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Senators Introduce of Bipartisan Legislation to Fight Government Waste, Fraud

A bipartisan group of senators, led by Sen. Chuck Grassley (R-Iowa), introduced the False Claims Amendments Act of 2021 to beef up the government’s most potent tool to fight fraud.

“The False Claims Act has clearly been the best tool to fight fraud against the government and recover lost taxpayer dollars. Tens of billions of dollars have been returned to the federal treasury since my updates of 35 years ago. The legislation we introduced today will help recoup even more money by clarifying confusion after the Escobar case. The Administrative False Claims Act will significantly improve the process for smaller claims. I look forward to pushing for these bills to become law, and continuing my work to protect taxpayers and whistleblowers who shine a light on fraud, waste and abuse. In light of the trillions of dollars that Congress has appropriated recently for COVID relief, these bills are needed, more than ever, to fight the significant amounts of fraud that we are already seeing,” Grassley said.

“The False Claims Act is an important tool for combatting fraud against the federal government and American taxpayers, in addition to providing incentives for whistleblowers to come forward with knowledge of wrongdoing. In 2016, the Supreme Court weakened this critical tool by making it more difficult for plaintiffs and whistleblowers to succeed in lawsuits against government contractors engaged in fraud. I am proud to join Senator Grassley again in amending the FCA to address the fallout from that decision. Strong FCA enforcement is vital to ensuring that those who defraud the federal government are held accountable. I hope that our bipartisan False Claims Amendments Act of 2021 moves swiftly through the Senate,” Sen. Patrick Leahy (D-Vt.) said.

“The False Claims Act Amendments of 2021 will crack down on those who leech dollars from American taxpayers’ pockets through legal loopholes. It will hold fraudsters accountable when their crimes cause investigations that waste taxpayer money. I am proud to partner with Sen. Grassley on this important legislation,” Sen. John Kennedy (R-La.) said.

“This is an important bill which builds on previous efforts to recoup lost taxpayer dollars. I’m proud to join this bipartisan group of colleagues to introduce a bill that will bolster the government’s ability to fight fraud,” Sen. Dick Durbin (D-Ill.) said.

“For over 30 years, whistleblowers have helped the federal government recover billions of taxpayer dollars lost to fraud,” Sen. Roger Wicker (R-Miss.) said. “Now that Congress has spent trillions responding to the COVID-19 pandemic, it is important to ensure the False Claims Act remains the most effective tool for combatting fraud and rewarding those who expose it.”

The False Claims Amendments Act of 2021 (S.2428) clarifies the current law following confusion and misinterpretation of the Supreme Court decision in United Health Services v. United States ex rel. Escobar, which has made it all too easy for fraudsters to argue that their obvious fraud was not material simply because the government continued payment. It also ensures that anti-retaliation provisions from the False Claims Act apply to post-employment retaliation and makes fraudsters liable for reimbursing the government for costs associated with a burdensome discovery process. The bill is cosponsored by Sens. Patrick Leahy (D-Vt.), John Kennedy (R-La.), Dick Durbin (D-Ill.), and Roger Wicker (R-Miss.).

Full text of the False Claims Act Amendments of 2021 can be found HERE. A summary of the legislation can be found HERE. The bill is endorsed by Taxpayers Against Fraud, the National Whistleblower Center, the Project on Government Oversight and the Government Accountability Project.

Another group of senators, also led by Grassley, introduced the Administrative False Claims Act, which updates the law governing smaller, and potentially more frequent, instances of fraud committed against the government. The legislation raises the statutory ceiling on these types of claims from $150,000 to $1 million, expands the number of Justice Department officials who can review these claims and allows the government to recoup costs for investigating and prosecuting these frauds. The bill is cosponsored by Sens. Dick Durbin (D-Ill.) and Maggie Hassan (D-N.H.).

Full text of the Administrative False Claims Act can be found HERE. A summary of the legislation can be found HERE. The bill is endorsed by several government accountability groups, including Empower Oversight, Government Accountability Project, National Security Counselors, National Whistleblower Center, Project on Government Oversight, Public Employees for Environmental Responsibility and Whistleblowers of America.

In 1986, Grassley led the successful effort to update the False Claims Act, which allows the government to recover taxpayer dollars from entities that defrauded federal agencies. A key provision in that update, known as qui tam, allows whistleblowers to bring suites against alleged fraudsters on behalf of the government and share in any recoveries. That provision is credited with more than two-thirds of all False Claims Act recoveries since 1987.

In January, the Justice Department announced the successful recovery of over $2.2 billion through False Claims Act cases that would have otherwise been lost to fraud in FY2020. More $1.6 billion of those claims were recovered through Grassley’s qui tam provisions. A total of more than $64 billion in taxpayer money has been recovered since the 1986 update to the law.

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