Taxpayers Against Fraud Touts 30-Year Success Of Whistleblower Law In The Fight Against Corrupt Government Contractors In Congressional Testimony

WASHINGTON, April 28, 2016 /PRNewswire-USNewswire/ -- On Thursday, the Subcommittee on the Constitution and Civil Justice of the House Judiciary Committee will be holding an oversight hearing on the False Claims Act. Among those testifying will be Neil Getnick, managing partner of the law firm of Getnick & Getnick, LLP, based in Manhattan, who will be testifying in his capacity as Chairman of the Taxpayers Against Fraud Education Fund.^[1]

Mr. Getnick will tout the 30-year anniversary of the bipartisan 1986 amendments to the civil war-era 'False Claims Act.' Those amendments strengthened federal protections for whistleblowers and removed certain hurdles on whistleblowers filing so-called  "qui tam" suits. Qui tam suits are filed by whistleblowers on behalf of the federal government against fraudulent government contractors. The Department of Justice examines the law suits, investigates the allegations, and can take over the litigation or allow the whistleblower to continue it on his or her own. The whistleblower is protected from employer retaliation and may receive up to 30 percent of the reward.

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 will oppose 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.

[1] The TAF Education Fund is a national, nonprofit, public interest organization dedicated to combating fraud against the government and protecting public resources through public-private partnerships. The organization is supported by successful whistleblowers and their counsel, as well as by membership dues and foundation grants.

SOURCE Taxpayers Against Fraud Education Fund

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