Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Seventeenth Congress
First Regular Session

HOUSE OF ‘ATIVES
HB xo 5890"

Introduced by Representative H. Harry L. Roque Jr.

EXPLANATORY NOTE

This bill is an adaptation of the US False Claims Act that secks to combat financial fraud
perpetrated agaist the government by individuals and companies.

In the United States, the False Claims Act has proven to be one of the most effective tools
in fighting all types of financial fraud perpetrated against the government. It contained qui ‘am
Provisions that allow private citizens to sue, on the government's behalf, companies and
individuals that are defrauding the government. Qui tam is short for a Latin phrase, “qui tam pro
domino rege quam pro se ipso in hac parte sequitur,” which roughly means, “he who brings an
action for the king as well as for himself.”

‘The qui tam provisions have been the key to the law's success. Many people who file qui
tam lawsuits (called the “relators”) are employees or former employees of companies that
commit fraud, but anyone who knows of an instance where the government has paid false claims
can file a qui tam lawsuit. That could be, for example, a competitor, a subcontractor, or even a
patient,

‘The whistleblower does not need to have personal knowledge of the fraud to file a False
‘Claims Act case. The lawsuit can be based on information the relator leamed from a friend, a
relative, a competitor, etc, As long as the individual is not publicly disclosed and the government
has not already sued the individual or company for the fraud, the relator may bring a qui sam
lawsuit.


‘The False Claims Act has encouraged a number of individuals to step forward and report
fraud because it gives whistleblowers pecuniary incentives. From 1986 to 2004, the US
government has recovered more than $3.5 billion as a result of qu/ tam lawsuits.

This bill also seeks to give whistleblowers share of the recoveries that result from gu!
tam lawsuits to give people a strong incentive to step forward and take the personal and
professional risks involved in pursuing a false claim lawsuit; hence, reducing fraud perpetrated

against the goverment.”

H HARRY L. ROQUE JR.

* This bill was originally Giled by Senator Miriam Defensor Santiago during the Sixteenth Congress, First Regular

2


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
Seventeenth Congress
First Regular Session

HOUSE OF [VES
HB. No.

Introduced by Representative H. Harry L. Roque Jr.

AN ACT
TO COMBAT FINANCIAL FRAUD PERPETRATED AGAINST THE GOVERNMENT

Be it enacted by the Senate and the House of Represematives of the Philippines in
Congress assembled:

SECTION 1. Short Title. ~ This Act shall be known as the “False Claims Act.”

SECTION 2. Declaration of Policy. — It is hereby declared to be the policy of the State to
sive priority to the enactment and enforcement of stronger measures to combat financial fraud
perpetrated against the government by individuals and companies.

SECTION 3. False Claims. —(1) Liability for certain acts - Any person who —

(A) knowingly presents, or causes to be presented, to an officer or employee of the
government or a member of the Armed Forces of the Philippines a false or
fraudulent claim for payment of approval,

(B) knowingly makes, uses, or causes to be made or used, a false record or statement
to get a false or fraudulent claim paid or approved by the government,

(©) conspires to defraud the government by getting a false or fraudulent claim
allowed or paid;

(D) has possession, custody, or control of property or money used, or to be used, by
the government and, intending to defraud the government, willfully conceals the


(E)

(@)

property, delivers, or causes to he delivered, less property than the amount for

which the person receives a certificate or receipt;

authorizes to make or deliver a document certifying receipt of property used, or to

be used, by the government and, intending to defraud the government, makes or

delivers the receipt without completely knowing that the information on the
receipt is tue;

knowingly buys, or receives as # pledge of an obligation or debt, public property

from an officer or employee of the government, or a member of the Armed

Forces, who may not lawfully sell or pledge the property; or

knowingly makes, uses, or causes to be made or used, a false record or statement

to conceal, avoid, or decrease an obligation to pay or transmit money or property

to the government, is liable to the government for a civil penalty of not less than

Two Hundred Thousand Pesos (P200,000.00) but not more than Four Hundred

‘Thousand Pesos (P400,000.00), plus three times the amount of damages which the

‘government sustains because of the act of that person. except that if the court

finds that -

(i) the person committing the violation of this Act furnished officials of the
government responsible for investigating false claims violations with all
information known to such person about the violation within thirty (30)
days after the date on which the defendant first obtained the information,

(ii) such person fully cooperated with any government investigation of such
violation; and

(iii) at the time such person furnished the government with the information
about the violation, no criminal prosecution, civil action, or administrative
action had commenced under this Act with respect to such violation, and
the person did not have actual knowledge of the existence of an
investigation into such violation; the court may assess not less than two
‘times the amount or damages which the government sustains because of
the act of the person. A person violating this section shall also be liable to

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the government for the costs of a civil action brought to recover any such
penalty or damages.

