Puckering Up

Reuben Guttman Articles, Whistleblowers Blog

“Whether to blow or not to blow – that intriguing issue triggered heated debate at a session on criminal fraud and the global economic recession at this week’s International Bar Association annual meeting” in Dublin, Ireland Reuben Guttman reports.  See his October 2, 2012 blog in The European Lawyer.

Should the US practice of paying bounties to whistleblowers be adopted by other countries?
Currently three US laws provide for bounties to be paid to individuals or entities providing information leading to the recovery of government money. The Internal Revenue’s code allows the Treasury Department to pay individuals that provide information enabling the government to collect unpaid taxes. The False Claims Act provides for bounties to be paid to those who have brought suit in the name of the government against entities or individuals that have filed or caused to be filed false statements causing the payout of monies which — in whole or in part — came from the government.

And, the Dodd-Frank Amendments provide for the payment of bounties to those whose original information or analysis enables the Securities and Exchange Commission to collect sanctions against those that have violated securities laws including the Foreign Corrupt Practices Act, which proscribes the bribery of foreign government officials by companies trading their stock on US exchanges.

http://www.globallegalpost.com/blogs/commentary/puckering-up-46704300/

“Backing Barack”

Reuben Guttman Articles, Whistleblowers Blog

The US President wins some heavyweight economic support as Reuben Guttman sees the curtain rise on the International Bar Association’s annual gathering in Dublin, Ireland.  See Reuben Guttman’s October 1, 2012 blog in The European Lawyer.

The International Bar Association opened its annual convention with keynote speaker and Nobel Prize winning economics professor Joseph Stiglitz announcing his support for the re-election of US President Barack Obama.

Speaking before several thousand attorneys from across the globe, Prof Stieglitz called for additional regulation of the banking and financial services sectors. ‘The first fiscal stimulus worked but it was too small,’ he told delegates. ‘We need another; we cannot afford not to do another stimulus.’

No choice

Prof Stiglitz’s support for Obama came as a surprise response to a question from a British lawyer. ‘Clearly Obama is better,’ he said. ‘When compared to the alternative there is no choice.’ But Prof Stiglitz also said that Mr Obama could have done ‘more with the restructuring of home mortgages’.
The Nobel Prize winner went on to compare the conduct of the banks to gambling, which is why ‘regulation is so important’.
A recent New York Times comment article — co-authored by Prof Stiglitz and economist Mark Zandi — noted that the president’s housing policies have ‘fallen short’ but that ‘Mitt Romney hasn’t offered any meaningful new proposals to aid distressed or underwater homeowners’.
Here in Dublin, when pressed, he made his ultimate political choice clear.

Political gridlock

While Prof Stiglitz urged more regulation, he expressed concern that political gridlock may preclude timely government intervention. ‘People say they believe in free markets but one person’s freedom is the right not to be injured by others,’ said Prof Stiglitz.

He continued by commenting that the ‘disparity in income brought about by the economic crisis means that there will be a disparity in political clout’. And he urged IBA members to respond by making sure that there will always be access to justice for those without the economic means.

It was a particularly intriguing observation given the controversy caused by the US Supreme Court’s 2010 ruling in Citizens United v Federal Elections Commission, which expanded the rights of corporations to make independent expenditures to influence the outcome of federal elections. The 2012 election marks the first test of that judgment on a US presidential race.

http://www.globallegalpost.com/blogs/commentary/backing-barack-91190962/

Expanded Protection for Whistleblowers: California Amends its False Claims Act

Dr. Caroline Poplin Articles, Whistleblowers Blog

On August 16, 2012, the California Assembly passed a bill (AB 2492) amending California’s state False Claims Act, Cal. Gov’t Code §§ 12650-12656 (“CAL FCA”) to largely conform to the provisions of the federal False Claims Act (“FCA”).  According to the Deficit Reduction Act of 2005, states with FCAs “at least as effective” as the federal FCA qualify for an additional 10 percent of any recoveries related to false Medicaid claims.  Due to the recent changes in the federal FCA as a result of the Fraud Enforcement and Recovery Act of 2009 (“FERA”), the Patient Protection and Affordable Care Act (“ACA”), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), states which seek to qualify for the additional payments must be proactive in ensuring that their FCAs are “at least as effective” as the federal FCA by the March 31, 2013 deadline.

