[Senate Report 110-507]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 910
110th Congress                                                   Report
                                 SENATE
 2d Session                                                     110-507

======================================================================



 
              THE FALSE CLAIMS ACT CORRECTION ACT OF 2008

                                _______
                                

  September 25 (legislative day, September 17), 2008.--Ordered to be 
                                printed

                                _______
                                

Mr. Leahy, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                         [To accompany S. 2041]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to which was referred the 
bill (S. 2041), to amend the False Claims Act, having 
considered the same, reports favorably thereon, with amendment, 
and recommends that the bill, do pass.

                                CONTENTS

                                                                   Page
  I. Background and Purpose of the False Claims Act Correction Act....1
 II. History of the Bill and Committee Consideration..................9
III. Section-by-Section Summary of the Bill..........................15
 IV. Congressional Budget Office Cost Estimate.......................30
  V. Regulatory Impact Evaluation....................................32
 VI. Conclusion......................................................32
VII. Changes to Existing Law Made by the Bill, as Reported...........32

  I. Background and Purpose of the False Claims Act Correction Act of 
                                  2008


                             A. BACKGROUND

    In 1863, President Abraham Lincoln proposed legislation 
designed to protect the United States Treasury from fraud and 
abuse in Civil War defense contracts. This legislation, the 
False Claims Act (FCA), was adopted by Congress late that year 
and signed into law by President Lincoln. The FCA that was 
originally enacted provided both civil and criminal penalties 
against individuals who were found to ``knowingly have 
submitted a false claim to the Government.'' \1\ These 
penalties included double damages for ``any false claims for 
money or property upon the United States'' \2\ or for any 
individual ``who submit[s] false information in support of 
claims.'' \3\ On top of double damages, the FCA passed in 1863 
also imposed a $2,000 civil penalty per false claim.
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    \1\ S. Rep. No. 99-345, 99th Cong., 2d Sess. (1986), reprinted in 
1986 U.S.C.C.A.N. 5266, 5273 (hereinafter ``S. Rep. No. 99-345'').
    \2\ Id.
    \3\ Id.
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    The heart of the 1863 Act was an authorization for private 
individuals, known as qui tam \4\ relators, to file FCA cases 
on behalf of the Federal Government. If an individual private 
relator successfully prosecuted a case to final judgment under 
the FCA, they were awarded one-half of the damages recovered. 
The FCA also awarded a successful relator with reimbursement 
for all costs to prosecute the case.\5\
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    \4\ The term qui tam is shorthand for qui tam pro domino rege quam 
pro se ipso in hac parte sequitur, which means ``who pursues this 
action on our Lord the King's behalf as well as his own.'' See Rockwell 
Int'l Corp., v. United States, 549 U.S. ____, 127 S.Ct. 1397, 1403 n.2 
(2007).
    \5\ See S. Rep. No. 99-345, supra note 1, at 5275.
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    The 1863 Act did not authorize the Government to intervene 
once a suit was commenced under the FCA by a private relator. 
In fact, as this Committee previously noted, ``[a] relator's 
interest in the action was viewed, at least in one instance, as 
a property right which could not be divested by the United 
States if it attempted to settle the dispute with the 
defendant.'' \6\ Further, under the 1863 Act, nothing precluded 
qui tam actions from being pursued by a relator regardless of 
the source of the relator's information. The 1863 Act remained 
on the books virtually unchanged until World War II.
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    \6\ Id. at 5275 (citing United States v. Griswold, 30 Fed. Rep. 762 
(Cir. Ct., D. Ore. 1887)).
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    In the early 1940s, a number of qui tam cases were filed in 
response to the increased Government procurement during World 
War II. One case, United States ex rel Marcus v. Hess, 317 U.S. 
537 (1943), raised the question of whether qui tam relators 
were filing FCA cases based solely upon information obtained in 
the criminal indictments brought by the Government. In Marcus, 
the Government argued that a civil action filed by an informant 
with knowledge of the criminal complaint created a situation 
where a relator was filing a qui tam action without any new 
information. The Court found that such suits could proceed and 
accomplish the goals of the Act recovering more money than is 
allowed under criminal penalties.\7\ This decision prompted 
then-Attorney General Francis Biddle to request \8\ a repeal of 
the qui tam provisions. This repeal passed in the House, but 
when amended in the Senate, the qui tam provisions were 
reinstated with modifications.\9\
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    \7\ See Marcus, 317 U.S. at 545.
    \8\ See S. Rep. No. 1708, 77th Cong., 2d Sess. (1942) (reprinting 
Attorney General Biddle's letter to Congress requesting modifications 
to the FCA).
    \9\ For further background see S. Rep. No. 99-345, supra note 1, at 
5276.
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    The Senate legislation limited jurisdiction of the courts 
by barring qui tam suits based upon information that was in 
possession of the Government unless the relator was an original 
source of that information.\10\ However, the final conference 
report adopted a modified version of this jurisdictional bar 
and did so without explanation. The final language ``dropped 
the clause regarding original sources of allegations'' and left 
a jurisdictional bar if the Government had prior knowledge.\11\ 
This ``government knowledge bar'' deprived courts of 
jurisdiction over qui tam actions ``based upon evidence or 
information in the possession of the United States, or any 
agency or officer or employee thereof, at the time such suit 
was brought.'' \12\
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    \10\ See False Claims Amendments Act of 1986, P.L. 99-562, 100 
Stat. 3154, 3157 (codified as amended at 31 U.S.C. Sec. 3730(e)(4)(b) 
(2000)).
    \11\ See S. Rep. No. 99-345, supra note 1, at 5277.
    \12\ 57 Stat. 608, codified as amended at 31 U.S.C. Sec. 232-235 
(1976). See also United States v. Pittman, 151 F.2d 851, 853-54 (5th 
Cir. 1945) (discussing 1943 amendments to the FCA).
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    The conference report also had other amendments to the FCA. 
The 1943 amendments authorized the Department of Justice to 
take over cases initiated by relators and required relators to 
submit all of their supporting evidence to the Department of 
Justice at the time they filed a complaint. The Department of 
Justice was then given 60 days to decide if they would 
intervene in the suit and take control of the case. If the 
Department took control, the relator had no say in the final 
disposition of the case. Further, the 1943 amendments limited 
the relator's portion of proceeds to ``fair and reasonable 
compensation'' not to exceed 10 percent of the proceeds if the 
Government prosecuted the suit.\13\ In the event the Government 
did not intervene, a relator could receive up to, but not to 
exceed, 25 percent of the recovery.\14\
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    \13\ Id.
    \14\ Id.
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    These changes--the ``government knowledge bar'' in 
particular--significantly limited the number of FCA cases that 
were filed. By the 1980s, the FCA was no longer a viable tool 
for combating fraud against the Government. Courts had 
interpreted the ``Government knowledge bar'' narrowly and found 
that there was a complete bar for qui tam relators even if the 
Government made ``no effort to investigate or take action after 
the original allegations were received.'' \15\ Some courts went 
further, finding that the bar precluded all qui tam cases when 
the information was already known, or should have been known by 
the Government, even if the source of the information to the 
Government was the qui tam relator.\16\ As a result, FCA 
filings plummeted from 1943 through 1986 with only about six to 
ten FCA cases filed per year.\17\
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    \15\ See S. Rep. No. 99-345, supra note 1, at 5277 (citing United 
States ex rel Lapin v. Int'l Bus. Machs. Corp., 490 F.Supp 244 (D. Hi. 
1980)).
    \16\ See United States ex rel., Wisconsin v. Dean, 729 F.2d 1100 
(7th Cir. 1984).
    \17\ Elleta Sangrey Callahan & Terry Morehead Dworkin, Do Good and 
Get Rich: Financial Incentives for Whistleblowing and the False Claims 
Act, 37 Vill. L. Rev. 273, 318 (1992).
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    In the early 1980s, Congress began to take note of the 
increased evidence of fraud against the Government. A three-
volume report issued by the General Accounting Office (now 
known as the Government Accountability Office or GAO) concluded 
that fraud against the Government was ``widespread.'' \18\ The 
report also noted that undetected fraud was probably much 
higher than expected because ``weak internal controls allow 
fraud to flourish.'' \19\ Further, this Committee observed that 
``the cost of fraud cannot always be measured in dollars and 
cents'' \20\ and the GAO report discussed how fraud erodes the 
public confidence and ability to manage programs.\21\ In 
addition, one Senate hearing included testimony that ``45 of 
the 100 largest defense contractors--including 9 of the top 
10--were under investigation for multiple fraud offenses.'' 
\22\ Scholars similarly expressed concern about serious fraud 
against the Government and began to discuss the past successes 
of the FCA.\23\
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    \18\ General Accounting Office, Fraud in Gov't Programs: How 
Extensive is It?--How Can it Be Controlled ii (1981) (hereinafter ``GAO 
Report'').
    \19\ S. Rep. No. 99-345, supra note 1, at 5268 (1986) (citing GAO 
Report).
    \20\ Id. at 5268.
    \21\ Id.
    \22\ S. Rep. No 99-345, supra note 1, at 5267 (citing testimony of 
Dep't of Defense Inspector Gen., Joseph Sherick).
    \23\ See, e.g., Erwin Chemerinsky, Controlling Fraud Against the 
Government: The Need for Decentralized Enforcement, 58 Notre Dame L. 
Rev. 995 (1983) (arguing that the FCA should be amended).
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    In response, Senators Charles E. Grassley, Carl Levin, and 
Dennis DeConcini introduced S. 1562, the False Claims 
Amendments Act, in 1985.\24\ This bill, along with similar 
legislation introduced by Senator Strom Thurmond, was referred 
to the Senate Committee on the Judiciary, Subcommittee on 
Administrative Practice and Procedure. The House of 
Representatives also considered a bill to amend the FCA, H.R. 
3317, which was referred to the House Committee on the 
Judiciary, Subcommittee on Administrative Law and Governmental 
Relations. Both the House and Senate Subcommittees held 
hearings to review this legislation.\25\
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    \24\ False Claims Amendments Act of 1986, S. 1562, 99th Cong. 
(1985).
    \25\ False Claims Reform Act: Hearing Bef. the Subcomm. on Admin. 
Practice and Procedure of the Senate Comm. on the Judiciary, 99th 
Cong., 1st Sess. (Sept. 17, 1985); Hearings Bef. the Subcomm. on Admin. 
Law and Govern. Rel. of the House Comm. on the Judiciary, 99th Cong., 
2d Sess. (Feb. 5, 1986).
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    The House and Senate bills amending the FCA in 1985 shared 
the similar goal of returning the qui tam provisions to the FCA 
in order to empower private citizens to work with the 
Government in rooting out fraud. More specifically, the Senate 
Committee on the Judiciary noted that ``perhaps the most 
serious problem plaguing effective enforcement [of fraud] is a 
lack of resources on the part of Federal enforcement 
agencies.'' \26\ The Committee continued, ``allegations that 
perhaps could develop into very significant cases are often 
left unaddressed at the outset due to a judgment that devoting 
scarce resources to a questionable case may not be efficient.'' 
\27\ This Committee concluded that it ``believes that the 
amendments [to the FCA] which allow and encourage assistance 
from the private citizenry can make a significant impact on 
bolstering the Government's fraud enforcement efforts.'' \28\
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    \26\ S. Rep. No. 99-345 supra note 1, at 5272.
    \27\ Id.
    \28\ Id.
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    Ultimately, the House and the Senate passed the False 
Claims Amendments Act of 1986 (the 1986 Amendments) and 
President Reagan signed it into law on November 23, 1986.\29\ 
The final legislation made a number of reforms to the 1943 
version of the FCA. Chief among them was a change to increase 
the penalty provision from the double damages to treble 
damages. The 1986 Amendments also provided the qui tam cases 
filed by private relators must be filed under seal for sixty 
days and served to the United States, but not the 
defendant.\30\ The purpose of this provision was two-fold: to 
provide the Department of Justice an opportunity to decide if 
the case was meritorious and worthy of the Department taking 
over the case, and to protect the defendant from unfounded 
accusations. The 1986 amendments also created a new mechanism 
that allowed the Department of Justice the option of 
intervening in a FCA case that it initially declined to take 
over, provided the Department had ``good cause.'' \31\ Further, 
the amendments included a provision that provided qui tam 
relators the ability to continue to participate in a FCA case 
working side-by-side with the Government, subject to a court's 
ability to limit the relator's role in certain instances.
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    \29\ False Claims Amendments Act of 1986, Pub. L. No. 99-562, 100 
Stat. 3153 (codified as amended at 31 U.S.C. Sec. Sec. 3729-3733) 
(1994); 22 Weekly Comp. Pres. Doc. 1499 (Nov. 3, 1986).
    \30\ 31 U.S.C. Sec. 3730(b)(2)-(3) (2000).
    \31\ 31 U.S.C. Sec. 3730(c)(3) (2000).
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    The 1986 amendments also sought to incentivize further qui 
tam relators by lifting the uncertainty of relators' monetary 
rewards for coming forward and reporting fraud. Specifically, 
the amendments removed the discretionary award structure for 
qui tam relators and, in most cases, provided that a relator 
could be awarded 15 percent of the recovery for coming forward 
and their hard work.\32\ Further, the amendments provided 
whistleblower protections in recognition of the risk that qui 
tam relators take in reporting fraud against the Government. 
This provision provided qui tam relators the ability to seek 
reinstatement, back pay with interest, as well as special 
damages that includes attorney's fees and litigation costs in 
courts if they were retaliated against.\33\
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    \32\ 31 U.S.C. Sec. 3730(d)(1)-(2) (2000).
    \33\ 31 U.S.C. Sec. 3730(h) (2000).
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    Most importantly, the 1986 Amendments specifically 
overturned the Government knowledge bar that was created in the 
1943 amendments and replaced it with a new mechanism referred 
to as a ``public disclosure bar.'' \34\ This new, public 
disclosure bar was designed to bar only truly parasitic cases 
filed by relators whose complaints were ``based upon the public 
disclosure of allegations or transactions in a criminal, civil, 
or administrative hearing, in a congressional, administrative, 
or Government [General] Accounting Office report, hearing, 
audit, or investigation, or from the news media.'' \35\ 
However, this jurisdictional limitation included an important 
exception that allowed cases to go forward in two instances: 
first, if it was brought by the Attorney General; \36\ and 
second, if ``the person bringing the action is an original 
source of the information.'' \37\ The 1986 Amendments defined 
``original source'' as ``an individual who has direct and 
independent knowledge of the information on which the 
allegations are based and has voluntarily provided the 
information to the Government before filing an action under 
this section which is based on the information.'' \38\ The goal 
of this provision was to ensure that any individual qui tam 
relator who came forward with legitimate information that 
started the Government looking into an area it would otherwise 
not have looked, could proceed with an FCA case.
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    \34\ 31 U.S.C. Sec. 3730(e) (2000); see also United States ex rel. 
LeBlanc v. Raytheon Co., 874 F. Supp. 35, 38 (D. Mass 1995), aff'd 62 
F.3d 1411 (1st Cir. 1995), cert. denied, 516 U.S. 1140 (1996).
    \35\ 31 U.S.C. Sec. 3730(e)(4)(A) (2000).
    \36\ Id.
    \37\ Id.
    \38\ 31 U.S.C. Sec. 3730(e)(4)(B) (2000).
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    Finally, the 1986 Amendments authorized an award of 
attorneys' fees to any defendant that prevailed in a suit where 
the ``court finds * * * [the litigation] was clearly frivolous, 
clearly vexatious, or brought primarily for the purposes of 
harassment.'' \39\
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    \39\ 31 U.S.C. Sec. 3730(d)(4) (2000).
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                 B. IMPORTANCE OF THE FALSE CLAIMS ACT

    The need for a robust FCA cannot be understated. For 
example, the year prior to the 1986 Amendments, the Department 
of Justice recovered only $54 million using the FCA. After the 
1986 Amendments, recoveries have increased incrementally each 
year with over $5 billion from settlements and judgments 
recovered in the past two years alone. All told, the 1986 
Amendments have led the Government to recover over $20 billion 
since 1986, of which $12.6 billion has been the result of qui 
tam actions. However, more work remains to be done. For 
instance, the Administrator of the Centers for Medicare and 
Medicaid Services testified in 2006 that fraud--excluding 
errors--in the Federal/State Medicaid program could be as high 
as 8 percent.\40\ Based on 2008 estimates, the fraud losses 
could be as high as $16.25 billion \41\ this year for the 
Federal Government alone--not including the State share of 
funds required by the Medicaid program. With such a great 
potential for fraud against the Government, it is important 
that the Committee revisit the FCA and correct erroneous court 
interpretations that have limited the scope and application of 
the FCA in contravention of Congress's intent in passing the 
1986 Amendments.
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    \40\ S. Hrg. 109-905, Physician-Owned Specialty Hospitals: Profits 
Before Patients? Hearing Before the Senate Comm. on Finance, 109th 
Cong. 141-142 (2006) (responses to questions for the record from Mark 
McClellan, Administrator, Centers for Medicare and Medicaid Services).
    \41\ United States Dep't of Health and Human Servs., Budget in 
Brief Fiscal Year 2009 61 (2008) available at http://www.hhs.gov/
budget/09budget/2009BudgetInBrief.pdf (last visited Aug. 13, 2008).
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    In the 110th Congress, the Judiciary Committee heard 
testimony highlighting the critical role that qui tam relators 
play in uncovering and prosecuting violations of the FCA.\42\ 
Pamela Bucy, Bainbridge Professor of Law at the University of 
Alabama School of Law, noted that a great deal of fraud would 
go unnoticed absent the assistance of qui tam relators. 
Professor Bucy testified:
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    \42\ See S. Hrg. 110-412, The False Claims Act Correction Act (S. 
2041): Strengthening the Gov't's Most Effective Tool Against Fraud for 
the 21st Century, Hearing before Committee on the Judiciary, 110th 
Cong., 2d Sess. (February 27, 2008).

