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Whistleblowers are Essential to Protect Infrastructure Funds

Posted  August 27, 2021

America’s roads, bridges, power grids, and airports are a mess.  Recently a group of civil and structural engineers graded the nation’s infrastructure a below-average C-. The Bipartisan Infrastructure Bill currently before Congress aims to solve some of those issues, with what the White House described as “a once-in-a-generation investment in our infrastructure.” The Bipartisan Infrastructure Bill promises $550 billion of new federal spending over eight years and $450 billion to renew existing programs, for a total of $1 trillion.  The funded programs include $110 billion for roads and bridges, $66 billion for rail, $65 billion for power grid improvements, $65 billion for broadband expansion, $55 billion for water projects, $47 billion for cybersecurity and climate change mitigation, $39 billion for public transit, and $25 billion for airports.

Unfortunately, with history as a guide, every large influx of government dollars into the economy is paired a feeding frenzy of attempted fraudsters trying to illicitly gain from government spending.  With this increased federal government spending, we can inevitably expect to see infrastructure and public works contracting fraud.

As far back as the Civil War, contractors to the Union Army were notorious for trying to sell lame mules as healthy horses, bags of sand as flour, and sawdust as gun powder, among other duplicities. It was this misbehavior that spawned the False Claims Act (FCA), also known as “Lincoln’s Law,” which remains the government’s principal enforcement tool against contracting fraud. The U.S. government has used it during other times of crisis and expanded government spending, including military mobilizations, Hurricane Katrina, and the 2008 Housing Crisis.

Among the key features of the False Claims Act is the right it provides whistleblowers to serve as “private attorneys general” and sue fraudsters on behalf of the United States.  Successful whistleblowers share in up to 30% of any recovery by the government. The U.S. treasury recovers billions under the law annually, with most of the cases being brought by whistleblowers.

The FCA has a history with infrastructure funding, whether the projects involve massive overages, misrepresentation of costs or performance, misrepresentation of contractor status, or other contractual violations.  For example, the contractors involved in Boston’s notorious Big Dig, a project to build a tunnel through downtown Boston that resulted in substantial cost overruns, agreed to pay $458 million to settle claims related to the project, including the resolution of whistleblower-filed FCA allegations. Another recent example is the long-awaited mass transit link between downtown Washington, D.C. and Dulles Airport, a project nearing a decade of delay. There, a concrete contractor paid a settlement to resolve allegations in a whistleblower-initiated case that its use of substandard concrete delayed the project further. At Washington state’s Hanford Site, managed by the Department of Energy, contractors have repeatedly faced False Claims Act liability for false claims related to overcharging and misspending of federal funds.  And, DOJ has long been active in pursuing fraudsters who cheat programs that give certain businesses, such as, small, minority-owned, or veteran-owned businesses, advantages in obtaining government contracts.

Government contracts in public works are notoriously byzantine and judging whether a contractor is compliant often requires inside knowledge and expertise. With an influx of new federal funding for infrastructure, fraud is sure to follow.  While the sheer scale of the Bipartisan Infrastructure Bill might stretch the government’s enforcement efforts, whistleblowers have a key role to play in bringing infrastructure contracting fraud to the attention of government enforcement agencies.

The vigilant eyes of engineers, construction workers, and other employees are essential to reveal fraud that might otherwise escape detection. Whistleblowers are, and have always been, key to keeping government contractors honest and public works projects running smoothly. The Department of Justice recognizes the importance of whistleblowers, and has stated that whistleblowers are “an essential source of new leads” that the government “will continue to rely on . . . to help root out the misuse and abuse of taxpayer funds.” The whistleblower team at Constantine Cannon stands ready to help potential whistleblowers with the information and answers they need about their options, the whistleblower process, and the potential financial rewards available to whistleblowers.

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Tagged in: FCA Federal, Government Procurement Fraud, Importance of Whistleblowers, Legislation and Regulation News,