Testimony Of Neil V. Getenick, Chairman of the Board, Taxpayers Against Fraud, Before House Subcommittee on the Constitution & Civil Justice

On April 28, 2016, Taxpayers Against Fraud's Chairman of the Board, Neil V. Getnick, testified before the House Judiciary Subcommittee on the Constitution and Civil Justice, urging Congress to strengthen, not dilute, the bipartisan False Claims Act that empowers whistleblowers and has helped recovered tens of billions for taxpayers.

Mr. Getnick said: "By any measure, the 1986 amendments have been, and are, a fantastic success. Prior to 1986, the Department of Justice recovered less than $50 million a year under the False Claims Act. In the ten years following 1986, the DOJ recovered $1 billion. Last year alone, DOJ recovered more than $3.5 billion, $2.8 of which came from qui tam suits. The total recoveries in the last six years was $26.4 billion."

Focusing on the fact that the False Claims Act recovers $20 dollars for every $1 dollar spent on health care enforcement, Mr. Getnick added, "Does anyone know of any government program, federal, state or local, that can boast those results? The False Claims Act enhances the government's defenses against fraud without increasing the size or the cost of government."

Mr. Getnick said TAFEF opposes proposals put forward by lobbyists for large government contractors to gut the False Claims Act by: 1) allowing contractors that have defrauded the public to escape full liability – which includes triple damages - if they adopt a so-called gold standard "corporate compliance program" (even when the program fails), and; 2) requiring whistleblowers to report fraud and expose themselves to their corrupt employers prior to filing a qui tam suit.

Mr. Getnick said, "Allowing companies to escape or face reduced liability from FCA actions because they have 'checked the boxes' on how to establish a compliance program will merely encourage companies to game this requirement the same way they game contract and regulatory requirements. Such gaming does not reduce fraud; it enables fraud."

Distinguishing "law-driven" compliance programs from "business-driven" integrity programs, Mr. Getnick said: "In the end, the overriding goal should be reform of corrupt industries and markets, not just companies. That goal can be achieved only by combining powerful business-driven integrity programs with effective law enforcement."

Mr. Getnick also pointed out that the success of the Federal False Claims Act has resulted in over 29 states passing such laws of their own to extend the benefits of public-private partnerships.

He pointed to some reforms incorporated into the New York State False Claims Act that have been proven successful and are worthy of emulating nationally, including applying the Act to large scale tax frauds, allowing whistleblowers to use the Freedom of Information Act to expose corporate corruption in a qui tam suit, and enabling the government to recover its attorneys' fees.