Justice Dept. Avoids Law on Tattletales : Agency Won’t Take Stand on Legality of Measure It Backed

The Justice Department on Wednesday declined for the fourth time this year to endorse in court the constitutionality of a law designed to encourage citizens to become whistle-blowers and expose fraud against the government despite the fact that the department encouraged Congress to enact the measure in 1986.

“The solicitor general is still considering the issue,” said Amy Brown, a spokeswoman for the Justice Department’s civil division.

The department’s refusal to take a public stance on the law came as a federal judge was considering whether to dismiss a lawsuit filed under the whistle-blower statute against the Northrop Corp. The suit, lodged by former employees, alleges that the Beverly Hills-based defense contractor bilked the government by knowingly using defective parts on guidance systems for the Air Force’s MX missile project.

Lawyer Disturbed

Herbert Hafif, a Claremont attorney who has filed several major suits alleging fraud by defense contractors under the statute, said he was disturbed by the Justice Department’s silence.

“I think the reason we haven’t seen the government come in is political pressure,” Hafif told reporters. Hafif noted that former President Reagan signed the measure into law after it was overwhelmingly passed by Congress, and he asked of the current President: “So where’s Bush?” Is he afraid to “offend someone,” Hafif asked.

The law in question is called the False Claims Act, originally enacted in 1863. As amended in 1986, it permits a private citizen to file a civil suit in the name of the government alleging fraud by a contractor and to share in any financial recovery by the government.

The Justice Department’s position on the issue has been the subject of intense internal debate for months. One group of department lawyers, reportedly headed by Michael Hertz, chief of the civil division, is urging the department to adopt a stance that the law is unconstitutional.

Sources report that these critics have two concerns--whether the law violates the Constitution’s separation of powers clause and, on a practical level, whether the law allows private lawyers to play a role in setting the department’s prosecutorial agenda.

Reasons for Support

Another group of department lawyers has taken the position that the law is constitutional, that it serves a useful purpose in helping to ferret out fraud and that the department looks foolish by not supporting a law that it earlier endorsed.

Last month, U.S. District Judge David Kenyon delayed a hearing in the Northrop case and asked the Justice Department to notify him by the end of the day Tuesday if it was going to take a position. The department declined.

Northrop attorney Richard Sauber asserted in court Wednesday that the whistle-blower law violates the separation of powers clause of the Constitution. He also contended that private citizens do not have standing to sue in these cases because they have not been individually injured by the alleged wrongdoing.

So far this year, three federal District Court judges in California, including two in Los Angeles, rejected these arguments and upheld the law’s constitutionality in cases involving Lockheed, McDonnell Douglas and Northrop.

Sauber acknowledged the losses but told Kenyon that the three other judges had disagreed on numerous points while reaching the same result. And he suggested that Kenyon could clarify the issue. One or all of the decisions are sure to be appealed to the 9th Circuit Court of Appeals in San Francisco and quite possibly to the Supreme Court.

Hafif retorted that the individuals do have standing to sue and that the law did not violate the separation of powers provision of the Constitution. In response to Sauber’s assertion that a private party should not be allowed to prosecute a case on behalf of the government, Hafif noted that the Justice Department has authority under the law to take over the whistle-blower suits at any time.

Kenyon took the case under submission and said he will try to issue a ruling shortly.