[Congressional Record (Bound Edition), Volume 160 (2014), Part 11]
[Senate]
[Pages 16255-16256]
[From the U.S. 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 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

[[Page 16256]]

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 out of control 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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