Eisenhower Calls for Passage of A Pennsylvania State False Claims Act

Eisenhower promises to be a proactive leader in fighting fraud

Philadephia (Feb. 2004) - Jim Eisenhower, Democratic candidate for Attorney General, today called on the Pennsylvania State Legislature to enact proposed legislation, known as the Fraud Against Taxpayers Act, which will substantially enhance enforcement and collection efforts against persons and entities that defraud the Commonwealth and local governments. Eisenhower is the first candidate running for Attorney General to advocate the passage of this pivotal piece of legislation.

"In these difficult fiscal times, it is essential that we take every possible step to protect dwindling taxpayer dollars by preventing fraud against the government," said Eisenhower. "With the passage of the Fraud Against Taxpayers Act, Pennsylvania will finally have a tool to combat nursing home, health care, pharmaceutical, environmental, Medicaid, securities and contractor and sub-contractor fraud. There is no other piece of legislation currently on the books which would provide the Attorney General and other prosecuting authorities throughout this Commonwealth with such a powerful fraud fighting tool."

The federal False Claims Act - which permits "qui tam" actions by whistleblowers - has existed in various forms since the mid-1860s. In a qui tam action, an individual with knowledge of fraud may bring a lawsuit on behalf of the federal government and share in the recoveries. Since 1986, over 4,000 federal qui tam cases have been filed, and the federal government has recovered over $8 billion from whistleblower suits alone and over $12 billion from total false claims act recoveries.

The states of California, Florida, Illinois, Delaware, Louisiana, Tennessee, Virginia, Hawaii, The District of Columbia, Massachusetts and Nevada have all passed statutes in recent years, which are closely modeled after the federal False Claims Act and the Pennsylvanians Against Fraud Act. These states have recovered hundreds of millions of dollars under their collective false claims statutes. Ten other states have statutes similar to the federal False Claims Act. In addition, Alabama, New Mexico, Ohio, Idaho, and New York and Minnesota have bills similar to the federal False Claims Act moving through their state legislatures.

A key component of the federal law as well as the proposed Fraud Against Taxpayers Act is the provision authorizing individuals who reveal frauds to obtain a share of the recovery. These financial incentives allow the Commonwealth and local governments to learn about frauds they otherwise would never discover. This will result in the recovery of amounts stolen from the government and deter future frauds from occurring. Strong whistleblower protections are also a key component of the bill.

"I have been told by many attorneys that they turn away individuals who claim to have evidence of frauds against Pennsylvania, because there is no viable basis for them to bring lawsuits to recover the funds or for the whistleblower to be adequately protected when he or she comes forward. We should be encouraging these individuals to come forward with such information, so that we can recover the amounts owed and reduce the burden on honest taxpayers," said Eisenhower. "If I am elected Attorney General, I will create an Affirmative Civil Enforcement Unit that would use the Pennsylvanians Against Fraud Act as one of its primary enforcement tools."

"The Commonwealth and its local governments are looking to balance their tight budgets by attacking fraud and abuse, deterring unscrupulous practices, cutting spending, and increasing revenues," said Eisenhower. "Enactment of a strong False Claims Act in Pennsylvania would allow us to do both simultaneously, by cutting off funds being paid to the perpetrators of frauds, and recovering the money they have already stolen from the government. This legislation will provide a tremendous and needed boost to the taxpayers of this Commonweatlh."

Throughout the country, false claims acts enjoy bipartisan support, because they not only prevent fraud, they also make more money available for education, health care and other purposes. Senator Charles Grassley (R-Iowa), who co-authored legislation updating the federal law in 1986 with Congressman Howard Berman (D-Cal.), has stated that the False Claims Act "is so successful because it employs bedrock principles of fiscal conservatism."

Contact: Nicholas Pullen, 267-252-8237

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