AG nominee Barr to back off previous attack on antifraud law: source

(Reuters) – U.S. President Donald Trump’s attorney general nominee William Barr is expected to back away from prior criticism of an anti-fraud law that allows private individuals to bring lawsuits on behalf of the government, a source familiar with the matter said on Wednesday.

Barr will clarify his current thinking on the U.S. False Claims Act, which he has previously called an unconstitutional “abomination,” when he goes before the U.S. Senate Judiciary Committee in a confirmation hearing in coming months, the source said.

Barr did not immediately respond to a request for comment sent to his law firm email account.

The law allows whistleblowers who expose fraud against the U.S. government to bring private lawsuits and keep a percentage of any damages awarded. In October, for example, the Justice Department agreed to a $93 million bounty for three whistleblowers after drug wholesaler AmerisouceBergen Corp (ABC.N) paid $625 million to resolve their allegations of Medicaid fraud.

Business groups, including the U.S. Chamber of Commerce, have criticized the False Claims Act (FCA) as primarily benefiting plaintiffs’ lawyers and their clients instead of taxpayers.

But the Justice Department has raked in nearly $60 billion in FCA settlements and judgments since the law was overhauled in 1986, including nearly $3 billion last year.

The law also still enjoys the strong support of Iowa Republican and Senate Judiciary Chairman Chuck Grassley, who was an architect of 1986 amendments that increased the FCA’s potency.

In 1991, during Barr’s previous confirmation hearing to serve as attorney general under President George H.W. Bush, Grassley explicitly asked Barr to pledge support to the FCA’s whistleblower provisions.

As a high-ranking Justice Department official in the Bush administration, Barr had authored a 1989 memorandum that concluded the law’s whistleblower provisions violated the separation of powers doctrine and other constitutional requirements.

Barr later said in a 2001 interview for an oral history of the Bush presidency that he wanted the Justice Department to attack the constitutionality of the law but was opposed by then Solicitor General Kenneth Starr.

The U.S. Supreme Court ruled unanimously in 2000 that private whistleblowers can sue on behalf of the U.S. government.

Barr has recently told others that his prior comments are outdated, according to the source. Barr believes DOJ’s current handling of FCA cases protects federal interests and no longer thinks a constitutional challenge is warranted, the source said.

Grassley is expected to cede chairmanship of the Judiciary Committee to Lindsey Graham, a Republican from South Carolina, before Barr’s confirmation hearing. He hailed President Trump’s nomination of Barr in a statement last month.

Grassley’s spokesman did not respond to a request for comment.

Reporting by Alison Frankel; Editing by Anthony Lin and Bill Berkrot

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