Attacks on anti-corruption laws continue to intensify: The attack on qui tam

Context

Qui tam lawsuit: A qui tam lawsuit is a legal action that allows private individuals, known as whistleblowers or relators, to file lawsuits on behalf of the government against entities that have committed fraud against the government. Qui tam lawsuits are primarily brought under the False Claims Act, a federal law that aims to recover funds lost to fraud against the government. Many states also have similar laws allowing qui tam actions for state-level fraud.

A whistleblower, often an employee or someone with inside knowledge, discovers fraud against the government. The whistleblower hires an attorney to file a qui tam lawsuit on behalf of the government. The lawsuit is filed "under seal," meaning it remains confidential initially. The government investigates the allegations and decides whether to intervene in the case. If successful, the fraudster may have to pay up to three times the government's losses plus penalties.

Qui tam lawsuits have existed in the United States legal system for over 240 years. The concept of qui tam lawsuits was first introduced in the United States during the Revolutionary War era. In 1778, the Continental Congress passed the first whistleblower law that included qui tam provisions.

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The LA Times reports:

Column: A Trump judge just overturned the government’s most effective 

anti-fraud tool, which has stood for 160 years

Since 1986, whistleblowers have been in the forefront of the government’s war on fraud, accounting for $53 billion, or more than 70%, of the $75 billion recovered from swindlers on defense contracts, from Medicare and from other federal programs.

There’s no debate over what’s driving this record: It’s a 1986 federal law that awards whistleblowers up to 30% of the recovery. For the federal government, this is a bargain. Without the law, the government might never even know about most of the $75 billion in fraud that was unearthed.

That makes the law “one of the government’s top fraud-fighting tools,” says James King, a spokesman for the Anti-Fraud Coalition, a Washington watchdog group.

So perhaps it’s unsurprising that a Trump-appointed judge in Florida has just declared a key provision of the law unconstitutional. The provision concerns so-called qui tam actions, in which private litigants bring lawsuits on behalf of the government as well as themselves. (The Latin term came to us via old English law.)

The ruling came from federal Judge Kathryn Kimball Mizelle, whom Trump named to the bench in 2020 despite her having been labeled “not qualified” by the American Bar Assn. due to her “lack of meaningful trial experience.” She did, however, boast a sterling right-wing legal pedigree, including service as a law clerk to Supreme Court Justice Clarence Thomas.

A good example concerned the drug company Biogen, which paid $900 million to the federal and state governments in 2022 to settle a qui tam lawsuit in which a former employee alleged that the company had paid kickbacks to doctors to entice them to prescribe its multiple sclerosis drugs. (The company didn’t admit guilt in the settlement.)

The government had declined to intervene in the lawsuit but praised the relator for having “diligently pursued this matter on behalf of the United States” over a decade. The whistleblower collected about $250 million, or roughly 30% of the federal government’s share of the settlement.

I offer this as more evidence in addition to the already large amount of evidence from federal court decisions that America's authoritarian radical right wealth and power movement is deeply corrupt and openly hostile to anti-corruption laws.  

Whether this decision will be appealed to the USSC and upheld isn't clear to me. Clarence Thomas very likely would vote to uphold it. The other five Repubs on the bench are open questions. The USSC recently legalized bribery in government by requiring payoffs to come only after a judge or politician gets a "gratuity" or "reward", not a bribe, for doing something the donor likes. Given that level of support for legalized corruption, it seems reasonable to think the USSC would be inclined to uphold this decision. But if the egregiousness of tossing out qui tam lawsuits is more than even the six Repub radicals could stomach, maybe they will reverse this blatantly pro-corruption decision.