The whistleblower provisions of the federal False Claims Act, codified at U.S.C.A. § 3729-3733, are based on the premise that those on the inside often have the best information about illegal acts and fraud. The Act has been around for a long time, having been enacted during the Civil War to combat fraud by suppliers of goods purchased by the Union during the war.
The Act has been amended several times over its 150 years of existence. In its current form, it provides for the filing of qui tam actions – lawsuits by private individuals suing on behalf of the government. Individuals filing lawsuits are called “relators” and can be rewarded handsomely for their efforts, if the suit is successful, via a share of the recovery obtained on the government’s behalf.