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Senate committee considers amendments to False Claims Act

The Senate Judiciary Committee held hearings on February 27 on proposed amendments to the False Claims Act.

According to a report in the February 28, 2008 New York Times, both Democratic and Republican committee members said they wanted to work with the Justice Department to undo some of the harm they thought had been caused by courts’ interpretation of the law. They cited to examples of apparently valid cases that were dismissed on legal technicalities.

Among the cases mentioned was one against Bombadier Corporation, which was dismissed because the court ruled that the False Claims Act did not cover fraud against Amtrak. Amtrak, a corporation whose stock is mostly held by the government, was considered by the court not to be a “government entity.”

Another case involved the American military contractor, Custer Battles L.L.C. After the company was convicted of fraud in connection with distributing new currency in Iraq, a judge threw the verdict out, saying the whistle-blower law covered only fraud involving American money, and the funds at issue in the Custer Battles case were Iraqi.

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