Pennsylvania is missing out on a golden opportunity to recover millions of dollars in taxpayer money from people who cheat state programs. We need a Pennsylvania False Claims Act.
A false claims act would allow the state to recover taxpayer money from those who cheat government programs. It would also provide protection for citizen whistleblowers who risk their careers and, many times, the well-being of their families, by exposing this fraud.
My bill, House Bill 1493, would enact a Pennsylvania False Claims Act and provide the necessary tools for the state to recover the maximum amount possible from those who cheat or attempt to cheat the state government.
This legislation would also provide an incentive for whistleblowers to come forward with vital information about government fraud by allowing them to share in the proceeds from the recovery and provide protection for them from employer retaliation.
If enacted, this law would help Pennsylvania recover millions of dollars in taxpayer money, while simultaneously deterring future fraudulent activity.
It's not a new concept.
In all, 29 states and the federal government have enacted false claims acts. Even local governments -- including Philadelphia and Allegheny County -- have enacted this common-sense law.
Pennsylvania remains the largest state in the nation without a false claims law. With bipartisan support already growing for my bill, it is my hope that we can finally pass this legislation.
We all have a stake in this, because when government funds are the target of fraud, every taxpayer is a victim.
Since 2005, the federal government has provided an extra financial incentive for states to prosecute their own cases of fraud when those cases involve joint state and federal programs, such as Medicaid.
Without a state false claims law in place, Pennsylvania can't prosecute government fraud under its own law and must instead rely on the federal government to prosecute under the federal law. As a result, Pennsylvania is potentially missing out on recovering millions of dollars.
Other states, such as Texas, are realizing the benefits of having a state false claims law.
From 2006 through 2012, cases brought under the federal and Texas false claims laws resulted in the recovery of more than $820 million for state and federal taxpayers. Nearly half of those recoveries -- $394 million -- resulted from fraud cases in which Texas led the investigation and prosecution of the case under Texas law.
The federal False Claims Act was first signed into law by President Abraham Lincoln during the Civil War to combat fraud that was being perpetrated by unscrupulous companies supplying the Union Army. The federal law was strengthened in the 1980s and the results have been remarkable. Between 1986 and 2011, federal false claims settlements and judgments totaled $31 billion.
There is no shortage of potential targets for fraud. Any business or program that benefits from state funding could be the subject of a whistleblower lawsuit if there are suspicions of cheating or misuse of taxpayer money.
Critics of enacting a state false claims law say the federal laws are adequate, but that's just not true.
The federal False Claims Act does not protect Pennsylvania tax dollars; it is limited only to federal government spending. Without our own false claims law in place, Pennsylvania has no way to adequately protect the billions of hard-earned Pennsylvania taxpayer dollars that are spent every year on education, public safety, job creation, road construction, and many other critical programs.
Detractors also say frivolous claims by unhappy employees looking for a pay day will clog the courts, but that's not been the experience of states that have enacted their own laws.
Under my bill, any person who brings a case that is found to be frivolous must pay the other side's attorneys' fees and legal costs. Additionally, the bill would give the state attorney general the authority to review claims of wrongdoing and decide, based on the merits of the accusations, whether to proceed with charges. Most cases will not proceed without the involvement of government prosecutors.
Pennsylvania Attorney General Kathleen Kane supports my bill and agrees it could help to encourage whistleblowers to expose fraudulent activity. Taxpayers are the victims of false claims. My bill gives the power back to the taxpayers and protects those who want to do the right thing by exposing fraud. Now is the time to enact a Pennsylvania False Claims Act.
-- State Rep. Brandon P. Neuman is a Democrat rep resenting the 48th Legislative District.