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How bad mules brought qui tam to America

by | Jun 9, 2021 | Firm News |

Qui tam legal theory goes back almost 600 years to English Common Law and the practice of suing on behalf of the government. While there are some definite shades of the principle’s use in early colonial law, the codification of qui tam principals came out of an apocryphal story from the Civil War involving lame mules and corrupt government contractors.

Lincoln’s outrage over Union suppliers

In the Civil War, just like with any war, soldiers on the front line depended on the support of their supply chains. Those supply chains, just as in modern warfare, were primarily sourced by government contractors. Some of those suppliers defrauded the government by selling the Union:

  • Injured horses
  • Sick mules
  • Broken rifles
  • Bad ammunition
  • Uniforms that disintegrated in the rain

Obviously, in a wartime situation where land travel depended on horses and mules, these sales caused a great deal of suffering. For these sales to continue as long as they did, there had to have been collusion with government purchasers.

What the False Claims Act did, then, was incentivize reporting the fraud to the government to recoup losses to taxpayers.

Expansions in 1986

The False Claims Act, however, did not always have the same teeth it does today. In 1943, congress repealed much of its utility over worries of disruption of the war-time suppliers  In 1986, the US once again saw its necessity after reports of over-priced tools, such as $200 hammers, prompting Congress to hold hearings and their findings that fraud against the government was pervasive, that the “Lincoln Law” was the best way to combat the fraud, and greater incentives and protections for whistleblowers were needed. Congress’s actions increased the award size for whistleblowers and offered significant protection from retaliation.

Next week we’ll take a closer look at qui tam whistleblowing activity regarding upcoding Medicare claims and options for potential whistleblowers.