          Complex economic wrongdoing cannot be detected or 
        deterred effectively without the help of those who are 
        intimately familiar with it. Law enforcement will 
        always be outsiders to organizations where fraud is 
        occurring. They will not find out about such fraud 
        until it is too late, if at all. When law enforcement 
        does find out about such fraud, it is very labor 
        intensive to investigate.
          Fraud is usually buried in mountains of paper or 
        digital documents. It is hidden within an organization. 
        Many different people within an organization, in 
        multiple offices, divisions, and corporate capacities, 
        may have participated in the illegality. Because of the 
        complex nature of economic crime and the diffuse nature 
        of business environments, it may not be apparent, 
        perhaps for years, that malfeasance is afoot. By then, 
        victims will have been hurt, records and witnesses will 
        have disappeared, and memories will have faded.
          Given these facts, insiders who are willing to blow 
        the whistle are the only effective way to learn that 
        wrongdoing has occurred. Information from insiders is 
        the only way to effectively and efficiently piece 
        together what happened and who is responsible. Insiders 
        can provide invaluable assistance during an 
        investigation by identifying key records and witnesses, 
        interpreting technical or industry information, 
        providing expertise, and explaining the customs and 
        habits of the business or industry. Help from an 
        insider can save time and expense for both law 
        enforcement and putative defendants by focusing the 
        investigation on relevant areas. Because of the 
        valuable information brought by insiders, it is no 
        surprise that Government officials state: 
        `Whistleblowers are essential to our operation. Without 
        them, we wouldn't have cases.' (Emphasis added).\43\
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    \43\ Id. at 120-21.

    Michael Hertz, Deputy Assistant Attorney General, Civil 
Division, of the Department of Justice concurred with Professor 
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Bucy, testifying:

          [T]he 1986 qui tam amendments to the Act that 
        strengthened whistleblower provisions have allowed us 
        to recover losses to the Federal fisc that we might not 
        have otherwise been able to identify.\44\
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    \44\ Id. at 192.

    The cases filed by qui tam relators following the 1986 
Amendments have proven that fraud is pervasive and that it 
permeates Government programs from welfare and food stamp 
benefits to multibillion dollar defense contracts; from crop 
subsidies to disaster relief; and from Government-backed loan 
programs to health care benefits issued by Medicare and 
Medicaid. Resourceful qui tam relators have uncovered these 
often-complex frauds and have tipped off the Government to 
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fraudulent activity. Mr. Hertz elaborated on this point:

          [T]here are no government programs that are immune 
        from possible fraud, as reflected by our caseload. 
        Cases brought by the Department under the Act, 
        including those initiated by whistleblowers, have 
        recovered significant funds on behalf of the Department 
        of Interior, the General Services Administration, the 
        Department of Housing and Urban Development, the 
        Department of Agriculture, the Department of Education, 
        the Department of State, the Department of Energy, 
        NASA, and more recently, the Department of Homeland 
        Security, to name but a few.\45\
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    \45\ Id. at 189.

    Mr. Hertz's testimony highlights the depth and breadth of 
frauds perpetrated against the Government. Yet it is important 
to note that some areas of fraud are more pervasive than others 
and none more so than healthcare benefits paid by the 
Government under the Medicare and Medicaid programs. FCA cases 
have touched virtually every area of the healthcare community, 
including hospitals, doctors, pharmaceutical companies, nursing 
homes, durable medical equipment retailers and manufacturers, 
and renal care facilities, among others. Healthcare cases have 
constituted a significant portion of FCA recoveries, with 
hospital cases recovering over $3.4 billion and pharmaceutical 
manufacturer cases recovering over $4.6 billion. That is about 
40 percent of $20 billion that the Government has recovered 
using the FCA over the past 20 years.
    Qui tam relators have been particularly instrumental in 
unearthing healthcare frauds given the complexity of Federal 
healthcare programs. Prescription drug pricing cases and 
Medicare billing frauds are often sophisticated and, are often 
compartmentalized within a corporation so that only a very few 
individuals may actually understand the fraudulent scheme. 
Complexity of subject matter should never preclude the 
Government from uncovering fraud, but, unfortunately, it is 
impossible to determine how much fraud goes undetected.
    Of the over 5,800 qui tam FCA cases filed since 1986, more 
than half (roughly 3,117) have focused on fraud against 
Government health care programs. These cases have recovered 
over $9 billion of the $12.6 billion recovered through qui tam 
cases since 1986 (nearly 72 percent). Frauds against the 
Department of Defense ranked second with over $1.6 billion of 
qui tam recoveries (nearly 13 percent). While these recoveries 
represent a victory for American taxpayers, they are only one 
measure of the fraud against the Government. As the GAO pointed 
out,\46\ fraud erodes public confidence in the Government's 
ability to efficiently and effectively manage its programs. 
This is why the FCA is so important to not just the Government, 
but to American taxpayers. It offers an opportunity for the 
Government to win back the hearts and minds of taxpayers who 
believe the Government does not care how taxpayer dollars are 
spent.
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    \46\ See S. Rep. No. 99-345, supra note 1, at 5268 (citing GAO 
Report).
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    In addition, the presence of effective qui tam provisions 
in the FCA has a deterrent effect on those who seek to defraud 
the Government. Mr. Hertz testified:

          In the wake of well-publicized recoveries 
        attributable to the qui tam cases, those who might 
        otherwise submit false claims to the Federal Government 
        are more aware than ever of the `watchdog' effect of 
        the qui tam statute. We have no doubt that the Act has 
        had the salutary effect of deterring fraudulent 
        conduct.\47\
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    \47\ S. Hrg. 110-412, supra note 42, at 192.

    Despite these important successes, the FCA continues to 
face challenge after challenge in courts across the country, 
and recent court interpretations now undermine its potential 
effectiveness.

                         C. PURPOSE OF THE BILL

    The original FCA was written to assist the Government in 
combating fraud against the U.S. Treasury by incentivizing 
private individuals to act as private attorneys general. By 
multiplying the number of individuals looking for fraud, the 
FCA was designed to bolster the resources of the Government to 
protect the Federal fisc and uncover frauds that otherwise 
would never have come to light. The FCA was crafted to enable 
private individuals to not only report fraudulent conduct, but 
also to move forward with lawsuits and to participate in the 
recovery. Allowing individual relators to proceed with lawsuits 
also provided a check on the Government bureaucracy that may 
lack the resources or the incentive to pursue complex or 
potentially embarrassing fraud cases. Despite these noble 
goals, the FCA has been subjected to substantial legal 
challenges that have led to conflicting interpretations from 
courts across the country. These conflicts make the outcomes of 
FCA cases unclear--not based upon facts, but based upon where 
the case is filed--and significantly undermine the 
effectiveness of the FCA.
    The Committee has closely watched various interpretations 
of the FCA that have been appealed all the way to the Supreme 
Court. Despite the Supreme Court's holdings in these cases, the 
interpretation of the FCA widely varies from court to court. 
Earlier this year, a court summarized the current state of law 
interpreting the FCA stating: ``The Court sympathizes with 
anyone litigating under the False Claims Act. Perhaps Congress 
will elect at some point to give legislative attention to the 
FCA to resolve some of the still unresolved questions about the 
Act's application.'' \48\ In addition to conflicting 
interpretations of the FCA, a number of courts--including the 
Supreme Court--have interpreted provisions of the FCA contrary 
to Congress's intent in passing the 1986 Amendments.
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    \48\ United States ex rel. Montgomery v. St. Edward Mercy Medical 
Center, 2008 WL 110858 (E.D. Ark. Jan. 8, 2008).
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    The False Claims Act Corrections Act, S. 2041, seeks to 
clarify conflicting interpretations of the FCA, to provide an 
affirmative answer to unresolved questions created over the 
years by litigation, and to bring the FCA back into line with 
congressional intent. Among other things, this legislation 
makes clear that the FCA protects all Federal funds, including 
circumstances in which a person discovers an overpayment by the 
Government and decides to retain those funds. The legislation 
also defines recoverable damages; clarifies that Government 
employees may act as qui tam relators in limited, defined 
circumstances; prevents dismissal of qui tam allegations that 
assist Government investigations; strengthens anti-retaliation 
protections for qui tam whistleblowers; clarifies the statute 
of limitations period for all portions of the FCA; and provides 
technical amendments to the Civil Investigative Demands (CIDs) 
the Department of Justice is authorized to issue under the FCA. 
These provisions will assist practitioners, judges, and 
businesses across the country by providing clarity and 
certainty to the FCA. A more detailed section by section 
analysis of these provisions is provided below.

          II. History of the Bill and Committee Consideration


                      A. INTRODUCTION OF THE BILL

    Senator Grassley introduced S. 2041, the False Claims Act 
Correction Act of 2007, on September 12, 2007, joined by 
Senators Durbin, Leahy, Specter, and Whitehouse as original 
cosponsors. The bill was referred to the Committee on the 
Judiciary.

                       B. COMMITTEE CONSIDERATION

1. Committee hearing

    The Committee held a hearing on S. 2041 entitled, ``The 
False Claims Act Correction Act (S. 2041): Strengthening the 
Government's Most Effective Tool Against Fraud for the 21st 
Century'' on February 27, 2008. Testimony was received from: 
Michael F. Hertz, Deputy Assistant Attorney General, Civil 
Division, Department of Justice; Tina M. Gonter of 
Jacksonville, Florida; The Honorable John E. Clark, Of Counsel, 
Goode, Casseb, Jones, Riklin, Choate, & Watson P.C., San 
Antonio, Texas; John T. Boese, Partner, Fried, Frank, Harris, 
Shriver, & Jacobson LLP, Washington, D.C.; and Pamela M. Bucy, 
Professor of Law, University of Alabama Law School, Tuscaloosa, 
Alabama.
    Mr. Hertz testified that while the Department of Justice 
was in agreement with many individual components contained in 
the legislation, it could not support the bill as drafted. In 
particular, the Department is concerned with section 3 of the 
legislation which expressly states that Government employees 
may act as qui tam relators in limited defined circumstances. 
Mr. Hertz also testified about the Department's concerns 
regarding the revisions to the public disclosure bar contained 
in the legislation. Mr. Hertz discussed the position 
articulated by the Department in a formal views letter and 
corresponding appendix which was submitted to the Committee 
prior to the hearing. Mr. Hertz also discussed other subjects 
where the Department supported provisions in the bill that 
clarify the FCA. Mr. Hertz stated that the Department believed 
some cases had been wrongly decided by the courts, including 
the Supreme Court, and that the Department had submitted briefs 
consistent with provisions contained in S. 2041. Specifically, 
Mr. Hertz discussed how the Department disagreed with holdings 
in United States, ex rel., Totten v. Bombardier Corp., 286 F.3d 
542 (D.C. Cir. 2004) (hereinafter ``Totten''), Allison Engine 
Co. v. United States, ex rel., Sanders, 471 F.3d 610 (6th Cir. 
2006), cert granted, 128 S. Ct. 491 (2007), rev'd on other 
grounds, 553 U.S. __, 128 S.Ct. 2123 (2008), and United States 
ex rel. DRC, Inc., v. Custer Battles, LLC, 376 F. Supp. 2d 617 
(E.D. Va 2005) (hereinafter ``Custer Battles''). Mr. Hertz 
concluded by stating that the Department of Justice was 
supportive of the qui tam provisions of the FCA and provided 
their views to ensure that corrections to the FCA do not 
``create additional obstacles to government enforcement 
efforts.'' \49\
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    \49\ See S. Hrg. 110-412, supra note 42, at 194.
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    Ms. Gonter, Judge Clark, and Professor Bucy each provided 
testimony recognizing the need to clarify the FCA and to 
strengthen the partnership between relators and the Federal 
Government.\50\ Ms. Gonter shared her first hand experience as 
a qui tam relator. She worked as a quality assurance inspector 
for a Navy subcontractor and how she uncovered a scheme where 
the subcontractor, with tacit approval from the prime 
contractor, supplied defective valves for use in United States 
Navy submarines. Ms. Gonter told the Committee how she tried to 
raise her concerns regarding the defective valves, but was 
ignored by company managers. She reported this to the prime 
contractor, and they ignored her concerns as well. Ms. Gonter 
testified about how she made the decision to disclose the fraud 
as a whistleblower and how she alerted the Government to the 
problem.
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    \50\ Unfortunately, due to illness, Professor Bucy was unable to 
attend the hearing in person, but submitted written testimony.
---------------------------------------------------------------------------
    Ultimately, Ms. Gonter filed a FCA qui tam complaint and 
assisted the Government during its five-year investigation. As 
a result of Ms. Gonter's efforts, the Government brought a 
criminal case against her company's owners and recovered more 
than $13 million from the prime contractor despite a decision 
by the Department of Justice not to intervene in that part of 
the case. Had Ms. Gonter not come forward, the Government would 
not have known about the defective values, would not have 
brought a criminal case, and would not have recovered any money 
for the defective valves. Ms. Gonter concluded her testimony by 
noting that S. 2041 would clarify the scope of a 
subcontractor's liability under the FCA, the statute of 
limitations period, the public disclosure provisions, and the 
CID provisions, all of which would enhance the Government's 
effectiveness in using the FCA. Ms. Gonter's testimony 
highlighted the very goals of the FCA--empowering everyday 
citizens to come forward and report fraud against the 
Government.
    Judge Clark discussed the need to amend the FCA from a 
practitioner's standpoint.\51\ Judge Clark testified that S. 
2041 provides much-needed clarification to the FCA by 
correcting several recent court decisions that have 
misconstrued the statute and limited its effectiveness. For 
instance, Judge Clark discussed how current case law has 
misinterpreted the public disclosure bar provisions in the 1986 
Amendments and provided defendants with ammunition to have 
meritorious cases dismissed. Judge Clark believes that these 
decisions were directly contrary to the spirit and intent of 
Congress in passing the 1986 Amendments.
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    \51\ Judge Clark has worked as a qui tam relator's counsel after 
stepping down from the state bench in Texas.
---------------------------------------------------------------------------
    Judge Clark also emphasized the need to clarify the public 
disclosure bar provisions in the FCA because of a split among 
the Federal circuit courts of appeals. Most significantly, he 
testified that the Supreme Court's decision in Rockwell 
International Corp. v. United States ex rel. Stone, 549 U.S. 
__, 127 S.Ct. 1397 (2007), misinterpreted the public disclosure 
bar and eroded the effectiveness of the FCA.
    Judge Clark also testified that provisions in S. 2041 were 
needed to clarify the substantive liability provisions of the 
FCA outlined in 31 U.S.C. Sec. 3729. Specifically, Judge Clark 
testified about clarifying the definition of the term ``claim'' 
in S. 2041 as necessary to bring the FCA back into line with 
the intent of the 1986 Amendments. Judge Clark observed that S. 
2041 would overrule the D.C. Circuit Court's recent decision in 
Totten and its progeny, which the Committee views as critical 
to the future of the FCA. Those cases have misinterpreted the 
liability provisions of the FCA to include a ``presentment'' 
requirement, when Congress never intended that result. Judge 
Clark testified that S. 2041 makes clear that the FCA applies 
to funds administered by the United States under Government 
programs, noting that, as a result of the misapplication of 
this ruling, Custer Battles, was wrongly decided.
    Professor Bucy's testimony also expressed general support 
for S. 2041, stating that the legislation properly clarifies 
the presentment issue raised in the Totten case, corrects the 
Custer Battles case, and properly broadens the Department of 
Justice's ability to use CIDs. Professor Bucy also supported S. 
2041's goal of clarifying the rules governing the FCA's public 
disclosure bar provisions, although she offered the Committee 
some suggestions that she believes would make that provision 
even clearer.
    Mr. John Boese testified on behalf of the U.S. Chamber of 
Commerce and the U.S. Chamber Institute for Legal Reform in 
opposition to S. 2041. Mr. Boese testified that S. 2041 would 
greatly expand the scope of the FCA beyond what Congress 
intended in 1986. He claimed that S. 2041 would result in the 
application of the Act to private contractual disputes that do 
not affect Federal funds, would unjustifiably allow 
whistleblowers who provide the Government with no new 
information to still share in recoveries of Government funds, 
and would allow Government employees to abuse their positions 
for personal profit. He also raised the concern that the 
amended liability provisions would cover false claims submitted 
to Federal Government employees in their personal capacity, and 
paid from their salary checks. Moreover, he voiced the specific 
concern that the amended liability provision would cover false 
claims to Social Security beneficiaries, if they used their 
Government benefits to pay the claims.

