The FCA in Wartime
The US-led war on Iran is now in its fourth week, with a preliminary price tag of $200 billion. Given that government money spent quickly increases the risk of fraud, it’s worth remembering that it was a war that motivated the False Claims Act in the first place. During the Civil War, while Union soldiers fought to preserve our country, corrupt contractors sold the Union Army spoiled food, gunpowder mixed with sawdust, sick mules, and boots made of cardboard. [1] These companies saw only dollar signs–soldiers and taxpayers be damned–and cynically used the fog and urgency of war as cover for their schemes.
Congress responded with the False Claims Act (FCA), also called the “Lincoln Law.” It recognized that insiders were best positioned to alert the government to fraud, and so whistleblower tips and rewards were central to the new law. [2] And while the FCA faded in importance over time, [3] it was once again wartime fraud that revitalized it. As one of the architects of the 1986 amendments, Senator Chuck Grassley explained, contractors were “charging the taxpayer $7,000 for a coffee pot and $640 for a toilet seat.” The amendments strengthened the whistleblower provisions and transformed the law into the government’s “#1 tool to fight and deter fraud.” [4]
The U.S. has fought many wars since then, and the FCA has continued to play a role in holding wartime contractors accountable when they inevitably seek to cut corners. Five years after the 1986 amendments, a helicopter crash during Operation Desert Shield in Iraq prompted a whistleblower suit alleging that Boeing failed to build the helicopter to contract specifications or properly inspect it, ultimately leading to a $25 million settlement. [5] After the 2003 Iraq war, Operation Desert Storm, KBR paid nearly $109 million [6] and DynCorp paid $21 million [7] to resolve whistleblower allegations that they inflated costs for the military. A major Swiss company and a UAE-based company, Supreme Foodservice GmbH and Supreme Foodservice FZE, along with Supreme Group B.V. and several of their subsidiaries, paid $434 million (inclusive of criminal fines) to settle allegations that they inflated food and water prices for troops in Afghanistan, [8] and Louis Berger Group paid $69 million to settle allegations that it defrauded USAID programs. [9] Just this month, a jury awarded $15 million to the government in a whistleblower case against Fluor Corporation, also related to logistics contracts in Afghanistan, a figure which will be automatically tripled to $45 million. [10]
The lesson being: nearly two hundred years after the Lincoln Law was passed, it remains more important than ever for protecting public funds used in defense contracting–in war and in peacetime. Fraud, waste, and abuse in Department of Defense contracts are longstanding problems that require sustained attention, [11] and whistleblowers have a critical role to play in holding the contracting industry accountable. [12]
Today, as hundreds of billions are allocated and spent over the course of just weeks or months, [13] it is a sobering reality that some contractors will once again be tempted by a quick buck, to the detriment of our taxpayers and troops. Whistleblowers can ensure that contractors do not get away with defrauding our military and, better still, discourage such misconduct before it begins.
[1] Chuck Grassley, Q & A: Whistleblowers Shine Light on Fraud (July 30, 2021) https://www.grassley.senate.gov/news/news-releases/qanda-whistleblowers-shine-light-on-fraud.
[2] Id.
[3] The False Claims Act, The Anti-Fraud Coalition, https://www.taf.org/resources/false-claims-act/ (last visited Mar. 30, 2026).
[4] Chuck Grassley, Q & A: Whistleblowers Shine Light on Fraud (July 30, 2021) https://www.grassley.senate.gov/news/news-releases/qanda-whistleblowers-shine-light-on-fraud.
[5] Mark H. Anderson, Boeing Owes $15 Million in Liability Case, Midland Daily News (June 26, 2003), https://www.ourmidland.com/news/article/Boeing-Owes-15-Million-in-Liability-Case-7184190.php.
[6] Iraq War Whistleblowers Announce $108.75 Million Settlement with KBR Over Accusations of Fraud, Wast and Abuse of Taxpayer Funds in Iraq, PR Newswire (July 6, 2023), https://www.prnewswire.com/news-releases/iraq-war-whistleblowers-announce-108-75-million-settlement-with-kbr-over-accusations-of-fraud-waste-and-abuse-of-taxpayer-funds-in-iraq-301871403.html.
[7] Press Release, U.S. Dep’t Just., DynCorp Agrees to Pay $21 Million to Resolve False Claims Act Lawsuit Alleging Inflated Costs on State Department Contract to Train Civilian Police Forces in Iraq (April 9, 2025), https://www.justice.gov/opa/pr/dyncorp-agrees-pay-21-million-resolve-false-claims-act-lawsuit-alleging-inflated-costs-state#:~:text=DynCorp%20International%20LLC%20(DynCorp)%20has,the%20State%20Department%20for%20reimbursement.
[8] Press Release, U.S. Dep’t Just., Defense Contractor Pleads Guilty to Major Fraud in Provision of Supplies to U.S. Troops in Afghanistan (Dec. 8, 2014), https://www.justice.gov/archives/opa/pr/defense-contractor-pleads-guilty-major-fraud-provision-supplies-us-troops-afghanistan.
[9] Press Release, U.S. Dep’t Just., Scheme to Defraud Government on Reconstruction Contracts Leads to Criminal Charges and Civil Penalties for Louis Berger Group, Inc. (Nov. 5, 2010), https://www.justice.gov/sites/default/files/usao-nj/legacy/2014/09/02/LBG%20Settlement%20PR.pdf.
[10] Daniel Seiden, Fluor Ordered to Pay $15 Million in Afghanistan Fraud Suit, Bloomberg Law, (Mar. 30, 2026), https://news.bloomberglaw.com/federal-contracting/fluor-ordered-to-pay-15-million-in-afghanistan-fraud-lawsuit.
[11] Kathleen Scanlan, Why is the Government’s Best Weapon Against Fraud So Rarely Deployed to Combat Defense Fraud, The Anti-Fraud Coalition, (Sept. 9, 2024), https://www.taf.org/fbtn2024-defensefraud/.
[12] Nicolas Mendoza, Whistleblowers Can Reverse the Decline in Defense FCA Cases, The Anti-Fraud Coalition (Sept. 17, 2025), https://www.taf.org/whistleblowers-can-reverse-the-decline/.
[13] How Much has the U.S. Government Spent This Year?, Fiscal Data U.S. Treasury https://fiscaldata.treasury.gov/americas-finance-guide/federal-spending/ (last visited Mar. 30, 2026).
