False Claims Act Correction Act of 2008

Mr. President, for 27 years, I have come to the Senate floor to discuss legislation that will help the Government run efficiently and effectively. I have been an outspoken advocate for whistleblowers, which whistleblowers in good faith bring forth information about waste, fraud, and abuse of taxpayers' dollars. I have championed oversight efforts, and I have spent my time in the Senate asking the tough questions of Government bureaucrats in order to expose these problems, particularly problems that have been brought to my attention by patriotic whistleblowers.

One thing I learned from oversight is that no matter how engaged Congress may be, there are not enough hands to find all the waste, fraud, and abuse in Government programs. Instead, we have to rely then, as I have indicated, on those courageous and patriotic individuals who speak out and blow the whistle, to go to court to collect Government money that was lost to unscrupulous contractors who are selling false or fraudulent goods, in the case of 100 years ago, to Union troops because that is why the False Claims Act came about, and to make sure that we protect whistleblowers when a program is not working and taxpayers' dollars are being lost.

These whistleblowers, by sticking their necks out, are individuals often at risk. They risk everything to fix problems within our Government because they believe in doing their job the way it was intended to be done, and they probably do not get the attention of higher-ups in the bureaucracy. That is why they become whistleblowers and come to Congress to bring these faults out. Somehow they end up being as welcome in the bureaucracy as a skunk is at a picnic.

However, pointing out fraud is one thing; getting results, fixing the problem, and recouping taxpayers' money lost to fraud, waste, and abuse is quite another thing.

The key to recouping these lost funds is ensuring that we have effective laws on the books. One such law is the Federal False Claims Act. I have come to the floor today to remind people about the history of the False Claims Act, but also to suggest some improvements in that act so it can be an even more useful tool in the fight against waste, fraud, abuse, and the protection of whistleblowers.

I have referred to the False Claims Act. This is known as the Lincoln law because it has some history going back to the Civil War. The Lincoln law was originally passed by Congress to combat war profiteering by Government contractors during the Civil War. The False Claims Act allowed individual citizen whistleblowers to go to court to collect Government money that was lost to unscrupulous contractors who were selling false or fraudulent goods to Union troops.

This legal mechanism, known as qui tam, a Latin term, is the key component to the False Claims Act allowing individual citizens to act as private attorneys general to help stop fraud and recover lost money. However, following World War II, the False Claims Act was weakened by an act of Congress which lowered the penalties limiting the money the Government could recover from fraud. This remained the state and the language of the False Claims Act until 1986 when I authored amendments to the act which restored teeth and breathed new air and new life into a law that was designed to protect all American taxpayers.

I am happy to report that in the 20 years since I introduced and Congress passed the 1986 amendment, the Federal Government has used the False Claims Act to recover over $20 billion from those who defraud Government. That is $20 billion that would otherwise be lost and gone forever.

More importantly, this $20 billion serves as a deterrent reminder to those who wish to steal from the Government. We cannot measure the deterrent value of this legislation, but I personally feel, and I have had students of Government tell me, the deterrent value of the False Claims Act is much greater than even the $20 billion that we can quantify that has come back to the Federal Treasury.

Today, the False Claims Act faces a situation where it may not be as effective as intended. Recent decisions by Federal courts have limited the False Claims Act in a way that was not envisioned when I authored the 1986 amendments. These court decisions threaten to undermine both the spirit and intent of the 1986 amendments.

The first case, U.S. Totten v. Bombardier Corporation, held that false claims presented to Government grantees, in this case employees at Amtrak, were not actually presented to the Federal Government. As a result, the Government was precluded from recovering money lost to fraud and abuse perpetuated against Amtrak.

The second case, Rockwell International Corporation, et al, v. U.S.,

was decided earlier this year by the U.S. Supreme Court. In this case, the Court interpreted an area of the False Claims Act, known as the public disclosure bar, which prohibits a false claims case from moving forward if the case is based upon publicly disclosed information, such as a government report, unless the whistleblower filing the case was the ``original source'' of the information.

Now here, the Supreme Court held that a qui tam whistleblower was barred from receiving a share of any money recovered unless that whistleblower was the original source of all claims ultimately settled. Now, I say to my colleagues that this may not sound like a very troublesome decision. However, it is, and the impact is that oftentimes a case is brought by a whistleblower on a certain set of facts and then expanded by the Department of Justice, which ultimately settles on other grounds. As a result, this case creates a disincentive for a whistleblower to bring forth information about fraud, as they may not get to share in any part of the recovery.

