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Why do you think all the most business-friendly states have state False Claims Acts?

Over the past few years I have noticed that certain questions and objections sometimes arise when a state considers a state False Claims Act.  Today’s post deals with the single most common objection and/or question. 

As an aside, I have also noticed that when legislators beginning asking the questions addressed in this blog, the end result is almost always that the legislation fails.  I have my theories about that, and I would appreciate the input of any of my readers….  

The single most common objection is as follows:  “A state false claims act will drive away business, and we want to improve our image as a business friendly state.”    

This is easily shown to be false.  The truth is that Virginia is always near the top of every pro-business ranking you can find, and we were one of the first states to have a false claims act.  Just a few examples are the following rankings:

  • The U.S. Chamber of Commerce ranks Virginia the most business-friendly state in the Union;
  • The state rankings done by Forbes show that Virginia is “clearly the No. 1 place to do business.”  Virginia was also the only state to score in the top ten in all six categories Forbes measured;
  • ranked Virginia the most business-friendly in 2007 and 2009, and as number two in 2008 and 2010. 
  • Commercial real estate giant Pollina, Inc. ranked Virginia number one in 2010, and in the top three in most of the other years.

I could go on and on, but the bottom line here is that if a state False Claims Act drove away business or put legitimate businesses out of business, the Virginia Fraud Against Taxpayers Act wouldn’t have lasted eight years, and it certainly wouldn’t have been amended in 2011.  

In fact, it seems that of the traditionally business-friendly states, most of the top ten have False Claims Acts.  That fact would tend to encourage states to pass this legislation would it not? 

Moreover, in Virginia, I have never, ever had this question from a legislator.  Not once.  In fact, when I discuss the battles being fought in other states over state FCA legislation, Virginia’s leading legislators (people like Del. Greg Habeeb (R-Salem), state Sen. Chap Petersen (D-Fairfax), and state Sen. Jill Vogel (R-Winchester) are all in agreement–“How could anyone be against a state false claims act?”  

So here is my own interpretation of what it means when a state legislator asks that question.  Because that question or objection obviously comes from anti-FCA lobbyists, it seems to me that such questions really mean that lobbyists have an enormous amount of power in that particular state’s legislative process.         

So any state legislator who gets this pitch from a Chamber of Commerce lobbyist, for example, should merely ask why most of the states in the Chamber’s pro-business rankings vigorously prosecutes FCA cases….