Getnick Defends Whistleblower Reward Programs at Congressional Hearing
On April 28, Neil V. Getnick, managing partner of Getnick & Getnick LLP and chairman of Taxpayers Against Fraud, testified at a hearing before the House Judiciary Committee’s Subcommittee on the Constitution and Civil Justice regarding “Oversight of the False Claims Act.” As noted in the Judiciary Committee’s press release, the hearing examined “the False Claims Act, which is one of the government’s principal anti-fraud laws that has proven to be effective at recovering taxpayer money lost as a result of fraud against the federal government.”
In his prepared remarks, Getnick lauded “the extraordinary success of the Federal False Claims Act in recovering stolen tax dollars, reforming corrupt practices, and creating an unparalleled public-private partnership to protect the public fisc.” Getnick cited the massive recoveries, the “twenty-to-one return on investment,” and the Act’s role in “leveling the playing field so that honest companies can compete” as evidence of the Act’s success and importance.
During the hearing, Getnick also responded to concerns expressed by Subcommittee Chairman Trent Franks and some of the other individuals testifying about the potential for abuse in the False Claims Act. In particular, these individuals stated that “businesses . . . are concerned that while the False Claims Act can be effective, it can also lead to unfair penalties and unjust results, particularly for health care companies, non-profits, and small and large businesses.” Getnick countered that “the False Claims Act is replete with protective mechanisms” that are a “tremendous boar against abuse,” including: legal hurdles for actions, DOJ’s power to dismiss an action, and sanctions imposed against those filing frivolous cases. Getnick further noted that the dynamics of FCA cases make it unlikely that a lawyer (often paid on a contingency basis) or a whistleblower (whose reputation is at stake) will proceed with a case they cannot win.
Responding to the often-suggested “improvements” to the False Claims Act, Getnick quoted the 2014 statement of the architect of the modern-day FCA, U.S. Senator Charles Grassley:
- They talk about a ‘gold-standard compliance certification program,’ but it’s just a pie-in-the-sky idea with no specifics. They are vague on who would create the program, who would enforce the program – basically, everything about it. But they want you to believe that once this pipe dream is in place, it will magically increase the amount of taxpayer dollars the government recovers.
- In exchange for this castle in the air . . . they want to eliminate the use of exclusion or debarment, surrendering one of the government’s strongest tools for deterring fraud. They want to lower the damages multiplier for those who self-report. And they repackage a detrimental proposal to whistleblowers that has been recycled again and again.
- Large corporations have long argued that whistleblowers should be forced to report wrongdoing internally before going to the government. Yet when whistleblowers try to do exactly that and get retaliated against, these large corporations change their stance in court and argue that whistleblowers only have protection if they report externally. Those kinds of inconsistent positions make it hard to believe that either argument is made in good faith.
In addressing the importance of allowing whistleblowers to proceed with cases in which the government declines to intervene, Getnick told the Subcommittee that:
What concerns me is hearing that there are only a “handful” of examples of declined cases that go onto be successful. And while I’m concerned about what I’ve heard from Mr. [Dennis] Burke [President & CEO, Good Shepherd Health Care System], I also recognize that that’s a case that took place ten years ago and so if we need to reach back ten years to find that type of situation, that should tell us that this is not a matter of great frequency. On the other hand, we only have to reach back to yesterday to see how declined cases play a very specific and important role. One of the cases you pointed out in your opening remarks was the Wyeth/Pfizer Protonix case. That case settled yesterday for $750 million after an initial Department of Justice declination and fourteen years of work. It’s very important to realize that the Department of Justice at some point declined, but because this action-forcing mechanism took place, the relator and relator’s counsel were able to continue investigating the case, continue to advance the case, and prove it up. Then the Department of Justice said, “Wait a moment, this is a case we have to become involved in.” And, then, we see that yesterday that Wyeth/Pfizer is going to pay $413 million to the United States, the participating states, $371 million dollars. And those companies are not denying the government’s allegations of alleged illegal bundling and pricing violations. So, that case was successfully defended on a motion to dismiss and zero dollars would have come out without the whistleblowers and their lawyers pursuing that case after DOJ declined.
Watch Getnick’s testimony here.