(2) Knowing and Knowingly Defined - For purposes or this Act, the terms “knowing”
and “knowingly” mean that a person, with respect to information ~

(A) has actual knowledge of the information;

(B) acts in deliberate ignorance of the truth or falsity of the information; or

(C) acts in reckless disregard of the truth or falsity of the information, and no proof of

specific intent to defraud is required.

(3) Claim Defined - For purposes of this section, “claim” includes any request or
demand, whether under a contract or otherwise, for money or property which is made 10 a
contractor, grantee, or other recipient for any portion of the money or property which is
requested or demanded. or if the government will reimburse such contractor, grantee, or other
recipient for any portion of the money or property which is requested or demanded.

(4) Exclusion - This section does not apply to claims, records, or statements made
under the National Internal Revenue Code.

SECTION 4. Civil Actions for False Claims. -

(1) Responsibilities of the Solicitor General - The Solicitor General shall investigate a
violation under Section 3. If the Solicitor General finds that « person has violated or is violating
Section 3, he may bring a civil action under this section against that person.

I action for a violation

(2) Actions by Private Persons - (A) A person may bring a
of section 3 for the person and for the government. The action shall be brought in the name of the
government. The action may be dismissed only if the court and the Solicitor General give written
consent to the dismissal and their reasons for consenting.

(B) A copy of the complaint and written disclosure or substantially all material
evidence and information the person possesses shall be served on the goverment
pursuant to the pertinent provisions of the Rules of Court on Civil Procedure. The
complaint shall remain under seal for at least sixty (60) days and shall not be
served on the defendant until the court so orders. The government may elect to

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«

(Dd)

(E)

G)

intervene and proceed with the action within sixty (60) days after it receives both

the complaint and the material evidence and information.

‘The government may, for good cause shown, move the court for extensions of the

time during which the complaint remains under seal. Any such motions may be

supported by affidavits. The defendant shall not be required to respond to any

complaint filed under this section until twenty (20) days after the complaint is

unsealed and served upon the defendant.

Before the expiration of the sixty (60) day period, the government shall ~

(i) proceed with the action, in which case the action shall be conducted by the
government, or

(ii) notify the court that it declines to take over the action, in which case the
person bringing the action shall have the right to conduct the action

‘When a person brings an action under this section, no person other than the

government may intervene or bring a related action on the facts underlying the

pending action.

Rights of the Parties to Qui Tam Actions - (A) If the government proceeds with

the action, it shall have the primary responsibility for prosecuting the action, and shall not be
bound by an act of the person bringing the action. Such person shall have the right to continue as
‘party to the action, subject to the limitations set forth in paragraph (13).

(B) (j) The government may dismiss the action, notwithstanding the objections of the

person initiating the action, if the person has been notified by the government of

the filing of the motion and the court bas provided the person with an opportunity

for a hearing, on the motion,

(ii) ‘The government may settle the action with the defendant, notwithstanding
the objections of the person initiating the action, if the court determines,
after hearing, that the proposed settlement is fair, adequate, and reasonable
under all the circumstances.

(iti) Upon showing by the government that unrestricted participation during the
course of the litigation by the person initiating the action would interfere

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with or unduly delay the government's prosecution of the case, or would
be repetitious, irrelevant, or for purposes of harassment, the court may, in
its discretion, impose limitations on tile person's participation, such as -
(a) limiting the number of witnesses the person may call;

(b) limiting the length of the testimony of such witnesses:

(©) limiting the person’s cross-examination of the witnesses; or

(@) otherwise limiting the participation by the person in litigation.

(iv) Upon a showing by the defendant that unrestricted participation during the
course of the litigation by the person initiating the action would be for
Purposes of harassment or would cause the defendant undue burden or
unnecessary expense, the court may limit the participation by the person in
the litigation

If the government elects not to proceed with the action, the person who initiated

the action shall have the right to conduct the action. Ifthe government so requests,

it shall be served with copies of all pleadings filed in the action and shall be
supplied with copies of all deposition transcripts (at the government's expense).

‘When a person proceeds with the action, the court, without limiting the status and

rights of the person initiating the action, may nevertheless permit the government

10 imervene at a later date upon a showing of good cause.

