Whistleblower laws are about incentivizing integrity in order to efficiently ferret out fraud. Incentivized whistleblower programs forge public-private partnerships between whistleblowers, their attorneys, and the government to combat fraud. The success of the False Claims Act, the oldest incentivized whistleblower law in the United States, has spurred passage of similar laws in 29 states and the District of Columbia, as well as whistleblower-incentive programs at the Securities Exchange Commission, the Internal Revenue Service, and the Commodities Future Trading Commission.
History in a Nutshell
Rooted in Common Law
The False Claims Act’s qui tam provisions are rooted in English common law. Qui tam is simply a truncated version of the Latin phrase “Qui tam pro domino rege quam pro se ipso in hac parte sequitur,” which translates as “He who sues on behalf of the King, as well as for himself.”
Endorsed by the Founders
Qui tam provisions traveled with settlers to the New World, and were embraced by America’s founders. In fact, of the twelve penal statutes that the Continental Congress enacted, ten contained qui tam provisions.
Approved by the Courts
The Supreme Court has endorsed the False Claims Act noting, in United States ex rel. Stevens, that the statute passes constitutional muster.
Strengthened in the 1980s
The 1986 False Claims Act Amendments were passed with overwhelming bipartisan support in the House and Senate, and were signed into law by President Ronald Reagan.
A Replicated Success
The False Claims Act has proven to be the single most effective tool the U.S. government has to recover billions of dollars stolen through fraud every year. The success of the False Claims Act has spurred states to pass their own versions of the law, and Congress to pass incentivized whistleblower programs, modeled on the False Claims Act, to cover tax fraud, securities fraud, and fraud in U.S. commodities markets.