[Congressional Record Volume 168, Number 2 (Tuesday, January 4, 2022)]
[Senate]
[Pages S17-S19]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                            False Claims Act

  Mr. GRASSLEY. Mr. President, we study about checks and balances in 
government in political science classes.

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Often, people think in terms of the Court, the Supreme Court, 
primarily, being a check on the Congress of the United States not doing 
constitutional things or things in a constitutional way or maybe 
checking a President not doing things that he is constitutionally 
empowered to do.
  We don't often think of Congress being a check on the judicial branch 
of government, but from time to time we pass legislation that says: To 
you folks on the Supreme Court making a decision, you didn't make that 
decision according to what congressional intent was. So we find 
ourselves passing legislation to overturn some Court case that 
misinterpreted a statute. At least that is our view that they 
misinterpreted a statute or congressional intent.
  The last time I remember doing this was maybe a couple, 3 years ago 
on a tax bill. It happened that I had at least one person interpreting 
our statute correctly on this tax provision. It was Justice Breyer. I 
got a little note from Justice Breyer, pointing to his dissent in that 
case, and it said: It is an opportunity for you to pass a statute 
correcting what, I think, was a misinterpretation by the majority of 
that tax provision.
  And we got that passed.
  So here I am again. I don't know how many times in the last 30 years 
I have had to correct Court decisions misinterpreting the False Claims 
Act. We are in the process of trying to do that on the subject of 
whether or not certain actions of our government are material to that 
case actually being able to be prosecuted. I am talking about the False 
Claims Act that I and a liberal Member of the House of Representatives 
got passed in 1986.
  The False Claims Act is the government's most powerful tool in 
fighting and deterring fraud. And I say to my fellow colleagues that 
any law that has brought in about $65 billion of fraudulently taken 
money, that ought to, in itself, prove the worth of this legislation.
  On the other hand, the courts interpret it and maybe weaken it, so I 
am back here to make an argument for strengthening it but not 
strengthening it beyond the original intent of the Congress of the 
United States in 1986. I have devoted much of my time in the Senate to 
strengthening this law on behalf of the taxpayers.
  Last November, the Judiciary Committee voted on a bill that I 
sponsored that was very much a bipartisan cosponsorship to further 
strengthen the False Claims Act by clarifying what violations are 
``material.'' Some of my colleagues expressed concern with my 
amendment, even in light of the fact that this legislation has brought 
$65 billion of fraudulently taken money back into the Federal Treasury. 
Most of those concerns by my colleagues were based on debunked, 
recycled talking points from lobbyists that sound a lot like the ones 
that I have been hearing since 1986--the purpose of the legislation. 
Most of the time, they have come from businesses that profit the most 
from defrauding the government.
  When I authored the False Claims Act amendments in 1986, I did it 
because fraud against the Federal Government was out of control, 
especially in the defense sector. At the time, the Justice Department 
estimated that we were losing somewhere between 1 percent to 10 percent 
of the Federal budget to fraud. Most importantly, I saw that fraud put 
lives at risk, including those of our military, those of our law 
enforcement, and even of our veterans. So I am going to speak about 
some of this fraud that put lives at risk.
  Recent court misinterpretations--and these are the misinterpretations 
that I have talked about already. Recent court misinterpretations have, 
once again, like several times in the last 25 years, hurt the 
government's ability to hold these fraudsters accountable by the courts 
that have made those decisions not following properly legislative 
intent.
  Some courts now say that if the government keeps paying a claim 
despite some knowledge of potential fraud, then the violation is not 
material. Now, that is not common sense. If the government knows of 
fraud--now, think of this: If the government actually knows of fraud 
but keeps paying for that fraud, then that fraud can't be prosecuted 
under the False Claims Act.
  That doesn't make sense to hard workers on Main Street in the 
Midwest. It doesn't meet the commonsense test for the government to 
protect fraudsters. This is wrong, and I want to show you some 
instances of where it is dangerous.
  Today, I want to bring examples to you about real cases with real 
life experiences, cases where, had this flawed interpretation applied, 
the results would have been absurd and tragic.
  First, in 2009, a major defense contractor settled a False Claims Act 
case with the Federal Government for $325 million after allegations 
arose that they provided faulty parts for spy satellites. Due to the 
faulty parts, several satellites started to malfunction. One of them 
was on an important mission over the Middle East during a time of war.
  Evidence showed that the contractor knew about the malfunctions but 
hid--hid--these modifications from the government. But even if the 
government had some idea about fraud, it couldn't stop payment because 
the contractor was the only company that could manufacture and support 
these satellites. Had this case been brought today, a court could 
incorrectly find that the violation was not material.
  This ought to be unacceptable, and it is. This kind of fraud can hurt 
our troops and damage our national security.
  Second example: Fraud hurts our law enforcement officers here at 
home. In 2018, the Justice Department settled a fraud claim brought by 
a whistleblower against a manufacturer of bulletproof vests. According 
to public records, the manufacturer knew the vests would actually 
degrade and degrade very quickly under normal heat and humidity. The 
manufacturer tried to cover its tracks by publishing misleading data.
  Those actions delayed the government's efforts to determine the true 
extent of the damage to these bulletproof vests. After years of 
investigation, a National Institute of Justice study found that more 
than 50 percent of the used vests could not stop a bullet--a very life-
threatening issue.
  In this case, the manufacturer argued that since the government kept 
paying for the vests, the fact that they didn't work was immaterial. 
Thankfully, the judge had common sense enough to see past such 
ridiculous arguments. In other words, common sense prevailed in that 
particular courtroom.
  Now, remember, the actions of these fraudsters put our law 
enforcement personnel's lives at risk. Now, we had a brave 
whistleblower. So thanks to that brave whistleblower who uncovered this 
fraud, the money recovered from the settlement was used to purchase new 
bulletproof vests.

