Crisis of Conscience E-Book

Tom Mueller

• Herausgeber: Atlantic Books
• Kategorie: Sachliteratur, Reportagen, Biografien
• Sprache: Englisch

Seitenzahl: 1224

Veröffentlichungsjahr: 2020

Beschreibung

'Powerful...His extensively reported tales of individual whistleblowers and their often cruel fates are compelling...They reveal what it can mean to live in an age of fraud.' Washington Post 'Tom Mueller's authoritative and timely book reveals what drives a few brave souls to expose and denounce specific cases of corruption.' George Soros We are living in a time of mind-boggling corruption, but we are also, as it happens, living in a golden age of whistleblowing. Over the past two decades, the brave insiders who decide to expose wrongdoing have gained unprecedented legal and social stature, emerging as the government's best weapon against corporate misconduct - and the citizenry's best defense against government gone bad. They are also forcing us to consider fundamental questions about our democracy, especially the proper balance between free speech and state secrecy, and between individual rights and corporate power. Drawing on relentless original research, including in-depth interviews with more than 200 whistleblowers and the elite coterie of legal trailblazers who have armed them for battle - plus scores of politicians, intelligence analysts, government watchdogs, cognitive scientists, and other experts - Crisis of Conscience is a modern-day David-and-Goliath saga, told through a series of riveting cases drawn from Big Pharma, the military, and beyond. Whistleblowers are not only heroes who expose and anatomize corruption and ensure that it is punished usually at enormous cost to themselves - Mueller shows how they are also models we all must think and act more like if our democracy is to survive.

Leseprobe

Crisis of Conscience

Also by Tom Mueller

Extra Virginity: The Sublime and Scandalous World of Olive Oil

This edition published by arrangement with Riverhead Books, an imprint of Penguin Random House LLC.

First published in hardback in Great Britain in 2020 by Atlantic Books, an imprint of Atlantic Books Ltd.

Copyright © Tom Mueller, 2019

The moral right of Tom Mueller to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act of 1988.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of both the copyright owner and the above publisher of this book.

1 2 3 4 5 6 7 8 9

A CIP catalogue record for this book is available from the British Library.

Hardback ISBN: 978-1-78239-745-8

E-book ISBN: 978-1-78239-747-2

Paperback ISBN: 978-1-78239-748-9

Book design by Cassandra Garruzzo

Printed in Great Britain

Atlantic Books

An Imprint of Atlantic Books Ltd

Ormond House

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WC1N 3JZ

www.atlantic-books.co.uk

Contents

CHAPTER 1Becoming a Whistleblower

CHAPTER 2Question Authority

CHAPTER 3The Money Dance

CHAPTER 4Blood Ivory Towers

CHAPTER 5Reaping the Nuclear Harvest

CHAPTER 6Money Makes the World Go Round

CHAPTER 7Ministries of Truth

EPILOGUEThe Banana Republic Wasn’t Built in a Day

NOTES

INDEX

“A time comes when silence is betrayal.”

Martin Luther King Jr., “Beyond Vietnam,”a speech delivered at Riverside Church, New York City, April 4, 1967

Crisis of Conscience

CHAPTER 1

Becoming a Whistleblower

Resolved, that it is the duty of all persons in the service of the United States . . . to give the earliest information to Congress or other proper authority of any misconduct, frauds or misdemeanors committed by any officers or persons in the service of these states, which may come to their knowledge.

Legislation of July 30, 1778, reprinted in Journals of the Continental Congress, 1774–1789

Some of the worst crimes, and the most wrenching tests of character, happen by slow degrees, steady as sunrise. This is the story of how Allen Jones, an investigator at the state Office of the Inspector General in Harrisburg, Pennsylvania, moved in gradual, irrevocable steps to a crossroads in his life, and one day made a fateful choice.

On July 23, 2002, Jones learned that a check for $2,000 had recently been deposited into an unnamed bank account used by Steven J. Fiorello, the state’s chief pharmacist. Hardly a remarkable sum, yet Jones’s instincts, honed by years of investigating multimillion-dollar fraud schemes, were aroused. Fiorello and his superiors had failed to register the account’s existence with the state comptroller, which was a felony offense in Pennsylvania. Worse, the check was from Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson. Since Fiorello’s job was to choose which drugs were available for purchase by state hospitals, foster homes, prisons and elder care facilities throughout Pennsylvania, this money looked suspiciously like a bribe.

“It was the first of a series of ‘Oh my God!’ moments I had over the next months and years,” Jones remembers. “That check was like a loose pebble that started an avalanche.”

Today Jones is a slope-shouldered, rough-handed man of sixty who resembles a heavyset Chuck Norris. His close-cropped, grizzled beard is stained with nicotine around his mouth, and his face is reddened by weather. Beneath gray bangs and seams of concern across his forehead, his clear green eyes seem wary, though as he gets to know you they occasionally glint with humor. Jones likes to build things in wood and stone—houses, barns, drywall terracing—and spends much of his time alone in the forested foothills of the Appalachian region of central Pennsylvania, where he grew up. This is Pennsylvania Dutch country, where the Amish drive horse-drawn buggies with two gas lanterns for headlights, and the barns and clapboard houses stand square across the roof beam but often need a coat of paint. Jones grew up working with the Amish, and has some of their calm reserve. He chooses his words judiciously, like a good mason laying bricks, like a man accustomed to living at hazard before the law. He even swears judiciously: “The only way to accurately describe my state of mind at that moment,” he says of his realization that his own office was covering up massive pharmaceutical fraud, “was ‘fucking devastated.’ ” Jones has many friends who drop by his cabin at odd hours, to drink a beer and swap deer-hunting stories, but occasionally he’ll leave their company, walk out on his back porch and look over the frozen pond into the bare woods beyond, drawing hard on a cigarette.

Jones continued exploring Fiorello’s finances and found more checks written by Janssen, as well as by two other pharmaceutical companies, Pfizer and Novartis. “As an investigator I was taught to look for the big picture,” Jones says. “Not just what happened, but why it happened. So I started looking into what these drug companies were doing in Pennsylvania in the first place.” The funds were being used to support and expand the Pennsylvania Medication Algorithm Project (Penn-MAP), a protocol to diagnose and treat bipolar disorder, schizophrenia, ADHD and major depression. This protocol required doctors in all state facilities to treat these conditions with a new generation of drugs, called atypical antipsychotics, in preference to older, generic antipsychotic medications that had previously been prescribed. Jones discovered that the protocol was a carbon copy of one being used in Texas, TMAP, which Johnson & Johnson and other pharmaceutical companies had launched in the late 1990s, with generous funding to mental health officials, who in return had often helped market the drugs. Jones also found evidence that Johnson & Johnson, together with acquiescent state officials, was rolling out similar programs in at least ten other states.

