A recent article in the Corporate Crime Reporter (CCR) suggested that qui tam lawsuits against military contractors are not often successful because the Defense Department is too “cozy” with the contractors. Before we address this issue, let’s first set the stage by discussing qui tam actions and the huge whistleblower awards available in those cases.
“Qui Tam” is the condensed version of a much longer Latin phrase. In ancient England, people could bring lawsuits in the name of the king. Today in the United States, a Civil War statute allows whistleblowers to bring lawsuits in the name of the U.s. government.
Why would anyone want to do the government’s dirty work? Because the law – called the False Claims Act – pays huge cash awards. If your information helps the government recover tax dollars, you can receive up to 30% of that money. These lawsuits often result in $1+ million dollar rewards.
The law in the U.S. began as a way to fight vendors that were defrauding the Union Army during the Civil War… wagons with broken wheels, gunpowder laced with sawdust and wool blankets filled with moth holes. Fast forward to the 21st century and the law is still in use today.
Qui Tam Lawsuits Against Military Contractors
The recent post in CCR said,
“The most promising area is cases arising out of the Iraq and Afghan wars. There have been many cases brought against private companies that serve the military in war zones, like KBR, but nearly all have failed in court and the government has joined very few of them. One reason is that our military is very cozy with these contractors, and the Defense Department agencies resist joining False Claims Act cases against war contractors. If the military opposes the case, the Justice Department will not join it, and if they don’t join, the odds of success drop dramatically.”
Prosecuting cases for fraud in the Middle East is difficult, yes. Our concern is more with the availability of witnesses and proof of the fraud. It can be hard for a person returning to or based in the United States to prove something that happened thousands of miles away.
While the Justice Department and federal courts have tremendous power in the United States, trying to subpoena a person in Afghanistan is nearly impossible.
We recently had a declined case involving construction in certain less than desirable neighborhoods of a country on the brink of civil war. The case was declined because of the difficulty in finding witnesses, not because of a cozy relationship between the government and the contractor.
So why share the story of an unsuccessful outcome? Obviously, prosecuting any case where the wrongdoing occurred in Afghanistan, Syria, Iraq or Yemen is going to be tougher than the local Medicare fraud qui tam case. These limitations can be overcome, however.
Prosecuting a qui tam involving defense contractors involved in fraud outside the United States means getting as much documentation and proof while still employed or deployed. It is often very frustrating for us, the Justice Department, the Defense Department and obviously the whistleblower to know a fraud has taken place but not be able to get the proof. The earlier we get involved in a case, the better our chances of success.
Another workaround involves finding a “co-relator.” The term “relator” is the fancy legal term for “whistleblower.” The relator typically gets between 15% and 30% of whatever the government collects (less the legal fees.)
Let’s say that a relator’s share of a case is $1 million. No one would walk away from an award that size. Now let’s say that the case involves a contract in Iraq. The potential award might be high but if the chances of winning are near zero, you essentially have a 1% chance of making $1,000,000.
If we can find a co-relator who is still in Iraq or who has better access to documents or proof, then conceivably you may have to share your award but the probability of collecting an award also goes up considerably.
In simple English, an 80% chance of collecting $500,000 (1/2 of $1 million) is worth more than 1% chance of collecting $1 million. In a defense contractor case, sometimes having a co-relator often dramatically increases your odds of collecting an award.
The takeaway to this post is not to simply believe that the DOD and military contractors are always in bed with each other. There may be a cozy relationship because of the seemingly revolving door between contractors and the government but that doesn’t mean that the Justice Department will walk away from its duty to enforce the law. The lesson here is that in tough cases, successful qui am lawyers figure out creative ways to better present and prepare the case.
Think you have a case against a military contractor or vendor? Give us a call. We have helped our whistleblower clients collect tens of millions of dollars. One lucky client received over $50 million.
Fraud is rampant, especially with the Defense Department’s offshore spending. Whistleblowers are the new American heroes helping taxpayers and the government recover billions of dollars each year. The next qui tam award could be yours.
For more information, contact attorney Brian Mahany at or by telephone at (414) 704-6731. All inquiries are protected by the attorney – client privilege and kept strictly confidential. (Just don’t call or email us from a work phone, computer or email address.) Worried that you don’t have enough information to bring a case? Let us help with that process too.
MahanyLaw – America’s Qui Tam Whistleblower Lawyers
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