The proposed amendments to the CAL FCA would expand both the liability of defendants and the rights of qui tam plaintiffs in a number of ways, including broadening the definition of “original source” and increasing protections for whistleblowers.  .

Some of the key amendments include:

  • Allowing the Attorney General to override the public disclosure bar.  The CAL FCA would permit the California Attorney General (“AG”) to prevent dismissal of a CAL FCA claim based on publicly disclosed information by “opposing” dismissal.
  • Expanding the definition of “original source.”  The CAL FCA definition would broaden to include individuals who have voluntarily disclosed to the state the information upon which a claim is based, or have knowledge that is independent of, and “materially adds” to, publicly disclosed allegations of false claims.
  • Broadening the definition of “claim” to include “contractor, grantee, or other recipient, if the money, property, or service is to be spent or used on a state or any political subdivision’s behalf or to advance a state or political subdivision’s program or interest . . . .”;
  • Incorporating the federal FCA’s definition of an “obligation”: An obligation includes retention of an overpayment, thereby giving rise to liability under the CAL FCA for retention of an overpayment;
  • Statute of limitations/relation back:  The CAL FCA would provide that, for statute of limitations purposes, if the AG files a complaint in intervention, it will relate back to the filing date of the relator’s complaint;
  • Making relators eligible for an award even if they planned and initiated the violation upon which the CAL FCA action was based; 
  • Eliminating the requirement that a claim must have been presented to an officer, employee, or agent of the state;
  • Clarifying that the CAL FCA’s anti-retaliation provisions apply when relators are discriminated against for furthering an action under the CAL FCA or for trying to stop a violation of the CAL FCA;
  • Granting relief to relators who are discriminated against, including reinstatement with the same seniority status, twice the amount of back pay plus interest, and compensation for special damages.
  • Defendant can recover attorneys’ fees:  clarifying an existing provision allowing defendants to recover attorneys’ fees if the defendant prevails in a CAL FCA case and the court finds that the claim was clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.

Changing the Debate

Whistleblowers Blog

CHARLOTTE, NC — Twenty-eight years ago, then New York Governor Mario Cuomo gave a keynote address to the Democratic National Convention in San Francisco with a speech that will be remembered for the ages. But that speech, which focused on the demise of an industrial economy, was built on passion and emotion.

Last night, Former President Bill Clinton gave a speech to delegates that will be remembered for the ages, but for different reasons. It was a speech based on facts and logic. It was a speech which established protocols for how voters should think about the issues. It was also a tactical speech that counseled voters on how they should evaluate the Romney message which will be delivered not door-to-door but over the airwaves. It was Bill Clinton at his best; he didn’t just speak — he taught.

For those seeking to make an argument in an era of hyperbole, the Clinton speech — indeed perhaps a closing argument — is a lesson in how to organize facts and raise questions. It is a lesson for whistleblowers – a lesson for those who are sometimes caught up by emotion and argue passion rather than logic.

It’s all about Ohio

Whistleblowers Blog

CHARLOTTE, NC — Inside the Democratic National Convention here it is all about winning voters in the State of Ohio. Democratic strategists now believe that if President Obama does not carry the State of Florida, Ohio is a must-win state. While Democratic leaders are guardedly optimistic about Obama’s chances in this rust belt state, they are taking no chances.

While the focus of the presidential race has been on healthcare, the Obama people refocused the debate last night beginning with a speech by former Ohio Governor Ted Strickland who reminded the packed house at Charlotte’s Time Warner Center that a billion dollar bailout by the Obama administration saved the US auto industry. The Democrats only hope that the Republicans challenge them on the wisdom of the bailout as the return of General Motors as a viable entity and the saving of thousands of US jobs is evidence that the bailout was a success. Democrats here believe this is a debate they will win.

Though the bailout meant job preservation, only once during the entire evening was the word “union” mentioned. That reference came during a speech by Massachusetts Governor Deval Patrick. There is a diminished union presence at this convention which sets it apart from those in Denver and Boston.

Tonight Bill Clinton takes the podium in day three.

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