The more Jones learned about these protocols, the more disturbing they seemed. They made Risperdal and other atypical antipsychotics the treatment of choice for a wide range of mental disorders. Since atypicals were far more expensive than first-generation antipsychotics—Risperdal cost about 45 times more than previous medications—Texas Medicaid payments for atypicals had skyrocketed from $28 million in 1997 to $177 million in 2004. The same was happening in Pennsylvania: between 2000 and 2003 alone, Medicaid spending for atypical antipsychotics rose by 55 percent.

Yet despite their cost, Jones discovered that much of the supposedly impartial medical research used by pharmaceutical marketers to convince state officials that Risperdal and other atypicals worked better than older medications had been ghostwritten by the pharmaceutical companies. Unbiased clinical trials not only suggested no increase in effectiveness but revealed serious side effects caused by atypicals, which the pharma-sponsored studies had downplayed. Risperdal could cause muscle spasms, medically serious weight gain, and an increased risk of diabetes, stroke, pituitary tumors and death. Patients on Risperdal might develop disfiguring and irreversible twitching of the face, torso and limbs. Some male patients grew lactating breasts, and required mastectomies. Though Johnson & Johnson apparently concealed major research from the Food and Drug Administration (FDA), the FDA knew enough about Risperdal to forbid the company from claiming that the drug was superior to earlier antipsychotics; to require warnings of the neurological side effects, weight gain and diabetes it could cause; and to impose, in one demographic, the agency’s strongest, or “black box,” warning, reserved for drugs with life-threatening side effects. The FDA approved extensive use of the drug only for adult schizophrenics. Johnson & Johnson, Jones found, had ignored many of these prohibitions, and downplayed or denied them in its marketing campaigns; in Texas, the company had aggressively marketed Risperdal for children, adolescents and elders, to treat anxiety, insomnia, mood disorders, agitation and mild emotional discomfort. In fact, the Texas protocol mandated Risperdal for these conditions in state prisons, hospitals, reform schools and nursing homes, whose captive patient populations had little or no say in their medical care. Now the company and Pennsylvania officials were starting to impose the same regime in Jones’s home state.

Thinking he might be misunderstanding the evidence, Jones traveled to Janssen headquarters in New Brunswick, New Jersey, to question marketing executives and company lawyers. Apparently dismissing him as a harmless paper-shuffler, they blandly confirmed his worst suspicions. “I’d never seen anything so blatant,” he remembers. “They had co-opted state healthcare, and were using it to sell billions of dollars of dangerous drugs in illegal ways.” Among the documents that Jones reviewed was a “drug usage evaluation” that Steven Fiorello, at the request of Janssen Pharmaceuticals, had performed on 756 diagnosed schizophrenics in eight Pennsylvania mental hospitals, who were given Risperdal or one of four other atypicals. Janssen then paid for Fiorello to fly to New Orleans and present this research to pharmacists from across the country. Behind the chill, clinical language, Jones saw evidence of terrible suffering. One patient on Risperdal had lost 59 pounds during the study, while another had gained 85 pounds. A patient on Zyprexa, an atypical produced by Eli Lilly, had gained 240 pounds. “Someone in a white coat sat by and watched those poor people, and jotted everything down,” Jones says. Certain patients exhibited extreme swings in serum glucose and cholesterol levels, putting them at high risk of diabetes, heart disease and other conditions. Stefan Kruszewski, a psychiatrist working as a reviewer at one of the hospitals, told Jones that he believed the deaths of several children in mental health facilities had been linked to the use of atypical antipsychotics.

Healthcare fraud, like other thefts of taxpayer dollars, creates countless victims, yet few of us see them. They are hidden behind a scrim of marketing and earnings reports and objective-looking research, presented by executives and researchers in suits and white lab coats who are clever and ambitious, perhaps a bit like us. This is the subtle treachery of corporate crime.

Jones knew firsthand what it meant to be invisible, powerless. He’d grown up at the end of a mile-long dirt road, in a solitary house in the middle of an apple orchard, with an outdoor privy and no hot water. When Jones was three, his father was hit by a car while helping another motorist; he was an invalid, in and out of hospital, for several years, and was left with permanent damage to his left arm and leg. His mother worked in a shoe factory and a chicken processing plant, and the rest of the time cared for his father. They ate souse, scrapple, occasionally chops or ham, and game shot by Jones and his relatives. His paternal grandmother, a stout, hard, profane woman straight out of Faulkner, stole the family Christmas tree from a tree farm one foggy December morning, and made squirrel stews that sometimes had fur and claws lurking at the bottom of the pot.

A hard life took its toll on Jones’s parents, and on their relationship with him. He was drawn to work with addicts and the mentally ill, he says, to “prevent others from living through the kind of things I had.” Once, after staying with a neighboring family of farmers for a couple of nights to help with chores, he called his mother to ask if he could stay a night or two longer. She brought a box of his clothes and told him, “Stay as long as you want.” Jones explains: “I learned to distance myself from them. I cared for them, but spent very little time with them.”

Instead, Jones worked. He tanned deer hides for five dollars a skin, planted and tended half-mile rows of tomatoes, and was a chaser at a local chicken ranch. In ultraviolet light the birds are blind to, he’d herd them to one end of a long barn and snatch them up, scratching and pecking, by a leg. “It was like a vision from hell,” he remembers. Later he began building houses up from the bare studs, and renovating dilapidated buildings with minimal cash down and lots of sweat equity. He’d built a house of his own by the time he was twenty-five.

Perhaps because of his solitary childhood, Jones sought out tight-knit communities. He often worked as a hired hand with local Amish farmers, and was the only “Englishman,” or non–Pennsylvania Dutch speaker, invited to several barn raisings. He was also drawn to outsiders and underdogs. The 1972 massacre of Israeli athletes at the Munich Olympics stunned and horrified him, and awakened an affinity for Israel. He moved to a military base in the central Galilee, and served two tours of duty as a civilian volunteer in the Israel Defense Forces, helping soldiers with nonmilitary jobs like painting and building repair. Although he was an atheist, he spent Shabbat weekends with Israeli families on nearby moshavim, and accompanied them to services.

