How to use Colorado's new whistleblower statute
The Colorado False Claims Act was just by Gov. Jared Polis on June 7. Come September, it has the potential to root out millions of dollars in fraud — and handsomely reward people who report it.
Whistleblowers have been everywhere this year. Looking at the headlines about Frances Haugen or the Theranos whistleblowers, it would be easy to presume that the majority of entities covering up wrongs are big tech companies. But you don’t have to work at a high-profile Silicon Valley company to be a whistleblower. Fraud happens in all kinds of companies and organizations.
It’s for this reason that the Colorado General Assembly passed the False Claims Act, which was signed by Governor Polis. This new law will allow whistleblowers to act on behalf of the government to stop fraud against the state or local governments by bringing forward evidence that a company or person is defrauding the government. For doing so, Colorado would reward that whistleblower up to 30% of any funds recouped. There is already a whistleblower reward program in Colorado, but it is limited to certain kinds of healthcare fraud.
If the new Colorado law proves as effective as the federal statute it was modeled after, tips from whistleblowers could return hundreds of millions of dollars to Colorado taxpayers. New Jersey netted $147 million in the first 10 years after the Garden State passed a similar law.
The expanded law opens up the opportunity for nearly anyone who discovers fraud in the use of Colorado public funds to come forward, get protection, and share in a monetary reward. The target can be a healthcare company that unlawfully feeds at the taxpayer trough, as Denver Health learned when it paid $6.3 million in 2012 to settle allegations that it overbilled Medicare and Medicaid when it misclassified the admission status of patients. Or it can be a household name like Verizon and AT&T, which together paid over $125 million to settle allegations that they overcharged state government customers for wireless services.
And fraud doesn’t end at simply charging the government more than a contractor can. It can also extend to providing defective products, as Cisco did when it sold the government a supposedly secure surveillance system that it allegedly knew was vulnerable to hackers. Whistleblowers were at the heart of each of these cases.
How do we ensure this new whistleblower law gets put to good use in Colorado? Well, if you discover something that looks like fraud and want to stop it, you might want to blow the whistle. But you will need to consider several issues before coming forward.
Has Colorado suffered a financial loss? Not all misconduct hits the government in the pocketbook.
What kind of evidence do you have? While you do not need to have witnessed the misconduct, you do want to have concrete and specific evidence of the fraud, not just a hunch.
Has someone else already reported the misconduct, or has it been made public? If so, that can spell the end of your claim.
Are you ready to deal with professional retaliation? If you blow the whistle on your employer, the risk of retaliation is very real. Colorado’s new law protects whistleblowers from being fired, demoted, or discriminated against. But even when such protections exist, whistleblowers who report misconduct may still be unfairly fired, demoted, or mistreated. An experienced whistleblower attorney can help you evaluate these issues and many others that you should consider before blowing the whistle.
The vast majority of whistleblower cases come from members of the public. More than 70 percent of the $2.2 billion recovered under the federal False Claims Act in 2021 came from cases that whistleblowers brought; for their labors, the federal government paid those citizens $309 million.
We hope this “how-to” can help you to use Colorado’s new law safely and effectively to root out fraud, saving yourself and other taxpayers from being defrauded by bad actors. If you see something, say something. You just might earn yourself some money in the process.
Ari Yampolsky and Mary Inman are partners in the whistleblower practice at Constantine Cannon.