You see, one of the incentives for the whistleblowers is if they bring a case that brings back money into the Federal Treasury, they get part of that settlement as an incentive to do this. Quite frankly, a whistleblower sticks their neck out. By doing the right thing, they are probably ruining themselves professionally. Let us say that they get part of the recovery. Well, the Federal Government gets billions of dollars that we would not have even gotten if we had not had the information from the whistleblower. That is why the whistleblower is very important.

Now, there is another case that gives us problems. This third case that challenges the intent of the False Claims Act is United States DRC v. Custer Battles, decided a year ago. In that case, a jury found that a defense contractor in Iraq had defrauded the Government of $10 million. However, the judge overturned the jury verdict, finding that the money lost was not U.S. taxpayer money but was instead Iraqi money under the control of the U.S. Government. As a result of this case, the U.S. Government may not recover for any fraud committed against the U.S. Government if the funds are not American funds, even if the U.S. Government has been entrusted with the management of those funds.

These decisions, I can tell you as author of this legislation, are contrary to the spirit and the intent of the 1986 amendments. Today, I am joined by Senator Durbin as the lead cosponsor, along with Senator Leahy and Senator Specter--and in those two individuals I will say that Senator Leahy is chairman of the Judiciary Committee which has jurisdiction, and Senator Specter is the former chairman of the committee and now the Ranking Republican--so I feel by having Senator Durbin, Senator Leahy, and Senator Specter as cosponsors of this False Claims Act Correction Act, as powers within the Senate to bring attention to what the courts have done, this injustice to the False Claims Act and gutting of the False Claims Act, this act will bring it back to its original intent.

This legislation will correct judicial interpretations damaging the False Claims Act. This bill is narrowly tailored to ensure that the intent of Congress in the 1986 amendments is upheld and nothing more. The False Claims Act Correction Act will correct these three judicial interpretations in addition to also making technical and correcting amendments.

First, the bill will address the Totten decision by removing the requirement that false claims be directly presented to a government official, instead tying the liability directly to Government money and property.

Next, the bill will address the Rockwell decision by requiring the Attorney General to file a timely motion to dismiss claims that violate the public disclosure bar. By allowing the Attorney General to present to the court information about public disclosures upfront in a case, the bill would eliminate procedural uncertainties that exist now by allowing public disclosures to be addressed at any time in the case.

The False Claims Act Correction Act also clarifies that nontaxpayer funds under the trust and administration of the U.S. Government subject to fraud are actionable under the False Claims Act. Thus, money directly under the control of the U.S. Government subject to fraud that are currently outside the scope of the False Claims Act would now be covered. This will correct the problems that have arisen following the decision in the Custer Battles case.

Additionally, the bill clarifies a split between the Federal Circuit Courts of Appeal that currently exists regarding whether a government employee may file a False Claims Act case. More specifically, the bill provides that a government employee would be able to bring a False Claims Act case based upon information learned in the course of their employment, only when the employee: No. 1, discloses the fraud to their supervisors; No. 2, discloses the fraud to the inspector general of that agency; and, No. 3, discloses the fraud to the Attorney General and then waits 12 months without the Government acting. After these conditions are met, then, and only then, may a government employee act as a qui tam whistleblower.

Finally, the bill makes two technical corrections to the False Claims Act. The first is a technical-correcting amendment that clarifies the statute of limitations. The second is a technical amendment to the civil investigative demands that the Department of Justice is already authorized to issue. These technical corrections will streamline the procedures for filing as well as prosecuting False Claims Act cases by both qui tam whistleblowers as well as cases instituted originally by the Department of Justice.

The False Claims Act Correction Act is a narrowly tailored bill that seeks to ensure the legislative intent of the 1986 amendments is truly understood. This is not a Democratic or Republican issue. It is an American taxpayer issue. I am proud to say this bill has strong bipartisan support, as I am joined by Senator Durbin as the lead Democratic cosponsor, and I wish to emphasize Senator Leahy's and Senator Specter's cosponsorship of this legislation.

I am glad we have a bipartisan coalition ready to work to fix the False Claims Act with these narrowly tailored corrections, but I encourage my colleagues not to bow to special interest groups who have worked to weaken the No. 1 tool for recovering Government dollars lost to fraud.