2. Substitute bill

    In response to the concerns raised at the hearing, S. 2041 
was revised and a substitute bill was prepared prior to the 
Committee mark-up on February 28, 2008. The substitute bill 
incorporated 13 of 16 recommendations made by the Department of 
Justice, as well as addressing a number of concerns raised by 
Mr. Boese.
    First, the substitute bill modified the liability 
provisions of the FCA by removing ambiguous language that 
claims be presented to a Government officer or employee of the 
U.S. Government. The substitute also removed definitions of 
``Government money and property'' and ``Administrative 
Beneficiary'' after hearing concerns from the Department of 
Justice that these new definitions would require substantive 
litigation and could render an outcome contrary to that which 
was intended. These modifications retained all the scienter 
requirements for liability to attach, but redefined the term 
``claim'' to ensure that liability attaches to false claims to 
a Government contractor or grantee when the contractor or 
grantee pays the claim, at least in part, with funds that the 
Government has provided or for which the Government will 
provide reimbursement. Further, the substitute bill ensured 
that money or property under the trust of the Government or 
otherwise administered by the Government is protected as well. 
These changes made clear that false claims are covered whether 
made to the Government itself or to an organization that 
received Federal funds and expended them on the Government's 
behalf or to further Government programs, purposes, or 
interests. However, the substitute bill did not amend any of 
the FCA's current intent requirements. Additionally, in 
response to the concerns raised by the U.S. Chamber of 
Commerce, the substitute bill made clear that FCA liability 
will not attach to false claims submitted to individuals who 
receive employment compensation or income subsidies (such as 
Social Security) from the Federal Government.
    Second, the substitute bill outlined the circumstances 
under which a Government employee can serve as a whistleblower 
in a qui tam lawsuit. The substitute bill made modifications to 
this provision to help alleviate concerns about the motives of 
a Government employee who may serve as a qui tam relator. 
Specifically, the provision defined narrow circumstances where 
a Government employee can act as a qui tam relator and created 
a defined procedure that a qualifying Government employee must 
follow before filing a qui tam action. If the Government 
employee does not meet the qualifications or if proper 
procedure is not followed, the Government has the right to 
dismiss the relator from the case.
    Regarding the Government relator's qualifications, the 
substitute bill specifically barred Government employees from 
being relators when they were auditors, attorneys, and other 
Government investigators. The substitute also barred family 
members of Government employees from filing qui tam lawsuits, 
closing a potential loophole for barred Government employees 
who could merely pass along the information to family members.
    The substitute bill also created a defined procedure that a 
qualifying Government employee relator must follow. The 
substitute required that if the Government employee learned of 
the information that is the basis for his/her FCA case during 
the course of his/her employment for the Government, then that 
employee must first directly disclose such information to the 
agency's designated Inspector General or to the Attorney 
General if there is not an Inspector General. Further, the 
Government employee must also notify his/her supervisor of the 
disclosures as well as the Attorney General (if he/she had 
previously reported to the Inspector General). Only if the 
Attorney General fails to bring a claim based on the disclosed 
information within 18 months is the Government employee then 
free to bring the claim as a qui tam relator. In addition, the 
substitute bill prohibited Government employees from being qui 
tam relators if they derive information for their FCA claim 
from an indictment or information, or any ongoing active 
criminal, civil, or administrative investigation. The Committee 
notes that these modifications in the substitute bill are 
restrictions that were discussed by the Tenth Circuit Court of 
Appeals in then-Chief Judge Tacha's dissenting opinion in 
United States ex rel. Holmes v. Consumer Ins. Group, 318 F.3d 
1199 (10th Cir. 2003). While the Committee strongly agrees with 
the majority opinion holding that Government employees may 
serve as qui tam relators without condition under the current 
FCA and these restrictions are currently not imposed upon 
Government employees that file FCA cases as qui tam relators in 
the Eleventh and Sixth Circuits, the Committee nonetheless 
believes such a limitation would help to clarify the split of 
authority across the country related to Government employee 
relators.
    Third, the substitute bill empowered the Attorney General 
to file a timely motion to dismiss a claim, so that the only 
cases barred are those in which a qui tam relator truly 
contributed no information providing a new basis for recovery. 
This section incorporated much of the language submitted by the 
Department of Justice in its views letter. The provision allows 
courts to dismiss a claim if it relates to substantially the 
same matters and same wrongdoer that is the subject of an open 
and active criminal indictment or information, criminal, civil, 
or administrative fraud investigation or audit, news media 
report, or congressional hearing, report or investigation that 
is acted on by the Department of Justice or Inspector General 
within 90 days. This section also makes technical modifications 
to the FCA including a clarification that no claim for a 
violation of section 3729 may be waived or released from 
liability by a person other than the Government, unless it is 
part of a settlement of a section 3730(b) action. This section 
also included additional language requested by the Department 
of Justice that ensures that this limitation will not prohibit 
the Government from pursuing FCA settlements with defendants. 
This provision will ensure that the courts dictate which 
violations of the FCA may be dismissed as part of an approved 
settlement agreement.
    Fourth, with respect to the FCA's retaliation provisions, 
the substitute bill included a clarifying provision to include 
the term ``agent'' in the list of individuals who may use the 
anti-retaliation provisions of the FCA. The omission of the 
term ``agent'' was merely a clerical error in the original 
draft of S. 2041 and was always intended to be included.
    Fifth, the substitute bill made two minor amendments to the 
use of CIDs by including a provision allowing the Department of 
Justice to share information derived from a CID with Federal, 
State, or local law enforcement officers conducting an 
investigation into allegations raised in a FCA case.
    Sixth, the substitute made a clarifying amendment that 
information obtained from a CID by the Department of Justice, 
may be shared with qui tam relators who filed the FCA claim. 
The Committee included this provision because it is well-
recognized that qui tam relators are often insiders who have 
substantive knowledge of how a corporation may work and can 
provide substantive background (as was the case with Ms. 
Gonter's support of Navy investigators).
    Seventh, with respect to severability, the substitute bill 
adopted language offered by the Department of Justice designed 
to avoid the unnecessary use of Government resources to 
litigate the application of these amendments to current cases 
and to ``ensure that any provision in the FCA that might be 
invalidated does not result in the invalidity of the remaining 
provisions.''
    Finally, the substitute bill incorporated a provision 
sought by the Department of Justice that would expressly apply 
to ``all cases pending on the date of enactment, and to all 
cases filed thereafter.'' This provision was requested in order 
to avoid the same type of litigation that occurred following 
the passage of the 1986 Amendments. The Department of Justice 
noted that it spent significant resources and time litigating 
the application of the 1986 Amendments and that this provision 
would help to prevent a similar situation.

3. Executive business meeting

    The False Claims Act Corrections Act of 2008, S. 2041, was 
placed on the Committee's executive business meeting agenda on 
February 28, 2008. However, the bill was held over and not 
addressed by the Committee until April 2008. During this time, 
the sponsors of the bill drafted and circulated a second 
substitute bill that incorporated three additional changes. 
First, the second substitute amended a clerical error where the 
previous version of S. 2041 erroneously struck portions of 31 
U.S.C. 3730(d)(1). Second, the substitute made a technical 
change requested by the Department of Justice to the CID 
provision. Finally, the second substitute made one substantive 
change creating a tiered application of the effective date as 
recommended by the Department of Justice. The second substitute 
also renamed the bill as ``The False Claims Corrections Act of 
2008,'' to reflect the changes made in 2008.
    The bill was considered by the Committee at its executive 
business meeting on April 3, 2008. Chairman Leahy, on behalf of 
Senator Grassley, offered the complete second substitute bill 
as an amendment, which was accepted by unanimous consent. No 
other amendments were offered.
    The Committee then voted to report the False Claims Act 
Correction Act of 2008, with an amendment in the nature of a 
substitute, favorably to the Senate by voice vote.

              III. Section-by-Section Summary of the Bill


Section 1. Short title

    This section provides that the legislation may be cited as 
the ``False Claims Act Correction Act of 2008.''

Section 2. False claims generally

    This section of the bill updates the substantive liability 
provisions of the FCA which are contained in section 3729(a) of 
the Act. The bill contains clarifications to remove ambiguities 
and inconsistencies in the law that have been created through 
years of litigation. As the bill makes changes to the section 
and renumbers the liability provisions compared to the current 
statute, this report will outline the clarifications to the law 
based on each topic.
            A. Fraud against government contractors and grantees
    Following the decision in United States ex rel. Totten v. 
Bombardier Corp. a number of courts have held that the FCA does 
not reach false claims that are (1) presented to Government 
grantees and contractors, and (2) paid with Government grant or 
contract funds.\52\ These cases are representative of the types 
of frauds the FCA was intended to reach when it was amended in 
1986. This section of the bill clarifies that liability under 
3729(a) attaches whenever a person knowingly makes a false 
claim to obtain money or property, any part of which is 
provided by the Government without regard to whether the 
wrongdoer deals directly with the Federal Government; with an 
agent acting on the Government's behalf; or with a third party 
contractor, grantee, or other recipient of such money or 
property. The bill explicitly excludes from liability requests 
or demands for money or property that the Government has paid 
to an individual as compensation for Federal employment or has 
received as an income subsidy, such as Social Security 
benefits.
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    \52\ 380 F.3d 488 (D.C. Cir. 2005); see, e.g., United States, ex 
rel., Atkins v. McInteer, 345 F. Supp. 2d 1302 (N.D. Ala. 2004), aff'd 
on other grounds, 470 F.3d 1350 (11th Cir. 2006); United States, ex 
rel., Rafizadeh v. Continental Common, Inc., 2006 WL 980676 (E.D. La. 
April 10, 2006); United States v. City of Houston, 2006 WL 2382327 
(S.D. Tex. Aug. 16, 2006); United States, ex rel., Rutz v. Village of 
River Forest, 2007 WL 3231439 (N.D. Ill. Oct. 25, 2007); United States, 
ex rel., Arnold v. CMC Engineering, 2007 WL 442237 (W.D. Pa. Feb. 7, 
2007).
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    As some defendants have argued that Totten and Atkins 
restrict FCA liability from attaching to Medicaid claims, the 
bill clarifies the position taken by the Committee in 1986 that 
the FCA reaches all false claims submitted to State-
administered Medicaid programs. By removing the offending 
language from section 3729(a)(1), which requires a false claim 
be presented to ``an officer or employee of the Government, or 
to a member of the Armed Forces,'' the bill clarifies that 
direct presentment is not required for liability to attach. 
This is consistent with the intent of Congress in amending the 
definition of ``claim'' in the 1986 Amendments to include ``any 
request or demand . . . for money or property which is made to 
a contractor, grantee, or other recipient if the United States 
Government provides any portion of the money or property which 
is requested or demanded, or if the Government will reimburse 
such contractor, grantee, or other recipient for any portion of 
the money or property which is requested or demanded.'' \53\
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    \53\ 31 U.S.C. 3729(c) (2000). See also S. Rep. No. 99-345 supra 
note 1, at 5282-5301 (providing section-by-section analysis explaining 
that a false claim includes claims submitted to grantees and 
contractors if the payment ultimately results in a loss to the 
Government).
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            B. Fraud against funds administered by the United States
    The Committee included provisions in Section 2 of the bill 
to address a decision recently decided involving funds 
administered by the U.S. Government during the reconstruction 
of Iraq. In United States ex rel. DRC, Inc. v. Custer Battles, 
LLC, a trial court judge set aside a jury award finding that 
Iraqi funds administered by the U.S. Government on behalf of 
the Iraqi people were not U.S. Government funds within the 
scope of the FCA.\54\ The Committee believes this result is 
inconsistent with the spirit and intent of the FCA.
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    \54\ 376 F. Supp. 2d 617 (E.D. Va. 2006).
---------------------------------------------------------------------------
    When the U.S. Government elects to invest its resources in 
administering funds belonging to another entity, or providing 
property to another entity, it does so because use of such 
investments for their designated purposes will further interest 
of the United States.\55\ False claims made against Government-
administered funds harm the ultimate goals and U.S. interests 
and reflect negatively on the United States. The FCA should 
extend to these administered funds to ensure that the bad acts 
of contractors do not harm the foreign policy goals or other 
objectives of the Government. Accordingly, this bill includes a 
clarification to the definition of the term ``claim'' in new 
section 3729(b)(2)(A) and attaches FCA liability to knowingly 
false requests or demands for money and property from the U.S. 
Government, without regard to whether the United States holds 
title to the funds under its administration.
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    \55\ See, e.g., United States ex rel. Haynes v. CMC Electronics, 
Inc., 297 F.Supp.2d 734 (D.N.J. 2003) (discussing sales of equipment to 
foreign governments under the Arms Export Control Act).
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            C. Conspiracy
    As noted above, the current FCA contains a provision that 
subjects those who knowingly conspire to defraud the Government 
by getting a false or fraudulent claim allowed or paid. Some 
courts have interpreted this provision narrowly.\56\ The 
current FCA conspiracy provision does not explicitly impose 
liability on those who conspire to violate other provisions of 
the FCA, such as delivery of less Government property than that 
promised or making false statements to conceal an obligation to 
pay money to the Government.\57\ Because of the confusion and 
uncertainty surrounding the application of the conspiracy 
provision, Section 2 amends current section 3729(a)(3) to 
clarify that conspiracy liability can arise whenever a person 
conspires to violate any of the provisions in Section 3729 
imposing FCA liability.
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    \56\ See, e.g., United States ex rel. Huangyan Import & Export 
Corp. v. Nature's Farm Products, Inc., 370 F.Supp.2d 993 (N.D. Cal. 
2005) (holding that section 3729(a)(3) does not extend to conspiracies 
to violate section 3729(a)(7)).
    \57\ 31 U.S.C. Sec. Sec. 3729(a)(4)-(6) (2000).
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            D. Wrongful possession, custody or control of government 
                    property
    Section 3729(a)(4) of the FCA has remained unchanged since 
enactment of the FCA in 1863. This provision establishes FCA 
liability upon an individual that has ``possession, custody, or 
control of property or money used, or to be used, by the 
Government, and, intending to defraud the Government or 
willfully to conceal the property, delivers, or causes to be 
delivered, less property than the amount for which the person 
receives a certificate of receipt.'' \58\ This section allows 
the Government to recover losses that are incurred because of 
conversion of Government assets. However, because this section 
has remained unchanged from the original act that was drafted 
in 1863, the archaic language has made recoveries under a 
conversion theory contingent upon the individual receiving an 
actual receipt for the property. The new section, renumbered as 
section 3729(a)(1)(D) in the bill, updates this provision by 
retaining the core conversion principle while redrafting it in 
a more straightforward manner and removing the receipt 
requirement. Where knowing conversion of Government property 
occurs, it should make no difference whether the person 
receives a valid receipt from the Government. This amendment to 
3729(a)(1)(4) was supported by the Department of Justice, as 
noted in its February 21, 2008 views letter.
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    \58\ 31 U.S.C. Sec. 3729(a)(4) (2000).
---------------------------------------------------------------------------
            E. ``Reverse'' false claims
    Section 3729(a)(7) of the FCA currently imposes liability 
on any person who ``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.'' \59\ This provision is commonly referred to 
as creating ``reverse'' false claims liability because it is 
designed to cover Government money or property that is 
knowingly retained by a person even though they have no right 
to it. This provision is similar to the liability established 
under 3729(a)(2) for making ``false records or statements to 
get false or fraudulent claims paid or approved.'' \60\ 
However, the provision does not capture conduct described in 
3729(a)(1), which imposes liability for actions to conceal, 
avoid, or decrease an obligation directly to the Government. 
This legislation closes this loophole and incorporates an 
analogous provision to 3729(a)(1) for ``reverse'' false claims 
liability.
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    \59\ 31 U.S.C. Sec. 3729(a)(7) (2000).
    \60\ 31 U.S.C. Sec. 3729(a)(2) (2000).
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    Further, this legislation addresses current confusion among 
courts that have developed conflicting definitions of what the 
term ``obligation'' in section 3729(a)(7) really means.\61\ The 
term ``obligation'' now contains an express definition under 
new section 3729(b)(3) and includes both fixed and contingent 
duties owed to the Government--including fixed liquidated 
obligations such as judgments, and fixed, unliquidated 
obligations such as tariffs on imported goods. It is also 
noteworthy to restate that while the new definition of 
``obligation'' expressly includes contingent, non-fixed 
obligations, the Committee supports the position of the 
Department of Justice that current section 3729(a)(7) ``speaks 
of an `obligation,' not a `fixed obligation.' '' \62\ By 
including contingent obligations such as ``implied contractual, 
quasi-contractual, grantor-grantee, licensor-licensee, fee-
based, or similar relationship,'' this new section reflects the 
Committee's view, held since the passage of the 1986 
Amendments,\63\ that an ``obligation'' arises across the 
spectrum of possibilities from the fixed amount debt obligation 
where all particulars are defined \64\ to the instance where 
there is a relationship between the Government and a person 
that ``results in a duty to pay the Government money, whether 
or not the amount owed is yet fixed.'' \65\
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    \61\ See, e.g., United States ex rel. Prawer & Co. v. Verrill & 
Dana, 946 F.Supp. 87, 93-95 (D. Me. 1996) (discussing the definition of 
``obligation'' at length); Am. Textile Mfr's Inst., Inc. v. The 
Limited, Inc., 190 F.3d 729, 736 (6th Cir. 1999) (discussing definition 
of ``obligation'').
    \62\ Brief for United States at 23, United States v. Bourseau No. 
06-56741, 06-56743 (9th Cir. July 14, 2008).
    \63\ See S. Rep. No. 99-345 supra note 1, at 5283.
    \64\ See, e.g., Am. Textile Mfrs. Inst. v. The Limited, Inc., 190 
F.3d 729 (6th Cir. 1999); United States v. Q Int'l Courier, Inc., 131 
F.3d 770 (8th Cir. 1997).
    \65\ Brief for United States at 24, United States v. Bourseau No. 
06-56741, 06-56743 (9th Cir. July 14, 2008) (citing United States ex 
rel. Bahrani v. Conagra, Inc., 465 F.3d 1189, 1201 (10th Cir. 2006), 
motn. for reh'g pending, (10th Cir. 2007)); United States v. Pemco 
Aeroplex, Inc., 195 F.3d 1234, 1237-38 (11th Cir. 1999) (en banc).
---------------------------------------------------------------------------
    The new definition of the term ``obligation'' also includes 
``customs duties for mismarking country of origin,'' a singular 
type of obligation that is specific and not a general class of 
obligations. The Committee included this provision in response 
to the decision in American Textile Manufacturers Institute, 
Inc. v. The Limited, Inc. where the Sixth Circuit Court of 
Appeals narrowly defined the term ``obligation'' to apply 
reverse false claims to only fixed obligations and dismissing a 
claim for false statements made by importers to avoid paying 
customs duties.\66\ The inclusion of this express reference to 
customs duties is not intended to exclude other types of 
contingent or fixed obligations that are similar in effect and 
purpose or that otherwise meet the definition set forth in the 
proposed amendments.
---------------------------------------------------------------------------
    \66\ See Am. Textile Mfrs. Inst., 190 F.3d at 729.
---------------------------------------------------------------------------
    The Committee also notes that the reverse false claims 
provision and amendments to that provision do not include any 
new language that would incorporate or should otherwise be 
construed to include a presentment requirement. This is 
consistent with various court decisions that have held that the 
current reverse false claims provision does not contain a 
presentment requirement.\67\
---------------------------------------------------------------------------
    \67\ See, e.g., United States ex rel. Bahrani, 465 F.3d 1189, 1208 
(10th Cir. 2006); United States ex rel. Koch v. Koch Indus., 57 
F.Supp.2d 1122, 1144 (N.D. Okla. 1999).
---------------------------------------------------------------------------
    Finally, the new definition of ``obligation'' includes an 
express statement that an obligation under the FCA includes 
``the retention of an overpayment.'' The Department of Justice 
supported the inclusion of this provision and provided 
technical advice that the proper place to include overpayments 
was in the definition of obligation.\68\ This new definition 
will be useful to prevent Government contractors and others who 
receive money from the Government incrementally based upon cost 
estimates from retaining any Government money that is overpaid 
during the estimate process. Thus, the violation of the FCA for 
retention of a known overpayment occurs once a payment is 
retained following the final submission of payment as required 
by statute or regulation--including relevant statutory or 
regulatory periods designated to reconcile cost reports, but 
excluding administrative and judicial appeals.
---------------------------------------------------------------------------
    \68\ Letter from Brian Benczkowski, Principal Deputy Assistant 
Attorney General, United States Department of Justice, to Senator 
Patrick Leahy, Chairman, Senate Committee on the Judiciary Appendix 3 
(Feb. 21, 2008) (hereinafter ``DOJ Views Letter'').
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            F. Damages
    The 1986 Amendments to the FCA created a system where 
damages are measured based on ``the amount of damages which the 
Government sustains because of the act of that person.'' \69\ 
After determining that amount, the damages are trebled. This 
provision was designed to provide courts flexibility to measure 
damages on a case-by-case basis to ensure the broad remedial 
goal of the Act. Despite this legislative goal, some courts 
have read the damage provision narrowly and have made it 
difficult for the Government to recover the true losses 
sustained because of the fraud, let alone include penalties to 
provide a deterrent effect.
---------------------------------------------------------------------------
    \69\ 31 U.S.C. Sec. 3729(a)(2000).
---------------------------------------------------------------------------
    For example, problems have occurred with certain medical 
providers who were sued for violating the FCA. These providers 
received payments from Medicare and Medicaid despite being 
disqualified from participating in the programs because they 
received kickbacks from referring physicians, but argued there 
were no damages when they provided services and sought 
reimbursement.\70\ While it may appear that there are no actual 
damages for simply seeking reimbursement when disqualified, the 
integrity of those Federal programs is seriously undermined by 
these practices which can cause overutilization of services, 
patient steering, and medical decisions made outside of the 
best interest of the patient.
---------------------------------------------------------------------------
    \70\ See United States ex rel. Pogue v. Am. Healthcorp, Inc., 914 
F.Supp. 1507, 1513 (M.D. Tenn. 1996) (hereinafter ``Pogue I'') (holding 
that the FCA was ``intended to govern not only fraudulent acts that 
create a loss to the government but also those fraudulent acts that 
cause the government to pay out sums of money to claimants it did not 
intend to benefit); United States ex rel. Pogue v. Diabetes Treatment 
Ctrs. of Am. Inc., 238 F. Supp.2d 258, 264-66 (D.D.C. 2002) (discussing 
various courts that have upheld implied certification theory for 
violations of the Anti-Kickback and Stark laws as sufficient to state a 
claim under the FCA and reaffirming Pogue I).
---------------------------------------------------------------------------
    To address problems that have occurred, this bill amends 
the damages provision in Section 3729(a) to a more simplified 
approach that measures damages based on the amount of money or 
property ``paid or approved because of the act of the 
defendant.''

