I have been asked by several of our readers how the False Claims Act (FCA) came about. Perhaps we need to take a brief look at the history of the Act. It was during the Civil War when President Lincoln ratified the FCA, and it was during the Gettysburg Address when Lincoln proclaimed our government to be “of the people, by the people, [and] for the people.” American citizens fund the tax pool, which the government uses to benefit the public through government programs. Therefore, when an organization or individual defrauds the government, they are actually stealing from that very tax pool. When this occurs, taxpayer-funded programs no longer have the money needed to do the job required to aid the public. The FCA, by detecting and deterring fraud, replenishes and protects the tax pool by ensuring that taxpayers receive a fair deal when the government negotiates.
A case in point occurred this past March. In that case, CA Inc., a New York information technology management software and service company, agreed to pay $45 million to settle FCA claims alleging the company violated this underlying principle of fair deals. It was alleged that CA Inc. violated the FCA by making false statements and claims during the negotiation and administration of a General Service Administration (GSA) contract.
Assistant Attorney General Chad A. Readler, who is in the Justice Department’s Civil Division, had this to say:
[CA’s settlement] demonstrates [the government’s] continuing vigilance to ensure that contractors deal forthrightly with federal agencies when seeking taxpayer funds. [The government] will take actions against contractors who withhold information and cause the government to pay more than it should for commercially available items.
At the time CA contracted with the GSA, the contractors were required to fully and accurately disclose how they conducted business in the commercial marketplace. The reason for this discloser was so that the GSA could use the information to negotiate a fair price for the government agencies purchasing CA products and services. This particular contract also had a price reduction clause that required CA to reduce the prices charged to the government if the prices to commercial customers improved. The FCA allegations against CA were:
• CA failed to fully and accurately disclose its discounting practices.
• CA, instead, provided false information concerning the discounts it gave its customers.
• CA violated the price reduction clause by not providing the government with the required discounts when the commercial discounts improved.
As stated by the GSA Inspector General, Carol Fortine Ochoa, “GSA contractors must be honest and forthcoming when doing business with the federal government. American taxpayers deserve a fair deal.”
The government fights the war against fraud not with soldiers but with ordinary citizens − courageous men and women – who do the right thing and blow the whistle. The FCA not only provides an avenue, through the qui tam provision, for ordinary citizens to blow the whistle on fraud, but the Act also provides incentives and protection. These incentives include 15 to 30 percent of the damages recovered by the government, and the protection stems from the anti-retaliation provision that prohibits employers from retaliating against whistleblowers. Dani Shemesh, a former CA employee, filed the case against CA under the qui tam provision of the FCA. Shemesh is to receive more than $10 million for her share of the settlement.
Are you aware of fraud being committed against the federal government, or against a state government? If so, the FCA can protect and reward you for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, you can contact a lawyer on our firm’s Whistleblower Litigation Team for a free and confidential evaluation of your claim. Members of the team include: Archie Grubb, Larry Golston, Lance Gould and Andrew Brashier. You can call them at 800-898-2034 or reach them by email at Archie.Grubb@beasleyallen.com, Larry.Golston@beasleyallen.com, Lance.Gould@beasleyallen.com or Andrew.Brashier@beasleyallen.com. You may also contact Beasley Allen for a free copy of Lance Gould’s book, Whistleblowers: A Brief History and a Guide to Getting Started.
Sources: U.S. Department of Justice, abrahamlincolnonline.org
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