I will say at this point that yesterday I had a private discussion with a Senator who will go unnamed. He said, even as corrective as this legislation is, and it is only meant to be correcting, that already we have the pharmaceutical companies out working against this legislation. So this may not be easy to get through, even though it is sticking with the original intent. So I don't want to get into a situation such as I did in 1986, when we wrote a bill that was bipartisan, and it took about a year to get the various holds off that were put on this. In those days, we had secret holds. Under the new rules of the Senate, we are not supposed to have any secret holds anymore.

So if people have complaints about this legislation, I wish to work it out, but I don't know how anybody can hold up legislation where the underlying legislation has brought $20 billion that would have otherwise been lost to fraud back to the Federal Treasury. The American taxpayers deserve a law that detects, prevents, and recovers money lost to fraud. The False Claims Act works and has recovered this $20 billion, and that law is 20 years old. But let me say this money didn't start rolling in until about 6 or 7 years after that 1986 law was passed.

The False Claims Act Correction Act will provide necessary and narrowly tailored corrections to ensure that the False Claims Act works to protect the taxpayers into the future, as I visualized it would in 1986 in spirit as well as in letter. I urge my colleagues to support this important legislation.

I have had the pleasure of having the Presiding Officer ask to be a cosponsor of the bill, so I ask unanimous consent that Senator Whitehouse be added as a cosponsor at this point.

Mr. President, for 27 years, I have come to the Senate floor to discuss legislation that will help the Government run efficiently and effectively. I have been an outspoken advocate for whistleblowers, which whistleblowers in good faith bring forth information about waste, fraud, and abuse of taxpayers' dollars. I have championed oversight efforts, and I have spent my time in the Senate asking the tough questions of Government bureaucrats in order to expose these problems, particularly problems that have been brought to my attention by patriotic whistleblowers.

One thing I learned from oversight is that no matter how engaged Congress may be, there are not enough hands to find all the waste, fraud, and abuse in Government programs. Instead, we have to rely then, as I have indicated, on those courageous and patriotic individuals who speak out and blow the whistle, to go to court to collect Government money that was lost to unscrupulous contractors who are selling false or fraudulent goods, in the case of 100 years ago, to Union troops because that is why the False Claims Act came about, and to make sure that we protect whistleblowers when a program is not working and taxpayers' dollars are being lost.

These whistleblowers, by sticking their necks out, are individuals often at risk. They risk everything to fix problems within our Government because they believe in doing their job the way it was intended to be done, and they probably do not get the attention of higher-ups in the bureaucracy. That is why they become whistleblowers and come to Congress to bring these faults out. Somehow they end up being as welcome in the bureaucracy as a skunk is at a picnic.

However, pointing out fraud is one thing; getting results, fixing the problem, and recouping taxpayers' money lost to fraud, waste, and abuse is quite another thing.

The key to recouping these lost funds is ensuring that we have effective laws on the books. One such law is the Federal False Claims Act. I have come to the floor today to remind people about the history of the False Claims Act, but also to suggest some improvements in that act so it can be an even more useful tool in the fight against waste, fraud, abuse, and the protection of whistleblowers.

I have referred to the False Claims Act. This is known as the Lincoln law because it has some history going back to the Civil War. The Lincoln law was originally passed by Congress to combat war profiteering by Government contractors during the Civil War. The False Claims Act allowed individual citizen whistleblowers to go to court to collect Government money that was lost to unscrupulous contractors who were selling false or fraudulent goods to Union troops.

This legal mechanism, known as qui tam, a Latin term, is the key component to the False Claims Act allowing individual citizens to act as private attorneys general to help stop fraud and recover lost money. However, following World War II, the False Claims Act was weakened by an act of Congress which lowered the penalties limiting the money the Government could recover from fraud. This remained the state and the language of the False Claims Act until 1986 when I authored amendments to the act which restored teeth and breathed new air and new life into a law that was designed to protect all American taxpayers.

I am happy to report that in the 20 years since I introduced and Congress passed the 1986 amendment, the Federal Government has used the False Claims Act to recover over $20 billion from those who defraud Government. That is $20 billion that would otherwise be lost and gone forever.

More importantly, this $20 billion serves as a deterrent reminder to those who wish to steal from the Government. We cannot measure the deterrent value of this legislation, but I personally feel, and I have had students of Government tell me, the deterrent value of the False Claims Act is much greater than even the $20 billion that we can quantify that has come back to the Federal Treasury.

Today, the False Claims Act faces a situation where it may not be as effective as intended. Recent decisions by Federal courts have limited the False Claims Act in a way that was not envisioned when I authored the 1986 amendments. These court decisions threaten to undermine both the spirit and intent of the 1986 amendments.

