DANIEL KIRK suspected that his employer, Schindler Elevator Corp., had defrauded the federal government by falsifying or failing to file documents about the military veterans on its payroll. The company could be denied payment if it failed to meet this annual requirement; Mr. Kirk, a Vietnam vet and a manager who dealt with personnel issues, believed that the company was skirting the law.
To substantiate his claims, Mr. Kirk, through his wife, filed several Freedom of Information Act (FOIA) requests with the Labor Department to obtain forms filled out by Schindler. He said the documents showed that Schindler had failed to file the mandatory forms for several years and had entered erroneous information on those it did file. Mr. Kirk filed suit against Schindler in 2005.
The FOIA request would prove to be fatal to his cause. In a 5 to 3 decision on Monday, with Justice Elena Kagan taking no part, the Supreme Court concluded that the forms obtained by Mr. Kirk undercut his ability to sue Schindler under the False Claims Act.
The law allows a citizen to sue a company for allegedly defrauding the government — and to collect a portion of the money recovered should he prevail. But the individual must prove he learned of the alleged wrongdoing on his own and not through information that was already disclosed “in a criminal, civil, or administrative hearing, in a congressional, administrative, or Government Accounting Office report, hearing, audit, or investigation, or from the news media.” This makes sense: After all, the government should reward only people who are instrumental in bringing fraud to its attention.
What does not make sense is the court’s decision to label administrative forms filled out by the suspect company as “reports” even though they contained only raw information that had not been audited, analyzed or investigated by the government or any outside entity. The decision could prevent legitimate whistleblowers from moving forward with their cases. Corporate insiders are often essential in ferreting out fraudulent contracting practices.
Lawmakers should take up the exhortations of dissenting Justice Ruth Bader Ginsburg and rewrite the False Claims Act to ensure that public records requests such as Mr. Kirk’s do not undermine the efforts of legitimate whistleblowers.