Early in his stay, Chaim, the patriarch of his host family, pointed inland to the horizon. “See that line? That’s the Mediterranean.” He turned 180 degrees. “And that line? That’s the West Bank. This is the narrow waist of Israel. The people in those hills want to put us in that sea.” At the top of the hill on which the settlement was built stood a playground, a concrete defense tower at its center. At first, Jones wondered how Israel had survived, even prospered, in such adverse conditions. Gradually, he says, he understood. People lived with an intensity he’d never before experienced: “You have good food, you eat it,” an old Israeli man told him. “Cigarettes? You smoke them. Today, you live!” His host family led a communal existence utterly unlike his own solitary upbringing. “When they broke the bread together, I saw all the love and respect they showed to each other, and to Chaim. All the men at the table were soldiers; all the women were, too. And I said to myself, ‘Okay, so this is how Israel has survived.’ ”

Back in the States, Jones continued to be drawn to underdogs. After a few years at the newly founded Pennsylvania Office of the Inspector General (OIG), he took a job as a state probation and parole officer, where he specialized in working with addicts, foster children and the mentally ill. To this day, when he visits poor inner cities, he often buys two fast-food dinners and offers one to a homeless person, then coaxes out his new acquaintance’s story as they eat together. “I try to give them the respect and attention they deserve. I take them seriously. I guess I’ve always tried to stand up for the little guy, the person with no voice,” he says. “These are my people.”

Now, on his second tour of duty at the OIG, Jones knew that Pennsylvania, following Texas’s lead, had begun to medicate countless voiceless wards of the state with strong, unproven and potentially harmful chemicals, at huge cost to taxpayers and enormous profit to the pharma companies. He also knew this was the kind of wrongdoing the OIG had been created to fight.

Soon after his trip to New Jersey, the atmosphere at his office changed. His superiors instructed him to treat the case strictly as a personnel matter concerning Fiorello, and to stop investigating the pharmaceutical companies that were paying him. When Jones objected, his boss, Dan Sattele, told him, “Morally and ethically, you’re right, but politically this is dead.” Sattele suggested that the drug firms had purchased impunity by contributing money to state politicians in both parties. “These companies are very aggressive marketers. They write checks to both sides of the aisle.”

Nevertheless, Jones continued to gather evidence about the pharma protocol in Pennsylvania and Texas. He requested clearance to conduct interviews with officials in Corrections, the Department of Public Welfare, and other state agencies that also appeared to be receiving pharma money and taking part in the Pennsylvania protocol. Sattele refused. “These are not the good old days,” he told Jones. Then, visibly dejected, he added: “If you want to find waste, fraud and abuse, you don’t have to look outside the OIG. It’s all here.” (Sattele, in a later deposition, remembered their conversation differently, saying that Jones expressed frustrations—many of which Sattele shared—about changes that had occurred in the OIG since his first stint there. “Allen, accept the team concept,” Sattele says he told Jones. “Accept the attorneys are here to stay.”) Soon an order came down from the office of Tom Ridge, the Republican governor of Pennsylvania, to close the investigation and to shred Allen Jones’s fat dossier of corruption.

When Jones persisted in his pharma investigation, Henry Hart, the deputy inspector general, stopped at his cubicle and announced in a voice audible throughout the office that they needed to talk. He led Jones past the desks of the other investigators to the law library, where they sat in full view of the office. There he announced a “problem”: the office receptionist had accused Jones of sexual harassment, for which he could be disciplined or fired. Jones concluded that the charge had been fabricated as a way of shutting down his probe.

Later that day, in what Jones calls “a classic good cop–bad cop routine,” Dan Sattele took Jones aside in the lunchroom and asked him what had happened. Jones repeated what Hart had said, and told Sattele he was worried he would be fired. “Am I a marked man? Is there a conspiracy against me? What do I have to do?”

Sattele said there was no conspiracy against him among front-line investigators, though his eye contact and body language told Jones there was probably one higher up. “Quit being a salmon,” Sattele told him. “Quit swimming against the current with the pharmaceutical case. Go with the flow.”

It had taken Allen Jones nearly six months of “Oh my God” moments to reach this point. Now he made a rapid mental inventory. He had settled his parents in a comfortable home that he had built. His daughters had finished college and were financially independent. If he lost this job, he could still work construction for a living. He was free to act.

“But the odd thing was, even while I was running through these facts, I never actually felt there was a choice,” Jones remembers. “I’d just been ordered to go against the principle and mandate of my office, and to participate in the cover-up of corruption. I felt like a soldier who has received illegal orders. At the same time, I now knew that defenseless, mentally ill people were suffering and dying, and taxpayers were being ripped off by the pharma companies. Once I knew all this, I couldn’t let it go, or I’d have become complicit, and part of the moral responsibility for these crimes would have been mine. I realized I’d become a whistleblower.”

Jones pretended to submit to his superiors, while continuing his investigations of the drug companies as an undercover operative in his own office. “I was thinking, ‘You’re the enemy,’ ” he recalls. “ ‘And I’m going to prove what you’re doing, when you’re doing it, and why it’s wrong.’ ” Jones surreptitiously gathered more evidence about the protocols in Texas and Pennsylvania, and traced their deep political root structure. He sent letters detailing the fraud to the Department of Justice and the Department of Health and Human Services (HHS) in Washington, DC, as well as to the attorneys general of Texas, Arkansas, Louisiana, Virginia, South Carolina and other states where Johnson & Johnson and its competitors were operating some version of the scheme. The DOJ and HHS took no action. Some states declined to investigate the case. Most simply did not answer.

Eventually, his bosses at the OIG discovered that Jones hadn’t stopped digging, and they relieved him of all investigative duties. But Jones was ready. He had made copies of the most incriminating documents in his case file. He published a lengthy “whistleblower document” on the Web, detailing his investigative findings about patient harm, pharmaceutical wrongdoing and corruption by state officials in Pennsylvania and Texas. He contacted patients’ rights advocates, who put him in contact with reporters at the New York Times, the British Medical Journal and other publications, where he gave interviews. In response, the leaders of the OIG assigned Jones to menial jobs and subjected him to a steady stream of intimidation and public humiliation. His officemates, even former friends, avoided him. “Everyone at work looked at me like I was a cobra,” he remembers. “I couldn’t have been more alone if they’d put me in the toilet.” His desk was searched, and members of his office formed what he termed the “Jones Strikeforce” to monitor his movements and communications. When he called in sick or took a day off, a squad car from the OIG appeared near his house; when he returned to work, a manager would question him: Who was he talking to outside the OIG? Was he under a subpoena? If so, was he testifying? “They kept trying to do things that would make me behave like them, so they could control me,” Jones says. “There was this huge disconnect—they just couldn’t conceive of a whistleblower identifying with the greater mission of the office, instead of blind loyalty to his bosses.”

