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Commentary: Follow the rules or pay the price

Mark Hamby
Dolan Media Newswires

Oklahoma City – If you have received more than $25,000 in federal stimulus money through the American Recovery and Reinvestment Act, you must report on the expenditure of the money starting Oct. 1. This is one of the many hurdles recipients may face as part of the stimulus program. While none of us thinks we should be subject to strict oversight by the government as to the spending of the stimulus money, we all think everybody else should be and the public is critical of the government when it is lax. The government heard our concerns and is set to make sure that the money is accounted for to the public.

While the government has reporting requirements in place, it has also set up inspector general and whistle-blower hotlines for concerned people to report potential fraud. In addition to new mechanisms and reporting requirements, an existing means of preventing or reporting fraud remains – the False Claims Act. The FCA has been around since the Civil War and is the basis for lawsuits by private individuals on behalf of the government alleging that people or companies have received federal money by making false claims. The FCA does not require individuals to be harmed – rather, only the federal government must be harmed – but the individuals are able to share in the recovery.

Stimulus project guidelines require recipients to follow certain contractual requirements, regulations or statutes. If a project for roads or bridges, for example, were to require compliance with the stimulus program’s buy-American provision, the contractor must agree to abide by those rules in order to get paid. If the contractor fails to use iron, steel, and manufactured goods produced in the United States, although the project is still completed, the contractor has not complied with the guidelines and may face liability for it.

When the contractor submits his paperwork he may be submitting a false claim to the federal government for payment in violation of the FCA.

A claim made with the goal of getting paid with federal money can be deemed a violation of the FCA when the person falsely certifies compliance with a statute, regulation, or contract provision, if the certification is a prerequisite to obtaining government payment.

So remember, although stimulus money can provide a boost to during these economically trying times, recipients must comply with contractual, statutory, and regulatory guidelines if they receive the money or face harsh penalties.

Mark Hamby is an attorney with Bonham & Howard law firm in Tulsa

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