Ideas For Reforming The False Claims Act

Every company that receives federal funds in any form—whether by contract, as a subcontractor, through a federal subsidy program or as a grantee— or that has obligations to the federal government, has reason to focus on the False Claims Act (FCA). A statute originally designed to punish fraud in government contracting, the FCA has been amended in recent years to reach every form of federal assistance, including grants and loans, and indirect as well as direct recipients. And the FCA incentivizes whistleblowers by allowing them to sue in the name of the federal government. As a result, litigation and liability under the FCA are skyrocketing. Nearly a thousand new suits were filed last year, most by self-proclaimed "whistleblowers" seeking a share of the government's recoveries— which over the past five years have totaled nearly $15 billion.