Finally, on April 28, 2004, his superiors summoned Jones to a second-floor conference room. They placed him on administrative leave, took his badge and identity card, and told him to stay off OIG property. A security guard handed him a box containing a few belongings from his desk and escorted him out of the building. He still remembers the sharp, terminal click of the security door shutting behind him. Two months later, the OIG fired him for acts of insubordination: sharing confidential information with persons outside the OIG and speaking with the press.

Allen Jones knew he was a whistleblower. But how, he wondered, could he use his newfound status to fight against the OIG and a pharma multinational? Jones began a ten-year education in public and private whistleblowing, and in the complex and rapidly changing array of laws that both encouraged and protected it. In the process, he would walk the two very different legal paths that modern whistleblowing has taken in America.

With the help of lawyers at the Government Accountability Project (GAP), a nongovernmental organization based in Washington, DC, that has represented whistleblowers since 1976, Jones brought suit against Sattele, Henry Hart and other members of the Pennsylvania Office of the Inspector General. They had violated his First Amendment rights, he argued, by preventing him from speaking freely on two matters of urgent public concern: the wrongdoing by pharmaceutical companies that he had uncovered, and the OIG’s attempts to conceal that wrongdoing. Later, after being terminated by the OIG, he filed a second whistleblower retaliation suit for wrongful discharge.

“When Allen Jones came to us, he was in a very bad spot,” remembers Jason Zuckerman, one of the attorneys who defended Jones on behalf of GAP. “He was living in a cabin in the woods without indoor plumbing, and he didn’t have any money. He just barely got by. Once he was fired by the IG, he was both unemployed and unemployable.” (Recognizing the importance of the case, GAP represented Jones pro bono.)

Zuckerman was impressed by Jones’s commitment. “Whenever I meet with prospective clients, I try to go in with skeptical eyes, and ask a lot of hard questions. I didn’t really feel the need to take that approach with Allen. It was obvious, from the moment I met with him, that he was absolutely credible, and that he had put a lot on the line in order to do the right thing. This wasn’t about Allen. He was extremely concerned about all the kids and adults in the state mental hospitals who were being put on atypical antipsychotics, and as a result would be harmed for life, by diabetes or other complications. And it was clear that he was never going to back down, until the people who were doing it were held accountable.”

Zuckerman and his colleagues at GAP, on Jones’s behalf, filed a First Amendment suit, one of the oldest whistleblower defenses in the United States, whose guiding ethos predates the nation. On March 25, 1777, Marine captain John Grannis came before the Continental Congress to denounce crimes committed by Esek Hopkins, commander in chief of the Continental navy. Grannis spoke for himself and for nine other sailors and Marines who served aboard the USS Warren, a frigate in the Continental navy. He stated that Hopkins had treated British prisoners “in the most inhuman and barbarous manner”; negligently failed to intercept British shipping; and publicly ridiculed the members of the Congress as a “parcell of lawyers clerks” and “a pack of damned fools.” The Congress swiftly relieved Hopkins of his command, and when he jailed several of the whistleblowers for criminal libel and conspiracy, it unanimously issued the following act on July 30, 1778:

Resolved, that it is the duty of all persons in the service of the United States, as well as all other inhabitants thereof, to give the earliest information to Congress or other proper authority of any misconduct, frauds or misdemeanors committed by any officers or persons in the service of these states, which may come to their knowledge.

The Continental Congress, showing a clear understanding of the risks run by subordinates when they denounce powerful superiors, also ordered that Grannis and his shipmates receive any government documents they needed to defend themselves in court, pledged to pay their legal fees, and hired a distinguished attorney to represent them. The ten men eventually won their case and were reinstated, while the embittered Hopkins retired to private life.

This early law shows how central the basic tenets of whistleblowing were to the intellectual climate of Revolutionary America. In writing this law, and the First Amendment eleven years later, the Founders drew on two millennia of ancient thought about individual conscience, egalitarianism, free speech, and the citizen’s duty to denounce public wrongdoing. They knew the English Bill of Rights of 1689, with its stress on the “freedom of speech and debates” in Parliament, and John Milton’s defense of a free press in the Areopagitica forty-five years earlier. They likewise employed conceptions established during the Enlightenment and the Scientific Revolution, like Locke’s ideas on personal conscience and the social contract, and Galileo’s courageous stand for the objective truth of the heliocentric universe against the obscurantist, authoritarian pronouncements of the Inquisition. The Founders were also familiar with classical precedents for whistleblower-like behavior, particularly the free, bold speech against unjust power that the ancient Athenians called parrhesia, which Socrates famously defended to the death during his trial for impiety in Athens.

The Founders themselves were practicing these same principles in their wrenching break with Mother England and their Divine Monarch—a rejection of authority whose radicalism we can hardly imagine today. On the day they passed the law, British troops occupied New York, and George Washington and his fledgling Continental Army were fighting for survival in New Jersey. They knew well the danger that the USS Warren whistleblowers were running, for they, too, risked life and limb if their uprising failed. Repeatedly in their laws and writings, the Founders underscored the moral duty of virtuous dissent, and of following individual conscience against blind obedience to unjust, brutal rulers. “If the freedom of speech is taken away,” wrote George Washington, “then dumb and silent we may be led, like sheep to the slaughter.” Benjamin Franklin was more succinct: “Rebellion to tyrants is obedience to God.” The Founders had expressed similar sentiments a year earlier, in the Declaration of Independence, whose preamble stresses the “right” and the “duty” of citizens to overthrow unjust rulers, and the fundamental equality of all men. They set these precepts in still more binding form in the First Amendment, which made free speech and a free press the birthright of all American citizens.

This foundation for whistleblowing laid down by the Founders became actionable through a series of new laws and court rulings that began with the Civil Rights Act of 1871, progressed through the new civil rights era of the 1960s and 1970s, and has continued to evolve to the present day. By 1968, public servants who discovered wrongdoing at their jobs and were silenced by superiors could rely on a powerful First Amendment defense. This was the legal basis of Allen Jones’s claim against the Pennsylvania OIG. Now he had to win his case in court.

To help his lawyers, Jones wrote a series of memoranda describing corruption at his former employer, which reveal a taste for legal combat he’d developed as an investigator. Jones described the essential changes that had taken place at the OIG. The office had been created in 1987 by Governor Robert Casey, as an independent body required to “deter, detect, prevent, and eradicate waste, fraud, misconduct, and abuse” in all agencies under the governor’s jurisdiction, in a sense an institutional whistleblower force built into the state government. Shortly after taking over as governor in 1994, however, Tom Ridge stripped the OIG of its independence: before investigating a state agency, the office now had to obtain permission from that agency and approval from the governor’s office. The staff of special investigators was cut by two-thirds. Ridge instituted a new policy of shredding old case files, which might destroy valuable evidence. Lawyers who reported to the governor’s office began to keep careful watch on the OIG’s activities.