Section 3. Government right to dismiss certain actions

    This section addresses the current split of authority 
between various courts regarding whether or not Government 
employees may act as qui tam relators under the FCA. The FCA 
was originally designed to be an avenue for any individual to 
bring a claim for recovery when the predicate elements for the 
offense were met. The FCA currently provides no specific 
guidance as to whether a Government employee may serve as a qui 
tam relator, and a number of courts have addressed this issue 
during the course of litigation.\71\ The crux of the debate 
surrounding the role Government employees may play in qui tam 
litigation involves ethics concerns about Government employees 
filing potentially parasitic qui tam actions based upon 
information learned in the course of fulfilling their job 
duties.
---------------------------------------------------------------------------
    \71\ See, e.g. United States ex rel. Holmes v. Consumer Ins. Group, 
318 F.3d 1199 (10th Cir. 2003); United States ex rel. LeBlanc v. 
Raytheon Co., Inc., 913 F.2d 17 (1st Cir. 1990); United States ex rel. 
Maxwell v. Kerr-McGee Chemical Worldwide, LLC, 486 F.Supp.2d 1217 (D. 
Colo. 2007).
---------------------------------------------------------------------------
    This issue first arose following the passage of the 1986 
Amendments, when the House Judiciary Committee, Subcommittee on 
Administrative and Government Relations held hearings to 
discuss the topic in 1990.\72\ At the hearing, Senator 
Grassley--the original Senate sponsor of the 1986 Amendments--
testified that Government employees should be allowed to act as 
qui tam relators under the FCA provided, ``he can show that he 
first made a good faith effort within the proper channels'' to 
report the fraud.\73\ Further, Senator Grassley stated that 
Government employee relators are a key check on the Government 
bureaucracy and are a basic resource to fight fraud.\74\ 
Subsequent to the hearings, legislation was introduced in the 
next two sessions of Congress to remedy this open question.\75\
---------------------------------------------------------------------------
    \72\ False Claims Act Implementation, Hearing Before the House 
Subcomm. on Admin. and Governmental Relations, 101st Cong., 2d Sess. 1 
(Apr. 4, 1990).
    \73\ Id. at 7.
    \74\ Id.
    \75\ False Claims Act Amendments Act of 1992, H.R. 4563, 102 Cong., 
2d Sess. (1992); False Claims Act Amendments Act of 1993, S. 841, 103rd 
Cong., 1st Sess. (1993).
---------------------------------------------------------------------------
    Over time, courts across the country began to take various 
approaches in addressing the question of whether a Government 
employee could serve as a qui tam relator. Currently, the 
prevailing case law in the Tenth and Eleventh Circuits supports 
the proposition that Government employees are not categorically 
barred from acting as relators in FCA cases regardless of 
whether reporting fraud was one of the employee's main 
duties.\76\ However, the prevailing case law in the First 
Circuit and the Ninth Circuit does not allow Government 
employees to act as qui tam relators.\77\ Together these 
decisions create a patchwork of applications of the FCA to 
Government employee relators and the Committee believes 
providing clarity on the issue is consistent with the spirit 
and intent of the 1986 Amendments.
---------------------------------------------------------------------------
    \76\ See United States ex rel. Williams v. NEC Corp., 931 F.2d 
1493, 1502 (11th Cir. 1991) (finding no general prohibition against 
government employees serving as qui tam relators); United States ex 
rel. Holmes v. Consumer Ins. Group, 318 F.3d 1199, 1214 (10th Cir. 
2007) (en banc) (rejecting arguments seeking to preclude government 
employees per se from filing qui tam actions based upon information 
obtained during the course of their employment).
    \77\ See United States ex rel. LeBlanc v. Raytheon Co., Inc., 913 
F.2d 17 (1st Cir. 1990) re'hrg denied, cert. denied, 499 U.S. 921 
(1991); United States ex rel. Fine v. Chevron, U.S.A., Inc., 72 F.3d 
740 (9th Cir. 1995).
---------------------------------------------------------------------------
    To achieve this goal, the bill includes section 3, which 
clarifies when Government employees could serve as qui tam 
relators. The section resolves the circuit split by providing 
that Government employees can file qui tam suits in narrow 
circumstances and only after following a specific procedure. If 
the specific procedure is not followed, the Government has the 
right to dismiss the relator from the case. For example, if the 
person learned of the information that is the basis for their 
FCA claim in the course of their employment for the Government, 
the person must disclose such information to the agency's 
designated Inspector General or to the Attorney General 
directly if there is not an Inspector General. Further, that 
individual must also notify their supervisor of the disclosures 
as well as to the Attorney General (if they had previously 
reported to the inspector general). Only if the Attorney 
General fails to bring a claim based on the disclosed 
information within 18 months, is the employee then free to 
bring the claim as a qui tam relator.
    This section also includes new language that bars any 
Government employee from being a qui tam relator if they derive 
information for their FCA claim from an indictment or 
information, or any ongoing active criminal, civil, or 
administrative investigation. Government employees are also 
barred if they work as investigators, auditors, or attorneys 
who have a duty to investigate fraud and they learn about the 
alleged fraud from an ongoing investigation or audit. These are 
restrictions that were discussed by the Tenth Circuit in then-
Chief Judge Tacha's dissenting opinion in United States ex rel. 
Holmes v. Consumer Ins. Group. The Committee believes these 
restrictions strike the proper balance between providing 
protections so that Government employees simply do not hide 
fraud in order to file a qui tam action, while ensuring that 
good faith claims brought by Government employees can remain a 
check on Government bureaucrats who may be disinterested in 
chasing allegations of fraud against taxpayer dollars.

Section 4. Barred actions

            A. Waiver of claims
    Section 4(a) of the bill adds language to the FCA that is 
designed to protect individuals from unknowingly waiving their 
right to file qui tam actions on behalf of the Government. This 
provision was included because of the growing number of 
employees who unwittingly waive the right of either the United 
States, or that individual, to file FCA cases.\78\ These cases 
have created a situation where employers may use separation 
agreements as a method of preventing the Government's right to 
recover monies lost to fraud, waste, or abuse.
---------------------------------------------------------------------------
    \78\ See, e.g., United States ex rel. Green v. Northrop Corp., 59 
F.3d 953 (9th Cir. 1995); United States. ex rel. Gebert v. Transport 
Admin. Servs., 260 F.3d 909 (8th Cir. 2001).
---------------------------------------------------------------------------
    This section clarifies that no person who brings an action 
under the FCA may waive or release a claim unless it is part of 
a court-approved settlement of a false claim civil action. 
However, because the Department of Justice was concerned that 
the original language could be construed to require court 
approval of a non-qui tam settlement negotiated by the 
Department, the Committee included the requested modifications 
the Department sought in the second substitute bill adopted 
during the mark-up. These changes added the following language: 
``Nothing in this paragraph shall be construed to limit the 
ability of the United States to decline to pursue any claim 
brought under this subsection, or to require court approval of 
a settlement by the Government with a defendant, unless the 
person bringing the act objects to the settlement.'' This 
language is consistent with the intent of the sponsors not to 
restrict the Department of Justice in settling non-qui tam FCA 
cases, while protecting qui tam relators from accidently 
waiving valid claims for themselves, or the Government.
            B. Basis for government dismissal
    Section 4(b) of the bill amends the provisions that were 
commonly referred to as the ``public disclosure bar'' which is 
contained in section 3730(e)(4) of the FCA. These amendments 
were required because of excessive litigation over perceived 
ambiguities in the statute following the 1986 Amendments. As a 
result, many meritorious cases brought by qui tam relators have 
been dismissed because of the misuse of the public disclosure 
bar and other related erroneous interpretations of the 1986 
Amendments. The Committee believes that many of these court 
interpretations dismissing qui tam actions have created a 
situation where the prevailing case law in many jurisdictions 
is inconsistent with the original intent of the public 
disclosure bar.
    The 1986 Amendments added the public disclosure bar to 
ensure the dismissal of truly parasitic cases filed where a qui 
tam relator brought no new information to the Government. It 
also sought to dismiss parasitic claims based solely upon 
public information. The one statutory exception to this public 
disclosure bar was for qui tam relators that were an ``original 
source'' of the public information. An original source was 
statutorily defined as an individual with direct and 
independent knowledge of the information and brought the 
information to the Government before filing suit. In creating 
both the public disclosure bar and the original source 
exception, the Committee explained that this provision was 
intended to only bar truly ``parasitic'' lawsuits, such as 
those brought by individuals who did nothing more than copy a 
criminal indictment filed by the Government.\79\
---------------------------------------------------------------------------
    \79\ See S. Rep. No. 99-345 supra note 1, at 5275-5278.
---------------------------------------------------------------------------
    Section 4(b) replaces the ``public disclosure'' 
jurisdictional bar with a new section that provides the 
Government with the sole authority to move to dismiss parasitic 
qui tam cases that are brought based upon information that is 
known to the Government and has led to or was based upon part 
of an ``open and active criminal, civil, or administrative 
investigation or audit.'' This new dismissal for barred actions 
will apply only when the Government has already initiated an 
investigation into the same matter based on information 
received from an independent source. The Committee does not 
intend to bar suits solely because the Government already knew 
of the fraud or could have learned of the fraud from 
information in the public domain. This balance was designed to 
bar parasitic cases while encouraging relators to come forward 
with information that would assist the Government in recovering 
money or property lost to fraud, waste, or abuse.
    Despite the Committee's belief that the public disclosure 
bar and original source statutory provisions were clear when 
passed in 1986, many courts have interpreted these provisions 
to create ambiguities and have issued opinions contrary to the 
intent outlined in the 1986 Committee report. The result of 
these interpretations has been significant litigation, delays 
in settling FCA cases with clear violations of law, and, 
regrettably, the dismissal and presumptive barring of 
meritorious claims brought by qui tam relators. These decisions 
have created a chilling effect on relators coming forward with 
claims because certain types of cases cannot survive dismissal. 
Some examples--but by no means an exclusive list--of these 
decisions that run contrary to the intent of the Committee are:
     Using the public disclosure bar to deny an award 
to a qui tam relator despite the objections of the United 
States.\80\
---------------------------------------------------------------------------
    \80\ See Rockwell Int'l Corp. v. United States, supra note 4.
---------------------------------------------------------------------------
     Finding the public disclosure bar applies to bar 
cases that are ``similar to'' rather than the statutorily 
required standard of ``derived from'' information in the public 
domain, unless the relator has firsthand knowledge of the 
fraud--thus finding that any information about the matter that 
was available in the public domain, even if it was not readily 
accessible, is sufficient to prompt a Government investigation 
and bar the qui tam action.\81\
---------------------------------------------------------------------------
    \81\ See United States ex rel. Doe v. John Doe Corp, 960 F.2d 318 
(2d Cir. 1992) (holding that investigators questioning employees during 
execution of a search warrant was sufficient to make information about 
the fraud ``public'' and barring the qui tam action); United States ex 
rel. Mistick PBT v. Housing Auth. of City of Pittsburgh, 186 F.3d 376 
(3d Cir. 1999) (holding release of information under Freedom of 
Information Act (FOIA) by Government agency was a public disclosure in 
an administrative report triggering jurisdictional bar).
---------------------------------------------------------------------------
     Finding production of documents or information 
during the discovery phase of trial is a ``public disclosure'' 
even if documents are not put into the public record of the 
judicial proceeding.\82\
---------------------------------------------------------------------------
    \82\ See, e.g., United States ex rel. Paranich v. Sorngard, 396 
F.3d 326 (3d Cir. 2005) (holding that disclosures made in an unrelated 
state lawsuit constitute public disclosures); United States ex rel. 
Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prudential Ins. Co., 944 
F.2d 1149, 1158 (3d Cir. 1991) (determining that absent a protective 
order information disclosed in court ordered discovery is ``potentially 
accessible'' to the public and therefore qualifies as a public 
disclosure).
---------------------------------------------------------------------------
     Four Courts of Appeals have ruled that responses 
to FOIA requests are public disclosures and deprives 
jurisdiction even if the relator relies exclusively on 
knowledge gained as an insider to establish the requisite 
elements of liability.\83\
---------------------------------------------------------------------------
    \83\ See, e.g., United States ex rel. Grynberg v. Praxair, Inc., 
389 F.3d 1038 (10th Cir. 2004), cert. denied, 545 U.S. 1129 (2005); 
United States ex rel. Reagan v. E. Tex. Med. Ctr. Reg'l Healthcare 
Sys., 384 F.3d 168, 175-176 (5th Cir. 2004); United States ex rel. 
Mistick PBT v. Housing Auth. of City of Pittsburgh, 186 F.3d at 383, 
cert. denied, 529 U.S. 1018 (2000).
---------------------------------------------------------------------------
     Interpreting the public disclosure bar to mean 
that disclosure in a Government report includes disclosures 
even in a State or local government report, which were not 
required to be given to the Federal Government and might never 
have come to the Government's attention.\84\
---------------------------------------------------------------------------
    \84\ See, e.g., United States ex rel. Maxwell v. Kerr McGee Oil & 
Gas Corp., 486 F.Supp.2d 1217 (D. Colo. 2007); United States ex rel., 
Bly-Magee v. Premo, 470 F.3d 914 (9th Cir. 2006), cert. denied, 128 
S.Ct.1119 (2008) (holding that an administrative report, audit or 
investigation prepared by a state entity qualifies as a 
``congressional, administrative, or Government Accounting Office 
report, hearing, audit, or investigation'' for purposes of the public 
disclosure bar).
---------------------------------------------------------------------------
     Courts have concluded that a public disclosure 
occurs even when the information is not disclosed to the public 
at large.\85\
---------------------------------------------------------------------------
    \85\ See, e.g., United States ex rel. Fowler v. Caremark RX, LLC, 
496 F.3d 730 (7th Cir. 2007) (holding that disclosure to U.S. Attorney 
was a public disclosure for purposes of Section 3730(e)(4)(A)).
---------------------------------------------------------------------------
     Courts have concluded that when the Government 
enlists the qui tam relators help reviewing documents obtained 
from the defendant; either the act of the defendant producing 
the documents or the act of the Government showing the 
documents to the relator constitutes a public disclosure.\86\
---------------------------------------------------------------------------
    \86\ Id. See also United States ex rel. Montgomery v. St. Edwards 
Mercy Medical Center, et al., 2007 U.S. Dist. LEXIS 73376 (E.D. Ark. 
2007) (holding reviewed by relators along with Government agents and 
Attorney's after the filing of the initial complaint, but prior to the 
filing of an amended complaint, constitute public disclosures barring 
the action).
---------------------------------------------------------------------------
     Courts have held that the public disclosure of an 
industry-wide fraud constitutes a public disclosure with 
respect to a particular defendant even though that defendant 
had not been identified and the Government would not be aware 
of the particular fraud by that entity.\87\
---------------------------------------------------------------------------
    \87\ See United States ex rel. Gear v. Emergency Medical Assoc's of 
Illinois, Inc., 436 F.3d 726 (7th Cir. 2006); see also 145 Cong. Rec. 
E1546 (July 14, 1999) (remarks of Rep. Berman and letter to Attorney 
General Reno) (critiquing the notion that report of industry-wide 
practice sufficiently informs Government of fraud against a particular 
defendant).
---------------------------------------------------------------------------
    While these are examples of the problem with the overuse 
and overexpansion of the public disclosure bar, it is by no 
means an exclusive list. The Committee believes providing 
examples of these cases is helpful in explaining the need for 
legislating, but the Committee also wants to make clear that 
courts should not use this as a exhaustive list of problematic 
cases. All cases that have expanded the public disclosure bar 
and narrowed the original source doctrine threaten to limit the 
FCA more than the Committee ever intended in passing the 1986 
Amendments.
    The erroneous court interpretations of the public 
disclosure bar are particularly problematic for the FCA because 
once a court finds that a case is based upon a public 
disclosure, the qui tam relator then has an uphill battle to 
prove he/she was the original source of that information. 
Because courts have also narrowly construed the terms 
``direct'' and ``independent'' under the original source 
exception to bar actions in which any aspect of the relator's 
information was derivative or second-hand, real meritorious 
cases have been dismissed where the Government would have never 
been brought but for the qui tam action pointing the Government 
to the fraud. For instance, courts have dismissed cases where a 
relator has hired an investigator to corroborate information or 
has obtained Government documents to confirm that false claims 
were submitted.\88\
---------------------------------------------------------------------------
    \88\ See United States ex rel. Grynberg v. Praxair, Inc., 380 F.3d 
1038 (10th Cir. 2004), cert. denied, 545 U.S. 1139 (2005).
---------------------------------------------------------------------------
    Many of these cases arose as a result of a motion by 
defendants because of the jurisdictional nature of public 
disclosure bar. However, the best source for determining 
whether a relator has provided meaningful, new information to 
the Government is the Government itself. Only the Government 
has an interest in ensuring that its resources are not 
squandered on litigation that does no more than duplicate a 
fraud matter already under investigation. In fact, the 
incentive is strongest with the Government to ensure that 
monies recovered based upon an internal Government 
investigation are not split or shared with qui tam relators who 
file truly parasitic suits. This is especially true when the 
law allows the Government to proceed against the defendant for 
the same damages even after a relator is dismissed.\89\ Despite 
this, defendants continue to raise this jurisdictional defense 
in virtually all FCA cases, while searching in court filings 
across the country hoping to find that one piece of information 
the Government would never have found that may deny the court 
jurisdiction. In fact, in one case a court declared the 
Government could not intervene to collect a judgment despite 
the fact that a jury had awarded the judgment, all because the 
defendant successfully argued that the relator should be 
dismissed on public disclosure grounds.\90\
---------------------------------------------------------------------------
    \89\ See United States ex rel. Stone v. Rockwell Int'l Corp., 127 
S. Ct. 1397, 1411 (2007).
    \90\ See United States ex rel. Maxwell v. Kerr-McGee Oil & Gas 
Corp., 486 F.Supp.2d 1233 (D. Colo. 2007).
---------------------------------------------------------------------------
    The amendments in section 4(b) of the bill are designed to 
stop this abuse of the public disclosure bar from occurring. 
The provision converts the public disclosure bar from a 
jurisdictional bar that may be invoked by either the defendant 
or the Government, to a basis for a motion to dismiss that may 
only be filed by the Government. The provision also clarifies 
that a FCA action may be dismissed only if the action is truly 
parasitic. Thus, the provision provides for a motion to dismiss 
only when the Government learned of the matter from another 
source prior to the qui tam filing, and then either filed a 
criminal indictment or information, or launched an active fraud 
investigation or audit either prior to the filing, or, if the 
source was a media or congressional publication, with 90 days 
of the publication. Importantly, the media report or 
congressional matter must be the reason the Government opened 
its investigation or audit. If the court's examination of the 
relevant circumstances indicates that the Government actually 
opened its investigation or audit as a response to the qui tam 
filing, the qui tam case is not barred.
    This new provision is designed to balance and further two 
important public policies. First, it encourages relators to 
come forward with information that will contribute in a 
meaningful way to the United States ability to exercise its 
remedies under section 3729. Second, it prevents relators from 
pursuing cases that do no more than add to the administrative 
workload of law enforcement and the judiciary. Accordingly, 
while this provision should operate to bar cases that do no 
more than replicate information that the Government already 
obtained from independent sources in a still active 
investigation, it should not discourage or bar qui tam cases 
with important information that provides a new basis for 
recovery.
    To carry out these policies, amended section 3730(e)(4) 
applies when the prior Government criminal indictment or 
information, investigation, or audit, or the prior disclosure 
in the media or in a congressional publication, is focused on 
``the same wrongdoer'' and ``substantially the same matters.'' 
This means that the prior Government criminal indictment or 
information, investigation or audit, or the prior disclosure in 
the media or in a congressional publication, must concern the 
same transactions, claims or communications as those at issue 
in the qui tam complaint and must involve alleged violations of 
the FCA or other law imposing liability or penalties for 
knowing false claims or fraud.
    For example, under Section 3730(e)(4), an investigation or 
audit into specific information about misconduct leading to 
false claims in one time period or at one company location does 
not provide a basis to dismiss a qui tam with specific 
information about the same type of conduct leading to false 
claims in a different time period or a separate company 
location. Likewise, an investigation or audit into particular 
kickback transactions does not bar a qui tam alleging different 
kickback transactions. Further, an investigation or audit into 
alleged fraud in one contract does not bar a qui tam case 
alleging fraud in a separate contract.
    To help guard against the Government misusing the provision 
to dismiss cases for political or other inappropriate reasons, 
the amendment requires that the Government's investigation or 
audit be open and active. The Committee anticipates that courts 
will question and look critically at the Government's 
representations that it is conducting an ``open'' and 
``active'' investigation and audit of the matter. Courts should 
ask for factual support for the Government's representation. In 
some cases, courts may see merit in permitting such information 
to be submitted under seal or pursuant to a protective order to 
ensure that the Government investigation is not compromised.
    The new provision acknowledges that even when the 
Government is already looking into the same transactions, 
claims or communications as possible violations of the FCA or 
other false claims or fraud law, there will be instances in 
which a qui tam plaintiff's information or evidence brings new 
additional value to the case and that they should not be barred 
because of the similar claims. The goal of this is to promote 
and expedite the recovery for fraud and relators that add value 
to any case are encouraged to come forward. Thus, the provision 
states that a qui tam case shall not be dismissed when ``new 
information'' provided by the person adds ``substantial grounds 
for additional recovery.'' The application of this exception 
should be fact-specific.
    Finally, there is no basis for dismissal under new section 
3730(e)(4) when the person filing the qui tam action brought 
information to the Government prior to the Government 
initiating its investigation or audit, or, in the case of a 
Government investigation or audit prompted by a media or 
congressional publication, prior to the publication in 
question. This exception applies regardless of whether the 
person's information prompted the Government's investigation or 
audit. The qui tam relator has no control over the diligence or 
competency of the particular Government official to whom they 
disclose information and should not be penalized if that 
official fails to follow up on the matter as required by their 
job duties. On the other hand, the clause ``brought by the 
person to the Government'' assumes that the person properly 
brought the information to the Government by making a full and 
comprehensible disclosure of the material facts to an office 
within the Government charged with responsibility for 
investigating fraud or false claims. This provision is designed 
to ensure that qui tam relators are not mere opportunists who 
file incomprehensible documents with the Government in the 
hopes of evading the disclosure responsibility and trying to 
obtain a windfall profit. The courts should view such actions 
as parasitic and take all appropriate steps to prevent this 
from occurring.

