The Origins of the False Claims Act (1863)

The False Claims Act was passed in response to widespread fraud committed by suppliers against the Union Army during the Civil War. Contractors were delivering faulty weapons, rotten food, and even selling the government mules that were unfit for service. These abuses wasted public money and endangered soldiers’ lives on the battlefield.

– President Abraham Lincoln signed the original law on March 2, 1863
– The law quickly became known as “Lincoln’s Law”
– Its purpose was to protect the public treasury from deceit

The government faced serious fraud from contractors supplying the Union Army.

– Contractors delivered faulty weapons and defective equipment
– They supplied rotten food supplies that endangered soldiers
– They sold the government mules that were unfit for service
– Some suppliers delivered musket boxes filled with sawdust instead of guns

These abuses not only drained public funds but also put soldiers’ lives at risk on the battlefield. The fraud was so widespread that Congress and the public were well aware of the problem. As a result, Congressman Van Wyck of New York spearheaded investigative proceedings that exposed rampant fraud in government contracting, setting the stage for the law’s enactment.

The original 1863 FCA and the modern version differ in several important ways.

– Damages: The original imposed double damages, while the modern version imposes treble damages (three times the government’s loss)
– Penalties: The original had a $2,000 civil penalty per false claim, now adjusted to approximately $13,000 to $27,000 per claim
– Relator share: The original allowed whistleblowers to collect 50% of the proceeds, compared to 15% to 30% today
– Enforcement: The original law lacked many of the procedural tools that make the modern FCA so effective

Despite these changes, the original purpose remains the same: to protect the public treasury from deceit.

Senator Henry Wilson of Massachusetts introduced the bill in 1863 aimed at addressing fraud against the US government.

However, it was Senator Jacob Howard of Michigan who was the chief proponent of the law in Congress.

In the House of Representatives, Congressman Van Wyck of New York spearheaded the investigative proceedings that exposed rampant fraud in government contracting and set the stage for the law’s enactment.

President Abraham Lincoln proposed the legislation and signed it into law on March 2, 1863.

“Lincoln’s Law” is simply another name for the False Claims Act.

President Abraham Lincoln signed the original False Claims Act into federal law on March 2, 1863. The anti-fraud tool became known as Lincoln’s Law because of the president’s determination to protect public funds during the Civil War.

The law was enacted at Lincoln’s urging, as he embraced meatier measures to go after fraudsters bilking the US Treasury. The nickname reflects both its wartime origins and Lincoln’s personal commitment to holding corrupt contractors accountable.

Yes, private citizens were allowed to sue under the original 1863 act.

The law created a system known as “qui tam” from a Latin phrase meaning “he who sues on behalf of the king as well as for himself.”

Any citizen who knew of a false claim could file an action in the name of the federal government. Under the original law, whistleblowers could collect 50% of the proceeds. This created a strong incentive to come forward with information about wrongdoing. The law established a framework where fraud could be pursued aggressively even when government officials lacked the resources or inside knowledge to investigate every suspicious contract.

The False Claims Act fell into relative disuse over the years, particularly after the 1943 amendments. The qui tam provisions were weakened greatly as a result of those amendments, and qui tam litigation became virtually nonexistent.

The 1943 amendments virtually destroyed the ability of private citizens to bring successful lawsuits. The law remained largely dormant throughout the last half of the century due to the strict 1943 amendments and adverse court decisions.

However, the FCA was revitalized in 1986 through amendments spearheaded by Senator Grassley. The 1986 amendments breathed new life into what is known as Lincoln’s Law by empowering qui tam relators and increasing financial incentives. Since the 1986 amendments, the False Claims Act has returned over $59 billion to the US Treasury.