The result, Jones noted in a memorandum, was an office that had lost its original fraud-fighting mission and become a façade. Paraphrasing Leon Uris, he described the prevailing atmosphere in the Ridge-era OIG: “It is I against my brother—my brother and I against our father—our family against the tribe—the tribe against the nation—our nation against the world.” Most employees, he said, had forgotten the public interest they had sworn to protect; some, whom Jones called “the walking wounded,” had resigned themselves to playing the new game. His colleagues had made an example of him, Jones believed, in order to discourage other honest employees from coming forward with evidence of political corruption. For his part, Jones was determined to make an example of them, and to show other OIG employees how they, too, could expose and defeat such corruption. He wrote:

The only “fame” I desire is among government administrators who may be tempted to set aside their duty in service to corrupt politics. I would like them to “see” my face in their mind’s eye before they act—to have to consider that the person they are about to crush just might turn the tables on them. It would please me if middle managers everywhere invoked my name as a Boogeyman to frighten their children (and their bosses) into good behavior.

Despite expert help from GAP, as the litigation ground through the courts, one by one the defendants were granted immunity and Jones’s charges were pared back. Eventually, lawyers for the remaining defendants in his wrongful discharge case offered to settle it for $37,500. By now, Jones had been forced to sell the house he’d built for himself, and was living in a hunting cabin with plywood floors that he owned with a friend. “I felt that I was losing everything I’d built, everything in my life I cared about.” He accepted the settlement. After paying off creditors, replacing the tires on his pickup and filling his propane tanks for the winter, he was left with $1,200.

“Allen Jones had been a distinguished law enforcement officer for many years, but once he blew the whistle, it was all over—he was almost homeless,” says Jason Zuckerman. “I think his claim is a good response to what I hear out of the Chamber of Commerce and the Wall Street firms, that whistleblower laws create the wrong incentives, and provide a way for disloyal employees to get very wealthy overnight. That’s utter bullshit. The reality is that all of the whistleblowers I’ve worked with would probably have been ‘smarter,’ and served their economic interests better, just to look the other way. If you calculate what they would have earned if they’d kept below the radar and continued their professional careers, it would be a hell of a lot more money than they earned blowing the whistle.”

Worse, Jones was haunted by the knowledge of myriad helpless patients still being abused by pharmaceutical companies. Building walls to pay for food, Jones continued to investigate the various drug protocol schemes around the country. Eventually he learned of another whistleblower law that might allow him to bring suit against Johnson & Johnson in the name of the United States of America. It had been passed at the height of the Civil War, and at its heart was a Latin phrase that sounded like a sorcerer’s incantation: Qui tam pro domino rege quam pro se ipso in hac parte sequitur.

The phrase, which means, “He who sues on behalf of our Lord the King and on his own behalf,” originated in early medieval England, where the king, having no regular police unit, often relied on private individuals to help enforce his laws. The “qui tam” mechanism allowed common citizens to become private prosecutors and to bring suit on behalf of His Majesty, even when the Crown took no part in the proceedings. It also paid these citizens a bounty if they won the suit. The earliest known qui tam provision appears in a 695 declaration of King Wihtred of Kent: “If a freeman works during the forbidden time [i.e., the Sabbath], he shall forfeit his healsfang [i.e., pay a fine in lieu of imprisonment], and the man who informs against him shall have half the fine, and [the profits arising from] the labor.” Other qui tam provisions that accumulated over the centuries helped control the sale of wine at universities and the brewing of beer; the manufacture of clogs and other wooden shoes; the importation of silk and grain; the practice of games like kailes, half-bowls, hand in and hand out, and queckboard; together with what one legal commentator has called “a tawdry bag of poaching, bastardy and theft.” William Shakespeare’s father was sued, and perhaps ruined, by qui tam informers who accused him of usury and the illicit sale of wool. From the fourteenth century, an increasing number of qui tam laws enabled private persons to sue public officers, including mayors, sheriffs, bailiffs and customs officers, for negligence and for engaging in private business related to their public duties.

The thirteen British colonies in America adopted numerous English laws that contained a qui tam provision; at the First Congress in 1789, shortly after signing the Constitution, the Framers passed several qui tam laws of their own. But the most momentous private prosecutor law in America was enacted a century later, in 1863, when the Union army suffered from sweeping fraud by defense contractors. Two years earlier, at the beginning of the Civil War, the Union’s fledgling Department of Defense had rushed to equip a fighting force, at a moment when the North–South split was causing severe shortages in basic supplies like wool, horses and gunpowder. The result was, as one congressman put it, “a mania for stealing that ran from the general to the drummer boy.” When Brooks Brothers ran out of wool, the company began pressing rags together with glue to make “shoddy” uniforms, which, as the Sacramento Daily Union reported in 1861, “resolved themselves into their original elements within a week after being put on by the soldier.” Horse traders sold blind mules and lame horses to Army quartermasters at $110 a head; armorers supplied defective rifles that blew off soldiers’ thumbs at the first shot, then collected the weapons, repaired the defects, and sold them back to the Army at a markup. Artillery crews in the heat of battle pried open gunpowder barrels only to find them brimful of sawdust. Jim Fisk, a circus performer turned stockbroker who became one of the most notorious robber barons of the Gilded Age, made millions selling shoddy blankets and cardboard boots to the US military. “You can sell anything to the government,” he once bragged, “at almost any price you’ve got the guts to ask.’’

Abraham Lincoln detested such war profiteers, and agreed with New York congressman Charles H. Van Wyck, an abolitionist and vehement opponent of contract fraud, who wrote: “Worse than traitors in arms are the men who pretend loyalty to the flag, feast and fatten on the misfortunes of the nation, while patriotic blood is crimsoning the plains of the south and their countrymen are moldering in the dust.” At the beginning of the war, Van Wyck chaired a House Select Committee on Government Contracts, which questioned hundreds of witnesses and produced a long and lurid chronicle of defense chicanery. “Nearly every man who deals with the Government seems to feel or desire that it would not long survive,” Van Wyck observed, “and each had a common right to plunder it while it lived.”

