Justice News Flash: Featured Column : Will the False Claims Act Become a U.S. Export?

Will the False Claims Act Become a U.S. Export?

Malta has passed a law that protects government whistleblowers from retaliation

Malta whistleblowers
Will the False Claims Act Become a U.S. Export?

// Justice News Flash: Featured Column // Kathleen Scanlan
The parliament of the tiny and corruption-wracked European country of Malta has passed a law that protects government whistleblowers from retaliation—and even offers them the chance to assume a new identity.

While Malta might be the only country offering a witness protection plan of sorts, many countries around the world—including India, Australia, and Czechoslovakia--are following the lead of the United States and adopting or improving upon whistleblower laws in order to fight government graft and corporate corruption and to protect those who expose it.

Whistleblowers face unfair punishment from their employers when they come forward to tell the truth; some lose their jobs, their friends, and their professional networks. A lot is at stake, and whistleblower protection laws send the message that employers do not have the right to penalize such brave people.

Whistleblower laws are on the rise because, around the world, contractors in the areas of finance, health care, and military defense, stand accused of bilking governments of tens of millions of dollars.

Even with all this fraud and abuse and lax oversight, the U.S. still stands out as a country with a law—the False Claims Act--that provides a financial reward to people who provide information to blow the lid off fraud. (Whistleblowers under the FCA stand to reap up to 30 percent of the settlement from a civil case that recovers stolen monies.) This unique feature of Lincoln's Law, named for the President who signed it in 1863, doesn't sit well with lawmakers in some countries. Paying for this information makes them uncomfortable.

If recent news reports are true, however, both Britain and Australia might be soon getting over fears of looking gauche and enacting FCA-style laws that incentivize whistleblowers to come forward with what they know about fraud. Maybe the fact that the U.S. Department of Justice recovered nearly $5 billion through FCA cases in 2012 alone thanks to those whistleblowers has something to do with the shifting view of what is gauche. It wouldn't be the first time that outside the box American thinking served as a catalyst.

In the U.K. the move toward an FCA-type law was recently announced with the debut of Britain’s National Crime Agency. Britain is under pressure to attack malfeasance in the wake of news that security contractors have been charging in the millions for surveillance work never performed.

Also, British regulators might be jealous after seeing the U.S. settle a case against pharmaceutical giant Ranbaxy for $500 million this year. The whistleblower in the case, a Ranbaxy executive from India, had also approached British regulators with his knowledge that the company was selling adulterated and sub-par drugs to British government agencies.

In an article published recently, a British writer noted that the qui tam portion of the False Claims Act, which allows people to sue on behalf of the government, is actually rooted in English Common Law. “Why don’t we do it here?” he asked.

The United States has been known for exporting things like McDonald's and Coca-cola. The False Claims Act would be a fine and healthful addition to our export list.


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