Section 5. Relief from retaliatory actions

    The 1986 Amendments included Section 3730(h) which provides 
a cause of action for individuals who faced retaliation in 
response to bringing forth FCA claims of fraud against the 
Government.\91\ Congress included this provision in the 1986 
Amendments because, as the Committee noted, it recognized 
``that few individuals will expose fraud if they fear their 
disclosures will lead to harassment, demotion, loss of 
employment, or any other form of retaliation.'' \92\ While this 
provision was designed to protect employees from employer 
retaliation, over the past 20 years courts have limited this 
protection through various decisions narrowly interpreting the 
definition of ``employee'' and thus leaving contractors and 
subcontractors open to retaliation.
---------------------------------------------------------------------------
    \91\ S. Rep. No. 99-345 supra note 1, at 5299.
    \92\ Id.
---------------------------------------------------------------------------
    For example, the Third and Fourth Circuits have held that 
an independent contractor is not protected under section 
3730(h).\93\ To correct this loophole, section 5 clarifies 
section 3730(h) by simply including the terms ``government 
contractor, or agent'' in addition to the term ``employee.'' 
The Committee believes that it is necessary to include these 
additional terms to assist individuals who are not technically 
employees within the typical employer-employee relationship, 
but nonetheless have a contractual or agent relationship with 
an employer. The Committee believes this is a vitally important 
clarification that respects the spirit and intent of the 1986 
Amendments while offering whistleblower protections to 
contractors and agents who may come across fraud against the 
Government and report it under the FCA.
---------------------------------------------------------------------------
    \93\ See United States ex rel. Watson v. Connecticut Gen. Life 
Ins., 2004 U.S. App. LEXIS 1736 (3d Cir. 2004); Vessell v. DPS Assocs. 
of Charleston, Inc., 148 F.3d 407 (4th Cir. 1998).
---------------------------------------------------------------------------

Section 6. Statute of limitations

            A. Statute of limitations period
    The FCA currently contains a statute of limitation 
provision in section 3731(b)(1) and 3731(b)(2). These 
provisions provide that a FCA action may not be brought more 
than six years after the date on which the violation is 
committed,\94\ or not more than three years after the date when 
facts material to the right of action are known or reasonably 
should have been known by the official of the United States 
charged with responsibility to act in the circumstances.\95\ 
That current statute of limitations also includes a 10-year 
statute of repose that prohibits the filing of a FCA action, 
``more than 10 years after the date on which the violation was 
committed.'' \96\ This provision has been the subject of 
significant litigation over the years and varying 
interpretations of the statute of limitations have created 
significant questions as to the true applicability of the 
statute of limitations to certain provisions of the FCA.
---------------------------------------------------------------------------
    \94\ 31 U.S.C. Sec. 3731(b)(1)(2000).
    \95\ 31 U.S.C. Sec. 3731(b)(2)(2000).
    \96\ Id.
---------------------------------------------------------------------------
    Federal courts have taken two different approaches to 
determining the application of the statute of limitations.\97\ 
One line of cases has taken the position that section 
3731(b)(2), which contains the tolling provision, only applies 
to cases the Government initiates, imposing a shorter statute 
of limitations on cases that originate as qui tam actions.\98\ 
Other cases have stated that the section 3731(b)(2) applies to 
suits brought solely by a qui tam relator, but that a relator 
is also subject to the tolling provision same as the Government 
and must file within three years of when they learn of the 
fraud.\99\ The Supreme Court has also interpreted the statute 
of limitations provisions contrary to the spirit and intent of 
the 1986 Amendments.
---------------------------------------------------------------------------
    \97\ See U.S. ex rel. El Amin v. George Washington Univ., 26 
F.Supp.2d 162, 171 (D.D.C. 1998).
    \98\ See, e.g., Id.; United States ex rel. Thistlewaite v. Dowty 
Woodville Polymer, Ltd, 6 F.Supp.2d 263 (S.D.N.Y 1998) (holding three 
year tolling provision only applies to the government); United States 
ex rel. Sikkenga v. Regence BlueCross BlueShield of Utah, 2006 WL 
3491784 (10th Cir. 2006) (holding 3731(b)(2) inapplicable to private 
qui tam relators).
    \99\ See United States ex rel. Hyatt v. Northrop, 91 F.3d 1211 (9th 
Cir. 1996); cf. United States ex rel. Pogue, 474 F.Supp.2d 75 (D.D.C. 
2007) (holding that in a qui tam case where the Government declined to 
intervene, the three year tolling provision runs from the date the 
Government official learned of the alleged violation, not the qui tam 
relator).
---------------------------------------------------------------------------
    In 2005, the Supreme Court held that the FCA statute of 
limitations which applies to ``a civil action under section 
3730'' \100\ is not available to individuals who file a claim 
alleging retaliation in violation of section 3730(h).\101\ The 
Supreme Court held that instead of utilizing the six year 
statute of limitations proscribed in section 3731(b)(1) or even 
the three-year tolling provision in 3730(b)(2), the plaintiff 
must follow the most applicable State law statute of 
limitations of a similar anti-retaliation statute. These 
similar State law statutes for unlawful termination or 
retaliation are usually shorter than the FCA statute of 
limitations and vary from 90 days, to six months, or up to one 
year after the alleged retaliation occurs.\102\ This decision 
effectively renders the statute of limitations provision in 
section 3731 inapplicable to claims filed under 3730(h) and 
potentially incorporates 50 different State statute of 
limitations provisions for Federal courts to consider. Further, 
without clear guidance, Federal courts could mix and match 
different statutes of limitations from different analogous 
State law statutes on a case-by-case basis lending confusion to 
individuals seeking relief from retaliatory actions. The 
Committee believes that Congress did not intend to create such 
uncertainty when it included this provision in 1986, and that 
such uncertainty also frustrates the goal the Committee had in 
seeking to protect individuals from ``harassment, demotion, 
loss of employment or any other retaliation'' \103\ for coming 
forward with claims of fraud and abuse of Government programs.
---------------------------------------------------------------------------
    \100\ 31 U.S.C. Sec. 3731(b)(2000).
    \101\ See Graham County Soil & Water Conservation Dist. v. United 
States ex rel. Wilson, 545 U.S. 409 (2005).
    \102\ See Graham County, 545 U.S. at 419, n3, citing Conn. Gen. 
Stat 31-51m (2005) (90 days); Fla. Stat.112.3187(8)(a), 448.103 (2003) 
(180 days); Mich. Comp. Laws Ann. 15.363(1) (West 2004) (90 days); 
N.Y.C.P.L.R. 215(4) (West 2003) (one year); Ohio Rev. Code Ann. 
4113.52(D) (Lexis 2001) (six months); and Tex. Gov't. Code Ann. 554.005 
(West 2004) (90 days).
    \103\ S. Rep. No. 99-345, supra note 1, at 5299.
---------------------------------------------------------------------------
    In seeking to correct these interpretations that are 
inconsistent with the intent of the 1986 Amendments, the bill 
clarifies the statute of limitations in section 3731(b). 
Section 6 of the bill addresses all of the aforementioned 
problems by adopting a simple and straightforward 10-year 
statute of limitations that begins when the violation occurs 
for claims brought under section 3729 or 3730, brought by 
either the United States or a qui tam relator on behalf of the 
United States, and it exclusively applies the provision to 
retaliation claims filed under section 3730(h), rejecting the 
State law application favored by the Supreme Court in Graham 
County.\104\
---------------------------------------------------------------------------
    \104\ See Graham County, 545 U.S. at 409.
---------------------------------------------------------------------------
            B. Relation back doctrine
    The FCA is silent on the question of whether the United 
States may amend a qui tam plaintiff's complaint or file its 
own complaint upon intervention in a qui tam case subject to 
the same rules that allow ``relation back'' of amended 
complaints as if it were the Government's own complaint. 
Federal Rule of Civil Procedure 15(c)(2) provides that a 
party's amendment of a pleading will relate back to the date of 
its original pleading when the claim, ``asserted in the amended 
pleading arose out of the conduct, transaction, or occurrence 
set forth or attempted to be set forth in the original 
pleading.'' \105\ The Second Circuit recently ruled that the 
United States cannot use Rule 15(c)(2) when amending a qui tam 
plaintiff's complaint.\106\ The implication of this decision is 
that the United States will be forced to forego a complete and 
thorough investigation of the merits of a qui tam relators' 
allegations in order to expedite a filing so as not to have an 
action foreclosed upon due to the statute of limitations.
---------------------------------------------------------------------------
    \105\ Fed. R. Civ. Pro. 15(c)(2).
    \106\ United States v. Baylor Univ. Med. Ctr., 469 F.3d 263 (2d 
Cir. 2006).
---------------------------------------------------------------------------
    Section 6 of the bill clarifies that the Government's 
complaint in intervention or amended complaint will relate back 
to the date of the original qui tam complaint so long as the 
conditions of Federal Rule of Civil Procedure 15(c)(2) are met.

