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U.S. Government Should Lay Off Anti-Fraud Enforcement, Says U.S. Chamber of Commerce

November 21, 2013 — The U.S. Chamber of Commerce has launched an attack on the government’s use of the False Claims Act to fight the rampant abuses engaged in by government contractors that bilk U.S. taxpayers out of millions of dollars every year. The qui tam provisions of the federal False Claims Act allow whistleblowers to stop fraudulent claims against the government by bringing a lawsuit on behalf of the government. To reward tipsters who have the courage to step forward and do the right thing, the Act permits informants to share in the government’s recovery.

According to Law 360, the Chamber of Commerce has issued a report — prepared by lawyers employed by firms that represent corporations in False Claims Act cases — accusing the Justice Department of coercing companies into too-generous settlements to escape the threat of treble damages under the Act.

The Chamber suggests that incentives for whistleblowers, who often risk their jobs and strain professional and personal relationships by acting to end fraud against the government, are just too high. The Chamber’s Institute for Legal Reform has announced the big-business advocate’s intent to wage a targeted campaign to change the False Claims Act to help businesses that fail to abide by it.

As things now stand, the Chamber decries, companies that defraud the American taxpayers have no justice as the government forces them to pay back what they owe rather than face dire consequences, like the loss of federal contracts. Of course, it is the failure to adhere to the terms of the highly-prized federal contracts that lands businesses in trouble in the first place.

The Chamber suggests that corporate fraud against the government could be better fought by voluntary corporate compliance programs than by the harsh penalties allowed under the False Claims Act. Yet businesses that truly wanted to avoid False Claims Act violations could implement their own compliance programs now, rather than wait for any big-government oversight on the issue.

Companies that voluntarily adopt their own strict compliance programs, argues the Chamber of Commerce, should be exempt from the most severe penalties sanctioned by the False Claims Act. But regardless of whether companies implement internal measures to prevent fraud against the American taxpayers, whistleblowers should receive less, says the Chamber.

In the Chamber’s view, apparently, the False Claims Act should be rewritten to hold the government and the whistleblowers accountable, but corporate violators should be permitted to police themselves.

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