The first case, U.S. Totten v. Bombardier Corporation, held that false claims presented to Government grantees, in this case employees at Amtrak, were not actually presented to the Federal Government. As a result, the Government was precluded from recovering money lost to fraud and abuse perpetuated against Amtrak.

The second case, Rockwell International Corporation, et al, v. U.S.,

was decided earlier this year by the U.S. Supreme Court. In this case, the Court interpreted an area of the False Claims Act, known as the public disclosure bar, which prohibits a false claims case from moving forward if the case is based upon publicly disclosed information, such as a government report, unless the whistleblower filing the case was the ``original source'' of the information.

Now here, the Supreme Court held that a qui tam whistleblower was barred from receiving a share of any money recovered unless that whistleblower was the original source of all claims ultimately settled. Now, I say to my colleagues that this may not sound like a very troublesome decision. However, it is, and the impact is that oftentimes a case is brought by a whistleblower on a certain set of facts and then expanded by the Department of Justice, which ultimately settles on other grounds. As a result, this case creates a disincentive for a whistleblower to bring forth information about fraud, as they may not get to share in any part of the recovery.

You see, one of the incentives for the whistleblowers is if they bring a case that brings back money into the Federal Treasury, they get part of that settlement as an incentive to do this. Quite frankly, a whistleblower sticks their neck out. By doing the right thing, they are probably ruining themselves professionally. Let us say that they get part of the recovery. Well, the Federal Government gets billions of dollars that we would not have even gotten if we had not had the information from the whistleblower. That is why the whistleblower is very important.

Now, there is another case that gives us problems. This third case that challenges the intent of the False Claims Act is United States DRC v. Custer Battles, decided a year ago. In that case, a jury found that a defense contractor in Iraq had defrauded the Government of $10 million. However, the judge overturned the jury verdict, finding that the money lost was not U.S. taxpayer money but was instead Iraqi money under the control of the U.S. Government. As a result of this case, the U.S. Government may not recover for any fraud committed against the U.S. Government if the funds are not American funds, even if the U.S. Government has been entrusted with the management of those funds.

These decisions, I can tell you as author of this legislation, are contrary to the spirit and the intent of the 1986 amendments. Today, I am joined by Senator Durbin as the lead cosponsor, along with Senator Leahy and Senator Specter--and in those two individuals I will say that Senator Leahy is chairman of the Judiciary Committee which has jurisdiction, and Senator Specter is the former chairman of the committee and now the Ranking Republican--so I feel by having Senator Durbin, Senator Leahy, and Senator Specter as cosponsors of this False Claims Act Correction Act, as powers within the Senate to bring attention to what the courts have done, this injustice to the False Claims Act and gutting of the False Claims Act, this act will bring it back to its original intent.

This legislation will correct judicial interpretations damaging the False Claims Act. This bill is narrowly tailored to ensure that the intent of Congress in the 1986 amendments is upheld and nothing more. The False Claims Act Correction Act will correct these three judicial interpretations in addition to also making technical and correcting amendments.

First, the bill will address the Totten decision by removing the requirement that false claims be directly presented to a government official, instead tying the liability directly to Government money and property.

Next, the bill will address the Rockwell decision by requiring the Attorney General to file a timely motion to dismiss claims that violate the public disclosure bar. By allowing the Attorney General to present to the court information about public disclosures upfront in a case, the bill would eliminate procedural uncertainties that exist now by allowing public disclosures to be addressed at any time in the case.

The False Claims Act Correction Act also clarifies that nontaxpayer funds under the trust and administration of the U.S. Government subject to fraud are actionable under the False Claims Act. Thus, money directly under the control of the U.S. Government subject to fraud that are currently outside the scope of the False Claims Act would now be covered. This will correct the problems that have arisen following the decision in the Custer Battles case.

Additionally, the bill clarifies a split between the Federal Circuit Courts of Appeal that currently exists regarding whether a government employee may file a False Claims Act case. More specifically, the bill provides that a government employee would be able to bring a False Claims Act case based upon information learned in the course of their employment, only when the employee: No. 1, discloses the fraud to their supervisors; No. 2, discloses the fraud to the inspector general of that agency; and, No. 3, discloses the fraud to the Attorney General and then waits 12 months without the Government acting. After these conditions are met, then, and only then, may a government employee act as a qui tam whistleblower.

