I had to reach pretty far back in my law school memory banks for this one. Congress enacted the first False Claims Act during the Civil War, in order to catch suppliers and manufacturers who were cheating the federal government. The law included a qui tam provision that allowed people who had knowledge of the fraud but weren’t connected to the government to file a lawsuit on behalf of the government. What’s more, it gave them the right to collect a certain portion of the fines and penalties. Qui tam comes from a medieval Latin phrase that means “he who sues for the king and himself”—the “king,” in this case being Uncle Sam. As I said, it was old law school exam material, especially that medieval qui tam bit.
But qui tam is also very current, very simple, and very much in the news these days. The law—which has been updated over the years since the Civil War—rewards people for doing the right thing: notifying the Department of Justice of any fraud that involves federal funds and providing the evidence (or at least the initial evidence) that leads to a conviction. In Texas and elsewhere, state legislatures have climbed on the antifraud bandwagon.
Any fraud involving government funds? That covers a lot of territory, doesn’t it? Just think of the gazillions of taxpayer dollars Uncle Sam shells out annually on health care, schools and colleges, highways and bridges, farm subsidies, and defense contracts. Add space exploration, research and development funding, and homeland security, and you get a glimpse of just how much money we’re talking about and how widely it is dispersed.
And anywhere and everywhere that kind of money is spent, some of it is going to be slipped into people’s pockets, instead of going where it’s supposed to go. Contracts are illegally bid, kickbacks are paid, defective products are sold, regulations are ignored, the government is overcharged—and that’s just the beginning of the ways greedy people divert money into their offshore bank accounts, where they seldom pay income tax on their ill-gotten gains. Which means that the IRS can be involved as well.
The False Claims Act encourages whistle-blowers to tell the truth about fraud they see on the job and institutes legal proceedings designed to return those dollars, plus a hefty fine, to the federal kitty. The FCA also safeguards the whistle-blower from retaliation by an employer and rewards him or her for having the courage to do something most people don’t like to do: snitch. And the reward is definitely enticing. Under the law, for every dollar Uncle Sam collects from fraudsters, the whistle-blower may earn from fifteen to as high as thirty cents, depending on the case.
The total amounts of these payoffs can be staggering. I read recently that the guy who blew the whistle on the Union Bank of Switzerland’s U.S. tax fraud pocketed $104 million. A group of six Pfizer employees were awarded $102 million for exposing the illegal promotion of the arthritis drug Bextra. And $96 million was paid to a woman who identified faults in manufacturing at the pharmaceutical company GlaxoSmithKline. Not all rewards are this large, of course. The average case settles for $2 million or less, for which the average whistle-blower earns about $320,000 and the average lawyer 40 percent.
And that’s as it should be, for the process is a complicated one and there are plenty of ways to go astray. For one thing, a whistle-blower’s False Claims case has to be fully and completely documented according to federal rules, and is initially filed “under seal.” That is, everything about the case is strictly hush-hush and nobody but the court and the Department of Justice sees the evidence the whistle-blower has assembled. Once the case is filed, the Department of Justice opens its own investigation. If the case is solid and there’s potentially enough fraud to make it worth the attorney’s time, the DOJ will step in and litigate on behalf of the government and the whistle-blower.
Meanwhile, everything is still under seal, and the defendant (the alleged fraudster), is completely in the dark. He doesn’t know that a whistle-blower has filed a lawsuit until the DOJ decides to deal itself in. Or out, in which case the whistle-blower has to decide whether to go forward on his own or drop the whole thing. You can see why I said that this is a matter for the attorneys who know how to litigate stuff like this. It’s not a job for the unlearned or the fainthearted.
But there’s another wrinkle. If a qui tam case ends in a large penalty for the wrongdoer, the first to file is the one who gets the goodies. Say, for example, that two or three employees have observed the same corporate fraud. The “first to file” rule means that the one who gets to the courthouse first gets 100 percent of the credit for reporting the fraud, even if someone comes along later with a briefcase full of more and better evidence.
