Friday, November 9, 2012

Whistleblower Action

The Justice Department announced in a press release yesterday that it has intervened in a whistleblower lawsuit against Fluor Corporation in the U.S. District Court for the Eastern District of Washington. The False Claims Act lawsuit was originally filed by a former employee of Fluor.

The whistleblower complaint alleges that, as a condition of receiving a Government contract, Fluor was required to certify that it would not use federal funds for lobbying activities. The complaint further alleges that between 2005 and 2008, Fluor ignored these restrictions and used Government funding to lobby Congress and executive branch officials for additional funding on an existing contract.

The complaint was filed under the False Claims Act, which authorizes private parties to sue on behalf of the United States and share in any recovery. The act authorizes the United States to intervene in such a suit and take over the responsibility for litigating it.

The claims asserted in this case are allegations only, and there has been no determination of liability. However, the Government, prior to intervening in the case, saw the evidence and based on that evidence, decided to join in the suit. Many times, the Government does not intervene in whistleblower suits because of there is not sufficient evidence to take the allegations forward.

There has been a marked increase in the number of whistleblower (qui tam) lawsuits in recent year. The potential of a big payday awaits those who persevere.  The Justice Department reported that a record of 638 qui tam lawsuits were filed in 2011, after hovering between 300 and 400 a year for most of the prior ten years. Contractors are advised to ensure that their system of internal controls, codes of conduct, and ethical practices are implemented and operating effectively.

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