Finally, the bill makes two technical corrections to the False Claims Act. The first is a technical-correcting amendment that clarifies the statute of limitations. The second is a technical amendment to the civil investigative demands that the Department of Justice is already authorized to issue. These technical corrections will streamline the procedures for filing as well as prosecuting False Claims Act cases by both qui tam whistleblowers as well as cases instituted originally by the Department of Justice.

The False Claims Act Correction Act is a narrowly tailored bill that seeks to ensure the legislative intent of the 1986 amendments is truly understood. This is not a Democratic or Republican issue. It is an American taxpayer issue. I am proud to say this bill has strong bipartisan support, as I am joined by Senator Durbin as the lead Democratic cosponsor, and I wish to emphasize Senator Leahy's and Senator Specter's cosponsorship of this legislation.

I am glad we have a bipartisan coalition ready to work to fix the False Claims Act with these narrowly tailored corrections, but I encourage my colleagues not to bow to special interest groups who have worked to weaken the No. 1 tool for recovering Government dollars lost to fraud.

I will say at this point that yesterday I had a private discussion with a Senator who will go unnamed. He said, even as corrective as this legislation is, and it is only meant to be correcting, that already we have the pharmaceutical companies out working against this legislation. So this may not be easy to get through, even though it is sticking with the original intent. So I don't want to get into a situation such as I did in 1986, when we wrote a bill that was bipartisan, and it took about a year to get the various holds off that were put on this. In those days, we had secret holds. Under the new rules of the Senate, we are not supposed to have any secret holds anymore.

So if people have complaints about this legislation, I wish to work it out, but I don't know how anybody can hold up legislation where the underlying legislation has brought $20 billion that would have otherwise been lost to fraud back to the Federal Treasury. The American taxpayers deserve a law that detects, prevents, and recovers money lost to fraud. The False Claims Act works and has recovered this $20 billion, and that law is 20 years old. But let me say this money didn't start rolling in until about 6 or 7 years after that 1986 law was passed.

The False Claims Act Correction Act will provide necessary and narrowly tailored corrections to ensure that the False Claims Act works to protect the taxpayers into the future, as I visualized it would in 1986 in spirit as well as in letter. I urge my colleagues to support this important legislation.

I have had the pleasure of having the Presiding Officer ask to be a cosponsor of the bill, so I ask unanimous consent that Senator Whitehouse be added as a cosponsor at this point.

Mr. President, I am pleased to join my colleague Senator Grassley in introducing the False Claims Act Correction Act of 2007. This bipartisan legislation takes important steps to modernize and strengthen the Federal False Claims Act and will help protect the Government and taxpayers from waste, fraud, and abuse of Government funds.

During the Civil War, President Abraham Lincoln saw the need for a law that would prevent war profiteers and other unscrupulous Government contractors from defrauding the Government and the Nation's taxpayers. Lincoln urged the passage of legislation that would allow the Government to seek damages and penalties against perpetrators of fraud, and that would permit whistleblowers with information about false or fraudulent claims to file qui tam lawsuits on the Government's behalf in exchange for a share of the recovered funds. In 1863, Congress heeded Lincoln's call and enacted the Federal False Claims Act, FCA, which became known as ``Lincoln's Law.''

Lincoln's Law is still in effect today and it is still much-needed. In recent years, there have been alarming reports of waste, fraud, and abuse of Government funds in the Iraq war and reconstruction effort, in the recovery from Hurricane Katrina and other disasters, in military and homeland security procurement contracts, and in Federal healthcare programs. We need strong laws that can expose and root out such fraudulent practices.

The last major update of the FCA took place in 1986, when Senator Grassley and Congressman Berman sponsored amendments that revitalized the FCA and its qui tam provisions in response to widespread reports of defense contractor fraud. Since 1986, the Federal Government and qui tam relators have worked together to recover over $20 billion in moneys that would otherwise have been lost to fraud, waste or abuse in Government programs. The recovery of this enormous sum is a victory for taxpayers, and a demonstration of the success of the FCA and its qui tam model.

It has now been 21 years since the enactment of the 1986 FCA amendments, and during that time changes in the interpretation of the act and in the nature of Government contracting have threatened to limit the FCA's effectiveness. In particular, several recent court decisions have weakened the intent and application of Senator Grassley's 1986 amendments to the FCA and have limited the FCA's ability to reach certain types of fraud and abuse involving Government programs.

The False Claims Act Correction Act seeks to correct these court decisions and to ensure the FCA's utility as an effective tool against fraud. It does so in several ways.

