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Project on Government Oversight




Defense and Health Care Industries: Rather Than Clean Up Their Act, They Attack the Act

January 28, 1997 


WASHINGTON, DC--The Project On Government Oversight (POGO) has uncovered almost $2 billion in forced False Claims Act (FCA) reimbursements from the health care and defense industries since 1994.

POGO hopes to stymie the defense and health care industries' efforts to eliminate the FCA. POGO recently filed an amicus brief before the Supreme Court for the first FCA case to be heard by that Court on February 25th, 1997. As an Appendix to the brief, POGO completed a survey in response to the industries' attacks on the FCA. The attorney of record for POGO is the former Counsel to the House of Representatives, Charles Tiefer.

Danielle Brian, Executive Director of POGO, said, "We have discovered that since 1994, the health care industry has been forced to reimburse the government over $1 billion, and the defense industry over $850 million--through the False Claims Act alone. Of course big industry wants to eliminate this Act--returning billions of dollars to the government and protecting and rewarding whistleblowers isn't in their best interest." Brian continued, "Our amicus brief and report expose how often these contractors had themselves defrauded the government and been forced to pay up. These critics of the FCA already lost their battle in Congress--now they're trying to win in the courts."

In an earlier survey, POGO revealed that from FY1990 to FY1993, over 90% of defense contractors had themselves either been found guilty, plead guilty or settled in civil and criminal cases for fraudulent conduct. General Electric alone was responsible for 15 separate cases in just over four years.

Currently, the defense and health care industries, which account for the overwhelming number of FCA settlements, are rising up in support of the Hughes Aircraft Company-- the defendant in a pending fraud case before the Supreme Court. Hughes' appeal to the Supreme Court challenges the potency of the FCA. "These industries are attacking this law because it has successfully forced those who defraud the government to pay for their illegal activities since the Civil War," added Brian.

The Aerospace Industries Association, the Shipbuilders Council of America, the National Security Industrial Association and the Electronic Industries Association have been joined by the American Medical Association, the American Hospital Association and the American Association of Medical Colleges in their attacks on the FCA. These associations are arguing in amicus curiae briefs to the Supreme Court that this law is being used to unfairly prosecute their members over 'regulatory disputes.'"

POGO's survey makes clear that the vast majority of False Claims Act settlements were made in the face of evidence of fraudulent activity. The defense and health care industries must dismantle this effective tool in order to preserve their profitable fraudulent activity in government contracting. Because the False Claims Act isn't broke-- because it is working--these industries want to "fix" it right out of existence.  

Founded in 1981, the Project On Government Oversight (POGO) is a nonpartisan independent watchdog that champions good government reforms. POGO's investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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