Section 7. Civil investigative demands

    Currently, the FCA allows the Attorney General to issue 
CIDs for ``any documentary material or information relevant to 
a false claims law investigation.'' The CID is authorized when 
the Attorney General ``has reason to believe that any person 
may be in possession, custody or control'' of the documents in 
question. The Attorney General may issue a CID before 
commencing a civil proceeding under the FCA. There are problems 
with the CID provision as written that prohibit its effective 
use by the Department of Justice in prosecuting FCA cases.
    The CID is seldom-used because of two strict 
interpretations by the Department of Justice of the CID 
statute. First, the statute currently reads that only the 
Attorney General may issue a CID, which has been interpreted to 
mean that the Attorney General, Deputy Attorney General, or 
Assistant Attorney General must personally sign off on the CID 
order and that they cannot delegate that authority. This 
procedure is cumbersome and limiting for Government attorneys 
and as a result, CIDs are infrequently used. Second, the 
Department of Justice has interpreted the CID statute to 
prohibit discussions of information obtained from CIDs with qui 
tam relators. This lack of ability to share information makes 
FCA investigations more difficult and requires the utilization 
of court orders.
    This section of the bill resolves both issues, first by 
inserting the phrase ``or designee'' after Attorney General to 
clarify that the Attorney General may delegate his or her 
authority to issue a CID. Second, this section states 
explicitly that any information obtained by the Attorney 
General under a CID may be shared with qui tam relators if the 
Attorney General determines that doing so is a necessary part 
of the investigation. Further, this section incorporates a new 
definition of ``official use'' to allow the Department to share 
information with Federal, State, and local government agencies 
in furtherance of a Department of Justice investigation or 
prosecution. This will allow the Department to properly 
investigate FCA cases by coordinating with relators and 
investigative entities.

Section 8. Severability

    At the request of the Department of Justice, and out of an 
abundance of caution, the Committee included a severability 
clause that would ensure the integrity of the bill in the event 
any provision is found to invalid by severing any invalid piece 
from the rest of the Act. This amendment is consistent with the 
intent of the Committee to provide narrowly tailored 
clarifications to the FCA and ensures the integrity of the FCA 
will remain even in the event of one section being held 
invalid.

Section 9. Effective date and application

    The original draft of S. 2041 was silent on the question of 
what the effective date and application of the amendments would 
be. However, the Department of Justice views letter pointed out 
that after the 1986 Amendments, the Department spent 
``substantial time and resources litigating the effective 
date'' of the amendments.\107\ The Committee recognized the 
concerns and incorporated a provision applying the amendments 
contained in S. 2041 to ``all cases pending on the date of 
enactment, and to all cases filed thereafter.'' \108\
---------------------------------------------------------------------------
    \107\ DOJ Views Letter I supra note 96, at 16. See also Hughes 
Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939 (1997).
    \108\ See DOJ Views Letter supra note 96, at 16.
---------------------------------------------------------------------------
    The Department of Justice filed a second views letter April 
2, 2008, discussing additional views on the proposed substitute 
amendment circulated prior to mark-up. In the second views 
letter, the Department stated that it ``was not clear whether 
the effective date should apply to all parts of the bill or 
only to its procedural provisions.'' \109\ As such, the 
Department revised its position on the effective date and 
application and supported a tiered system for application of 
the amendments.
---------------------------------------------------------------------------
    \109\ United States Dept. of Justice, Comments on Manager's 
Substitute Amendment to S. 2041 at 8 (April 2, 2008).
---------------------------------------------------------------------------
    The sponsors of the legislation agreed with the 
recommendation from the Department of Justice and incorporated 
a three-tiered effective date and application in the substitute 
amendment adopted by the Committee. First, section 9 of the 
bill provides that the substantive liability provisions amended 
in section 3729 take effect upon the date of enactment and 
``shall apply to conduct occurring after that date of 
enactment.'' Second, the bill states that amendments to section 
3731(b)(1)--the statute of limitations provisions--apply upon 
date of enactment and shall apply to civil actions filed after 
the date of enactment and not revive claims that are time-
barred as of the date of enactment. Finally, section 9 of the 
bill states that all remaining provisions take effect on the 
date of enactment and apply to all civil actions before, on, or 
after that date.

             IV. Congressional Budget Office Cost Estimate

    The Committee sets forth, with respect to the bill, S. 
2041, the following estimate and comparison prepared by the 
Director of the Congressional Budget Office under section 402 
of the Congressional Budget Act of 1974:

                                                    April 21, 2008.
Hon. Patrick J. Leahy,
Chairman, Committee on the Judiciary,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 2041, the False 
Claims Act Correction Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Leigh Angres.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

S. 2041--False Claims Act Correction Act of 2008

    S. 2041 would amend certain provisions of the False Claims 
Act (FCA), which allows a private individual with knowledge of 
past or present fraud committed against the government to file 
qui tam claims against federal contractors. In qui tam claims, 
such individuals (known as relators or whistleblowers) receive 
a share of any recovered claims against the government. CBO 
estimates that S. 2041 would have no significant effect on the 
federal budget. S. 2041 contains no intergovernmental or 
private-sector mandates as defined in the Unfunded Mandates 
Reform Act and would not affect the budgets of state, local, or 
tribal governments.
    In most cases, the amendments that would be made by the 
bill would take effect on the date of enactment and apply to 
all civil actions filed before, on, or after such date. 
Specifically, the legislation would:
           Stipulate that individuals who present false 
        claims to contractors, grantees, and others can be held 
        liable under the FCA (under current law, that liability 
        exists only for false claims presented to government 
        employees);
           Permit qui tam suits by government 
        employees, while allowing the government, under certain 
        circumstances, to dismiss actions brought by a qui tam 
        relator who is, or is related to, a federal employee;
           Bar waivers or releases of claims except as 
        part of a court-approved settlement;
           Authorize a court, upon a motion by the 
        Attorney General, to dismiss an action if, when it was 
        filed, the same matters were disclosed in federal 
        hearings or reports from the news media;
           Expand the court's authority to reduce the 
        relator's share of proceeds under certain 
        circumstances;
           Place a 10-year statute of limitations on 
        the filing of civil actions against individuals who 
        submit a false or fraudulent claim for payment; and
           Permit the Attorney General to delegate 
        authority to other officials of the Department of 
        Justice (DOJ) to issue a civil investigative demand 
        against an individual possessing information relevant 
        to a false claims investigation.
    According to information from DOJ, each year its attorneys 
handle several hundred qui tam cases under the False Claims 
Act. In the past two years, the government has recovered more 
than $5 billion from settlements and judgements in such cases. 
Because the proposed amendments would not appreciably change 
the workload of DOJ attorneys nor the monetary recoveries in 
such cases, CBO estimates that S. 2041 would have no 
significant impact on the federal budget.
    The CBO staff contact for this estimate is Leigh Angres. 
This estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                    V. Regulatory Impact Evaluation

    In compliance with rule XXVI of the Standing Rules of the 
Senate, the Committee finds that no significant regulatory 
impact will result from the enactment of S. 2041.

                             VI. Conclusion

    The False Claims Act Correction Act of 2008, S. 2041, will 
bring much needed clarity to the FCA and will enhance the 
efforts of the Federal Government in recovering monies lost to 
fraud, waste, and abuse of Government programs. It will 
streamline FCA litigation by clarifying the law and will reduce 
unnecessary and costly litigation. It will expedite settlements 
and will reward and protect qui tam relators for coming forward 
to alert the Government to fraud. Finally, the legislation will 
bring the FCA back into alignment with the 1986 Amendments and 
the expressed intent of Congress that has been overlooked and 
misinterpreted by some Federal courts.

       VII. Changes to Existing Law Made by the Bill, as Reported

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
S. 2041, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                           UNITED STATES CODE

TITLE 31--MONEY AND FINANCE

           *       *       *       *       *       *       *


Subtitle III--Financial Management

           *       *       *       *       *       *       *


CHAPTER 37--CLAIMS

           *       *       *       *       *       *       *



Subchapter III--Claims Against the United States Government

           *       *       *       *       *       *       *



Sec. 3729. False claims

    (a) Liability for Certain Acts.--[Any person who--]
          (1) In general.--Subject to paragraph (2), any person 
        who--
                  [(1)](A) knowingly presents, or causes to be 
                presented, [to an officer or employee of the 
                United States Government or member of the Armed 
                Forces of the United States] a false or 
                fraudulent claim for payment or approval;
                  [(2)](B) knowingly makes, uses, or causes to 
                be made or used, a false record or statement to 
                get a false or fraudulent claim paid or 
                approved [by the Government];
                  [(3)](C) conspires to commit a violation of 
                subparagraph (A), (B), (D), (E), (F), or (G) or 
                otherwise to defraud the Government by getting 
                a false or fraudulent claim paid or 
                approved[allowed or paid];
                  [(4)](D) has possession, custody, or control 
                of property or money used, or to be used, by 
                the Government and knowingly delivers, or 
                causes to be delivered, less than all of that 
                money or property;[, intending to defraud the 
                Government or willfully to conceal the 
                property, delivers, or cause to be delivered, 
                less property than the amount for which the 
                person receives a certificate or receipt;]
                  [(5)](E) is 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;
                  [(6)](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 [the] 
                property; or
                  [(7)](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, or knowingly conceals, avoids, or 
                decreases 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, as adjusted by the Federal Civil Penalties 
        Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note; 
        Public Law 104-410), plus 3 times the amount of 
        [damages which the Government sustains] money or 
        property paid or approved because of the act of that 
        person [, except that if the court finds that--].
          (2) Reduced damages.--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 sustains] money or 
        property paid or approved because of the act of that 
        person. [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.]
    (b) [Knowing and Knowingly Defined.--] Definitions.--For 
the purposes of this section--
          (1) the terms ``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[.];
          [(c) Claim Defined.--For purposes of this section, 
        ``claim'' includes] (2) the term ``claim''--
                  (A) means any request or demand, whether 
                under a contract or otherwise, for money or 
                property, [which] that--
                          (i) is presented to an officer, 
                        employee, or agent of the United 
                        States; or
                          (ii) is made to a contractor, 
                        grantee, or other recipient if the 
                        United States Government--
                                  (I) provides or has provided 
                                any portion of the money or 
                                property [which is] requested 
                                or demanded[,]; or
                                  (II) [if the Government] will 
                                reimburse such contractor, 
                                grantee, or
                        other recipient for any portion of the 
                        money or property which is requested or 
                        demanded[.]; and
                  (B) does not include requests or demands for 
                money or property that the Government has paid 
                to an individual as compensation for Federal 
                employment or as an income subsidy with no 
                restrictions on that individual's use of the 
                money or property; and
          (3) the term ``obligation'' means a fixed duty, or a 
        contingent duty arising from an express or implied 
        contractual, quasi-contractual, grantor-grantee, 
        licensor-licensee, fee-based, or similar relationship, 
        including customs duties for mismarking country of 
        origin, and the retention of any overpayment;
    [(d)](c) Exemption From Disclosure.--Any information 
furnished pursuant to [subparagraphs (A) through (C) of 
subsection (a)] subsection (a)(2) shall be exempt from 
disclosure under section 552 of title 5.
    [(e)](d) Exclusion.--This section does not apply to claims, 
records, or statements made under the Internal Revenue Code of 
1986.