First, the False Claims Act Correction Act clarifies the ``presentment requirement'' in the FCA. In 2004, the DC Circuit Court of Appeals held that liability under the FCA can only be found if the allegedly fraudulent claim is ``presented to an officer or employee of the United States Government.'' This interpretation has been used by courts to dismiss a number of FCA cases where abuses of Federal Government funds were clearly evident but where the false claims were submitted to grantees or agents of the Federal Government--such as the Iraq Coalition Provisional Authority--and not directly to Government employees. Our legislation would make clear that FCA imposes liability if a person presents a false or fraudulent claim for Federal Government money or property, and that the claim need not be directly presented to a Government employee.

Our legislation also clarifies the applicability of the FCA's ``public disclosure bar.'' The FCA currently allows a relator's FCA case to be dismissed if the case is based on information that was publicly available at the time of the filing, unless the relator was the ``original source'' of the public information. In its 2007 decision in Rockwell Int'l Corp. et al. v. United States, the Supreme Court held that the public disclosure bar prevents a relator from recovering money unless the relator was an original source for all the

claims that are settled or upon which a verdict is rendered. The Rockwell holding is troubling because relators often file actions based on facts which prove to be the tip of the iceberg, and upon further investigation DOJ discovers more fraud and ends up settling or winning the case on the grounds of the latter fraud.

The Rockwell court's interpretation of the public disclosure bar might discourage whistleblowers from filing legitimate FCA cases and alerting DOJ to fraud. Our legislation would preclude a relator from recovery under the public disclosure bar only where the relator derived knowledge of all essential elements of the claim from public disclosure. Thus, only relators who truly contributed no new information to the case would be barred.

Among its other provisions, the False Claims Act Correction Act resolves a split among the Federal circuit courts by allowing a Government employee to act as a qui tam relator when the employee learns of fraudulent conduct on the job, provided that the employee has first taken steps to report the fraud internally. Our legislation also strengthens the protections in the FCA for whistleblowers, so that whistleblowers who are Government contractors and agents can receive the same antiretaliation protection as employees of the company perpetrating the alleged fraud. Our bill further simplifies the FCA statute of limitations with a clear 10-year standard for all cases, and also makes technical changes to enhance DOJ's usage of the civil investigative demand process in DOJ investigations of potential FCA violations.

The changes that our legislation would make to the FCA are narrowly tailored, and are designed to clarify the FCA's scope in keeping with the intent of the authors of the 1986 FCA amendments. I commend Senator Grassley, the Senate architect of the 1986 FCA amendments, for his devotion to ensuring the effective functioning of the FCA, and I am proud to join him in introducing this legislation to better combat waste, fraud, and abuse of Government programs.

In sum, the False Claims Act Correction Act will enhance whistleblowers' ability to shine a light on fraudulent conduct involving Government funds, and to hold the perpetrators accountable through legitimate qui tam claims. The bill's reforms will ensure that the FCA can continue to serve as a viable tool for recovering taxpayer funds lost to fraud, waste or abuse. The legislation we are introducing today will strengthen the legacy of Lincoln's Law, and I am pleased to serve as its lead cosponsor. I urge my colleagues to support its passage.

Mr. President, I am pleased to join my colleague Senator Grassley in introducing the False Claims Act Correction Act of 2007. This bipartisan legislation takes important steps to modernize and strengthen the Federal False Claims Act and will help protect the Government and taxpayers from waste, fraud, and abuse of Government funds.

During the Civil War, President Abraham Lincoln saw the need for a law that would prevent war profiteers and other unscrupulous Government contractors from defrauding the Government and the Nation's taxpayers. Lincoln urged the passage of legislation that would allow the Government to seek damages and penalties against perpetrators of fraud, and that would permit whistleblowers with information about false or fraudulent claims to file qui tam lawsuits on the Government's behalf in exchange for a share of the recovered funds. In 1863, Congress heeded Lincoln's call and enacted the Federal False Claims Act, FCA, which became known as ``Lincoln's Law.''

Lincoln's Law is still in effect today and it is still much-needed. In recent years, there have been alarming reports of waste, fraud, and abuse of Government funds in the Iraq war and reconstruction effort, in the recovery from Hurricane Katrina and other disasters, in military and homeland security procurement contracts, and in Federal healthcare programs. We need strong laws that can expose and root out such fraudulent practices.