To rein in such abuse, which threatened the Union war effort, in 1863 Senator Jacob M. Howard and a group of reform-minded congressmen sponsored the False Claims Act, a vigorous and inventive new fraud-fighting measure. The law fined offending contractors $2,000 for each misrepresentation, or “false claim,” that they made in their request for payment from the government. In addition, defendants were liable for double damages—they had to return to the Treasury twice what they had stolen. But the law’s most incisive feature was its qui tam provision, which allowed individuals to prosecute fraud with or without the government’s participation. Allowing private citizens to sue on behalf of their government was essential to the effectiveness of the False Claims Act, not only because no central law enforcement agency or Department of Justice yet existed, but also because high-ranking officials in the government, including Secretary of Defense Simon Cameron and Secretary of the Navy Gideon Welles, were implicated in the fraud. In return for insider information, the whistleblower, which the new law termed a “relator,” received 50 percent of the money recovered by that suit. Senator Howard explained that he favored the qui tam provision because “ ‘setting a rogue to catch a rogue’ . . . is the safest and most expeditious way I have ever discovered of bringing rogues to justice.”

Lincoln championed the law, urging Congress to send an army of “citizen soldiers” against corrupt military contractors and their creatures within the government. After Congress passed the False Claims Act by a generous majority, it became known as the “Lincoln Law.”

Predictably, defense companies disliked the new act and eventually found a way to defang it, with help from the executive branch. In 1943, with the United States deep in World War II, leading contractors urged Congress to repeal the law, claiming that it impeded their ability to deliver vital war matériel. Attorney General Francis Biddle agreed. Biddle had learned that a few enterprising lawyers had begun hanging around courthouses, copying criminal complaints as soon as they were filed by the Department of Justice and refiling them as civil False Claims Act lawsuits. Although these new lawsuits often resulted in further recoveries for the Treasury, Biddle viewed them as dishonest. “Informers’ suits have become mere parasitical actions, occasionally brought only after law-enforcement offices have investigated and prosecuted persons guilty of a violation of law and solely because of the hope of a large reward.” He petitioned Congress to eliminate the qui tam provision, arguing not only that it enabled parasitic behavior but that such meddling by private attorneys general could harm the war effort. Biddle asserted that the DOJ should be in complete control of all litigation that concerned the federal government.

Senator William Langer of North Dakota, a lawyer like Biddle, objected. “What harm can there be if 10,000 lawyers in America are assisting the Attorney General of the United States in digging up war frauds?” In fact, he pointed out, the DOJ had not diligently pursued fraudulent defense contractors, though their crimes often endangered soldiers’ lives. But the law’s opponents won the day: although Congress didn’t repeal the FCA entirely, it curtailed the role of the relator, cut the potential bounty and added a “government knowledge” clause that required the dismissal of all cases in which the wrongdoing had previously been known to a public official—which was almost always true. The defense contractors and the DOJ had succeeded in neutralizing the FCA.

Yet while imaginative lawyers, by angering Attorney General Biddle, had led to the weakening of the act, forty years later, during a further season of defense scandals, another such lawyer found a way to revitalize the law and turn it into the US government’s most powerful fraud-fighting tool.

John Phillips first heard of the False Claims Act in 1983, as he sat in a breezy, light-filled office in Century City, the headquarters of the Center for Law in the Public Interest (CLIPI). The office bore little resemblance to a law firm, though it was a step up from CLIPI’s original location in a strip mall, where the Formica furniture and orange shag carpet had exuded a lingering fug of fried food from the burger joint next door. Phillips had cofounded the Center in 1971, having left the august law firm of O’Melveny & Myers after revealing, in a case he’d taken pro bono without telling the firm’s partners, that their biggest client, Union Oil, had broken the law by secretly funding a referendum against public transportation. Three other O’Melveny associates also left the firm with Phillips to cofound CLIPI.

The firm’s shabby-chic office was one of many iconoclastic moves. “At first we had virtually no money, except a small grant from the Ford Foundation,” Phillips remembers. “We hardly had jobs at all, because public interest law was in its infancy. So we took the cheapest offices we could find. But the contrast with the oakpaneled gravitas of big law firms really worked. It signaled to everyone that we weren’t just doing your average lawyering, but were up to something different.”

Just so: Phillips isn’t your average lawyer. He’s lean and tanned and voluble, and seems restless until he hears an idea that really interests him. Then his jaw and his posture firm, and his eyes get the distant, inward-looking commitment of a marathoner at the starting line, as he latches on to the idea, teasing out ways make it better. Some of his ideas come from deep left field. “One time John decided that pregnant women being forced to carry babies for nine whole months was cruel and unusual, a kind of slavery,” his wife, Linda Douglass, a former distinguished television journalist and director of communications for the White House Office of Health Reform under Barack Obama, told me. “He talked with a bunch of biotech experts, and generated some interesting theories. Including bringing babies to term in the uteruses of cows.” She cocked her head pertly and watched my reaction, while Phillips held his chin with a hint of contrition.

“That idea never got much traction!” Douglass cackled. You could see from Phillips’s expression, tinged with wistfulness and tenacity, that he hadn’t completely given up on it. “Tricky to put all the pieces of the puzzle together, sure,” he said quietly, almost to himself. “But something like this still could work.”

Phillips has a flair for calculated rebellion. As a boy barely able to see over the dashboard, he borrowed cars from his father’s Ford dealership and drove them around woodlots in Leechburg, the coal and steel town in western Pennsylvania where he grew up. Around ten o’clock in the evening he’d often drive down to the Elks Club to collect his father, who’d been drinking there for hours and was usually in no condition to drive himself home. Upon graduating from high school in 1960, he enlisted in the army, rather than risk being drafted after college. He reported for duty to Fort Knox, Kentucky, but learned when he arrived that there weren’t enough empty bunks in the barracks; he and his fellow recruits had to stand in formation in the courtyard all night. “I’ve never been so cold,” he remembers, obviously still irritated. “Can you imagine? Your first day in the service of your country, and you spend it standing in the cold like an idiot?” The next year, starting a new tour of duty at Fort Benning, Georgia, he discovered that his name was missing from the roll call roster. For the first three months, while his comrades in arms went through basic training, he read philosophy in the local library, returning to the barracks for dinner and sleep. Later, the recruits’ belongings were being pilfered while they trained, so he set a trap with ink-stained money and caught the culprit, a cook’s assistant; when the commanding officer refused to discipline the thief, Phillips wrote one of his congressmen and had the officer reprimanded. After the army, he earned a degree in government and international studies at Notre Dame, then attended law school at the University of California at Berkeley, at that time a nexus of protests against the Vietnam War.

When Dupont Circle was still druggy and dangerous, he bought the Blaine Mansion, the enormous 1881 residence on the Circle that is now his Washington residence and the headquarters of his law firm, Phillips & Cohen. He fell in love with Borgo Finocchieto, an abandoned hilltop village in the Tuscan countryside, bought it all, and, with eight years of effort and expense, restored it into an oasis in the sky. His eye for future value is occasionally off. He was an early investor in Theranos, the biotech company that seemed poised to revolutionize laboratory blood testing and reap a fortune before the company’s leaders were charged with massive civil and criminal fraud. But far more often than not, his risks pay off. The False Claims Act certainly did, and handsomely.

