ANNAPOLIS, Md. (AP) — Lame horses, faulty ammunition — even during the Civil War dishonest businesses were attempting to cheat the government.
More than 150 years after Congress passed the federal False Claims Act during the administration of Abraham Lincoln, Attorney General Brian Frosh is backing an effort to give Maryland options to prosecute private contractors who cheat the state.
The Maryland False Claims Act of 2015 “is a way to help fight fraud, to incentivize integrity,” Frosh said Wednesday during a news conference to promote the legislation. The act, now being considered in the Legislature, would provide protection for whistleblowers and allow the state to pursue legal action against private contractors.
“We believe that by having a broader false claims act, we can do good things for the state,” Frosh said. “We can stop fraud, we can incentivize whistleblowers and we can help honest businesses, because honest businesses suffer when cheaters get state contracts and steal from the state.”
Frosh says the state could recover hundreds of millions of dollars under the broader legislation. He pointed to the billion-dollar lawsuit Virginia has launched against banks for their participation in the housing market crash, as well as the $20 million settlement New York won in 2010 against food service provider Sodexo after it was discovered the company overcharged nearly two dozen school districts.
Maryland has recovered more than $60 million since the adoption of the state’s current false claims act, which only covers health care. Information provided by the attorney general’s office shows that 29 states and Washington, D.C. have false claims acts. Nine of them, including Maryland, only address health care fraud.
Sen. Jamie Raskin, D-Montgomery County, one of the sponsors of the bill, pointed to the fact that the country’s most business friendly states — such as Virginia, Florida and California — have broad false claims acts.
“Why? They want to make sure the honest businesses are being effectively rewarded, that taxpayer dollars are being respected and cheaters are not walking off with all of our money,” Raskin said. “This legislation is long overdue.”
A similar proposal made it past the committee level and through the House last year. Frosh said he was “optimistic” the act would pass this session.
(Copyright 2015 by The Associated Press. All Rights Reserved.)