The bipartisan leadership of the Senate Judiciary Committee introduced legislation Thursday to redirect a portion of money recovered through fraud cases back into Justice Department anti-fraud activities.
Senators Patrick Leahy (D-Vt.) and Charles Grassley (R-Iowa) introduced a bill that would redirect about $15 million a year in funds recovered through fraud cases back into the DOJ’s fraud enforcement efforts.
The Justice Department is currently authorized to keep 3 percent of the money it collects through its civil debt collection litigation activities in its Working Capital Fund to use for agency-wide expenditures. The new legislation would increase that amount to 3.5 percent, drawing from penalties and fines levied in fraud cases and stipulating that the additional .5 percent be spent exclusively on fraud enforcement.
The bill also would allow DOJ to recoup the costs of prosecuting and investigating successful Civil False Claims Act cases. The Department is currently authorized to deduct 3 percent from False Claims Act recoveries into the Working Capital Fund.
“In the last fiscal year alone, the Department of Justice recovered well over $6 billion through fines, penalties, and recoveries from fraud cases – far more than it costs to investigate and prosecute these matters,” Leahy said in a statement. “The recovery of these vast sums of money demonstrates that investment in fraud enforcement pays for itself many times over.”
Perhaps in anticipation of criticism that the legislation would provide the Justice Department with unchecked funding, the bill calls for increased “accountability by requiring the Justice Department to better manage and account for key spending,” according to the release.
Specifically, the bill would cap the amount of the 3.5 percent collected annually that the Justice Department can carry over to spend in subsequent years and would require the department to report to Congress on the Working Capital Fund every year. The legislation also requires the Attorney General to submit an annual report to Congress on every False Claims Act Settlement.
“Without transparency and accountability the fight to combat fraud often falls short,” Grassley said in the release. “To ensure that the funds and manpower are being used most effectively, and False Claims Act lawsuits aren’t being settled for pennies on the dollar, the transparency provisions included in this bill are an important way to hold the department accountable for its actions.”
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