Senate panel moves whistleblower measure
Bill would eliminate a requirement that false claims have to be presented directly to a government employee before liability attaches.
The Senate Judiciary Committee approved a modified version of legislation intended to shore up the ability of government whistleblowers to collect claims under a landmark 1986 law.
The bill, which was sponsored by Sen. Charles Grassley, R-Iowa, and cleared on a voice vote with no discussion, is intended to counter a series of recent court decisions that critics say weakened the law -- the False Claims Act -- by imposing major limitations on the latitude of whistleblowers to take action under the 22-year-old statute. It authorized individuals file "qui tam" claims against federal contractors for defrauding the government, and share a portion of the recovered claims with the government regardless of whether it opted to join the suits.
Effectively reversing a 2004 appeals court decision, the Grassley bill would eliminate a requirement that false claims have to be presented directly to a government employee before liability attaches. In the case, the court ruled that the government could not collect on a false claim because the defendant submitted it to employees of Amtrak, a government grantee.
The legislation also scuttles a U.S. Supreme Court stipulation that only claimants who originate fraud charges can recover money, and clarifies that government employees may act as whistleblowers once they have reported fraud up the chain of command only to see no effective recovery action for 18 months.
To fend off opposition from the Bush administration to the bill, Grassley agreed to a series of changes, including a provisions prohibiting "parasitic" claims based on public information and government probes, and explicitly requiring government employee whistleblowers to report fraud first to supervisors for investigation and redress.
In addition, the new version of the bill would exempt Social Security and other government assistance payments from liability, and bar government auditors, attorneys and other government investigative employees from filing false claim actions.
Aides to Grassley, author of the original False Claims Act, said he agreed to the modifications at the suggestion of the Justice Department but did not believe they amounted to a watering-down of his legislation to bolster the law. From 1987 to 2005, recoveries under the Act totaled $15.6 billion, from which whistleblowers got settlements of $1.6 billion.
The Grassley bill has pitted federal contracting trade groups, which regard the measure as an expansion of the law, against trial attorneys, who have one of the strongest lobbies on Capitol Hill.