Blowing the Whistle on Jackpot Justice

The Washington Times (Washington, DC), April 25, 2005 | Go to article overview

Blowing the Whistle on Jackpot Justice


Byline: Stephen Moore and Phil Kerpen, SPECIAL TO THE WASHINGTON TIMES

It is urgent we fight financial mismanagement and fraud throughout federal agencies if we ever hope to rebalance the budget.

The Office of Management and Budget recently found Medicare made $21.7 billion in improper payments to doctors, hospitals and insurers in 2004. Medicaid, with its overlapping state and federal roles, also has rampant fraudulent claims. Unfortunately, government efforts at combating erroneous payments are pitifully ineffective, thus encouraging more fraud, fueling medical inflation, and ripping off tens of billions of dollars from taxpayers.

The primary vehicle for attacking fraud in government contracting is the False Claims Act, dating back to the Civil War when it prevented defense contractors from selling the government bad gunpowder. Substantially beefed up in 1986, the law authorizes workers ("whistle-blowers") to sue their employers on the government's behalf. The Justice Department may join in the lawsuit and initiate a fraud investigation.

This is all well and good except that the 1986 law allows whistle-blowers to reap windfall rewards of 15 percent to 30 percent of the eventual financial penalty or settlement.

This allows whistle-blowers to enrich themselves with tens of millions of reward money. Two of the most famous jackpot award winners in recent years were David Franklin, paid $24.6 million for blowing the whistle on Pfizer, and Doug Durand, recently profiled in Forbes, who got a whopping $173 million for whistle-blowing against two different medical companies.

In this compulsive get-rich-quick society, whistle-blowing has become a rapid-growth industry, with employees enticed by the quick route to fabulous wealth becoming parasitic on-site snoopers against their employers.

The theory behind rewards to whistle-blowers makes sense: Without the conscientious employee exposing wrongdoing, taxpayers may never have recovered a dime of the fraudulent payments in these cases. But these super-jackpot rewards dangling in front of employees in many cases have exactly opposite the hoped for effect. They prevent companies' early detection and correction of erroneous billing practices.

Here's why: There's a powerful incentive for an employee who uncovers improprieties, which may be inadvertent or unknown to upper management, to secretly collect evidence and go to a lawyer, rather than stopping the fraud early and inside the company. Whistle-blowers often quietly collect evidence for months while fraud continues. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Blowing the Whistle on Jackpot Justice
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.