supports and protects citizens to ←22 | 23→help enforce the law the behalf of the state.58 Consequently, the private individual is the one who initiates the proceedings. The government is legally obliged to examine the allegations made by the individual.59 After considering all the circumstances, the Department of Justice decides whether to join the proceedings.60 According to 31 U.S.C. § 3730 (c)(3), if the government decides not to proceed with the action, the initiator has the right to conduct it. However, if the Government decides to join the proceedings, it bears the main responsibility for prosecution and is not bound by the act of the person bringing the action.61 Still, a private individual has the right to continue the proceedings as a party.62 Before the expiration of the sixty-day period or any extension under the Act, the government should proceed with the action – in such case the action is taken by the government – or notify the court that it refuses to take over the action, in which case the person bringing the action has the right to take over the action.63 The whistleblower acts anonymously for at least sixty days. This period may be extended by the court.64 It follows from the above that the identity of the whistleblower is initially protected, yet it is disclosed at a later stage in the proceedings.
In § 3729(a), the False Claims Act indicates the liability for certain acts.65 For instance, § 3729(a)(1)(A) & (B) makes liable anyone who knowingly made a false claim, or caused someone else to make a false claim, or knowingly made a false record or statement, in order to induce the government to pay a false claim. On the other hand, § 3729(a)(1)(G) is known as a section of reverse false claim.66 In this case, liability arises when action is taken to avoid the obligation to pay money to the government.67 Moreover, ←23 | 24→according to § 3729(a)(1)(C), liability arises also in the case of conspirators plotting the infringement of provisions. Fraud against the government can take many forms. For example, it could be overcharging, a failure to provide a service, a supply of a smaller quantity, or a poorer quality of products or services.68 A request for payment from the government in the cases above makes the request false or fraudulent, hence the name of the False Claims Act.
In 1986, the Congress increased the penalties for fraud against the government. Currently, if the defendant is found liable for fraud, the courts can order him to pay three times the damage suffered by the government, plus civil penalties between $5,000 and $10,000 for each false claim.69
The Act defines the terms “knowing” and “knowingly.” According to § 3729(b)(1)(A) these words mean that a person, with respect to information:
(1) has actual knowledge of the information;
(2) acts in deliberate ignorance of the truth or falsity of the information; or
(3) acts in reckless disregard of the truth or falsity of the information.70
However, according to § 3729(b)(1)(B), these terms require no proof of specific intent to defraud.
The False Claims Act provides for financial incentives for whistleblowers to encourage disclosure. Namely, they may receive between 15 % and 30 % of the total capital recovered.71 The financial award depends on whether or not the government joins the action and on the contribution made by the whistleblower to the prosecution of the act.72 If the government joins the action, the person reporting the fraud may receive at least 15 %, but no more than 25 % of the amount awarded by the defendant or the settlement ←24 | 25→amount.73 If the government does not intervene, then the whistleblower acting as a party in the proceedings may receive no less than 25 % and no more than 30 % of the recovered amount.74 According to the provisions of the False Claims Act, each whistleblower shall also receive an amount for reasonable expenses, which the court deems necessary to incur, plus reasonable professional fees and legal fees.75 All such expenses, fees, and costs shall be awarded against the defendant.76 We should indicate that in order to receive the award, it is not sufficient to simply inform the government of irregularities. It is necessary to file a quid tam claim and win the court proceedings in the form of a ruling that awards a certain amount of money or concludes a settlement with the defendant. The literature indicates that the possibility of a whistleblower receiving a high reward, which depends on the amount received from the defendant, may be the greatest protection for the whistleblower, because it enables them to cope with the loss of job or the impediment to professional career.77
Noteworthy, the defendant also benefits from certain protection in the event of actions against him by a whistleblower when the actions are contrary to the provisions of the Act. Namely, if the government does not join the proceeding and the whistleblower brings an action, the court may award reasonable lawyer fees and costs to the defendant, if the defendant wins the case and the court finds that the claim of the plaintiff was clearly frivolous, clearly vexatious, or was brought primarily for the purpose of harassment.78
Employees who filed a lawsuit against the government due to apparent irregularities benefit from employment protection. Under § 3730(h), any employee who has been dismissed, demoted, harassed or otherwise discriminated because of their lawful conduct is entitled by law to reinstate them, receive double back pay, compensation for other damages, including litigation costs, and reasonable attorney fees. As it follows from the above, ←25 | 26→the provisions of the Act prohibit employers from taking any discriminatory action. An employee who experiences such proceedings may bring a lawsuit before a court. A whistleblower seeking to sue his employer for retaliatory action against him must prove that he was engaged in activities protected by the False Claims Act and that the employer took retaliatory action due to knowledge of the qui tam action.79 The identity of the whistleblower is disclosed by the court when the proceedings go beyond the investigation stage. However, we should remember that an employer may deduce the identity of a person disclosing information earlier, on the basis of its content.80
The civil action referred to the above may not be brought before court more than three years after the date of the retaliation’s occurrence.81 However, under § 3731(b), a whistleblower may not bring a fraud suit against the government after six years from the date of the violation or after three years from the date when the facts relevant to the right of action are known or should have been known to a US official entrusted with responsibility for action.82 Under no circumstances may a claim be brought more than ten years after the date of infringement.83
1.2.1.2 The Whistleblower Protection Act
The US government passed the Whistleblower Protection Act in 1989.84 This Act protects federal employees in the United States from retaliation resulting from disclosing information about fraudulent or illegal activities taking place within the federal administration. This Act, like the False Claims Act, is one of the most important US regulations for the protection of whistleblowers.
The law provides statutory protection for individuals who engage in whistleblowing, which means the disclosure of evidence of illegal or improper ←26 | 27→government action.85 Protection is extended to most current and former employees of the federal administration and listed state-owned enterprises, as well as to those, who apply for certain positions.86 However, certain persons are excluded from the protection of this Act. These include, but are not limited to, employees of the Central Intelligence Agency (CIA), the National Security Agency (NSA), or individuals in positions legally excluded from the competitive federal service, because of their “confidential, policy-making, policy-shaping, or policy-supporting character.”87
The Act provides protection from personnel action against certain persons or the lack of such action for the purpose of making a protected disclosure of information, i.e. informing about irregularities.88 This includes a wide range of activities that have a negative impact on the employee. In accordance with U.S.C. 5. § 2302(a)(2)(A), prohibited human
