President Barack Obama Signs Legislation Amending the False Claims Act ("FCA") and Creating the Financial Crisis Inquiry Commission
May 26, 2009
George J. Terwilliger III, Darryl S. Lew, Daniel Levin
Introduced to Combat Fraud in Connection with Federal Assistance Fraud in the Current Economic Crisis, the Legislation Will Impact False Claims Act Litigation Generally and Will Greatly Expand Federal Enforcement Resources Resulting in a Substantial Increase in Enforcement Activity.
On May 20, President Obama signed into law the Fraud Enforcement and Recovery Act of 2009 ("FERA"). At the signing of the bill, President Obama stated:
"[This bill] allows DOJ to prosecute anyone who fraudulently obtains Recovery Act or TARP funds—precious taxpayer dollars we've carefully invested in order to turn this crisis around. And . . . it creates a bipartisan financial markets commission to investigate the financial practices that brought us to this point, so that we make sure a crisis like this never happens again."
Senators Charles Grassley (R-IA) and Patrick Leahy (D-VT) introduced FERA to provide additional funding for prosecutors and investigators and to amend numerous statutes, including the FCA, for the purpose of prosecuting financial fraud and criminalizing the misuse of federal assistance under the Troubled Asset Relief Program ("TARP"). When he introduced FERA in the Senate, Senator Leahy explained that:
"The False Claims Act must quickly be corrected and clarified in order to protect from fraud the Federal assistance and relief funds expended in response to our current economic crisis."
Read here for details and our analysis of it.
The text of the FERA can be found here.
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