Sec. 3730. Civil actions for false claims

    (a) Responsibilities of the Attorney General.--The Attorney 
General diligently shall investigate a violation under section 
3729. If the Attorney General finds that a person has violated 
or is violating section 3729, the Attorney General may bring a 
civil action under this section against the person.
    (b) Actions by Private Persons.--
          (1) A person may bring a civil action for a violation 
        of section 3729 for the person and for the United 
        States Government. The action shall be brought in the 
        name of the Government. The action may be dismissed 
        only if the court and the Attorney General give written 
        consent to the dismissal and their reasons for 
        consenting. No claim for a violation of section 3729 
        may be waived or released by any action of any person 
        who brings an action under this subsection, 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 paragraph shall be 
        construed to limit the ability of the United States to 
        decline to pursue any claim brought under this 
        subsection, or to require court approval of a 
        settlement by the Government with a defendant of an 
        action brought under subsection (a), or under this 
        subsection, unless the person bringing the action 
        objects to the settlement under subsection (c)(2)(B).
          (2) A copy of the complaint and written disclosure of 
        substantially all material evidence and information the 
        person possesses shall be served on the Government 
        pursuant to [Rule 4(d)(4)] rule 4 of the Federal Rules 
        of Civil Procedure. The complaint shall be filed in 
        camera, shall remain under seal for at least 60 days, 
        and shall not be served on the defendant until the 
        court so orders. The Government may elect to intervene 
        and proceed with the action within 60 days after it 
        receives both the complaint and the material evidence 
        and information.
          (3) The Government may, for good cause shown, move 
        the court for extensions of the time during which the 
        complaint remains under seal under paragraph (2). Any 
        such motions may be supported by affidavits or other 
        submissions in camera. The defendant shall not be 
        required to respond to any complaint filed under this 
        section until 20 days after the complaint is unsealed 
        and served upon the defendant pursuant to Rule 4 of the 
        Federal Rules of Civil Procedure.
          (4) Before the expiration of the 60-day period or any 
        extensions obtained under paragraph (3), the Government 
        shall--
                  (A) proceed with the action, in which case 
                the action shall be conducted by the 
                Government; or
                  (B) notify the court that it declines to take 
                over the action, in which case the person 
                bringing the action shall have the right to 
                conduct the action.
          (5) When a person brings an action under this 
        subsection, no person other than the Government may 
        intervene or bring a related action based on the facts 
        underlying the pending action.
          (6)(A) Not later than 120 days after the date of 
        service under paragraph (2), the Government may move to 
        dismiss from the action a qui tam relator that is an 
        employee of the Federal Government, or that is a family 
        member of an employee of the Federal Government, if--
                  (i) the necessary and specific material 
                allegations contained in such action were 
                derived from a filed criminal indictment or 
                information or an open and active criminal, 
                civil, or administrative investigation or audit 
                by the Government into substantially the same 
                fraud alleged in the action;
                  (ii) the duties of the employee's position 
                specifically include uncovering and reporting 
                the particular type of fraud that is alleged in 
                the action, and the employee, as part of the 
                duties of that employee's position, is 
                participating in or has knowledge of an open 
                and active criminal, civil, or administrative 
                investigation or audit by the Government of the 
                alleged fraud;
                  (iii) 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 either--
                          (I) in a case in which the employing 
                        agency has an inspector general, such 
                        person, before bringing the action has 
                        not--
                                  (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); 
                                or
                          (II) in a case in which the employing 
                        agency does not have an inspector 
                        general, such person, before bringing 
                        the action has not--
                                  (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); 
                                or
                  (iv) 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, made the 
                required disclosures and notifications under 
                clause (iii), and--
                          (I) less than 18 months (and any 
                        period of extension as provided for 
                        under subparagraph (B)) have elapsed 
                        since the disclosures of information 
                        and notification under clause (iii) 
                        were made; or
                          (II) within 18 months (and any period 
                        of extension as provided for under 
                        subparagraph (B)) after the disclosures 
                        of information and notification under 
                        clause (iii) were made, the Attorney 
                        General has filed an action based on 
                        such information.
          (B) Prior to the expiration of the 18-month period 
        described under subparagraph (A)(iv)(II) and upon 
        notice to the person who has disclosed information and 
        provided notice under subparagraph (A)(iii), the 
        Attorney General may extend such 18-month period by 1 
        additional 12-month period.
          (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 against who the Government has filed a 
        motion to dismiss under subparagraph (A) 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 evidentiary material 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) Upon granting a motion filed under subparagraph 
        (A), the court shall dismiss the qui tam relator from 
        the action.
          (G) If the motion to dismiss under this paragraph is 
        granted, the matter shall remain under seal.
          (H) Not later than 12 months after the date of the 
        enactment of this paragraph, and every 12 months 
        thereafter, the Department of Justice shall submit a 
        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 are filed.
          (I) Nothing in this paragraph shall be construed to 
        limit the authority of the Government to dismiss an 
        action or claim, or a person who brings an action or 
        claim, under this subsection for any reason other than 
        the grant of a motion filed under subparagraph (A).
    (c) Rights of the Parties to Qui Tam Actions.--(1) If the 
Government proceeds with the action, it shall have the primary 
responsibility for prosecuting the action, and shall not be 
bound by an act of the person bringing the action. Such person 
shall have the right to continue as a party to the action, 
subject to the limitations set forth in paragraph (2).
    (2)(A) The Government may dismiss the action 
notwithstanding the objections of the person initiating the 
action if the person has been notified by the Government of the 
filing of the motion and the court has provided the person with 
an opportunity for a hearing on the motion.
    (B) The Government may settle the action with the defendant 
notwithstanding the objections of the person initiating the 
action if the court determines, after a hearing, that the 
proposed settlement is fair, adequate, and reasonable under all 
the circumstances. Upon a showing of good cause, such hearing 
may be held in camera.
    (C) Upon a showing by the Government that unrestricted 
participation during the course of the litigation by the person 
initiating the action would interfere with or unduly delay the 
Government's prosecution of the case, or would be repetitious, 
irrelevant, or for purposes of harassment, the court may, in 
its discretion, impose limitations on the person's 
participation, such as--
          (i) limiting the number of witnesses the person may 
        call;
          (ii) limiting the length of the testimony of such 
        witnesses;
          (iii) limiting the person's cross-examination of 
        witnesses; or
          (iv) otherwise limiting the participation by the 
        person in the litigation.
    (D) Upon a showing by the defendant that unrestricted 
participation during the course of the litigation by the person 
initiating the action would be for purposes of harassment or 
would cause the defendant undue burden or unnecessary expense, 
the court may limit the participation by the person in the 
litigation.
    (3) If the Government elects not to proceed with the 
action, the person who initiated the action shall have the 
right to conduct the action. If the Government so requests, it 
shall be served with copies of all pleadings filed in the 
action and shall be supplied with copies of all deposition 
transcripts (at the Government's expense). When a person 
proceeds with the action, the court, without limiting the 
status and rights of the person initiating the action, may 
nevertheless permit the Government to intervene at a later date 
upon a showing of good cause.
    (4) Whether or not the Government proceeds with the action, 
upon a showing by the Government that certain actions of 
discovery by the person initiating the action would interfere 
with the Government's investigation or prosecution of a 
criminal or civil matter arising out of the same facts, the 
court may stay such discovery for a period of not more than 60 
days. Such a showing shall be conducted in camera. The court 
may extend the 60-day period upon a further showing in camera 
that the Government has pursued the criminal or civil 
investigation or proceeding with reasonable diligence and any 
proposed discovery in the civil action will interfere with the 
ongoing criminal or civil investigation or proceedings.
    (5) Notwithstanding subsection (b), the Government may 
elect to pursue its claim through any alternate remedy 
available to the Government, including any administrative 
proceeding to determine a civil money penalty. If any such 
alternate remedy is pursued in another proceeding, the person 
initiating the action shall have the same rights in such 
proceeding as such person would have had if the action had 
continued under this section. Any finding of fact or conclusion 
of law made in such other proceeding that has become final 
shall be conclusive on all parties to an action under this 
section. For purposes of the preceding sentence, a finding or 
conclusion is final if it has been finally determined on appeal 
to the appropriate court of the United States, if all time for 
filing such an appeal with respect to the finding or conclusion 
has expired, or if the finding or conclusion is not subject to 
judicial review.
    (d) Award to Qui Tam Plaintiff.--(1) If the Government 
proceeds with an action brought by a person under subsection 
(b), such person shall, subject to the second sentence of this 
paragraph, receive at least 15 percent but not more than 25 
percent of the proceeds of the action or settlement of the 
claim, depending upon the extent to which the person 
substantially contributed to the prosecution of the action. If 
the person bringing the action is not dismissed under 
subsection (e)(4) because the person provided new information 
that adds substantial grounds for additional recovery beyond 
those encompassed within the Government's existing indictment, 
information, investigation, or audit, then such person shall be 
entitled to receive a share only of proceeds of the action or 
settlement that are attributable to the new basis for recovery 
that is stated in the action brought by that person. [Where the 
action is one which the court finds to be based primarily on 
disclosures of specific information (other than information 
provided by the person bringing the action) relating to 
allegations or transactions in a criminal, civil, or 
administrative hearing, in a congressional, administrative, or 
Government Accounting Office report, hearing, audit, or 
investigation, or from the news media, the court may award such 
sums as it considers appropriate, but in no case more than 10 
percent of the proceeds, taking into account the significance 
of the information and the role of the person bringing the 
action in advancing the case to litigation.] Any payment to a 
person under the first or second sentence of this paragraph 
shall be made from the proceeds. Any such person shall also 
receive an amount for reasonable expenses which the court finds 
to have been necessarily incurred, plus reasonable attorneys' 
fees and costs. All such expenses, fees, and costs shall be 
awarded against the defendant.
    (2) If the Government does not proceed with an action under 
this section, the person bringing the action or settling the 
claim shall receive an amount which the court decides is 
reasonable for collecting the civil penalty and damages. The 
amount shall be not less than 25 percent and not more than 30 
percent of the proceeds of the action or settlement and shall 
be paid out of such proceeds. Such person shall also receive an 
amount for reasonable expenses which the court finds to have 
been necessarily incurred, plus reasonable attorneys' fees and 
costs. All such expenses, fees, and costs shall be awarded 
against the defendant.
    (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--[Whether or not the Government proceeds with the 
action, if the court finds that the action was brought by a 
person who planned and initiated the violation of section 3729 
upon which the action was brought, then the court may, to the 
extent the court considers appropriate, reduce the share of the 
proceeds of the action which the 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 person bringing the action is convicted of 
criminal conduct arising from his or her role 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.]
          (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.
    (4) If the Government does not proceed with the action and 
the person bringing the action conducts the action, the court 
may award to the defendant its reasonable attorneys' fees and 
expense if the defendant prevails in the action and the court 
finds that the claim of the person bringing the action was 
clearly frivolous, clearly vexatious, or brought primarily for 
purposes of harassment.
    (e) Certain Actions Barred.--(1) No court shall have 
jurisdiction over an action brought by a former or present 
member of the armed forces under subsection (b) of this section 
against a member of the armed forces arising out of such 
person's service in the armed forces.
    (2)(A) No court shall have jurisdiction over an action 
brought under subsection (b) against a Member of Congress, a 
member of the judiciary, or a senior executive branch official 
if the action is based on evidence or information known to the 
Government when the action was brought.
    (B) For purposes of this paragraph, ``senior executive 
branch official'' means any officer of employee listed in 
paragraphs (1) through (8) of section 101(f) of the Ethics in 
Government Act of 1978 (5 U.S.C. App.).
    (3) In no event may a person bring an action under 
subsection (b) which is based upon allegations or transactions 
which are the subject of a civil suit or an administrative 
civil money penalty proceeding in which the Government is 
already a party.
    (4) A court shall dismiss an action or claim or the person 
bringing the action or claim under subsection (b), upon a 
motion by the Government filed on or before service of a 
complaint on the defendant under subsection (b), or thereafter 
for good cause shown if--
          (A) on the date of the action or claim was filed, 
        substantially the same matters, involving the same 
        wrongdoer, as alleged in the action or claim were 
        contained in, or the subject of--[No court shall have 
        jurisdiction over an action under this section based 
        upon the public disclosure of allegations or 
        transactions in a criminal, civil, or administrative 
        hearing, in a congressional, administrative, or 
        Government Accounting Office report, hearing, audit, or 
        investigation, or from the news media, unless the 
        action is brought by the Attorney General or the person 
        bringing the action is an original source of the 
        information.]
                  (i) filed criminal indictment or information, 
                or an open and active criminal, civil, or 
                administrative investigation or audit; or
                  (ii) a news media report, or public 
                congressional hearing, report, or 
                investigation, if within 90 days after the 
                issuance or completion of such news media 
                report or congressional hearing, report, or 
                investigation, the Department of Justice or an 
                Office of Inspector General opened a fraud 
                investigation or audit of the facts contained 
                in such news media report or congressional 
                hearing, report, or investigation as a result 
                of learning about the public report, hearing, 
                or investigation;
          (B) any new information provided by the person does 
        not add substantial grounds for additional recovery 
        beyond those encompassed within the Government's 
        existing criminal indictment or information, or an open 
        and active criminal, civil, or administrative 
        investigation or audit; and [For purposes of this 
        paragraph, ``original source'' means an individual who 
        has direct and independent knowledge of the information 
        on which the allegations are based and has voluntarily 
        provided the information to the Government before 
        filing an action under this section which is based on 
        the information.]
          (C) the Government's existing criminal indictment or 
        information, or an open and active criminal, civil, or 
        administrative investigation or audit, or the news 
        media report, or congressional hearing, report, or 
        investigation was not initiated or published after the 
        Government's receipt of information about substantially 
        the same matters voluntarily brought by the person to 
        the Government.
    (f) Government Not Liable for Certain Expenses.--The 
Government is not liable for expenses which a person incurs in 
bringing an action under this section.
    (g) Fees and Expenses To Prevailing Defendant.--In civil 
actions brought under this section by the United States, the 
provisions of section 2412(D) of title 28 shall apply.
    (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, or agent 
        whole, if that employee, government contractor, or 
        agent [who] is discharged, demoted, suspended, 
        threatened, harassed, or in any other manner 
        discriminated against in the terms and conditions of 
        employment [by his or her employer] 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 efforts 
        to stop 1 or more violations of this subchapter. [an 
        action under this section, including investigation for, 
        initiation of, testimony for, or assistance in an 
        action filed or to be filed under this section, shall 
        be entitled to all relief necessary to make the 
        employee whole. Such relief]
          (2) Relief.--Relief under paragraph (1) shall include 
        reinstatement with the same seniority status that 
        [such] 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 [employee may bring an 
        action] in the appropriate district court of the United 
        States for the relief provided in this subsection.

Sec. 3731. False claims procedure

    (a) A subpoena requiring the attendance of a witness at a 
trial or hearing conducted under section 3730 of this title may 
be served at any place in the United States.
    (b)[ A civil action under section 3730 may not be brought--
](1) A civil action under 3730 may not be brought more than [6] 
10 years after the date on which the violation of section 3729 
or 3730 is committed.[, or]
    (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 purpose 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. [more than 3 years after the 
date when facts material to the right of action are known or 
reasonably should have been known by the official of the United 
States charged with responsibility to act in the circumstances, 
but in no event more than 10 years after the date on which the 
violation is committed, whichever occurs last.]
    (c) In any action brought under section 3730, the United 
States shall be required to prove all essential elements of the 
cause of action, including damages, by a preponderance of the 
evidence.
    (d) Notwithstanding any other provision of law, the Federal 
Rules of Criminal Procedure, or the Federal Rules of Evidence, 
a final judgment rendered in favor of the United States in any 
criminal proceeding charging fraud or false statements, whether 
upon a verdict after trial or upon a plea of guilty or nolo 
contendere, shall estop the defendant from denying the 
essential elements of the offense in any action which involves 
the same transaction as in the criminal proceeding and which is 
brought under subsection (a) or (b) of section 3730.