The last major update of the FCA took place in 1986, when Senator Grassley and Congressman Berman sponsored amendments that revitalized the FCA and its qui tam provisions in response to widespread reports of defense contractor fraud. Since 1986, the Federal Government and qui tam relators have worked together to recover over $20 billion in moneys that would otherwise have been lost to fraud, waste or abuse in Government programs. The recovery of this enormous sum is a victory for taxpayers, and a demonstration of the success of the FCA and its qui tam model.

It has now been 21 years since the enactment of the 1986 FCA amendments, and during that time changes in the interpretation of the act and in the nature of Government contracting have threatened to limit the FCA's effectiveness. In particular, several recent court decisions have weakened the intent and application of Senator Grassley's 1986 amendments to the FCA and have limited the FCA's ability to reach certain types of fraud and abuse involving Government programs.

The False Claims Act Correction Act seeks to correct these court decisions and to ensure the FCA's utility as an effective tool against fraud. It does so in several ways.

First, the False Claims Act Correction Act clarifies the ``presentment requirement'' in the FCA. In 2004, the DC Circuit Court of Appeals held that liability under the FCA can only be found if the allegedly fraudulent claim is ``presented to an officer or employee of the United States Government.'' This interpretation has been used by courts to dismiss a number of FCA cases where abuses of Federal Government funds were clearly evident but where the false claims were submitted to grantees or agents of the Federal Government--such as the Iraq Coalition Provisional Authority--and not directly to Government employees. Our legislation would make clear that FCA imposes liability if a person presents a false or fraudulent claim for Federal Government money or property, and that the claim need not be directly presented to a Government employee.

Our legislation also clarifies the applicability of the FCA's ``public disclosure bar.'' The FCA currently allows a relator's FCA case to be dismissed if the case is based on information that was publicly available at the time of the filing, unless the relator was the ``original source'' of the public information. In its 2007 decision in Rockwell Int'l Corp. et al. v. United States, the Supreme Court held that the public disclosure bar prevents a relator from recovering money unless the relator was an original source for all the

claims that are settled or upon which a verdict is rendered. The Rockwell holding is troubling because relators often file actions based on facts which prove to be the tip of the iceberg, and upon further investigation DOJ discovers more fraud and ends up settling or winning the case on the grounds of the latter fraud.

The Rockwell court's interpretation of the public disclosure bar might discourage whistleblowers from filing legitimate FCA cases and alerting DOJ to fraud. Our legislation would preclude a relator from recovery under the public disclosure bar only where the relator derived knowledge of all essential elements of the claim from public disclosure. Thus, only relators who truly contributed no new information to the case would be barred.

Among its other provisions, the False Claims Act Correction Act resolves a split among the Federal circuit courts by allowing a Government employee to act as a qui tam relator when the employee learns of fraudulent conduct on the job, provided that the employee has first taken steps to report the fraud internally. Our legislation also strengthens the protections in the FCA for whistleblowers, so that whistleblowers who are Government contractors and agents can receive the same antiretaliation protection as employees of the company perpetrating the alleged fraud. Our bill further simplifies the FCA statute of limitations with a clear 10-year standard for all cases, and also makes technical changes to enhance DOJ's usage of the civil investigative demand process in DOJ investigations of potential FCA violations.

The changes that our legislation would make to the FCA are narrowly tailored, and are designed to clarify the FCA's scope in keeping with the intent of the authors of the 1986 FCA amendments. I commend Senator Grassley, the Senate architect of the 1986 FCA amendments, for his devotion to ensuring the effective functioning of the FCA, and I am proud to join him in introducing this legislation to better combat waste, fraud, and abuse of Government programs.

In sum, the False Claims Act Correction Act will enhance whistleblowers' ability to shine a light on fraudulent conduct involving Government funds, and to hold the perpetrators accountable through legitimate qui tam claims. The bill's reforms will ensure that the FCA can continue to serve as a viable tool for recovering taxpayer funds lost to fraud, waste or abuse. The legislation we are introducing today will strengthen the legacy of Lincoln's Law, and I am pleased to serve as its lead cosponsor. I urge my colleagues to support its passage.

Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, February 27, 2008, at 9:30 a.m., in open session, and possibly closed session, to receive testimony on the current and future worldwide threats to the national security of the United States.

Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on Wednesday, February 27, 2008, at 2:30 p.m., in room 253 of the Russell

Senate Office Building, in order to conduct a hearing.

The hearing will focus on the National Aeronautics and Space Administration's fiscal year 2009 budget proposal.

Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate in order to conduct a hearing on Wednesday, February 27, 2008, at 9:45 a.m., in room SD366 of the Dirksen Senate Office Building. At this hearing, the Committee will hear testimony to consider two nominations: Stanley C. Suboleski, of Virginia, to be an Assistant Secretary of Energy (Fossil Energy), vice Jeffrey D. Jarrett, resigned; and, J. Gregory Copeland, of Texas, to be General Counsel of the Department of Energy, vice David R. Hill.

Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on Wednesday, February 27, 2008 at 10:00 a.m. in room 406 of the Dirksen Senate Office Building in order to conduct a hearing entitled, ``Hearing on the President's Proposed EPA Budget for

Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet in executive session during the session of the Senate on Wednesday, February 27, 2008 at 10 a.m. in SD-430.

Agenda

S. 579, Breast Cancer and Environmental Research Act of 2007; S. 1810, Prenatally and Postnatally Diagnosed Conditions Awareness Act; S. 999, Stroke Treatment and Ongoing Prevention Act of 2007; S. 1760, Healthy Start Reauthorization Act of 2007; H.R. 20, Melanie Blocker- Stokes Postpartum Depression Research and Care Act; and S. 1042, Consistency, Accuracy, Responsibility, and Excellence in Medical Imaging and Radiation Therapy Act of 2007.

National Board for Education Sciences: Jonathan Baron, Frank Handy, Sally Shaywitz.

National Foundation on the Arts and Humanities: Jamsheed Choksy, Gary Glenn, David Hertz, Marvin Scott, Carol Swain.

National Museum and Library Science Board: Julia Bland, Jan Cellucci, William Hagenah, Mark Herring,

Truman Scholarship Foundation: Javaid Anwar, and Assistant Secretary of Labor ODEP: Neil Romano.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on Wednesday, February 27, 2008, at 10 a.m. in order to conduct a hearing entitled ``An Uneasy Relationship: U.S. Reliance on Private Security Firms in Overseas Operations.''

Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet during the session of the Senate on Wednesday, February 27, at 9:30 a.m. in room 485 of the Russell Senate Office Building in order to conduct a hearing on S. 2232, the Foreign Aid Lessons for Domestic Economic Assistance Act of 2007.

Mr. President, I ask unanimous consent that the Senate Committee on the Judiciary be authorized to meet during the session of the Senate, in order to conduct a hearing entitled ``The False Claims Act Correction Act (S. 2041): Strengthening the Government's Most Effective Tool Against Fraud for the 21st Century'' on Wednesday, February 27, 2008 at 10 a.m. in room SD-226 of the Dirksen Senate Office Building.

Witness List

Michael F. Hertz, Deputy Assistant Attorney General, Civil Division, U.S. Department of Justice, Washington, DC.

Panel II: Tina M. Gonter, Jacksonville, FL; The Honorable John E. Clark, Of Counsel, Goode, Casseb, Jones, Riklin, Choate & Watson, P.C., San Antonio, TX; John T. Boese, Partner, Fried, Frank, Harris, Shriver & Jacobson LLP, Washington, DC; and Pamela H. Bucy, Bainbridge Professor of Law, University of Alabama School of Law, Tuscaloosa, AL.

Mr. President, I ask unanimous consent that the Committee on Rules and Administration be authorized to meet during the session of the Senate on Wednesday, February 27, 2008, at 10:00 a.m., in order to hear testimony on Protecting Voters at Home and at the Polls: Limiting Abusive Robocalls and Vote Caging Practices.

Mr. President, I ask unanimous consent that the Committee on Small Business and Entrepreneurship be authorized to meet during the session of the Senate in order to conduct a hearing entitled ``The President's FY2009 Budget Request for the Small Business Administration on Wednesday, February 27, 2008, beginning at 10:00 a.m., in room 428A of the Russell Senate Office Building.

Mr. President, I ask unanimous consent for the Committee on Veterans' Affairs to be authorized to meet during the session of the Senate on Wednesday, February 27, 2008, in order to conduct an oversight hearing entitled ``Review of Veterans' Disability Compensation: Expert Reports on PTSD and other issues.'' The Committee will meet in room 216 of the Hart Senate Office Building, at 9:30 a.m.

Mr. President, I ask unanimous consent that the Personnel Subcommittee of the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, February 27, 2008, at 3:00 p.m., in open session to receive testimony on active component, reserve component, and civilian personnel programs in review of the defense authorization request for Fiscal Year 2009 and the Future Years Defense Program.