  Third example and last example: Fraud hurts our veterans and 
undermines the Federal programs Congress created to support them and 
their families.
  Another case involved fraud in home loans insured by the VA. The goal 
of these loans is to keep veterans in their homes. So, as most veterans 
know, VA loans prohibit lenders from charging veterans hidden fees. In 
this instance, a mortgage lender was illegally charging our veterans 
fees for VA-insured loans.
  But the government never ceased payment because doing so would hurt 
the program and the veterans it was meant to help--not to mention that 
once a loan guarantee is approved, the VA is prohibited by law from 
declining payments.
  Despite this, the district court applied the bogus new interpretation 
of materiality. The court dismissed the case. In other words, the 
fraudsters got away with it, and the court dismissed, saying that the 
government's continued payment meant the fraud was not material. So the 
government is allowing a program to go on, pay money out, even if they 
know there is fraud.
  So let me underscore the obvious. I am telling you, Congress didn't 
intend for courts to find that fleecing veterans for profit is 
immaterial. The legislation that has come out of the Judiciary 
Committee will fix this nonsense. And I hope some Republicans--because 
most of the opposition in the Judiciary Committee came from 
Republicans. Democrats understand that this bill must pass, but, for 
some reason, Republicans are willing to accept this nonsense about 
immateriality.
  So that is the purpose of this legislation. It clarifies that the 
government's

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decision to continue paying a claim despite knowledge of fraud is not 
dispositive if other reasons exist for the continued payment--these 
simple reasons like everybody expected our government ought to do: to 
continue protecting our troops, to continue helping our law enforcement 
officers be safe in their job, and to make sure that a veteran doesn't 
get taken as a sucker to give away a lot of money that would be 
illegally taken.
  So, as shown by the examples I just gave you, examples I highlighted 
this very day, the government's decision to continue paying a claim by 
itself doesn't prove materiality.
  You may ask: Why did the government continue the payments? Well, that 
is pretty much simple common sense too--because you want these programs 
to function the way they should function.
  My amendment will guarantee that the government can hold fraudsters 
accountable even when the government has to continue payment for a 
product or a service.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. MORAN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Kansas.