Whether or not the government proceeds with the action, upon a showing by the

government that certain actions of discovery by the person initiating the action

would interfere with the government's investigation or prosecution of a criminal
or civil matter arising out of the same facts, the court may stay such discovery for

8 period of not more than sixty (60) days. The court may extend the 60-day period

uupon a further showing that the government has pursued the criminal or civil

investigation or proceedings with reasonable diligence and any proposed
discovery in the civil action will interfere with the ongoing criminal or civil

investigation or proceedings.


8B

geek

(4) Award to Qui Tam Plaintiff - (A) If the government proceeds with an action
brought by person under subsection (2), such person shall, subject to the second sentence of
this paragraph, receive at least fifteen percent (15%) but not more than twenty-five percent
(25%) of the proceeds of the action or settlement of the claim, depending upon the extent to
which the person substantially contributed to the prosecution of the action. Where the action is
‘one which the court finds to be based primarily on disclosures of specific information (other than
information provided by the person bringing the action) relating to allegations or transactions in
1 criminal, civil, or administrative hearing. in a congressional, administrative, report, hearing,
audit, or investigation, or from the news media, the court may award such sums as it considers
appropriate, but in no case more than ten percent (10%) of the proceeds, taking into account the
significance of the information and the role of the person bringing the action in advancing the
case to litigation. Any payment to a person under the first or second sentence of this paragraph
shall be made from the proceeds. Any such person shall also receive an amount for reasonable
expenses which the court finds to have been necessarily incurred, plus reasonable attorney's fees
and costs. All such expenses, fees, and costs shall be awarded against the defendant.

(B) If the government does not proceed with an action under this section, the person
bringing the action or settling the claim shall receive an amount which the court
decides is reasonable for collecting the civil penalty and damages. The amount
shall be not less than twenty-five percent (25%) and not more than thirty percent
(30%) of the proceeds of the action or settlement and shall be paid out of such
proceeds. Such person shall also receive an amount for reasonable expenses
which the court finds to have been necessarily incurred. plus reasonable attorney's
fees and costs. All such expenses, fees, and costs shall b ¢ a warded against the
defendant.

(C) Whether or not the government proceeds with the action, if the court finds that the
action was brought by a person who planned arid initiated the violation of section
3 upon which the action was brought, then the court may, to the extent the court
considers appropriate, reduce the share of the proceeds of the action which the
person would otherwise receive under paragraph (A) or (B) of this section, taking

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(D)

(3)

into account the role of that person in advancing the case to litigation and any
relevant circumstances pertaining to the violation. If the person bringing the
action is convicted of criminal conduct arising from his or her role in the violation
of section 3, that person shall be dismissed from the civil action and shall not
receive any share or the proceeds of the action. Such dismissal shall not prejudice
the right of the government to continue the action, represented by the Department
of Justice.

If the government does not proceed with the action and the person bringing the
action conducts the action, the court may award to the defendant its reasonable
attomey's fees and expenses if the defendant prevails in the action and the court
finds that the claim of the person bringing the action was clearly frivolous, clearly
‘vexatious, or brought primarily for purposes of harassment.

Certain Actions Barred - (A) No court shall have jurisdiction over an action

brought by a former or present member of the armed forces under subsection (2) of this section

‘against 8 member of the Armed Forces arising out of such person's service in the Armed Forces;

@B)

«

‘No court shall have jurisdiction over an action brought under subsection (2)
‘against a member of Congress, a member of the judiciary, or a senior executive
branch official if the action is based on evidence or information known to the
government when the action was brought.

In no event may a person bring an action under subsection (2) which is based
upon allegations or transactions which are the subject or a civil suit or an
administrative civil money penalty proceeding in which the government is already
a party.

(D) (i) No court shall have jurisdiction over an action under this section based upon the

Public disclosure of allegations or transactions in a criminal, civil, or
‘administrative hearing, in a congressional, administrative report, hearing, audit, or
investigation, or from the news media, unless the action is brought by the
Solicitor General or the person bringing the action is an original source of the

information.


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(ii) For purposes of this paragraph, “original source’ means an individual
who has direct and independent knowledge of the information on which
the allegations are based and has voluntarily provided the information to
the government before filing an action under this section which is based
‘on the information.

(6) Government not liable for certain expenses - The government is not liable for
‘expenses which a person incurs in bringing an action under this section.

