In 1986, with the budgetary strains caused by the cold-war, and with fraudsters draining the U.S. Treasury with impunity, Congress acted by revitalizing the False Claims Act.
Today, Congress once again strengthened the False Claims Act, and brought that Act into the twenty-first century with passage of the Fraud Enforcement & Recovery Act of 2009. Passage of the Act was a beautiful example of bipartisan cooperation and civility, I should add!
The Fraud Enforcement and Recovery Act of 2009 is rumored to be on its way to President Obama, who has promised to quickly sign this bipartisan legislation. In a nutshell, the Fraud Enforcement and Recovery Act of 2009 removes many of the judicially created limitations and qualifications to the False Claims Act.
This much-needed legislation will modernize the Act, allowing the False Claims Act to reach modern-day fraud schemes. It will also remove many of the impediments to the Government’s investigative powers, strengthen anti-retaliation protections, and clarify many of the procedural questions that have derailed qui tam actions in recent years.
This is a giant first step forward for our country’s fraud-fighting efforts. The bipartisan support for this legislation demonstrates, once again, that when it comes to fighting fraud, politics takes a back seat to doing the right thing. Now that Congress has plugged the False Claims Act liability loopholes, we look forward to Congress addressing the rest of the problems identified in the False Claims Act Corrections Act of 2009.
No question about it, this is an historic day–more precisely, tomorrow will be the historic day, if the President signs the Act into law tomorrow. As I point out in my Practice Commentary on the False Claims Act (LexisNexis, 2009) changes to the Federal False Claims Act always accompany major changes in American society, and tomorrow is no different.