And that’s it in a nutshell. Of course, I could be way off base on this one. Kelly might have been onto something else entirely. But people don’t go shopping for a False Claims attorney just for the fun of it. If Charlie Lipman had suggested that Kelly call those attorneys, it was because he thought she needed somebody like Stevens, Worth, and Bullock to represent her. Ergo, she must have told him that she had some sort of knowledge of a fraud and wanted to become a whistle-blower. But I still had no idea what she might know or whether a False Claims attorney would consider her case substantial enough to make it worth pursuing.
But whatever it was, it could have potentially put her in danger. Whistle-blowers do not lead charmed lives. I shivered as I remembered what had happened to Karen Silkwood, an employee of Kerr-McGee Corporation, a company that manufactured plutonium pellets for nuclear reactor fuel rods at an Oklahoma site. Silkwood, twenty-eight, was a whistle-blower who went to the Atomic Energy Commission with her concerns about workers’ exposure to radioactive material at KMC’s Oklahoma factory. And as I remembered the story (retold in the movie Silkwood, with Meryl Streep), she was taking certain documents to a New York Times reporter when her car was hit from behind and forced off the road. She was pronounced dead on arrival at a local hospital. The documents—she had told friends that they were proof that Kerr-McGee was covering up faults in the handling of highly radioactive materials—were missing from her wrecked car. They were never found.
I sat up straight, my heart pounding. But I shouldn’t let the similarity between the car crashes—Karen Silkwood’s and Kelly Kaufman’s—lead me to misconstrue the situation. Kelly could have been onto something else entirely or onto nothing at all. I am not a conspiracy theorist by nature, but I have been known occasionally to leap to a conclusion on pretty flimsy evidence or connect a few dots that, on closer inspection, didn’t exist. If I was doing that in Kelly Kaufman’s case, it wouldn’t be the first time.
Anyway, I still had the third of Lara’s three phone numbers—the local number—to check out. I glanced at what I’d jotted down on the napkin and frowned, thinking that it looked familiar. Pretty darned familiar, in fact. I punched it into my cell phone, and as I did, the ID in my cell phone came up. Kelly hadn’t called a local attorney. She had called Jessica Nelson at the Pecan Springs Enterprise. I thought I knew why—and that it was a seriously bad idea.
Jessica Nelson is a dedicated young reporter who became famous a couple of years ago. She was on what seemed like a routine story assignment when she was kidnapped by a guy who was desperate to cover up a botched drug-related arson-murder. But Jessica managed to get away in a rather dramatic fashion. The day after her release, she was interviewed on CNN, NBC, and CBS, and the week after that, on ABC’s Good Morning America. She told how she had waited in fear in the dark, bound and gagged and wondering if she was going to be killed. And how she had slipped her bonds and taken down her captor entirely by herself, armed only with a seven iron from his golf bag. The media loved that part of the tale, and by the end of the first interview, Anderson Cooper had dubbed Jessica the Seven-Iron Slugger. Three hours later, she had been contacted by a New York literary agent. Her book was published not long afterward and did very well as true crime.
Jessica and I have remained friends and I see her often these days, at the newspaper and around town. She hangs around the police station, where she’s
good friends with Sheila and knows most of the detectives. She’s always on the lookout for a good story—especially another true crime.
Jessica picked up on the first ring. “Jessie Nelson,” she said crisply. “What can I do you for?”
“Huh,” I said. “Can’t you come up with something a little less corny than that?”
“Hark gets what he pays for,” Jessica retorted. “Pure corn.” She had recognized my voice, or more likely, my caller ID on her phone. “What’s up, China? Are you calling to say that you won’t be meeting the deadline for your page—again?”
Hark Hibler is the editor of the Enterprise, Jessica’s boss. My boss, too, at least on Thursdays, when my garden column is published. I write it in return for free advertising for the shop, which has turned out to be a pretty good deal. Hark is also Ruby’s boyfriend, at least at the moment.
