False Claims Laws find their origin in 13th Century England, but America
first broadly implemented its version under Lincoln in 1863 in response to military contractors selling guns to union soldiers
in crates that ended up containing nothing but sawdust. Similar frauds were being perpetrated with ammunition, food
suppliers, etc. during the war and the Justice Department was operating with limited resources and too few prosecutors.
To address the problem Lincoln signed the False Claims Act which essentially made whistleblowers
who knew about fraud but hadn't participated in it bounty hunters for the federal government with a right to keep a percentage
of whatever they and their attorneys (private attorneys general) could recover. The law was later weakened in the latter
19th century by special interest groups ranging from the railroad to certain industrialists who did regular contracting with
the federal government.
However, the law was strengthened again during WWII when then
Senator Truman launched an investigation into military contractor fraud that exposed pervasive fraud that endangered soldiers'
lives and stole millions of dollars from taxpayers. Congress then acted to shore up certain loopholes and weaknesses
in the law.
By the 1980s news reports were rampant about $400 coffee makers, $300 screw
drivers and $700 toilet seats being paid for by the government. In response to those complaints and congressional investigations,
a bipartisan effort resulted in adding further strength to the false claims act while adding the extra measure of creating
whistleblower protections for those who report fraud against the government by their employer and then experience any detrimental
repercussions as a result of that reporting (essentially witness tampering, witness intimidation, and potentially subourning
of perjury where any such retaliatory measures are taken).
Beginning in 1987 states beginning
with California began implementing their own false claims acts. And, on February 8, 2006 President George W. Bush signed
into law the Deficit Reduction Act which contained provisions for financial incentives to be given to states enacting their
own false claims acts relating to Medicaid, provided those acts meet certain criteria, which must match the federal act.
Roughly 32 states now have some form of a false claims act, with approximately 26 states having a "qualifying" act
under the requirements of the deficit reduction act. Several of those states address fraud against more than just state
or just Medicaid budgets, but address fraud against any budget within the state.
FALSE CLAIMS ACT IN KANSAS
Robert Collins was asked to serve on Kansas' Judicial Council's
False Claims Act Advisory Committee and fought hard for a provision for whistleblowers that mirrored the protections for whistleblowers
under the federal act. Robert's efforts were outvoted by committee members seeking to protect defendants, special interests,
or what some believed was the maximum legislative members would ultimately endorse. Robert did, however, succeed in
at least securing some kind of whistleblower protections codified in the new statute, and would-be whistleblower
plaintiffs who may experience retaliation in Kansas need to know that there are at least some protections under the 2009 statute.
Yet more importantly to note is that, so long as you can identify and implicate fraud against federal dollars, you are entitled
to all of the broader whistleblower protections for employees under the federal act. For example, perhaps you
discover fraud against Medicaid or by a road contractor. If it's Medicaid, 60% of all Kansas Medicaid dollars are from
the federal government and therefore you are entitled to the employee protections of the federal false claims act. The
same is true with road contracting fraud where federal department of transportation funds are involved. Our advice to
any such employee/whistleblower who may face or may have faced retaliation is to look for the involvement of any
federal dollars in the fraud you're reporting in order to obtain the much broader protections under the federal act until
Kansas can implement better employee protections.
FEDERAL VS KANSAS
The Deficit Reduction Act of 2005 mandates new training of all employees of any employer who does more than $5 million
of Medicaid contracting with the federal government in any given year. This training must cover what types of frauds
employees are required to report, where to report, what each employee's rights are for filing a false claims case if reports
"fall on deaf ears", and what to do if the employee faces retaliation, discrimination, or harassment for having
reported misconduct under the False Claims Act.
Enactment of recent federal laws ensure extension
of the federal false claims act and each of its provisions to protecting funds from TARP and federal "bailout" dollars,
including FERA (federal economic recovery act) and other new economic stimulus bills. The false claims act also extends
and applies to any and all government grants, loans and government contracts.
protections under the federal anti-retaliation provisions allow for double your backpay plus interest, reasonable attorneys
fees and litigation costs, and reinstatement to your prior job and seniority status that you would have had "but for"
your exercising your rights and obligations under the false claims act, or in lieu of reinstatement, front pay.
Under the employee protections of the Kansas false claims act you are not entitled to doubled backpay
and interest, reasonable attorneys fees and litigation costs, etc. The language of the Kansas statute merely allows the injured
party such relief as to make him or her whole.
Accordingly, there remain greater protections
under the specifics of the federal statute if you are able to identify where federal funds were implicated in any frauds you
have reported. Further, only the federal statute currently allows Kansans to bring a private cause of action on behalf
of the government, and only when brought on behalf of the federal government. In these cases, known as qui
tam (shortened latin for "he who sues on behalf of the king as well as on his own behalf") actions, if you
have information regarding fraud to which you are privy, you are the first or "original source" of the information
you are bringing forward, and you are the first one with that information to file your case with the federal government, federal
statutes allow you a percentage of whatever your information and assistance helps the government recover. If you participated
materially in the fraud your right to recovery may be affected, but that will be determined by the specifics of your case
and by what kind of a role you played in its instigation versus simply being one who was merely following the orders of more
CITIZENS' RIGHT TO SUE TO PROTECT PUBLIC HEALTH & SAFETY OR PUBLIC BUDGETS
For frauds against Kansas budgets there is no right to bring an action on behalf of the government,
nor is there any right to any recovery of any state or local dollars you help to recover. However, If you have experienced
any retaliation for reporting waste, fraud or abuse regarding any state or local budget-down to the most local political
subdivision-you should know that you do, in fact, still at least possess employment and legal protections, even under current
Kansas law. Therefore, if you are not able meet the qualifications for protection under the federal act, you should
seek to identify any protections you may still have under the Kansas False Claims Act.
TO DO IF YOU DISCOVER THREATS TO PUBLIC HEALTH, SAFETY OR PUBLIC BUDGETS
If you feel
that you have information that may need to be reported, please don't do anything until you have consulted a qualified false
claims attorney who can advise you and protect your best interests, your employment rights, and the rights you may have to
a recovery of whatever funds your reporting brings about. False Claims law is one of the most complex fields of law
and any misstep can cost you greatly, even though the right outcome can generously reward you, as well as the public at large.
You should only proceed with competent legal representation, which is available from most false claims act attorneys on a
contingency fee basis.
And, as with all litigation, time limits on statutes of limitations
are always a serious concern if you are to protect your rights. Further, if you have a qui tam case under the
federal statute, you will be dealing with first-to-file issues where delays can bar any claims you may have to a recovery
just as with the proverbial race to the patent office, which can bar your claims for compensation if you are not the first
to arrive and file your paperwork. So time is always of the essence.
*Robert Collins has written a number of articles and papers on the subject of whistleblower and false claims laws.
He has also assisted with work in Minnesota and other states in the drafting and enactment of their local false claims acts.