Qui tam suits: A division of camps

The Washington Legal Foundation, a free-enterprise, public-interest law and policy center, recently came out in strong opposition to federal employees acting as private plaintiffs in qui tam suits.

Qui tam suits are legal actions taken by private citizens against government contractors who they believe defrauded the government. The False Claims Act, initially enacted in 1863 and given more bite through amendments passed in 1986, allows such suits. The intent of this legislation was to encourage private citizens to blow the whistle on companies that rip off the government while working as contractors.

An interesting provision of the False Claims Act is the "sweetener" that's provided to those who file qui tam suits and win. These individuals can recover one-half of the damages and penalties imposed on the guilty party. Not a bad deal.

Despite this reward, not many qui tam suits were filed before 1986. Congress then modified the False Claims Act to make it easier for government employees—such as auditors, lawyers and investigators—to file qui tam suits.

I've always encouraged feds to blow the whistle, and I believe that any mechanism that encourages employees to identify wrongdoings is in the public interest. What better way to encourage feds to blow the whistle on corrupt contractors than to allow them to share in the bounty, should their charges be upheld by the courts? Apparently, the Washington Legal Foundation thinks otherwise. The foundation thinks federal employees should blow the whistle on contractor malfeasance as a routine part of their jobs. I have no basic objection to that line of reasoning. However, many feds labor in jobs that have little to do with ferreting out fraud and abuse within the government. Most feds aren't paid to do anything remotely resembling that. So how do you get those feds interested in eliminating waste, fraud and abuse?

The only way is to provide the proper incentives, with the rewards of successful qui tam suits serving as a key motivator.

The 1986 amendments to the False Claims Act require qui tam suits be based on information that has not been "publicly disclosed." The intent here, I believe, was to encourage feds and others to unearth information that has not yet been "publicly disclosed."

There have been a number of court cases addressing the issue of whether feds can/should file qui tam suits. One argument says feds should not be able to file such suits based on information they obtained while in government employ. Allowing the use of such information, even though valid, could create ethical and/or practical problems, such as feds paying scant attention to their jobs while pursuing information that would back up a qui tam case.

Ignoring primary job duties is certainly not something I can support. But if they are able to pursue a qui tam suit without diminishing job performance, why shouldn't feds be allowed permitted to pursue such a course of action?

The Washington Legal Foundation says that allowing feds to file qui tam suits could lead to "misuse of government resources, a mischaracterization of findings and fundamental mistrust by citizens who believe that investigators and auditors may be attempting to enrich themselves."

I don't buy any of these assertions. From what I read in the press, citizen distrust for feds has hit such an all-time high that I don't believe fed-initiated qui tam suits will make one bit of difference. Frankly, I think this is much ado about nothing. How many feds bring qui tam suits? Who ever even heard of a qui tam suit? I bet you can count the number of feds who know what the term means on one hand.

The foundation also argues that if feds were allowed to file qui tam suits, this would encourage them not to immediately root out fraud but instead hold on to any incriminating information for ammunition in a suit. Are they kidding? I think these guys definitely inhale. How many feds are going to behave like that?

I don't know what the Washington Legal Foundation's agenda is, unless it's to waste trees. My advice would be to apply its energies and efforts to more constructive efforts.


Bureaucratus is a retired federal employee who is a regular contributor to FCW and the author of Bureaucratus Moneyline, a personal finance newsletter for federal employees, available by subscription on FCW's Web page at http://www.fcw.com.


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