Hearing on Proposals to Fight Fraud and Protect Taxpayers: False Claims Act Corrections Act of 2009

I submit this testimony in support of the False Claims Act Corrections Act of 2009. At a time when we most need to protect every single tax dollar from fraudulent schemes, our country can ill afford to ignore the liability loopholes and statutory confusion that undermine the False Claims Act ("FCA"), the Government’s primary fraud-fighting weapon. My views on this much-needed legislation has been formed by my role as the President and C.E.O. of Taxpayers Against Fraud, a national nonprofit public interest organization dedicated to combating fraud against the federal government and state governments through the promotion of the use of the qui tam provisions of false claims acts, especially the federal FCA, 31 U.S.C. 3729-33. The FCA Corrections Act restores this important law enforcement mechanism, removes the statutory ambiguity that is breeding confusion for all parties, and deters dishonest entities who might seek to drain funds from the U.S. Treasury.

As President of Taxpayers Against Fraud, I have seen firsthand how meritorious fraud investigations and prosecutions are regularly derailed because of the problems addressed by the FCA Corrections Act. I have read every single published court decision from the past five years, and I can attest that this practice area is fraught with judicial confusion and statutory loopholes, which are leaving our tax dollars vulnerable to fraud. I have filed numerous amicus curiae briefs, including with the U.S. Supreme Court, echoing the position of the U.S. Department of Justice, only to see the court later reject our position, complaining that the statutory language ties its hands. I have the honor of working alongside the best federal and state government attorneys in the country, and they regularly share tales of promising fraud prosecutions dying under one of the extraneous procedural hurdles addressed by this Bill. The cases, of course, involve every area of government spending, including our war efforts in Iraq, Hurricane Katrina relief efforts, fraudulent Medicare and Medicaid spending, misappropriated NIH grants, and stolen federal highway funds, just to name a few.

Taxpayers Against Fraud strongly supports this commonsense legislation, the FCA Corrections Act of 2009. This Bill will significantly enhance the Government’s ability to identify, prosecute and deter fraud on U.S. Government programs. The Bill’s proposed corrections are needed to ensure that the Government’s primary fraud-fighting weapon remains fully effective in an era of escalating expenditures and increased reliance on government contractors. The FCA Corrections Act is also needed to overrule judicial opinions which have made it unduly difficult for qui tam whistleblowers to even bring forward meritorious allegations that the Government could not or would not have uncovered and pursued on its own. Finally, the FCA Corrections Act contains important changes that modernize the law to address new types of fraudulent schemes, to clarify procedural questions, to clarify the applicable statutes of limitations, and to transform the Government’s Civil Investigative Demand authority into a viable tool.

I strongly support each and every provision of this important legislation. However, my testimony focuses on the most important provisions of the Bill. 

For more information, please download the full testimony (PDF).