Whistleblowers Help Curb Corporate Fraud - The Ring Of Fire

Every year, billions of dollars worth of federal contracts are awarded to corporations. These contracts run the gamut from pharmaceuticals to weapons, and it is close to impossible to find an industry taking money from the government that hasn't at least attempted to take advantage of the system.

Corporations attempting to rip off the federal government is as old as the United States itself. But it was during the Civil War that President Abraham Lincoln finally decided to act. After seeing how badly the government was being ripped off by contractors for things like shoes and mules, President Lincoln signed the False Claims Act into law that gave whistleblowers the power to come forward and expose the misdeeds of corporate America.

The specific provision within that law that allows whistleblowers to bring actions against corporations on behalf of the federal government is the Qui Tam provision. This section of the law is what makes it so powerful.

Under Qui Tam provisions, a whistleblower that brings an action against a corporation on behalf of the government will be entitled to a percentage of the amount recovered, if fraud is proven. Typical rewards equal between 10 and 20 percent, which adds up quickly when you consider the amount of fraud that takes place.

Between 1987 and 2008, False Claims Act lawsuits recovered $22 billion dollars for the federal government. And while that did amount to significant rewards for whistleblowers, it also illustrates just how badly corporations are taking advantage of both the government and consumers.

In the year 2010 alone, the federal government recovered more than 3 billion dollars under the False Claims Act; more than 75% of that amount was the result of whistleblower actions.

Over the years, corporate America has lobbied to reduce or even completely remove Qui Tam provisions from the False Claims Act, which would put an end to the protections provided to whistleblowers. Luckily, most of the amendments passed relating to the law have strengthened it, rather than weakening the protections.

But corporations have other ways to prevent whistleblowers from coming forward. As you'll see shortly, many companies have a way of discouraging people from exposing fraud, and they will make someone's life miserable if they suspect them of reporting anything. And all too often, this intimidation has the capacity to completely ruin a person's career, or it prevents them from coming forward with allegations of abuse altogether.

Most of the fraud and corruption that has been revealed in recent years has been the result of whistleblower action. The mortgage crisis and Wall Street meltdown brought forward countless people willing to expose the lies and deceit from within the financial industry that helped burn down our economy.

Before the economic collapse, it was the Iraq War that gave birth to a new era of corporate corruption. One of the largest government ripoff artists was former Halliburton subsidiary Kellogg Brown Root. KBR had contracts for everything in Iraq ranging from water purification and delivery to laundry services, and all along the way they were scamming our troops, our government, and American taxpayers.

And that's the main point that everyone needs to remember -- when corporations defraud the federal government, they are defrauding the taxpayers. When they lie to the government, they are lying to taxpayers. And when they steal money from the government, they are skimming money off of YOUR paychecks.

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