Everyone in the Trump Administration seems hellbent on giving the president as much power as possible over nearly everything. Congressional Republicans are playing along.
Things are less clear in the courts, especially in the wake of the skeptical reception Trump’s tariffs just received in the Supreme Court. Yet there is a lower-profile judicial effort in the works that could further empower the executive branch at the expense of corporate accountability.
The effort concerns qui tam lawsuits filed by whistleblowers under the federal False Claims Act, which dates back to the Civil War era. The actions typically are brought by corporate insiders who expose fraudulent practices committed by government contractors in the provision of goods and services, especially healthcare.
Whistleblowers file their case on behalf of the federal government, and then one of two things will happen. The Justice Department can decide to take over the prosecution of the case, and the whistleblower receives a portion of any damages or settlement paid by the defendant. If the DOJ declines to intervene, the whistleblower can choose to pursue the lawsuit independently. Any financial recovery is then shared with Uncle Sam.
Both of those options may be in jeopardy. In 2023 the Supreme Court ruled 8-1 that the DOJ could choose to dismiss a qui tam case even if it initially decided not to intervene in the matter. The dissenting vote was cast by Justice Clarence Thomas, who used his dissent to question the constitutionality of the entire qui tam system.
Now an appellate court judge is seeking to make that view a reality. Judge James Ho of the 5th Circuit Court of Appeals has issued a concurring opinion in a ruling that dismissed a qui tam case against Encompass Health Corp. for allegedly submitting false claims to Medicare.
Ho, appointed by Trump during his first term, urged his colleagues to revisit the constitutionality of qui tam by making the MAGA-style argument that whistleblowers should not be able to bring cases, given that they “are neither appointed by, not accountable to, the President.”
It is unclear whether Ho’s colleagues will go along with his suggestion, but it is troubling to think that other jurists will take up the call to abolish qui tam. Whistleblower lawsuits have played a major role in lawsuits exposing and punishing corporate fraud against the government and thus the public.
A substantial portion of the 3,000 False Claims Act cases we document in Violation Tracker were initiated by whistleblowers and taken over by the DOJ. When the DOJ declines to intervene, most qui tam cases collapse for lack of resources. Yet we document about two dozen that survived and which recovered substantial sums. For example, in 2023 Eli Lilly was ordered to pay $183 million in a qui tam case that accused the company of shortchanging the Medicaid program in its drug rebate calculations.
Preserving the ability of individuals to expose corporate fraud is especially important at a time like this, when the administration in power has exhibited an inclination to make prosecutorial decisions based on dubious criteria. Cases are being dropped, leniency deals are being offered, and pardons are being awarded to companies and executives with ties to the president and his family’s businesses.
If whistleblowers were to be blocked from initiating cases, more rogue corporations would go unpunished.