(7) Any employee who is discharged, demoted, suspended, threatened, harassed, or in
any manner discriminated against in the terms and conditions of employment by his or her
‘employer because of lawful acts done by the employee on behalf 0 f the employee or others in
furtherance of an action under this section, including investigation for, initiation of, testimony
for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief
necessary to make the employee whole. Such relief shall include reinstatement with the same
seniority status such employee would have had but for the discrimination, two times the amount
of back pay, interest on the back pay, and compensation for any special damages sustained as a
result of the discrimination, including litigation costs and reasonable attorney's fees.

SECTION 5. False Claims Procedure. - (1) A subpoena requiring the attendance of a
witness at a trial or hearing conducted under section 4 of this Act may he served at any place in
the Philippines;

2) A civil action under section 4 may not be brought - (A) more than six (6) years after
the date on which the violation of section 3 is committed, or (B) more than thee (3) years after
the date when facts material to the right of action are known or reasonably should have been
known by the official of the government charged with responsibility to act in the circumstances,
but in no event more than ten (10) years afler the date on which the violation is committed,
whichever occurs last.

(3) In any action brought under section 4, the government shall be required to prove, all
essential elements of the cause of action, including damages, by a preponderance of the
evidence.


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(4) Notwithstanding any other provision of law or the Rules of Criminal Procedure, a
final judgment rendered in favor of the government in any criminal proceeding charging fraud or
false statements, whether upon a verdict after trial or upon a plea of guilty, shall stop the
defendant from denying the essential elements of the offense in any action which involves the
same transaction as in the criminal proceeding and which is brought under subsection (1) or (2)

of section 4.

SECTION 6. False Claims Jurisdiction. - Any action under section 4 may be brought in
any court in which the defendant or, in the case of multiple defendants, any one defendant can be
found, resides, transacts business, in which any act proscribed by section 4 occurred. A summons
4s required by the Rules of Civil Procedure shall be issued by the appropriate court and served at
any place within or outside the country.

SECTION 7. Civil Investigative Demands. -

(1) In General - (A) Issuance and service - Whenever the Solicitor General has reason
to believe that any person may be in possession, custody, or control of any documentary material
or information relevant to a false claims law investigation, the Solicitor General may, before
commencing a civil proceeding under section 4 or other false claims law, issue in writing and
cause to be served upon such person, a civil investigative demand requiring such person ~

(i) to produce such documentary material for inspection and copying:

(ii) to answer in writing written interrogatories with respect to such
documentary material or information:

(iii) tw give oral testimony conceming such documentary material or
information; or

iv) to furnish any combination of such material, answers, or testimony.

‘The Solicitor General may not delegate the authority to issue civil investigative demands
under this subsection. Whenever a civil investigative demand is an express demand for any
product of discovery, the Solicitor General shall cause to be served, in any manner authorized by
this section, a copy of such demand upon the person from whom the discovery was obtained and

9


shall notify the person to whom such demand is issued of the date on which such copy was

served.

(B) Contents and deadlines -
Each civil investigative demand issued under paragraph (A) shall state the
nature of the conduct constituting the alleged violation of a false claims

@

(ii)

(iii)

(iv)

Jaw which is under investigation, and the applicable provision of law
alleged to be violated.
If such demand is for the production of documentary material, the demand

shall -

(@)

)

©

describe each class of documentary material to be produced with
such definiteness and certainty as to permit such material to be
fairly identified;

prescribe a retum date for each such class which will provide a
reasonable period of time within which the material so demanded
may be assembled and made available for inspection and copying:
and

identify the false claims law investigator to whom such material
shall be made available.

If such demand is for answers to written interrogatories, the demand shall

(a)
(b)

©

set forth with specificity the written interrogatories to be answered:
prescribe dates at which time answers to written interrogatories
shall be submitted; and

identify the false claims taw investigator to whom such answers
shall be submitted.

If such demand is for the giving of oral testimony, the demand shall -

(a)

prescribe a date, time, aid place at which oral testimony shall be
commenced;


fe Ree eB

&

Ww)

(vi)

(vii)

(b) identify false claims law investigator who shall conduct the
examination aid the custodian to whom the transcript of such
‘examination shall be submitted;

(c) specify that such attendance and testimony are necessary to the
conduct of the investigation;

(@) notify the person receiving the demand of the right to be
‘accompanied by an attorney and any other representative; and

(©) describe the general purpose for which the demand is being issued
and the general nature or the testimony, including the primary
areas of inquiry, which will be taken pursuant to the demand.

