June 30, 2022

Volume XII, Number 181

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A Whistleblower’s Guide to the State of the Union

President Joe Biden reiterated his vision to “transform America and put us on a path to win the economic competition of the 21st Century” during his March 1, 2022 State of the Union address.

To achieve that vision, billions of government funding is going towards infrastructure, broadband Internet access, cybersecurity, COVID-19 relief, and healthcare programs. Contractors are queuing up to receive those funds and build bridges, lay fiber-optic cables, and provide healthcare services, and they are entrusted to spend that government funding properly.

Infrastructure & Government Contracts

President Biden said in his address, “We’re done talking about infrastructure weeks. We’re now talking about an infrastructure decade,” referring to the passage of the Bipartisan Infrastructure Law. Some $110 billion is allocated to fix roads and bridges and bring up American infrastructure from its current rank of 13th in the world.

Construction contractors not only need to use a carpenter’s square to make right angles in their project plans, they also “must turn square corners when they deal with the Government,” as Supreme Court Justice Oliver Wendell Holmes, Jr. wrote in 1920.

Common fraudulent activity in government contracts includes:

  • Obtaining contracts through false statements in bidding documents

  • Misrepresenting the cost of projects or underbidding contracts

  • Cross-charging or improperly cost allocating among contracts

  • Delivering products or services that do not meet contract specifications

Supporting American Jobs and Businesses

Next, President Biden touted “buying American,” specifically, “when we use taxpayers’ dollars to rebuild America, we’re going to do it by buying American.” The President continued, “There’s been a law on the books for almost a century to make sure taxpayers’ dollars support American jobs and businesses. Every administration – Democrat and Republican -says they’ll do it, but we’re actually doing it.” Potential whistleblowers, take note: failure to comply with the Trade Agreements Act (TAA) constitutes fraud against the government. TAA requires that the U.S. government only purchase goods made in countries with which the US has trade agreements. Misrepresenting the origin of materials purchased for a project as part of a government contract is fraud and a violation of the False Claims Act.

Medicare

Further in the address, the President championed allowing Medicare to negotiate the price of prescription drugs. Medicare Part D prescription drug fraud can take many forms, including pharmaceutical manufacturers paying kickbacks to physicians in exchange for prescribing their drugs, as well as pharmaceutical companies developing schemes to avoid collecting patient copays, circumventing the institution of copays as cost-controls. The Department of Justice has recovered more than $1 billion in Medicare drug fraud and whistleblowers in the pharmaceutical industry and healthcare settings can help report fraud.

Words Welcoming Whistleblowers

President announced two “crackdowns” on ocean carriers’ pandemic price-gouging and on worsening conditions in nursing homes, stating that “Medicare is going to set higher standards for nursing homes […] and they will look at that closely.” Nursing home workers, take note.

President Biden included a shoutout to Facebook whistleblower Frances Haugen, thanking her for speaking up and “hold[ing] social media platforms accountable for the national experiment they’re conducting on our children for profit.”

Related to pandemic relief fraud, the President said, “In my administration, the watchdogs are back,” announcing that the Justice Department will soon appoint a chief prosecutor for pandemic fraud. The watchdogs are indeed back, and reporting fraud, waste, and abuse of government funds is an important civic duty during President Biden’s administration.

© 2022 by Tycko & Zavareei LLPNational Law Review, Volume XII, Number 63
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About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...

202-973-0900
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