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ERC President Testifies for False Claims Act

In front of the House Judiciary Subcommittee on the Constitution and Civil Justice, Ethics Resource Center’s (“ERC”; “the Center”) Patricia Harned shared her thoughts on potential amendments to the False Claims Act. During testimony, the Center’s president told Congress that certification of private sector ethics and compliance programs are beneficial in protecting taxpayers from fraud by government contractors. She further stressed that the programs should give equal focus to both ethics and compliance, which lessens the need for enforcement caused by False Claims Act violations.

Referencing the ERC’s research, Harned also noted that companies with strong ethics and compliance programs take the pressure off employees to compromise standards, and could reduce fraud activity in half. According to the Center’s 2013 National Business Ethics Survey, 22 percent of workers at U.S. companies have witnessed a possible False Claims Act violation within the last 12 months. However, that number decreased by 71 percent among workers in companies that have a strong ethics culture.

Aside from making amendments to the False Claims Act, the House subcommittee is considering a voluntary accreditation system for compliance programs. Advocates say such programs would decrease dependence on after-the-fact enforcement by discouraging fraudulent conduct.

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