Any civil investigative demand issued under this section which is an

express demand for any product of discovery shall not be returned or

returnable until twenty (20) days after a copy of such demand has been

‘served upon the persons from whom the directory was obtained.

The date prescribed for the commencement of oral testimony pursuant to a

civil investigative demand issued under this section shall be # date which

is not less than seven (7) days after the date on which demand is received,
unless the Solicitor General determines that exceptional circumstances are

present which warrant the commencement or such testimony within a

lesser period of time.

The Solicitor General shall not authorize the issuance under this section of

‘more than one (1) civil investigative demand for oral testimony by the

same person unless the person requests otherwise or unless the Solicitor

General, after investigation, notifies that person in writing that an

additional demand for oral testimony is necessary. The Solicitor General

‘may not authorize the performance, by any other officer, employee, or

agency, or any function vested in the Solicitor General under this

subparagraph,

Protected Material or Information -


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(D)

10)

(ii)

In general - A civil investigative demand issued under subsection (1) may
not require the production of any documentary material, the submission of
my answers to written interrogatories, or the giving of any oral testimony
if such material, answers, or testimony would be protected from disclosure
under (a) the standards applicable to subpoena or subpoenas dices tecum
issued by a court; or (b) the standards applicable to the discovery requests
of the Rules of Civil, Procedure, to the extent that the application of such
standards to any such demand is appropriate and consistent with the
provisions and purposes of this section.

Effect on other orders, rules, and laws - Any such demand which is an
express demand for any product of discovery supersedes any inconsistent
order, rule, or provision of law (other than this section) preventing or
restraining disclosure of such product of discovery to any person
Disclosure of my product of discovery pursuant to any such express
demand does not constitute a waiver of any right or privilege which the
person making such disclosure may be entitled to invoke to resist
discovery of trial preparation materials,

Service; Jurisdiction - (i) By whom served - Any civil investigative demand

issued under subsection (1) may be served by a false claims law investigator, at
any place within the territorial jurisdiction of any court.

(ii)

(iii)

Service in foreign countries - Any such demand or any petition filed under
paragraph (H) may be served upon any person who is not found within the
territorial jurisdiction of any court in such manner as the Rules of Civil
Procedure prescribe for service in a foreign country.
Service upon legal entities and natural persons —
(a) Legal entities - Service of any civil investigative demand issued
under subsection (1) or of any petition filed under paragraph (a)
‘may be made upon a partnership, corporation, association, or other
legal entity by -
2


©

(F)

{b)

a)

@)

3)

delivering an executed copy of such demand or petition to
‘any partner, executive officer, managing agent, or general
agent of the partnership, corporation, association or entity,
for to any agent authorized by appointment or by law to
receive service of process on behalf of such partnership,
corporation, association, or entity.

delivering an executed copy of such demand or petition to
the principal office or place of business of the partnership,
corporation, association, or entity, or

depositing an executed copy of such demand or petition in
the mails by registered or certified mail, with a retum
receipt requested, addressed 10 such partnership,
corporation, association, or entity at its principal office or
place of business

Natural persons - Service of any such demand or petition may be

made upon any natural person by ~

ay

(2)

delivering an executed copy of such demand or petition to
the person; or

depositing an executed copy of such demand or petition in
the mail by registered or certified mail, with a return receipt
requested, addressed to the person at the person’s residence
or principal office or place of business

Proof of Service - A verified retum by the individual serving any civil
investigative demand issued under subsection (1) setting forth the manner of such
service shall be proof of such service. In the case of service by registered or
certified mail, such retum shall be accompanied by the return post office receipt
of delivery of such demand.

Documentary Material - The production of documentary material in response to a
civil investigative demand served under this section shall be made under a sworn

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(G)

certificate, in such form as the demand designates, in the case of a natural person,

the person to whom the demand is directed; or control, or knowledge of the
Person to whom the demand is directed has been submitted. To the extent that any
‘information is not fumished, the information shall be identified and reasons set
forth with particularity regarding the reasons why the information was not
furnished.