“Nope. I’m calling to ask you something,” I said. “Got a spare minute?”
“Just. I’m finishing a story and it’s due in the boss’ computer in half an hour.”
“Plenty of time,” I said. “Did a gal named Kelly Kaufman phone you yesterday?”
There was a moment’s silence. Then a guarded, “Well, maybe. Who’s asking? You or somebody else? If it’s you, why?”
“Me,” I said. “Me and me only. Did she?”
Jessica’s “Yeah” was also guarded. “And why exactly are you wanting to know?”
I countered with, “Did she tell you why exactly she was calling?”
Jessica sighed, and I pictured her rolling her eyes. “Well, yes and no. That is, she told me that she was calling with a heads-up about a story and hinted that it involved some local people and might make a pretty big local splash. Maybe a few national ripples, as well. I didn’t take it too seriously. I hear that a lot from people who are looking to get their five minutes of fame. But then—” She stopped.
Damn. I took a deep breath. “So? What happened? Did she tell you why she was calling? What was it about?”
A pause. I could hear the sound of a pencil tapping on the desk. Jessica operates on pulses of nervous energy. “So what happened was that she didn’t want to talk to me on the phone. Too hush-hush or something, or maybe she was afraid that Homeland Security or the FBI has my phone tapped. We made a date to get together for lunch today at Beans’.” More tapping. “The thing is, she didn’t show.”
“I see,” I said. Of course she didn’t. She was in the hospital.
“In case you’re curious,” she added, “since I was there, I went ahead and ate. I had Bob’s cabrito fajitas, which are truly spectacular. If you don’t have anything better to do tonight, go over there for supper.”
“So she didn’t tell you what she was calling about?”
“Nope. And like I said, she didn’t show. But what I’m saying, China, is that you absolutely have to have some of Bob’s cabrito fajitas.” Bob Godwin owns Beans’ Bar and Grill and is famous for his cabrito. “You’d love them. He says he uses orange zest, garlic, and a couple of different chiles in his rub, then he slow roasts it and serves the cabrito thin-sliced, with warm flour tortillas and salsa. I’m telling you, it’s out of this world.”
So Kelly hadn’t told her story to Jessica, which was a good thing. “I’m on my own for dinner tonight,” I said. “I think I’ll do Beans’.” I didn’t even pause for breath. I was eager to get off the line before she could start asking questions. “Thanks a bunch, Jessie. You have a great afternoon now. Talk to you later.”
But I didn’t click off quite fast enough.
“Hey, whoa,” she said quickly. “Where’re you going, China? Hang on a sec. You know about that car crash last night?”
“Which crash?” I asked, playing for time.
“Out your way, on Limekiln Road. A one-car crash. Kelly Kaufman was involved. You haven’t heard?”
“Oh, that one.” I don’t mind messing with the truth, and I’ll even fabricate a story when necessary. But I hate to lie in answer to a direct question. It’s too much like perjury. I sighed. “Yes, I heard.”
“Well, I hadn’t. Not until I got back from lunch and found out why she didn’t show.” Jessica took a breath. “There’s no official word from the hospital, but I called a buddy of mine over there and learned that Kaufman is critical, on life support. Then I talked to Sheila, and found out that they’re looking for a vehicle that might have rear-ended her. Maybe you can tell me something about that?”
I heard the clickety-click of Jessica’s computer keyboard and guessed that she was opening a file. It wouldn’t do any good to tell her to stop. She has a nose for news that just won’t quit. She was smelling a story.
“All I know is that Kelly is in the hospital,” I said evasively. Now I really wanted to end the conversation. “Sorry, Jessie, but something has just come up here that I need to—”
“Sheila told me that there are fresh dents in the rear end of the Astro Kaufman was driving,” Jessica said insistently. “And flecks of orange paints in the dents. You wouldn’t happen to have heard about that, would you? That wouldn’t be why you’re calling, would it, mmm?”