Phillips’s rebelliousness, tenacity, entrepreneurialism and strategic brilliance all helped CLIPI win a series of landmark cases in civil rights and First Amendment rights, environmental quality, consumer protection and affordable housing. When the City of Los Angeles ran the Century Freeway through some of its poorest neighborhoods, evicting thousands of residents, Phillips and his partners sued the city for civil rights and environmental violations, forced the construction of high-quality replacement housing, and eventually caused the freeway to be redesigned. They blocked the construction of nuclear power plants, saved public art masterpieces from demolition and championed the rights of blacks and women in the Los Angeles Police Department and in private sector jobs. After the Watergate investigators revealed that the defense giant Northrop had given $50,000 to the Nixon administration, some of which had gone to the Watergate burglars as hush money, CLIPI sued Northrop for illegal use of corporate funds, and eventually got Tom Jones, the Northrop president and CEO, to admit under oath that his company routinely paid bribes to foreign governments to secure contracts, in order to keep pace with competitors like Lockheed, who were doing the same. The revelation made nationwide news, triggered Senate hearings on defense contracting fraud, and led to the passage of the Foreign Corrupt Practices Act, a potent statute against corporate bribery abroad. Phillips also pioneered a new California law that could force defendants to pay the plaintiff’s attorney fees if the suit served the public good. “CLIPI was a fantastic job,” Phillips says. “I’d found a way to do good, and to do well doing it.”

In 1981, however, soon after an assailant shot John Lennon at point-blank range with five hollow-point bullets from a .38 Special, the ever-restless Phillips went on a leave of absence from his firm, cashed out his pension fund and took up arms against the National Rifle Association. He drafted Proposition 15, a California initiative to freeze new handgun sales, which received statewide support and was endorsed by Tom Bradley, the popular mayor of Los Angeles who was running on the same ballot to become the state’s first black governor. Four months before the election, pollsters predicted that Prop 15 would pass by a 2-to-1 margin, and gave Bradley an insurmountable 7-point lead.

Then the NRA arrived. Pro-gun activists launched a $7 million fear campaign among white rural inhabitants of California’s Central Valley, many of whom owned guns. They ran television ads in which armed, black-swathed burglars broke in on defenseless white grannies. They set up voter registration centers in gun stores throughout the state, and signed up three hundred thousand new voters. Prop 15 was voted down overwhelmingly, and Tom Bradley lost by a narrow margin.

In 1983, sitting in Century City after the NRA debacle, Phillips tried to reinvent himself once more. He asked an aide at CLIPI to assemble a list of little-known statutes that might be enhanced to create leverage against corporate power. Halfway down the list he found a nearly defunct nineteenth-century statute with a curious Latin phrase. Though in much-watered-down form, the False Claims Act still existed in the US legal code in 1983. And one case was currently working its way through the courts, brought by a three-hundred-pound machinist and Vietnam combat veteran, Jack Gravitt, against General Electric, then the nation’s largest corporation and a leading defense contractor, which Gravitt accused of defrauding the federal government to the tune of $40 million. Phillips called Gravitt’s lawyer, a young Cincinnati employment attorney named Jim Helmer, who explained that the DOJ was attempting to end the case with a patently inadequate $264,000 settlement with General Electric, and was threatening both Helmer and Gravitt with legal action if they didn’t go along.

Phillips was riveted. At that moment, the defense industry was embroiled in public scandals as virulent as those of 1863, when Abraham Lincoln had signed the original False Claims Act. Forty-five of the top hundred defense contractors were under investigation for multiple offenses, and four of the largest—General Electric, Rockwell, GTE and Gould—had been convicted of criminal fraud. The Department of Defense, under Caspar Weinberger, was being ridiculed for paying $640 for toilet seats on military planes. Lincoln had signed the original law to stop army and navy contractors from stealing taxpayer dollars, but also to push complacent or complicit government agencies to act. Phillips wondered: Could the Lincoln Law be revived and fortified to fight modern defense fraud? Could its all-important qui tam provision force the DOJ to discipline politically powerful fraudsters? Could Ronald Reagan be made to understand that private whistleblowers teaming up with prosecutors to recover taxpayer dollars was an ideal example of his vaunted public-private partnership?

Qui tam pro domino rege quam pro se ipso in hac parte sequitur. As John Phillips murmured the Latin phrase, his eyes got that familiar faraway look.

________

Eighteen months later, Phillips had achieved the impossible. He had persuaded a coalition of left-leaning Democrats and hard-right Republicans to join forces and amend the False Claims Act, reversing the damage done to the law during World War II and adding sharp new penalties, anti-retaliation protection for whistleblowers, and a stronger qui tam provision that made relators a formal party to their cases, allowing them to object to inadequate settlements and to prosecute cases alone when the government declined to intervene. The revitalized law guaranteed whistleblowers between 15 and 30 percent of funds recovered in successful cases; wrongdoers in these cases were also required to pay the whistleblowers’ legal bills.

The coalition was led by Chuck Grassley, the conservative Republican senator from Iowa, and Howard Berman, a liberal Democratic congressman from California. Polar opposites on most social issues, together they were a political odd couple of formidable energy and reach. When I asked Grassley, who receives millions of dollars in contributions from large corporations, why he backed a law that, according to many of his fellow Republicans, stacks the deck against American industry and enriches a lot of clever lawyers, he smiled his tart, preacherly smile. “I’m no enemy of corporations, and I’m certainly no great friend of lawyers,” he said. “But this law just works. It breaks the fraud cycle.”

A closer look at Grassley’s record reveals telltale anomalies that have made him whistleblowing’s most effective champion in Congress for the last four decades. He’s known for his attentiveness to ordinary citizens and regularly meets with Iowa farmers, housewives and small business owners visiting Washington even when he has ostensibly more significant work on his DC calendar. He is a tireless watchdog against abuse of authority by the executive branch. “Senator Grassley firmly believes that individuals have a right of conscience, and that they need to be protected from bureaucratic uniformity and repression,” says Ralph Nader, who over the years has fought many battles both with and against Grassley. “He loves civil servants who have conscience and speak out.”