Oral Examinations -

@

(ii)

(iii)

Procedure - The examination of any person pursuant to a civil
investigative demand for oral testimony served under this section shall be
taken before an officer authorized to administer oaths and affirmations by
law of the Philippines or of the place where the examination is held. The
officer before whom the testimony is to be taken shall put the witness on
oath or affirmation and shall, personally or by someane acting under the
direction of the officer and in the officer’s presence, record the testimony
of the witness. The testimony shall be taken stenographically and shall be
‘transcribed. When the testimony is fully transcribed, the officer before
whom the testimony is taken shall promptly transmit a copy of the
transcript of the testimony by any means authorized by, and in a manner
consistent with, the Rules of Civil Procedure;

Persons present - The false claims law investigator conducting the
‘examination shall exclude from the place where the examination is held all
Persons except the person giving the testimony, the attomey for, and any
other representative of the person giving the testimony, the attomey for the
government, any person who may be agreed upon by the attorney for the
government and the person giving the testimony, the officer before whom
the testimony is to be taken, and any stenographer taking such testimony;
‘Where testimony taken - The oral testimony of any person taken pursuant
to a civil investigative demand served under this Section shall be taken in
the court within which such person resides, is found, or transacts business,

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(iv)

™)

w

or in such other place as may be agreed upon by the false claims law
investigator conducting the examination and such person;

‘Transcript of testimony - When the testimony is fully transcribed, the fake
claims law investigator or the officer before whom the testimony is taken
shall afford the witness, who may be accompanied by counsel, a
reasonable opportunity to examine and read the transcript, unless such
examination and reading are waived by the witness. Any changes in form
or substance which the witness desires to make shall be entered and
identified upon the transcript by the officer or the false claims law
investigator, with a statement of the reasons given by the witness for
making such changes. The transcript shall then be signed by the witness,
unless the witness in writing waives the signing, is ill, cannot be found, or
refuses to sign. If the transcript is not signed by the witness within thirty
(30) days after being afforded a reasonable opportunity to examine it, the
officer or the false claims law investigator shall sign it and state on the
record the fact of the waiver, illness, absence of the witness, or the refusal
to sign, together with the reasons, if any, given therefore,

Certification and delivery to custodian - The officer before whom the
testimony is taken shall certify on the transcript that the witness was sworn
by the officer and that the transcript is a true record of the testimony given
by the witness, and the officer or fake claims law investigator shall
promptly deliver the transcript. or send the transcript by registered or
certified mail, to the custodian;

Furnishing or inspection of transcript by witness — Upon payment of
reasonable charges therefore, the false claims investigator shall furnish a
copy of the transcript to the witness only except that the Solicitor General
may, for good cause, limit such witness to inspection or the official
transcript of the witness’ testimony;


(wil)

(viii)

(eo

Conduct of oral testimony - (a) Any person compelled to appear for oral

testimony under a civil investigative demand issued under subsection (1)

‘may be accompanied, represented, and advised by counsel. Counse! may

advise such person, in confidence, with respect to any question asked of

such person. Such person or counsel may object on the record to any
question, in whole or in part, and shall briefly state for the record the
reason for the objection. An objection made, received, and entered upon
the record when it is claimed that such person is entitled to refuse to
answer the question on the grounds of any constitutional or other legal
rights of privilege, including the privilege against self-incrimination. Such

Person may not otherwise object to or refuse to answer any question, and

may not directly or through counsel otherwise interrupt the oral

‘examination. If such person refuses to answer any question, a petition may

be filed im the court under subsection (Hi) for an order compelling such

Person to answer such questions;

(b) If such person refuses tw answer any question on the grounds of the
Privilege against self-incrimination, the testimony of such person
may be compelled in accordance with the provisions of the Rules
of Court.

Witness fees and allowances - Any person appearing for oral testimony

under a civil investigative demand issued under subsection (1) shall be

entitled to the same fees and allowances which are paid to witnesses as

Provided in the appropriate provisions of the Rules of Court;

Custodians of Documents, Answers, and Transcripts —

(@) Designation - The Solicitor General shall designate a false claims
law investigator to serve as custodian of documentary material,
answers to interrogatories, and transcripts of oral testimony
received under this section, and shall designate such additional
false claims law investigators as the Solicitor General determines

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(b)

from time to time to be necessary to serve as deputies to the

custodian,

Responsibility for materials; disclosure - (1) A false claims
‘investigator who receives any documentary material, answers 10

interrogatories, or transcripts of oral testimony received under this
section shall transmit them to the custodian. The custodian shall

tale physical possession of such material, answers, or transcripts
and shall he responsible for the use made of them and for the
return of documentary material under paragraph (D).

