History of the False Claims Act & Whistleblower Protections

Posted on February 11, 2021

The first whistleblowers in America — under the False Claims Act — helped expose army suppliers who were selling sick horses as though they were healthy and sawdust as though it was gunpowder to the Union Army during the Civil War.

Congress created the False Claims Act in 1863, concerned that the Union Army was being defrauded by suppliers of goods. At this time, the False Claims Act gave individuals an incentive to report fraud, and held wrongdoers “who knowingly submitted false claims to the government” liable for double the government’s damages and a $2,000 penalty, according to the Department of Justice

The False Claims Act also specified “qui tam” (or whistleblower) provisions. These allowed individuals to file suit for violations on behalf of the government. An individual who does so is often referred to as a “relator.”

Today, the False Claims Act still exists to protect the government from fraud, and further protect individuals who report said fraud. 

Since 1863, the False Claims Act has been amended several times. Here’s a look at the history of whistleblower protections in America and why they remain so important today.

Protections Were Reduced in 1943

In 1943, Congress curtailed the qui tam provisions in the False Claims Act. The 1943 amendment prevented qui tam suits — or, suits filed by individuals on behalf of the government — that were based on information already within the government’s possession. At this time, the share of a successful suit that the individual, or relator, received was reduced from 50% to 25%. 

The amendment also required relators to provide the government with the evidence upon which their suit was based, and allow them 60 days to intervene. 

Protections Were Reinvigorated in 1986

Over 40 years after the qui tam provisions were reduced, the False Claims Act was again amended. This time, the amendments reinvigorated qui tam procedures after Congress received alarming reports of fraud, again coming from suppliers to the military. These reports included astronomical charges to the Navy, such as $400 for hammers, $7,000 for coffee pots, $660 for ashtrays, and $640 toilet seats.

The 1986 amendments increased incentives for whistleblowers to come forward with fraud allegations from not receiving more than 25% of recovery to not receiving more than 30% of the recovery, as well as increased damages and penalties for the wrongdoers committing fraud. These amendments also put protections in place for retaliation against whistleblowers.

Since these changes were enacted in 1986, the Justice Department has recovered more than $62 billion under the act as of 2019. 

Protections Were Expanded Even More in 2009

The False Claims Act was further expanded when the Fraud Enforcement and Recovery Act was passed in 2009. These new amendments reinforced the 1986 amendments, and further increased the scope of liability of potential wrongdoers.

The federal government’s ability to investigate and prosecute fraud was also strengthened in the 2009 amendments, as well as its ability to recover taxpayer dollars lost to fraud.

Contact an Experienced Whistleblower Attorney Today

If you’d like to learn more about the False Claims Act or how an attorney can help you protect your rights as a whistleblower, contact our team today. Our team includes attorneys experienced in litigating qui tam and other whistleblower cases, as well as several former FBI investigators who can help make sure your case gets the attention it deserves.

Our whistleblower attorneys will take a look at the evidence you have supporting fraud allegations, and help you decide on your next steps. They take pride in providing all of their clients with privacy and confidentiality.