Increases in government spending to address the COVID-19 pandemic “have led to an unprecedented level of theft of federal funds,” Sen. Chuck Grassley (R-Iowa) warned in recent remarks commemorating the 159th anniversary of the False Claims Act on March 2.

In a broadcast by the National Whistleblower Center, Sen. Grassley said such spending has made the law, which is designed to combat fraud of taxpayer dollars, “more important than ever.” 

The False Claims Act, also known as the FCA, was originally signed into law in 1863 to help combat fraud by suppliers to the U.S. government during the Civil War. Sen. Grassley was the driving force behind the 1986 amendments that ushered in a modern era of fraud fighting using the FCA’s so-called qui tam provisions, which incentivize whistleblowers to report a fraud against the government by rewarding them with a percentage of the amount the government successfully recovers because of the whistleblower’s FCA case. 

The FCA has not had a substantial change since 2009, however, Sen. Grassley is now one of the co-sponsors of the False Claims Amendments Act of 2021, which boasts bipartisan support in the Senate. 

The pending amendments are a legislative fix made necessary because of judicial interpretations of dicta (language that is not binding or precedent-setting) in the 2016 U.S. Supreme Court decision in United Health Services v. United States ex rel. Escobar that are inconsistent with what Congress intended in the law’s materiality standard. 

The sponsors of the Amendments Act say that judicial interpretations of a single example in the Escobar decision (that the government’s conduct after a claim is submitted is “strong evidence” that a requirement of the FCA is not material to the government) have made it more difficult for the government and whistleblowers to expose fraud against the government. 

Companies accused of defrauding the government have conducted fishing expeditions to determine if anyone in the government was aware of the alleged fraud, and then argued that if the government was aware, the alleged fraud was not material because the government did not act to stop it. 

Sen. Grassley was critical of this interpretation of the law in his recent remarks. 

“We all know that is not how things work in the real world,” he said. “There are many reasons why the government would continue paying a claim despite knowledge of fraud, such as national security concerns, fear of creating a drug scarcity or simply that they don’t have the legal authority to cease payments.”

He said his legislation would allow the government to continue to hold fraudsters accountable even in situations in which the government continues payment. The law would also make it harder for the Department of Justice to dismiss a whistleblower’s claims and extend whistleblower retaliation protections post-employment, he added.

Sen. Grassley highlighted the $5.6 billion in taxpayer money recouped in 2021 through the FCA, which the Department of Justice recently announced. Among the cases making up the $5.6 billion recouped in 2021 and specifically highlighted in DOJ’s announcement was a $90 Million Medicare Advantage fraud case where Keller Grover represented the whistleblower, Kathy Ormsby. Since its 1986 update, the FCA has helped the government recover more than $70 billion. 

Sen. Grassley ended his remarks by calling the FCA “the most powerful tool the government has to combat fraud,” and praised the whistleblowers who have come forward under it. 

“It’s the brave whistleblowers who make the law successful,” he said. “Whistleblowers are the government’s eyes and ears for uncovering and deterring fraud. Without whistleblowers the False Claims Act would simply not work.”

Keller Grover is committed to helping whistleblowers navigate the process of reporting fraud to the government. 

With over 30 years of experience litigating fraud and employment cases and billions in recoveries for its clients, Keller Grover is uniquely positioned to represent whistleblowers. 

If you want to report wrongdoing in your organization, we are here to help. For advice about how to handle suspected fraud, contact Keller Grover for a free and confidential consultation.