Sec. 3733. Civil investigative demands

    (a) In General.--
          (1) Issuance and service.--Whenever the Attorney 
        General, or a designee (for purposes of this section) 
        has reason to believe that any person may be in 
        possession, custody, or control of any documentary 
        material or information relevant to a false claims law 
        investigation, the Attorney General, or a designee, 
        may, before commencing a civil proceeding under section 
        3730(a) or other false claims law, or electing under 
        section 3730(b), issue in writing an cause to be served 
        upon such person, a civil investigative demand 
        requiring such person--
                  (A) to produce such documentary material for 
                inspection and copying,
                  (B) to answer in writing written 
                interrogatories with respect to such 
                documentary material or information,
                  (C) to give oral testimony concerning such 
                documentary material or information, or
                  (D) to furnish any combination of such 
                material, answers, or testimony.
        The Attorney General may [not] delegate the authority 
        to issue civil investigative demands under this 
        subsection. Whenever a civil investigative demand is an 
        express demand for any product of discovery, the 
        Attorney General, the Deputy Attorney General, or an 
        Assistant Attorney General shall cause to be served, in 
        any manner authorized by this section, a copy of such 
        demand upon the person from who the discovery was 
        obtained and shall notify the person to whom the 
        discovery was obtained and shall notify the person to 
        whom such demand is issued of the date on which such 
        copy was served. 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.
          (2) Contents and deadlines.--
                  (A) Each civil investigative demand issued 
                under paragraph (1) shall state the nature of 
                the conduct constituting the alleged violation 
                of a false claims law which is under 
                investigation, and the applicable provision of 
                law alleged to be violated.
                  (B) If such demand is for the production of 
                documentary material, the demand shall--
                          (i) describe each class of 
                        documentary material to be produced 
                        with such definiteness and certainty as 
                        to permit such material to be fairly 
                        identified;
                          (ii) prescribe a return date for each 
                        such class which will provide a 
                        reasonable period of time within which 
                        the material so demanded may be 
                        assembled and made available for 
                        inspection and copying; and
                          (iii) identify the false claims law 
                        investigator to whom such material 
                        shall be made available.
                  (C) If such demand is for answers to written 
                interrogatories, the demand shall--
                          (i) set forth with specificity the 
                        written interrogatories to be answered;
                          (ii) prescribe dates at which time 
                        answers to written interrogatories 
                        shall be submitted; and
                          (iii) identify the false claims law 
                        investigator to whom such answers shall 
                        be submitted.
                  (D) If such demand is for the giving of oral 
                testimony, the demand shall--
                          (i) prescribe a date, time, and place 
                        at which oral testimony shall be 
                        commenced;
                          (ii) identify a false claims law 
                        investigator who shall conduct the 
                        examination and the custodian to whom 
                        the transcript of such examination 
                        shall be submitted;
                          (iii) specify that such attendance 
                        and testimony are necessary to the 
                        conduct of the investigation;
                          (iv) notify the person receiving the 
                        demand of the right to be accompanied 
                        by an attorney and any other 
                        representative; and
                          (v) describe the general purpose for 
                        which the demand is being issued and 
                        the general nature of the testimony, 
                        including the primary areas of inquiry, 
                        which will be taken pursuant to the 
                        demand.
                  (E) Any civil investigative demand issued 
                under this section which is an express demand 
                for any product of discovery shall not be 
                returned or returnable until 20 days after a 
                copy of such demand has been served upon the 
                person from whom the discovery was obtained.
                  (F) The date prescribed for the commencement 
                of oral testimony pursuant to a civil 
                investigative demand issued under this section 
                shall be a date which is not less than seven 
                days after the date on which demand is 
                received, unless the Attorney General or an 
                Assistant Attorney General designated by the 
                Attorney General determines that exceptional 
                circumstances are present which warrant the 
                commencement of such testimony within a lesser 
                period of time.
                  (G) The Attorney General shall not authorize 
                the issuance under this section of more than 
                one civil investigative demand for oral 
                testimony by the same person unless the person 
                requests otherwise or unless the Attorney 
                General, after investigation, notifies that 
                person in writing that an additional demand for 
                oral testimony is necessary. [The Attorney 
                General may not, notwithstanding section 510 of 
                title 28, authorize the performance, by any 
                other officer, employee, or agency, of any 
                function vested in the Attorney General under 
                this subparagraph.]
    (b) Protected Material or Information.--
          (1) In general.--A civil investigative demand issued 
        under subsection (a) may not require the production of 
        any documentary material, the submission of any answers 
        to written interrogatories, or the giving of any oral 
        testimony if such material, answers, or testimony would 
        be protected from disclosure under--
                  (A) the standards applicable to subpoenas or 
                subpoenas duces tecum issued by a court of the 
                United States to aid in a grand jury 
                investigation; or
                  (B) the standards applicable to discovery 
                requests under the Federal Rules of Civil 
                Procedure, to the extent that the application 
                of such standards to any such demand is 
                appropriate and consistent with the provisions 
                and purposes of this section.
          (2) Effect on other orders, rules, and laws.--Any 
        such demand which is an express demand for any product 
        of discovery supersedes any inconsistent order, rule, 
        or provision of law (other than this section) 
        preventing or restraining disclosure of such product of 
        discovery to any person. Disclosure of any product of 
        discovery pursuant to any such express demand does not 
        constitute a waiver of any right or privilege which the 
        person making such disclosure may be entitled to invoke 
        to resist discovery of trial preparation materials.
    (c) Service; Jurisdiction.--
          (1) By whom served.--Any such demand which is an 
        express demand for any product of discovery supersedes 
        any inconsistent order, rule, or provision of law 
        (other than this section) preventing or restraining 
        disclosure of such product of discovery to any person. 
        Disclosure of any product of discovery pursuant to any 
        such express demand does not constitute a waiver of any 
        right or privilege which the person making such 
        disclosure may be entitled to invoke to resist 
        discovery of trial preparation materials.
          (2) Service in foreign countries.--Any such demand or 
        any petition filed under subsection (j) may be served 
        upon any person who is not found within the territorial 
        jurisdiction of any court of the United States in such 
        manner as the Federal Rules of Civil Procedure 
        prescribe for service in a foreign country. To the 
        extent that the courts of the United States can assert 
        jurisdiction over any such person consistent with due 
        process, the United States District Court for the 
        District of Columbia shall have the same jurisdiction 
        to take any action respecting compliance with this 
        section by any such person that such court would have 
        if such person were personally within the jurisdiction 
        of such court.
    (d) Service Upon Legal Entities and Natural Persons.--
          (1) Legal entities.--Service of any civil 
        investigative demand issued under subsection (a) or of 
        any petition filed under subsection (j) may be made 
        upon a partnership, corporation, association, or other 
        legal entity by--
                  (A) delivering an executed copy of such 
                demand or petition to any partner, executive 
                officer, managing agent, or general agent of 
                the partnership, corporation, association, or 
                entity, or to any agent authorized by 
                appointment or by law to receive service of 
                process on behalf of such partnership, 
                corporation, association, or entity;
                  (B) delivering an executed copy of such 
                demand or petition to the principal office or 
                place of business of the partnership, 
                corporation, association, or entity; or
                  (C) depositing an executed copy of such 
                demand or petition in the United States mails 
                by registered or certified mail, with a return 
                receipt requested, addressed to such 
                partnership, corporation, association, or 
                entity at its principal office or place of 
                business.
          (2) Natural persons.--Service of any such demand or 
        petition may be made upon any natural person by--
                  (A) delivering an executed copy of such 
                demand or petition to the person; or
                  (B) depositing an executed copy of such 
                demand or petition in the United States mails 
                by registered or certified mail, with a return 
                receipt requested, addressed to the person at 
                the person's residence or principal office or 
                place of business.
    (e) Proof of Service.-- A verified return by the individual 
serving any civil investigative demand issued under subsection 
(a) or any petition filed under subsection (j) setting forth 
the manner of such service shall be proof of such service. In 
the case of service by registered or certified mail, such 
return shall be accompanied by the return post office receipt 
of delivery of such demand.
    (f) Documentary Material.--
          (1) Sworn certificates.--The production of 
        documentary material in response to a civil 
        investigative demand served under this section shall be 
        made under a sworn certificate, in such form as the 
        demand designates, by--
                  (A) in the case of a natural person, the 
                person to whom the demand is directed, or
                  (B) in the case of a person other than a 
                natural person, a person having knowledge of 
                the facts and circumstances relating to such 
                production and authorized to act on behalf of 
                such person.
        The certificate shall state that all of the documentary 
        material required by the demand and in the possession, 
        custody, or control of the person to whom the demand is 
        directed has been produced and made available to the 
        false claims law investigator identified in the demand.
          (2) Production of materials.--Any person upon whom 
        any civil investigative demand for the production of 
        documentary material has been served under this section 
        shall make such material available for inspection and 
        copying to the false claims law investigator identified 
        in such demand at the principal place of business of 
        such person, or at such other place as the false claims 
        law investigator and the person thereafter may agree 
        and prescribe in writing, or as the court may direct 
        under subsection (j)(1). Such material shall be made so 
        available on the return date specified in such demand, 
        or on such later date as the false claims law 
        investigator may prescribe in writing. Such person may, 
        upon written agreement between the person and the false 
        claims law investigator, substitute copies for 
        originals of all or any part of such material.
    (g) Interrogatories.-- Each interrogatory in a civil 
investigative demand served under this section shall be 
answered separately and fully in writing under oath and shall 
be submitted under a sworn certificate, in such form as the 
demand designates, by--
          (1) in the case of a natural person, the person to 
        whom the demand is directed, or
          (2) in the case of a person other than a natural 
        person, the person or persons responsible for answering 
        each interrogatory.
If any interrogatory is objected to, the reasons for the 
objection shall be stated in the certificate instead of an 
answer. The certificate shall state that all information 
required by the demand and in the possession, custody, control, 
or knowledge of the person to whom the demand is directed has 
been submitted. To the extent that any information is not 
furnished, the information shall be identified and reasons set 
forth with particularity regarding the reasons why the 
information was not furnished.
    (h) Oral Examinations.--
          (1) Procedures.--The examination of any person 
        pursuant to a civil investigative demand for oral 
        testimony served under this section shall be taken 
        before an officer authorized to administer oaths and 
        affirmations by the laws of the United States or of the 
        place where the examination is held. The officer before 
        whom the testimony is to be taken shall put the witness 
        on oath or affirmation and shall, personally or by 
        someone acting under the direction of the officer and 
        in the officer's presence, record the testimony of the 
        witness. The testimony shall be taken stenographically 
        and shall be transcribed. When the testimony is fully 
        transcribed, the officer before whom the testimony is 
        taken shall promptly transmit a copy of the transcript 
        of the testimony to the custodian. This subsection 
        shall not preclude the taking of testimony by any means 
        authorized by, and in a manner consistent with, the 
        Federal Rules of Civil Procedure.
          (2) Persons present.--The false claims law 
        investigator conducting the examination shall exclude 
        from the place where the examination is held all 
        persons except the person giving the testimony, the 
        attorney for and any other representative of the person 
        giving the testimony, the attorney for the Government, 
        any person who may be agreed upon by the attorney for 
        the Government and the person giving the testimony, the 
        officer before whom the testimony is to be taken, and 
        any stenographer taking such testimony.
          (3) Where testimony taken.--The oral testimony of any 
        person taken pursuant to a civil investigative demand 
        served under this section shall be taken in the 
        judicial district of the United States within which 
        such person resides, is found, or transacts business, 
        or in such other place as may be agreed upon by the 
        false claims law investigator conducting the 
        examination and such person.
          (4) Transcript of testimony.--When the testimony is 
        fully transcribed, the false claims law investigator or 
        the officer before whom the testimony is taken shall 
        afford the witness, who may be accompanied by counsel, 
        a reasonable opportunity to examine and read the 
        transcript, unless such examination and reading are 
        waived by the witness. Any changes in form or substance 
        which the witness desires to make shall be entered and 
        identified upon the transcript by the officer or the 
        false claims law investigator, with a statement of the 
        reasons given by the witness for making such changes. 
        The transcript shall then be signed by the witness, 
        unless the witness in writing waives the signing, is 
        ill, cannot be found, or refuses to sign. If the 
        transcript is not signed by the witness within 30 days 
        after being afforded a reasonable opportunity to 
        examine it, the officer or the false claims law 
        investigator shall sign it and state on the record the 
        fact of the waiver, illness, absence of the witness, or 
        the refusal to sign, together with the reasons, if any, 
        given therefor.
          (5) Certification and delivery to custodian.--The 
        officer before whom the testimony is taken shall 
        certify on the transcript that the witness was sworn by 
        the officer and that the transcript is a true record of 
        the testimony given by the witness, and the officer or 
        false claims law investigator shall promptly deliver 
        the transcript, or send the transcript by registered or 
        certified mail, to the custodian.
          (6) Furnishing or inspection of transcript by 
        witness.--Upon payment of reasonable charges therefor, 
        the false claims law investigator shall furnish a copy 
        of the transcript to the witness only, except that the 
        Attorney General, the Deputy Attorney General, or an 
        Assistant Attorney General may, for good cause, limit 
        such witness to inspection of the official transcript 
        of the witness's testimony.
          (7) Conduct of oral testimony.--(A) Any person 
        compelled to appear for oral testimony under a civil 
        investigative demand issued under subsection (a) may be 
        accompanied, represented, and advised by counsel. 
        Counsel may advise such person, in confidence, with 
        respect to any question asked of such person. Such 
        person or counsel may object on the record to any 
        question, in whole or in part, and shall briefly state 
        for the record the reason for the objection. An 
        objection may be made, received, and entered upon the 
        record when it is claimed that such person is entitled 
        to refuse to answer the question on the grounds of any 
        constitutional or other legal right or privilege, 
        including the privilege against self-incrimination. 
        Such person may not otherwise object to or refuse to 
        answer any question, and may not directly or through 
        counsel otherwise interrupt the oral examination. If 
        such person refuses to answer any question, a petition 
        may be filed in the district court of the United States 
        under subsection (j)(1) for an order compelling such 
        person to answer such question.
          (B) If such person refuses to answer any question on 
        the grounds of the privilege against self-
        incrimination, the testimony of such person may be 
        compelled in accordance with the provisions of part V 
        of title 18.
          (8) Witness fees and allowances.--Any person 
        appearing for oral testimony under a civil 
        investigative demand issued under subsection (a) shall 
        be entitled to the same fees and allowances which are 
        paid to witnesses in the district courts of the United 
        States.
    (i) Custodians of Documents, Answers, and Transcripts.--
          (1) Designation.--The Attorney General shall 
        designate a false claims law investigator to serve as 
        custodian of documentary material, answers to 
        interrogatories, and transcripts of oral testimony 
        received under this section, and shall designate such 
        additional false claims law investigators as the 
        Attorney General determines from time to time to be 
        necessary to serve as deputies to the custodian.
          (2) Responsibility for materials; disclosure.--(A) A 
        false claims law investigator who receives any 
        documentary material, answers to interrogatories, or 
        transcripts of oral testimony under this section shall 
        transmit them to the custodian. The custodian shall 
        take physical possession of such material, answers, or 
        transcripts and shall be responsible for the use made 
        of them and for the return of documentary material 
        under paragraph (4).
          (B) The custodian may cause the preparation of such 
        copies of such documentary material, answers to 
        interrogatories, or transcripts of oral testimony as 
        may be required for official use by any false claims 
        law investigator, or other officer or employee of the 
        Department of Justice[, who is authorized for such use 
        under regulations which the Attorney General shall 
        issue]. Such material, answers, and transcripts may be 
        used by any such authorized false claims law 
        investigator or other officer or employee in connection 
        with the taking of oral testimony under this section.
          (C) Except as otherwise provided in this subsection, 
        no documentary material, answers to interrogatories, or 
        transcripts of oral testimony, or copies thereof, while 
        in the possession of the custodian, shall be available 
        for examination by any individual other than a false 
        claims law investigator or other officer or employee of 
        the Department of Justice authorized under subparagraph 
        (B). The prohibition in the preceding sentence on the 
        availability of material, answers, or transcripts shall 
        not apply if consent is given by the person who 
        produced such material, answers, or transcripts, or, in 
        the case of any product of discovery produced pursuant 
        to an express demand for such material, consent is 
        given by the person from whom the discovery was 
        obtained. Nothing in this subparagraph is intended to 
        prevent disclosure to the Congress, including any 
        committee or subcommittee of the Congress, or to any 
        other agency of the United States for use by such 
        agency in furtherance of its statutory 
        responsibilities. [Disclosure of information to any 
        such other agency shall be allowed only upon 
        application, made by the Attorney General to a United 
        States district court, showing substantial need for the 
        use of the information by such agency in furtherance of 
        its statutory responsibilities.]
          (D) While in the possession of the custodian and 
        under such reasonable terms and conditions as the 
        Attorney General shall prescribe--
                  (i) documentary material and answers to 
                interrogatories shall be available for 
                examination by the person who produced such 
                material or answers, or by a representative of 
                that person authorized by that person to 
                examine such material and answers; and
                  (ii) transcripts of oral testimony shall be 
                available for examination by the person who 
                produced such testimony, or by a representative 
                of that person authorized by that person to 
                examine such transcripts.
          (3) Use of material, answers, or transcripts in other 
        proceedings.--Whenever any attorney of the Department 
        of Justice has been designated to appear before any 
        court, grand jury, or Federal agency in any case or 
        proceeding, the custodian of any documentary material, 
        answers to interrogatories, or transcripts of oral 
        testimony received under this section may deliver to 
        such attorney such material, answers, or transcripts 
        for official use in connection with any such case or 
        proceeding as such attorney determines to be required. 
        Upon the completion of any such case or proceeding, 
        such attorney shall return to the custodian any such 
        material, answers, or transcripts so delivered which 
        have not passed into the control of such court, grand 
        jury, or agency through introduction into the record of 
        such case or proceeding.
          (4) Conditions for return of material.--If any 
        documentary material has been produced by any person in 
        the course of any false claims law investigation 
        pursuant to a civil investigative demand under this 
        section, and--
                  (A) any case or proceeding before the court 
                or grand jury arising out of such 
                investigation, or any proceeding before any 
                Federal agency involving such material, has 
                been completed, or
                  (B) no case or proceeding in which such 
                material may be used has been commenced within 
                a reasonable time after completion of the 
                examination and analysis of all documentary 
                material and other information assembled in the 
                course of such investigation,
        the custodian shall, upon written request of the person 
        who produced such material, return to such person any 
        such material (other than copies furnished to the false 
        claims law investigator under subsection (f)(2) or made 
        for the Department of Justice under paragraph (2)(B)) 
        which has not passed into the control of any court, 
        grand jury, or agency through introduction into the 
        record of such case or proceeding.
          (5) Appointment of successor custodians.--In the 
        event of the death, disability, or separation from 
        service in the Department of Justice of the custodian 
        of any documentary material, answers to 
        interrogatories, or transcripts of oral testimony 
        produced pursuant to a civil investigative demand under 
        this section, or in the event of the official relief of 
        such custodian from responsibility for the custody and 
        control of such material, answers, or transcripts, the 
        Attorney General shall promptly--
                  (A) designate another false claims law 
                investigator to serve as custodian of such 
                material, answers, or transcripts, and
                  (B) transmit in writing to the person who 
                produced such material, answers, or testimony 
                notice of the identity and address of the 
                successor so designated.
        Any person who is designated to be a successor under 
        this paragraph shall have, with regard to such 
        material, answers, or transcripts, the same duties and 
        responsibilities as were imposed by this section upon 
        that person's predecessor in office, except that the 
        successor shall not be held responsible for any default 
        or dereliction which occurred before that designation.
    (j) Judicial Proceedings.--
          (1) Petition for enforcement.--Whenever any person 
        fails to comply with any civil investigative demand 
        issued under subsection (a), or whenever satisfactory 
        copying or reproduction of any material requested in 
        such demand cannot be done and such person refuses to 
        surrender such material, the Attorney General may file, 
        in the district court of the United States for any 
        judicial district in which such person resides, is 
        found, or transacts business, and serve upon such 
        person a petition for an order of such court for the 
        enforcement of the civil investigative demand.
          (2) Petition to modify or set aside demand.--(A) Any 
        person who has received a civil Investigative demand 
        issued under subsection (a) may file, in the district 
        court of the United States for the judicial district 
        within which such person resides, is found, or 
        transacts business, and serve upon the false claims law 
        investigator identified in such demand a petition for 
        an order of the court to modify or set aside such 
        demand. In the case of a petition addressed to an 
        express demand for any product of discovery, a petition 
        to modify or set aside such demand may be brought only 
        in the district court of the United States for the 
        judicial district in which the proceeding in which such 
        discovery was obtained is or was last pending. Any 
        petition under this subparagraph must be filed--
                  (i) within 20 days after the date of service 
                of the civil investigative demand, or at any 
                time before the return date specified in the 
                demand, whichever date is earlier, or
                  (ii) within such longer period as may be 
                prescribed in writing by any false claims law 
                investigator identified in the demand.
          (B) The petition shall specify each ground upon which 
        the petitioner relies in seeking relief under 
        subparagraph (A), and may be based upon any failure of 
        the demand to comply with the provisions of this 
        section or upon any constitutional or other legal right 
        or privilege of such person. During the pendency of the 
        petition in the court, the court may stay, as it deems 
        proper, the running of the time allowed for compliance 
        with the demand, in whole or in part, except that the 
        person filing the petition shall comply with any 
        portions of the demand not sought to be modified or set 
        aside.
          (3) Petition to modify or set aside demand for 
        product of discovery.--(A) In the case of any civil 
        investigative demand issued under subsection (a) which 
        is an express demand for any product of discovery, the 
        person from whom such discovery was obtained may file, 
        in the district court of the United States for the 
        judicial district in which the proceeding in which such 
        discovery was obtained is or was last pending, and 
        serve upon any false claims law investigator identified 
        in the demand and upon the recipient of the demand, a 
        petition for an order of such court to modify or set 
        aside those portions of the demand requiring production 
        of any such product of discovery. Any petition under 
        this subparagraph must be filed--
                  (i) within 20 days after the date of service 
                of the civil investigative demand, or at any 
                time before the return date specified in the 
                demand, whichever date is earlier, or
                  (ii) within such longer period as may be 
                prescribed in writing by any false claims law 
                investigator identified in the demand.
          (B) The petition shall specify each ground upon which 
        the petitioner relies in seeking relief under 
        subparagraph (A), and may be based upon any failure of 
        the portions of the demand from which relief is sought 
        to comply with the provisions of this section, or upon 
        any constitutional or other legal right or privilege of 
        the petitioner. During the pendency of the petition, 
        the court may stay, as it deems proper, compliance with 
        the demand and the running of the time allowed for 
        compliance with the demand.
          (4) Petition to require performance by custodian of 
        duties.--At any time during which any custodian is in 
        custody or control of any documentary material or 
        answers to interrogatories produced, or transcripts of 
        oral testimony given, by any person in compliance with 
        any civil investigative demand issued under subsection 
        (a), such person, and in the case of an express demand 
        for any product of discovery, the person from whom such 
        discovery was obtained, may file, in the district court 
        of the United States for the judicial district within 
        which the office of such custodian is situated, and 
        serve upon such custodian, a petition for an order of 
        such court to require the performance by the custodian 
        of any duty imposed upon the custodian by this section.
          (5) Jurisdiction.--Whenever any petition is filed in 
        any district court of the United States under this 
        subsection, such court shall have jurisdiction to hear 
        and determine the matter so presented, and to enter 
        such order or orders as may be required to carry out 
        the provisions of this section. Any final order so 
        entered shall be subject to appeal under section 1291 
        of title 28. Any disobedience of any final order 
        entered under this section by any court shall be 
        punished as a contempt of the court.
          (6) Applicability of federal rules of civil 
        procedure.--The Federal Rules of Civil Procedure shall 
        apply to any petition under this subsection, to the 
        extent that such rules are not inconsistent with the 
        provisions of this section.
    (k) Disclosure Exemption.--Any documentary material, 
answers to written interrogatories, or oral testimony provided 
under any civil investigative demand issued under subsection 
(a) shall be exempt from disclosure under section 552 of title 
5.
    (l) Definitions.--For purposes of this section--
          (1) the term ``false claims law'' means--
                  (A) this section and sections 3729 through 
                3732; and
                  (B) any Act of Congress enacted after the 
                date of the enactment of this section which 
                prohibits, or makes available to the United 
                States in any court of the United States any 
                civil remedy with respect to, any false claim 
                against, bribery of, or corruption of any 
                officer or employee of the United States;
          (2) the term ``false claims law investigation'' means 
        any inquiry conducted by any false claims law 
        investigator for the purpose of ascertaining whether 
        any person is or has been engaged in any violation of a 
        false claims law;
          (3) the term ``false claims law investigator'' means 
        any attorney or investigator employed by the Department 
        of Justice who is charged with the duty of enforcing or 
        carrying into effect any false claims law, or any 
        officer or employee of the United States acting under 
        the direction and supervision of such attorney or 
        investigator in connection with a false claims law 
        investigation;
          (4) the term ``person'' means any natural person, 
        partnership, corporation, association, or other legal 
        entity, including any State or political subdivision of 
        a State;
          (5) the term ``documentary material'' includes the 
        original or any copy of any book, record, report, 
        memorandum, paper, communication, tabulation, chart, or 
        other document, or data compilations stored in or 
        accessible through computer or other information 
        retrieval systems, together with instructions and all 
        other materials necessary to use or interpret such data 
        compilations, and any product of discovery;
          (6) the term ``custodian'' means the custodian, or 
        any deputy custodian, designated by the Attorney 
        General under subsection (i)(1); [and]
          (7) the term ``product of discovery'' includes--
                  (A) the original or duplicate of any 
                deposition, interrogatory, document, thing, 
                result of the inspection of land or other 
                property, examination, or admission, which is 
                obtained by any method of discovery in any 
                judicial or administrative proceeding of an 
                adversarial nature;
                  (B) any digest, analysis, selection, 
                compilation, or derivation of any item listed 
                in subparagraph (A); and
                  (C) any index or other manner of access to 
                any item listed in subparagraph (A)b[.]; and
          (8) the term ``official use'' means any use that is 
        consistent with the law, and the regulations and 
        policies of the Department of Justice, including use in 
        connection with internal Department of Justice 
        memoranda and reports; communications between the 
        Department of Justice and a Federal, State, or local 
        government agency, or a contractor of a Federal, State, 
        or local government agency, undertaken in furtherance 
        of a Department of Justice investigation or prosecution 
        of a case; interviews of any qui tam relator or other 
        witness; oral examinations; depositions; preparation 
        for and response to civil discovery requests; 
        introduction into the record of a case or proceeding; 
        applications, motions, memoranda and briefs submitted 
        to a court or other tribunal; and communications with 
        Government investigators, auditors, consultants and 
        experts, the counsel of other parties, arbitrators and 
        mediators, concerning an investigation, case or 
        proceeding.

                                  
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