Taxpayers Against Fraud (TAF), an advocacy group whose stated mission is to combat fraud perpetrated against the government, submitted an amicus brief for the Fifth Circuit’s consideration in a would-be whistleblower’s pending appeal before that court. TAF’s amicus brief argues in support of the Fifth Circuit reversing and remanding a decision by a Texas district court that granted summary judgment to Northrop Grumman Systems Corp. and Lockheed Martin Corp., two federal government contractors. That summary judgment dismissed claims by a former Northrop Grumman employee alleging that both government contractors violated the False Claims Act by mismanaging the budgets for the F-35 Joint Strike Fighter program to hide cost overruns, thus resulting in false financial reporting.
In granting the contractors’ motion for summary judgment, the Texas district court deemed the former employee, Paul J. Solomon, a government employee for purposes of the False Claims Act. Government employees who are obligated to disclose fraudulent financial reporting as part of their job duties are generally barred from bringing claims under the False Claims Act based on those disclosures. In his own appellate briefing, Solomon argued that the False Claims Act’s voluntary disclosure requirement does not apply to him as he was neither (1) a government employee paid to detect fraud, nor was he (2) a private employee who made a disclosure only after being questioned or investigated by the federal government. Both kinds of whistleblowers are disqualified as False Claims Act whistleblowers (which are called “relators”).
TAF’s amicus brief urges the Fifth Circuit to hold that an employee of a government contractor who voluntarily reports fraud to the federal government, despite the fact that the contractor is under a contractual duty to self-disclose such misconduct to the government, should qualify as a False Claims Act relator. If the Fifth Circuit agrees with Solomon and TAF, Solomon would be permitted to continue pursuing his claims in the trial court. Successful False Claims Act relators stand to recover a share of any financial recovery they obtain for the government on their claims.