then-Virginia attorney
general Ken Cuccinelli recovered $37 million for the State of Virginia
from a drug company that was inflating its prices to scam taxpayer
dollars from Medicare. The next month, in 2013, Cuccinelli recovered
$21 million in two health care fraud settlements with multinational
pharmaceutical giant Johnson & Johnson, which was paying millions of
dollars in kickbacks to the Nation's largest pharmacy. Yet, just days
before Cuccinelli announced the settlements, Health and Human Services
Secretary Kathleen Sebelius also made an announcement. She revealed
that this administration did not intend to treat ObamaCare as a Federal
health care program, exempting it from antikickback laws. Precisely
because of the fraud opportunities under ObamaCare, one provision
Congress added to the law made a violation of antikickback law an
automatic violation of the False Claims Act. This administration has
chosen to ignore that part of ObamaCare.
Congress must step forward and reiterate that ObamaCare is no less
subject to the antikickback law and False Claims Act than other Federal
health care programs. Congress should strongly consider strengthening
the False Claims Act's connection with suspension and debarment. That
would keep repeat offenders away from the taxpayer dollars they have
defrauded in the first place.
This issue, then, is really one about law and order. If we really
want to improve the False Claims Act--not go the direction of the U.S.
Chamber of Commerce--we should make a judgment or settlement under the
law result in an automatic review for suspension or debarment. That
would capitalize on the success of the law while increasing its
deterrent effect.
The False Claims Act has already provided a crucial check during a
time of growing government and outofcontrol Federal spending.
Whistleblowers have been the key to the government finding out about
fraud when it happens. We have to do all we can to honor them for the
patriotic service they provide to the taxpayers and protect them from
those who resist the role they play.
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