Fraud stopper legislation is pushed

Published 12:00 am Thursday, July 8, 2004

During the last legislative session I submitted legislation that would set punishment for those that charge the state, county or city for services and materials that they don’t actually provide. The bill was well received, but did mot make it through the entire process. This proposed new law encourages citizens to report fraudulent. It would allow the person reporting the act to get a reward, and it would provide protection for that person from retaliation from their employer. Some folks might call this a “whistle blower” bill.

Examples of this all too common are: A supplier charges the state for 100 telephones, yet delivers only 50, or a consultant charges the state $100 an hour yet actually does nothing. How about charging the state $800,000 for TV and radio time when none was supplied? It happens every day, yet the very people that know about it have no incentive to report it, and certainly no desire to jeopardize their job. This legislation solves both problems; it rewards them for reporting the scam, and it protects their job.

Certain safeguards are built into the bill. It prevents ridiculously high jury awards by placing a cap on the penalty, and it discourages frivolous suits by turning the table on someone that uses a law suit as a form of harassment. The size of the penalty is based on the size of the crime, and the reward given to the person reporting the theft of tax dollars is based on the time and effort that person devotes to bringing the guilty party to justice.

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The concept of a Fraudulent Claims Act is very easy to understand and very easy to implement: the penalty is three time the amount of the theft, and the whistle blower receives 15% to 50% of the award. If a crime of this nature is reported, and the Attorney General or proper prosecuting authority (the DA if it is county money, of the city attorney if it is city money) refuses to prosecute, then the person reporting the crime can sue personally and if successful will receive a higher percentage. If the government prosecutes and does most of the work, the person reporting the crime still is rewarded, but not as much. The guilty party must pay the fine and the court costs, plus a penalty if they do not cooperate. This will be a strong deterrent to crime.

Is this good legislation and does it really work? You bet. Fourteen states have already enacted it and have lessened the need to raise taxes because of the money generated for the state coffers. The bad guys are paying penalties and the largest part of the penalty goes to the state to be used for education, roads, and indigent medical care. The tax payers in these states are relieved of a least some of the costs of operations. The federal government has recovered $12 billion dollars since 1986. Texas recovered $14 million in just one case. Hawaii put $4 million back in to state coffers in a single case, and Florida $2 million in a single case. Alabama needs to be on this list and Alabama tax payers deserve the same tax relief these other states are enjoying.

Who could be against this proposed new law? The only folks I can think of are the ones with something to hide. Fraudulent invoices and padded bills cost all the taxpayers and it is no different than taking money from the State Treasury with a gun. If it is illegal to steal money with a gun, it should be just as illegal to steal tax dollars with a pencil and piece of paper. When these slick operators steal tax dollars, it comes out of the tax payers pockets. This is a hole in the bucket we can plug.

I will introduce this bill in the next legislative session and need your help. Legislators will face over a thousand new bills, yet will pass maybe a couple hundred. Let your legislator know that you support passage of the Alabama False Claims Act. Your governor will have to sign it, so he needs to know. Your Attorney General needs it as an enforcement tool, so he needs to know how you feel. Speak up, be heard, and demand honesty in government. You worked hard for the tax dollars you send to Montgomery – let’s don’t let the crooks have a single penny of it.

To learn more bout false claims acts, visit Your senator’s name and address can be found at, and your representative’s name and address can be found at Call your senator at 334-242-7800 and your representative at 334-242-7600.

Dr. McClendon and his wife El live in

St. Clair Springs, in St. Clair County.

You may write him at 361 Jones Road,

Springville, AL 35146.