Q)

@)

‘The custodian may cause the preparation of such copies of
such documentary material, answers to interrogatories, or
transcripts of oral testimony as may be required for official
use by any false claims law investigator, or other officer or
employee of the Department of Justice, who is authorized
for such use under regulations which the Solicitor General
shall issue. Such material, answers, and transcripts may be
tused by any such authorized false claims law investigator
or other officer or employee in connection with the taking
of oral testimony under this section.
Except as otherwise provided in this subsection, no
documentary material, answers to interrogatories, or
transcripts of oral testimony, or copies thereof, while in the
possession of the custodian and under such reasonable
terms and conditions as the Solicitor General shall
prescribe-

(a) documentary, material and = answers to.
interrogatories shall be available for examination by
the person who produced such material or answers,
or by a representative of that person authorized by

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8

(©)

(d)

that person to examine such materials and answers;
and

(>) transcripts of oral testimony shall be available for

examination by the person who produced such
testimony, or by a representative of that person
authorized by that person to examine such
‘transcripts.
Use of materials, answers, or transcripts in other proceedings -
Whether any attomey of the Department of Justice has been
designated to appear before any court or agency in any case or
Proceeding, the custodian of any documentary material, answers to
imerrogatories, or transcripts of oral testimony received under this
section may deliver to such attorney such material, answers, or
transcripts for official use in connection with any such case or
proceeding as such attomey determines to be required.

Upon the completion of any such case or proceeding, such
attorney shall return to the custodian any such material, answers, or
‘transcripts so delivered which have not passed into the control of
such court, or agency through introduction into the record of such
case or proceeding,

Conditions for return or material - If any documentary material has

been produced by any person in the course of my false claims law

investigation pursuant to a civil investigative demand under this

‘section, and ~

(1) any case or proceeding before the court arising out of such
investigation, or any proceeding before any agency
involving such material, has been completed, or

(2) amy case or proceeding in which such material may be used
bas been commenced within a reasonable time after

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completion of the examination and analysis of all
documentary material and other information assembled in
the course of such investigation, the custodian shall, upon
written request of the person who produced such material,
return to such person any such material other than copies
furnished to the filse claims law investigator under
subsection (GYii) or made for the Department of Justice
under paragraph (2\B) which has not passed into the
control or any court or agency through the introduction into
the record of such case or proceeding,

Appointment of successor custodians - In the event of the death,
disability, or separation from service in the Department of Justice
of the custodian of any documentary material, answers to
interrogatories, or transcripts of oral testimony produced pursuant
to such custodian from responsibility for the custody and control or

such materials, answers, or transcripts, the Solicitor General shall
promptly -

ay

Q)

designate another false claims law investigator to serve as
custodian of such material, answers, or transcripts; and

transmit in writing to the person who produced such
‘material, answers, or testimony notice of the identity and
address of the successor so designated. Any person who is
designated to be a successor under this paragraph shall
have, with regard to such material, answers, or transcripts,
the same duties and responsibilities as were imposed by
this section upon that person's predecessor in office, except
that the successor shall not be held responsible for any
default or dereliction which occurred before that


(H)

Judicial Proceedings - (i) Petition for enforcement - Whenever any person fails to
comply with any civil investigative demand issued under subsection (I), or
whenever satisfictory copying or reproduction of any material requested in such
demand cannot be done and such person refuses to surrender such material, the

Solicitor General may file, in the court iii which such person resides, is found, of

transacts business, aid serve upon such person a petition for an order of such court
for the enforcement of the civil investigative demand.

ai

Petition to modify or set aside demand - (a) Any person who has received
4 civil investigative demand issued under subsection (1) may file, in the
court within which such person resides, is found, or transacts business, and
Serve upon the fiulse claims law investigator identified in such demand a
Petition for an order of the court to modify or set aside such demand. In
the case of a petition addressed 1 an express demand for any product of
discovery, a petition to modify or set aside such demand may be brought
only in the court in which the proceeding in which such discovery was
obtained is or was last pending. Any petition under this subparagraph must
be filed - (1) within twenty (20) days after the date of service of the civil
investigative demand, or at any time before the return date specified in the
demand, whichever date is earlicr; or (2) within such longer period as may
he prescribed in writing by any false claims law investigator identified in
the demand.
(b) The petition shall specify each ground upon which the petitioner
relies in seeking relief under subparagraph (a), and may be based
‘upon any failure of tile demand to comply with the provisions of
this section or upon any constitutional or other legal right or
Privilege of such person. During the pendency of the petition in the
court, the court may stay, as it deems proper, the running of the
time allowed for compliance with the demand, in whole or in part,