Above all, Chuck Grassley hates fraud, waste and abuse. Though pharma and healthcare companies help bankroll his elections, he has pursued Medicare corruption more relentlessly than anyone else in Washington. Grassley sees whistleblowing as a way of fighting fraud and protecting the individual simultaneously: of allowing individual citizens to make themselves heard by Big Government and Big Business alike. Since he first came to Washington as an Iowa representative in 1975, he has helped pass more than thirty whistleblower laws and provisions against both corporate and government misconduct, ranging from air safety to healthcare, shareholder rights to national security.

“Whistleblowing is a great act of courage and patriotism, yet all too often, whistleblowers are treated like a skunk at a picnic,” Grassley says. “The Founding Fathers recognized whistleblowing as one of the central rights, and duties, of the citizen to his society. This is about individuals healing the disease of bureaucracy and public thievery.”

On September 17, 1985, at the height of public outrage over defense contract fraud, Grassley chaired hearings before a subcommittee of the Senate Judiciary Committee that paved the way for the False Claims Act amendments—the opening salvo in a bitter war over whistleblowing that continues to this day. An odd assortment of witnesses had gathered for the event. Jack Gravitt, the Purple Heart recipient and whistleblower against General Electric, sat at the front of the room, beside attorney Jim Helmer and not far from John Phillips. Nearby were two senior Department of Justice officials, Jay Stephens and Stuart Schiffer, who soon made clear that the DOJ, as the prosecutorial arm of the executive branch, opposed the new law even more vehemently than GE did.

“Contractor fraud may well be the world’s second oldest profession,” Grassley said in his opening statement. “Certainly after 122 years of experience with contract fraud in this country, the U.S. government should have come to grips with how to solve this age-old problem.” In an obvious swipe at the DOJ, Grassley continued, “If we wish to deal effectively with rampant fraud, we must ask ourselves if the current system is institutionally capable of doing that. The evidence suggests it is not.”

Jay Stephens countered that Justice was actually doing an excellent job at fighting defense fraud, and that a stronger False Claims Act would hamper its work. The law, he said, was an anachronism from a time when the United States had no central investigative force; now that the DOJ and the FBI existed, most qui tam whistleblowers were parasitic “bounty hunters” who interfered with legitimate law enforcers and ultimately provided little useful evidence of wrongdoing. Finally, Stephens suggested that the act was unconstitutional. (This followed an earlier legal opinion, written by Assistant Attorney General William Barr, according to whom the False Claims Act, with its crucial qui tam clause, represented “a devastating threat to the Executive’s constitutional authority and to the doctrine of separation of powers.”) Stephens and his colleague Stuart Schiffer concluded that they were “quite proud” of the DOJ’s record of prosecuting defense contractors without the False Claims Act.

“It seems like every Department of Justice witness paints a rosy picture [of their prosecutions],” Chuck Grassley observed drily, “even though the evidence contradicts what they say.” Then he introduced John Gravitt, whose experiences as a plaintiff against General Electric demonstrated why the False Claims Act needed fixing—not least because the DOJ had been winking at fraud. Gravitt testified that GE was overbilling the Department of Defense with counterfeited time stamps at its Evendale, Ohio, aircraft engine plant, where he worked. Yet his numerous, detailed reports of this fraud, which amounted to $40 million over five years, had been ignored by his bosses and later by the Defense Department. The only concrete outcome of Gravitt’s actions was to get himself fired.

As a last resort, Gravitt had brought a false claims suit against GE, but the DOJ’s response had been to arrange a tiny settlement with the company, for a fraction of what it had stolen. When Gravitt and Helmer announced that Gravitt intended to pursue the case alone, as a false claims relator, the DOJ promptly opened a civil case against GE, which under the terms of the 1943 amendments to the False Claims Act blocked Gravitt from proceeding against the company. Then the DOJ closed the investigation. A senior DOJ lawyer threatened to prosecute the two men criminally if they didn’t drop their suit.

Gravitt, who had been badly injured in battle near Da Nang, told the committee that he had brought his suit mainly for patriotic reasons—“to force General Electric to stop overcharging the taxpayers and the US government”—and expressed bafflement at the DOJ’s obstructionism. “It appears they don’t want somebody doing their job for them,” he said, “but it is quite evident from what we have seen thus far with the situation at General Electric that somebody hasn’t done their job for a long, long time.” He urged Congress to pass the amendments, including a strengthened qui tam provision.

Helmer agreed, stressing that the amendments were needed to protect whistleblowers from retaliation, curtail widespread fraud, and prevent the DOJ from striking sweetheart deals with powerful contractors. “So long as Mr. Gravitt is not involved, nothing prevents the United States Government and General Electric Company from ‘settling’ his case for a nominal amount to avoid adverse publicity concerning defense procurement efforts,” Helmer said. If, on the other hand, relators like Gravitt were allowed to take an active part in their litigation, they “could act as watchdogs over taxpayers’ funds and ensure that fraudulent contractors pay an appropriate amount of damages.”

Six weeks later, on a groundswell of popular resentment against defense fraud, Congress amended the venerable False Claims Act as Phillips, Gravitt and Helmer had urged. However, the new law still needed the president’s signature; Congress had adjourned, and if Reagan didn’t sign the bill within ten days, it would automatically die by pocket veto. As days went by and Reagan didn’t sign, the law’s proponents began to wonder whether the defense lobby, which had long enjoyed Reagan’s favor, had convinced him to veto it. “That was an extremely stressful time,” John Phillips remembers. “We pulled out all the stops. I notified the press, and they asked Reagan whether he was being pressured by contractors. Chuck Grassley and his staff called everyone they knew.” Finally, on October 27, a day before the veto took effect, Ronald Reagan signed the revised act into law aboard Air Force One.

The amendments reversed the changes made in 1943 and added important new provisions. They prescribed substantial penalties, which have since been increased: a company or person found guilty must repay three times the amount that they stole, plus a minimum of $11,463 for each of their false claims, which typically are contracts to provide the government with goods or services that, in reality, were never provided. Depending on factors including the quality and quantity of the evidence that the relator supplied, he or she is eligible to collect between 15 and 30 percent of the total funds recovered for the state or national Treasury. The lawyers of a successful relator also receive their expenses from the defendant—the fraudster—as well as a portion of the relator’s share.

Despite its passage into law, and its obvious merits as a fraud-fighting tool, large sections of the federal government, particularly the DOJ, remained hostile to the new FCA. Two years later, DOJ lawyers argued before the Supreme Court that qui tam was unconstitutional and unnecessary, and that the FCA should be repealed. The court rejected their arguments, noting among other things that numerous laws containing qui tam provisions had been passed by the same men who had written the Constitution—how then could qui tam be unconstitutional?

Since then, the FCA has weathered many more juridical storms, and it remains at the heart of a fierce debate within American society, between two different visions of justice.

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