So when the Department of Justice makes its annual announcement of how much money the government recovered in False Claims Act cases, POGO thinks the occasion should be celebrated with a special award:
The Qui Tammies.
Qui tam (pronounced "key tam") is the name given to False Claims Act lawsuits filed by private persons on behalf of the United States alleging fraud in a wide variety of federally funded programs: Medicare and Medicaid, defense programs, federally insured mortgage and other federal housing programs, disaster relief loans, and agricultural subsidies. The Qui Tammy award statuette should be a carved figure of Abraham Lincoln since the False Claims Act is also called the “Lincoln Law.” It was enacted during the Civil War to deal with unscrupulous defense contractors who sold defective equipment to the Union Army.
Last week, Justice announced the federal government recovered $2.4 billion in settlements and judgments in cases involving fraud against the government in fiscal year 2009. (According to Taxpayers Against Fraud (TAF), the total is actually much higher because Justice does not include recoveries in criminal False Claims Act cases or settlement money distributed to the states, which accounts for about 45 percent of all money collected in Medicaid fraud cases. TAF claims the true total amount of recoveries by the government this past year is more than $5.6 billion.)
Justice claims that total recoveries since 1986, when Congress substantially strengthened the False Claims Act, now stand at more than $24 billion. Not too shabby.
The government even has two strong candidates for the inaugural Qui Tammy awards: Senator Chuck Grassley and Representative Howard Berman, the sponsors of the 1986 amendments. Grassley and Berman were also instrumental in the passage of the Fraud Enforcement and Recovery Act of 2009, which further strengthened the False Claims Act.
At the Qui Tammy Awards ceremony, host Billy Crystal’s silly little opening song and dance number will probably make fun of these notable False Claims Act settlements from the past year:
- October 2008: Armor Holdings Products paid the government $30 million to resolve allegations that it sold defective bulletproof vests to law enforcement agencies. Later in the month,
the final judgment was handed down in the government’s lawsuit against
engineering company Science Applications International Corporation
(SAIC). A federal jury had already found SAIC liable for False Claims
Act violations and breach of contract with regard to two contracts with
the Nuclear Regulatory Commission in the 1990s, for which the jury
awarded the government $1.97 million in damages, tripled to $5.9
million under the Act. The judge tacked on an additional $577,500 in
- December 2008: L-3 Vertex Aerospace, a subsidiary of L-3 Communications Corp., paid $4 million
to settle allegations that it submitted false and inflated employee
timesheets to the Army on a contract to provide helicopter maintenance
services in Iraq in 2004 and 2005.
- January 2009: The Shaw Group’s Stone & Webster Construction subsidiary paid $6.2 million
to end a False Claims Act investigation related to its work at
Tennessee Valley Authority (TVA) nuclear plants in Tennessee and
Alabama. The government alleged that, from 2003 through 2006, Stone
& Webster failed to maintain required logs and provided false
reports to TVA that misclassified and understated the number and
severity of employee injuries in order to boost its safety-related
- February 2009: AT&T Technical Services Corp. paid over $8.2 million
to settle allegations that it violated the False Claims Act in
connection with the Federal Communication Commission's E-Rate program,
which uses funds collected from customers to provide Internet service
to needy schools and libraries. AT&T-TSCO was accused of engaging
in non-competitive bidding practices and overcharging the government.
- March 2009: United Technologies division Sikorsky Aircraft Company paid the government almost $3 million
to resolve False Claims Act allegations in connection with its Army
contract to install armored plates in Black Hawk helicopters. The
government alleged that from 1991 to 2006, Sikorsky knowingly installed
armored plates that had not been ballistically tested as required under
- April 2009: Northrop Grumman and its predecessor, TRW Inc., agreed to pay $325 million
to settle allegations that Northrop and TRW provided and billed the
National Reconnaissance Office (NRO) for defective microelectronic
parts known as Heterojunction Bipolar Transistors (HBTs) from 1992 to
2002. The government also alleged that Northrop and TRW misrepresented
and concealed information regarding the reliability of the HBTs.
- May 2009: URS Corp. subsidiary EG&G Technical Services, Inc., paid over $1.7 million
to settle allegations of overbilling the Air Force for aircraft parts
and services between 1997 and 2004. EG&G employee Richard Thomas
Barkley pleaded guilty in the matter and was sentenced to 37 months in
prison. Two weeks later,
Sanofi-Aventis subsidiary Aventis Pharmaceutical paid $95.5 million to
settle False Claims Act allegations that it misreported drug prices in
order to reduce its Medicaid Drug Rebate obligations by millions of
dollars between 1995 and 2000.
- June 2009: Johns Hopkins Bayview Medical Center paid over $2.7 million
to settle allegations that it submitted false claims to federal health
benefits programs between July 2005 and February 2007. Bayview was
accused of seeking reimbursement for medical conditions that were not
actually diagnosed or treated.
- August 2009: In one week, Boeing paid $27 million to settle to two False Claims Act cases. In one, Boeing paid $25 million to resolve allegations that it performed defective work on Air Force KC-10 Extender refueling aircraft and overcharged the government. In the other, Boeing paid $2 million to settle claims that the company overcharged the government for work done on Air Force KC-135 tankers.
- September 2009: Pharmaceutical giant Pfizer Inc. and its subsidiary, Pharmacia & Upjohn Company Inc., paid a record-setting $2.3 billion to settle claims of illegally promoting and misbranding their products. Of that total, Pfizer paid $1 billion to resolve allegations under the civil False Claims Act.
The downside to Justice’s annual self-congratulatory announcement is the large backlog of False Claims Act cases still to be resolved. Last month, Senator Grassley noted that there is a backlog of 1,040 qui tam cases, of which 985 allege health care fraud and 205 allege defense procurement fraud. The backlog has grown slightly since last year.
Honest Abe and Billy Crystal would not find that a laughing matter.
-- Neil Gordon