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Senator Grassley Sends a Half Baked Message to State Legislatures Across the Country – Note to Sen. Grassley – Want to Send a Real Warning Make Government Liable to the People.

May 31, 2010

Senator Grassley Sends a Half Baked Message to State Legislatures Across the Country

As more states come on board and reap fantastic rewards from having a state FCA.

The FCA was supposed to protect individuals who step up against fraud NOT states.  All Senator Grassley’s Act does is provide incentives for States to go after businesses.  States are NOT going to go after the fraud its employees and legislators are perpetuating themselves for their own benefit.    

Think about it.  Why would States go after fraud they are helping perpetuate.  States would only get 10% back whereas if they continue defrauding the State and/or Federal taxpayer, they can reap significantly higher rewards. States are simply going to use the act for political purposes and their own self-interest.

Unless the FCA is amended so that State and Federal employees can be sued, the Act is nothing more than a sham.  It is a way for government to posture like it is fining bad behavior.  However, if you look at what the other hand of government is doing, it is awarding that same company more contracts and accepting donations and jobs for their family with the other.  Thus the government is basically paying (with taxpayer YOUR money) the fine.

Further, if the Federal Government has an extra 10% to give away, why not give it to the whistleblower who actually risks something by coming forward if the State refuses to intervene or assist in any investigation. 

The Federal legislation requiring State FCAs to be “as least as effective” as the Federal FCA, is a  coercive power grab.  States have the ability to pass whatever false claims act law they want to. For Federal claims, there is something called Federal Court. The Federal government should focus on what its own Government and Courts are doing instead of meddling with States.

States do not need the Federal government to give them permission or guidance to pass a fraud law. 

In another ironic act of Congress, this past week, Sen, Grassley sent a letter to our worthless Attorney General Eric Holder, asking for help.  Grassley asked the Attorney General to review existing state False Claims Acts for compliance with recent changes to the federal False Claims Act. 

Last we heard, the Attorney General was still working on reading the 10 – page Arizona immigration bill.  

Again, we ask the question — Medicaid is a Federal Act.  People can sue under the Federal False Claims Act for Medicaid Fraud. Why would the Federal government give States additional money off recoveries belonging to the Federal taxpayer simply for enacting State FCA statutes? 

And unless there is an issue of Constitutionality – what right does the Federal Government have to oversee, coerce or bribe a State’s legislative process using Federal taxpayer monies as bait?

As of this writing, 27 states have some form of false claims-style statute, but only 20 of those have submitted their false claims act to the feds for approval under DRA.  Of those 20 states, only 14 have qualified for the 10% incentive. 

In order to qualify, the state FCA must be at least as effective as the federal False Claims Act in establishing liability to the state for false claims, and must also be at least as effective as the federal FCA in rewarding qui tam whistleblowers. 

Questions for Senator Grassley:

  1. By “as effective” does Grassley mean that States should underfund, understaff and underprosecute fraud claims similar to what the Federal Government does.
  2. By “as effective” should states shirk their auditing and oversight duties for vendors, entities and industries it is not in their best interest to audit (think SEC, Fannie Mae, Freddie Mac, Madoff or Oil industry BP, Goldman Sachs, HUD  . . . . and the list goes on).
  3. It often takes the Feds years and years and years to decide whether to intervene in a FCA action.  So how many elapsed years before intervening is deemed “as effective”
  4. By “as effective” does Grassley mean that States should allow fraud to go unfettered for years before it gets around to auditing or bringing suit.
  5. By “as effective” does Grassley mean allowing individual whistleblowers risk their livlihood, jobs, home, pensions and financial security while government does nothing except put their hand out for their share after the reward is obtained.
  6. By “as effective” does Grassley mean allowing favored contractors the ability to negotiate out of treble damages i.e. New York got caught for the umpteenth time defrauding the Federal Government and instead of paying treble damages, only had to pay single damages.  While initially the money may come from taxpayers – taxpayers will soon vote out of office those who turn a blind eye to fraud. 

“If the prosecutor is obliged to choose his cases, it follows that he can choose his defendants. Therein is the most dangerous power of the prosecutor: that he will pick people that he thinks he should get, rather than pick cases that need to be prosecuted. With the law books filled with a great assortment of crimes, a prosecutor stands a fair chance of finding at least a technical violation of some act on the part of almost anyone. In such a case, it is not a question of discovering the commission of a crime and then looking for the man who has committed it, it is a question of picking the man and then searching the law books, or putting investigators to work, to pin some offense on him. It is in this realm—in which the prosecutor picks some person whom he dislikes or desires to embarrass, or selects some group of unpopular persons and then looks for an offense, that the greatest danger of abuse of prosecuting power lies.”

— Supreme Court Justice Robert H. Jackson.

Look no further than Eliot Spitzer and Tom Corbett for RECENT examples of Attorney Generals misusing their power to prosecute people for political (rather than legal) reasons:

From www.casablancapa.blogspot.com

We hope you find Tom Corbett’s rationalization of his outrageous subpoena to Twitter as appalling as we do.

CORBETT ADMITS HE WANTED JAIL TIME FOR BLOG CRITIC

It boils down to this: “Yes, it’s true I sought the identity of my anonymous critic so I could punish him with prison time, but only if it’s this one particular guy.”

We’re pretty sure they covered the First Amendment at Tom Corbett’s law school, but let’s clarify something for him: criticism of a public official – even anonymous criticism of a public official – is not punishable by law. Not even if the anonymous critic is some guy you managed to convict of a couple of felonies.

It’s been clear for more than a year that Tom Corbett and his minions have been hell-bent on proving his anonymous critics are defendants in a criminal case.

Be warned, It’s a very short leap from “He’s only criticizing me because he’s a criminal defendant,” to “He’s only a criminal defendant because he’s criticizing me.

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