While the qui tam or whistleblower provision of the False Claims Act has recently drawn increasing scrutiny from some Supreme Court Justices, the arguments for its constitutionality are supported by both history and precedent, and every court to formally consider the question has concluded that the FCA’s whistleblower provisions are constitutional. In an earlier article, we wrote about how the False Claims Act’s (FCA) qui tam or whistleblower provision has been essential in returning billions of dollars to the Federal Government. But the False Claims Act is not limited to healthcare fraud; as the Supreme Court wrote back in 1968, the FCA has always been “intended to reach all types of fraud, without qualification, that might result in financial loss to the Government.”
From the very start of the Act back in 1863, that has included fraud against the military and law enforcement. During the civil war, whistleblowers helped stopped fraud involving the sale of donkeys passed off as horses and muskets that didn’t fire; today, it involves bullet-proof vests that degrade, earplugs that don’t provide the promised protection, and helicopters that aren’t maintained according to contractual requirements.
As one example, a whistleblower suit from 2004 alleged that the material used in certain bulletproof vests sold to federal, state, and local police agencies rapidly degraded, putting law enforcement officers at risk. An investigation followed, and the National institute of Justice found that over 50% of the vests made with that material “could not stop bullets that they had been certified to stop.” Thanks to the whistleblower’s efforts, governments have recovered over $100 million paid for these vests that may have put officers at risk.
In another case, a whistleblower lawsuit resulted in a $9.1 million settlement with a Minnesota company that allegedly sold defective earplugs to the military. According to the United States, the company’s earplugs failed to perform well in certain situations, and even though the company knew about the defects, it did not disclose them. In this case, the whistleblower was a company that blew the whistle on its competitor.
Whistleblowers have also been essential not only in identifying defective products, but also in alerting the government when military contractors fail to live up to their promises. In one such example, a former employee blew the whistle on a company that allegedly failed to maintain helicopters according to its contractual requirements. Those helicopters were used to transport Department of Defense people and goods. As the Special Inspector General for Afghanistan Reconstruction put it, “Failure to properly maintain aircraft is unacceptable under any circumstances, but it’s especially egregious in a war zone, where the lives of America’s warfighters are on the line.” Whistleblowers have been essential in identifying and rooting out fraud that puts soldiers at risk.
It is easy for attorneys to get lost in the nuances of legal debates about how a law fits in with our country’s constitutional system, but it is also important to take a step back and appreciate how laws can keep us healthier, keep our police safer, and hold companies committing fraud accountable.
The False Claims Act remains one of the most important tools in the country’s fight against fraud. If you work at a company that supplies goods or services to police, the military, or any government agency and have spotted potential fraud and want to know your options, the experienced attorneys at Outten & Golden can help you understand the False Claims Act and other laws that incentivize and protect whistleblowers.
