By Deidre McPhillips
ANNAPOLIS—Maryland Attorney General Brian Frosh says he has a solution to recoup some of the state’s multi-million dollar budget deficit that everyone can agree on: crack down on fraud.
Frosh appeared before the state Senate Judicial Proceedings and House Judiciary Committees on Wednesday to present the Maryland False Claims Act of 2015, which would reward a private citizen, or “whistleblower” who brings a lawsuit against another individual for making a false claim on a state contract. Frosh’s office would approve the lawsuit, and the whistleblower, if they win, would be rewarded with a significant portion—up to 25 percent—of the state’s proceeds.
The state adopted the Maryland False Health Claims Act in 2010 to curb medical-billing fraud, and this bill would extend the practice to all government operations.
Frosh presented charts showing that about $40 million was recouped by the state in false medical claims in fiscal year 2014.
“If we had passed this bill years ago, we would be trying to decide how to use the extra dollars to pay for programs that support our taxpayers instead of leaving them in the pockets of people who are ripping off our taxpayers,” state Senator Jamie Raskin, D-Montgomery.
Frosh said he could not estimate how many additional dollars the state would receive if the bill was passed or in which departments or types of deals fraud is happening, but it is always “bringing money into state government out of which it has been cheated.”
Supporters of the bill, including Raskin, state Senator Michael Hough, R-Frederick and Carroll, and Delegate Will Smith, D-Montgomery, said that it is bipartisan and pro-business.
Twenty states and the District of Columbia have enacted broad false claims acts, including some traditionally pro-business states such as Texas, Virginia and Florida.
Frosh said that the bill is very similar to the federal False Claims Act, also known as the “Lincoln Law,” that was passed by President Abraham Lincoln in 1863 during the Civil War.
“It’s Lincoln’s Law resurrected by Ronald Reagan,” said Pete Bryant, secretary-treasurer of the Maryland-based chapter of the International Union of Bricklayers and Allied Craftworkers.
Last year, a similar bill was passed by the Maryland House of Delegates, but ran out of time on the state Senate floor on the last day of session.
That version included an amendment that clarified what it meant to “knowingly” commit fraud.
But this year, the bill is presented without that critical clarification, said Matthew Palmer, senior vice president of government affairs for the Maryland Chamber of Commerce.
Raskin agreed that “the entire legislation hinges on the word ‘knowingly.’” It appears in the bill nine times, he said, but does not clarify what must be known. This concerns opponents.
The two sides were not able to come to an agreement about the definition or intent of the term.
Patrick Burns, co-executive director of Taxpayers Against Fraud Education Fund, said that Virginia has seen the most recovery from faulty pension claims; road barriers that were not built in accordance with standards; and defective water pipes.
Attorney Brian Markovitz of Joseph Greenwald & Laake, in Greenbelt, added that underpaying workers despite a promise to pay prevailing wages is a common source of fraud.
“And the fraud does not stop at the Potomac River,” said Burns. “Only the enforcement does.”