Clickety-click.
“I’m afraid I don’t know any more than you do,” I hedged, which might or might not have been true, since I didn’t actually know how much Jessica knew, or guessed, or was inclined to speculate.
“Jimmy went out to the PSPD’s impound yard to get some photographs of the van and sent me a couple from his cell phone. I just saw them. The Astro looks like it was pretty well totaled.” Jimmy is the newspaper’s staff photographer, a college kid who is working his way to a journalism degree at CTSU. “Sheila told me that Kaufman was heading west on Limekiln Road when it happened, and that they’re operating on the theory that the van was struck from behind.” She paused. “So naturally I’m wondering about that, since you’ve called to ask me about her. You live out west on Limekiln, don’t you?” She didn’t wait for me to answer. Jessica knows very well where I live because she’s been there, quite a few times. “Was Kelly Kaufman on her way to see you when she went off the road?”
“No comment,” I said firmly.
Clickety-click.
“Did her reason for coming to see you have anything to do with her reason for calling me?”
“How the heck should I know?” I asked testily. “I have absolutely no clue why she called you.” Which was not exactly true, since I knew whom Kelly had called before she called Jessica, which gave me a couple of pretty good clues. “And no, you may not quote me.”
That didn’t stop her. “Let’s try again. Do you think the car crash might have had anything to do with her reason for calling me yesterday afternoon? Or for seeing you last night? For all I know, you two might be working together on this story she wanted to talk to me about. You have been known to solve a mystery or two around this town, you know.”
“No, we aren’t working together,” I said flatly. “Jessica, I wish you wouldn’t—”
“But she was on her way to your house?”
“I answered that already, Jessica. No comment.”
“Well, okay. But you’ve got to admit that it looks suspicious. Kaufman hinted to me that she had a big story I might be interested in writing about. And now you turn up, asking questions about her. It’s not a huge stretch to connect the dots.” Her tone became confidential. “Come on, China. If there’s something going on behind the scenes here, you and I would both be better off if we put our heads together and shared what we know. We’ve done it before. There’s no reason not to do it this time. Right?”
Wrong. There was a very good reason not to. But I couldn’t tell Jessica what it was or why it had been a very bad idea for Kelly to approach a reporter with her story.
Here’s the thing. When a whistle-blower files a False Claims lawsuit under qui tam rules, the case is immediately sealed. No matter what the substance
is or who’s involved, nobody, but nobody, is supposed to know a thing about it—except, of course, for the whistle-blower herself and her lawyers, the court, and the legal eagles at the Department of Justice.
Yes, there have been and continue to be other situations where a whistle-blower may want to air his findings on the Internet or head for a hungry reporter and spill all the beans in order to get the story out. That was what Karen Silkwood had to do, since, at the time she was trying to protect the safety of her coworkers, whistle-blowers at nuclear plants weren’t protected. That’s what CIA whistle-blower Edward Snowden did, because the Whistleblower Protection Act doesn’t apply to him or to any employees of the CIA, the FBI, and the Government Accountability Office.
But it applied to Kelly and to her case—if she had one, that is.
And although I confess to having only a general knowledge of the qui tam rules, I knew that if Jessica Nelson, zealous young journalist, smelled a story, she would feel duty-bound to dig as deeply as she could into it. And when she’d found out as much as she could about it, she would write a story that Hark Hibler would plaster all over the front page of the Enterprise. Which meant that if Kelly actually had a viable False Claims case, it would go down the drain as soon as the newspaper hit the streets. The fraudster would learn about the case against him, the Department of Justice would refuse to participate, and Kelly could become ineligible to receive whatever reward she might have had coming.
Assuming that she was alive to claim it, of course. That might be a rather slender assumption to hang on to, but I was going to cling to it until . . . well, until it was no longer assumable. Or something like that.
Blood Orange: A China Bayles Mystery Page 14