20


iy

(iv)

except that the person filing the petition shall comply with any

Portions of the demand not sought lo be modified or set aside
Petition to modify or set aside demand for product of discovery - (a) In the
case of any civil investigative demand issued under subsection (1) which
is an express demand for any product of discovery, the person from whom
such discovery was obtained may file, in the court in which the proceeding
in which said discovery was obtained is or was last pending, and serve
upon any false claims law investigator identified in the demand and upon
the recipient of the demand, a petition for an order of such court to modify
or set aside those portions of the demand requiring production of any such
product or discovery. Any petition under this subparagraph must be filed
(1) within twenty (20) days after the date of service or the civil
investigative demand, or at any time before the return date specified in the
demand, whichever date is earlier; or (2) within such longer period as may
he prescribed in writing by any false claims law investigator identified in
the demand. (3) The petition shall specify each ground upon which the
Petitioner relies in seeking relief under subparagraph (a), and may be
based upon any failure of the portions of the demand from which relief is
sought to comply with the provisions of this section, or upon any
‘constitutional or other legal right or privilege of the petitioner. During the
pendency of the petition, the court may stay, as it deems proper,
compliance with the demand and the running of the time allowed for
compliance with the demand.
Petition to require performance by custodian of duties - At any time during
which any custodian is in custody or control of any documentary material
‘or answers to interrogatories produced, or transcripts of oral testimony
given, by any person in compliance with any civil investigative demand
issued under subsection (I), such person, and in the case of an express
demand for any product of discovery, the person from whom such

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(vi)

discovery was obtained, may file, in the court within which the office of
such custodian is situated, and serve upon such custodian, a petition for an
‘order of such court to require the performance by the custodian of any
duty imposed upon the custodian by this section.

Jurisdiction - Whenever any petition is filed in any court under this
subsection, such court shall have jurisdiction to hear and determine the
‘matter so presented, and to enter such order or orders as may be required
to carry out the provisions of this section. Any final order so entered shall
bbe subject to appeal under the appropriate provisions of the Rules of
Procedure. Any disobedience of any final order entered under this section
bby any court shall be punished as contempt of the court.
Applicability of rules of civil procedure - The Rules of Civil Procedure
shall apply to any petition under this subsection, to the extent that such
rules are not inconsistent with the provisions of this section.

()__ Definitions - For purposes of this section -

i)

the term “false claims Law"means -

(a) this section and sections 3 and 4; and

(b) any Act of Congress enacted after the date of the enactment of this
section which prohibits, or makes available to the court any civil
remedy with respect to, any false claim against, bribery of, or
corruption of any officer or employee of the government;

the term “false claims law investigation” means any inquiry conducted by

any false claims investigator for the purpose of ascertaining whether any

person is or has been engaged in any violation of a false claims law.

the term “false claims investigator” means any attorney or investigator

employed by the Department of Justice who is charged with the duty of

enforcing or carrying into effect any false claims law, or any officer or

‘employee of the government acting under the direction and supervision of


RR

(iv)

Ww)

(vi)

(vii)

SECTION 8,

such attomey or investigator in connection with a false claims law

investigation:

the term “person” means any natural person, partnership, corporation,

association, or other legal entity, including any political subdivision of a

State;

the term ~ documentary material” includes the original or any copy of any

chart, or other document, or data compilations stored in or accessible

through computer or other information retrieval systems, together with
instructions and all other materials necessary to use or interpret such date
compilations, and any product of discovery;

the term “custodian” means the custodian, or any deputy custodian,

designated by the Solicitor General under subsection (G)(ix); and

the term “product of discovery” includes -

(a) the original or duplicate of any deposition, interrogatory,
document, thing, result of the inspection of land or other property,
‘examination, or admission, which is obtained by any method of
discovery in any judicial or administrative proceeding of an
adversarial nature;

(b) any digest, analysis, selection, compilation, or derivation ofany
item listed in subparagraph (1); and

(©) any index or other manner of access to any item listed in
subparagraph (i),

Separability Clause. - \f any provision or part thereof is held invalid or

unconstitutional, the remainder of the law or the provision not otherwise affected shall remain

valid and subsisting.

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SECTION 9. Repealing Clause. - Any Jaw. presidential decree or issuance, executive
order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent
with the provisions of this Act is hereby repealed, modified, or amended accordingly.

SECTION 10. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

publication in at least two (2) newspapers of general circulation

Approved,