Corporate Law News

AG Nominee Barr Pledges to ‘Diligently Enforce’ False Claims Act

Jan. 15, 2019, 4:39 PM

William Barr, President Donald Trump’s nominee for attorney general, said Jan. 15 he will “diligently enforce” a law that lets individuals sue companies on behalf of the U.S. for attempts to defraud the government.

Barr, in testimony before the Senate Judiciary Committee, said he supports the False Claims Act, despite his previous statement that the law’s so-called qui tam provisions were “patently unconstitutional.” Barr made that comment in a 1989 memo he authored while working in the DOJ’s Office of Legal Counsel.

The law’s qui tam provisions allow whistleblowers and other private citizens to bring civil cases for alleged fraud of federal services, such as Medicaid. The DOJ has the option to intervene in the case, decline to participate, and even have the case thrown out if it’s duplicative or could waste agency resources.

Sen. Chuck Grassley (R-Iowa), who helped expand the qui tam provisions in 1986, pressed Barr during the Jan. 15 hearing on whether he would ensure whistleblowers can continue with these cases even if the DOJ doesn’t get involved.

Barr said he would “enforce the law in good faith,” and agreed with Grassley that the law empowers whistleblowers.

The DOJ’s civil division, in an internal memo circulated Jan. 10, 2018, laid out a framework for deciding when to exercise its authority to throw out these cases. The memo said the department receives about 600 new False Claims Act actions each year, and it suggested that the DOJ should dismiss cases in order to “advance the government’s interests, preserve limited resources, and avoid adverse precedent.”

Grassley raised concerns about the 2018 memo. When asked, Barr said he would review it if confirmed as attorney general, and he would be willing to “sit down” with Grassley to discuss it.

To contact the reporter on this story: Jacob Rund in Washington at jrund@bloomberglaw.com

To contact the editors responsible for this story: Roger Yu at ryu@bloomberglaw.com; Seth Stern at sstern@bloomberglaw.com

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