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Every major federal agency has an Office of Inspector General (OIG). OIGs have multiple functions. One of the most important is to investigate fraud, waste, and abuse affecting their affiliated agencies. OIGs are not as well known to the public as the Department of Justice (DOJ) and the Federal Bureau of Investigation (FBI). However, their agents also have guns and badges and play a critical role in enforcing the law.
OIGs are especially important in cases brought under the False Claims Act (FCA). Congress has vested them with broad authority to investigate fraud. Among these powers are:
The President appoints Inspector Generals with the advice and consent of the Senate. Importantly, Inspector General (IG) appointments are to be made “without regard to political affiliation and solely on the basis of integrity and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations.’’
To remove an IG or transfer an IG to another position within the agency, the President must inform both Houses of Congress, in writing, of the reasons for the removal or transfer. This notice must be at least 30 days before the removal or transfer.
An IG reports to and is under the general supervision of the head of his or her agency. However, the agency head shall not “prevent or prohibit the Inspector General from initiating, carrying out, or completing any audit or investigation, or from issuing any subpoena during the course of any audit or investigation.” Further, Congress provided that IGs have separate legal counsel from those advising their agency heads. Counsel for the OIG reports directly to the IG.
Should IGs experience interference in carrying out their duties, they are to provide to Congress a detailed description of the agency’s attempt to “interfere with the independence of the Office.” Such interference includes “budget constraints designed to limit the capabilities of the Office” as well as “incidents where the establishment has resisted or objected to oversight activities of the Office or restricted or significantly delayed access to information, including the justification of the establishment for such action.”
Semi-annually, OIGs must report to Congress on their activities, including investigations, audits, management recommendations, and enforcement actions.
OIGs conduct audits of their agencies’ programs and operations. An Assistant Inspector General for Auditing heads the audit function. OIGs also have a robust investigative function. An Assistant Inspector General for Investigations supervises all investigative activities relating to the agency’s programs and operations.
IGs are invested with subpoena authority for “the production of all information, documents, reports, answers, records, accounts, papers, and other data in any medium (including electronically stored information), as well as any tangible thing and documentary evidence necessary in the performance of” their duties. In addition, they are authorized to take testimony under oath.
Whenever IGs have grounds to believe that federal criminal law has been violated, they must report that information to DOJ.
For suspected civil violations, an IG may refer the matter to DOJ. In addition, the OIG has the independent power to begin administrative proceedings for civil penalties under the Program Fraud Civil Remedies Act and/or to exclude the suspected perpetrator from participating in agency programs.
Some OIGs have authority beyond auditing and investigating. For example, the OIG for the Department of Health and Human Services (HHS-OIG) issues Advisory Opinions regarding potential violations of the Anti-Kickback Statute. In addition, some OIGs may issue Fraud Alerts and other guidance about their law enforcement priorities and interpretation of their regulations.
OIGs are critical players in investigating and settling False Claims Act cases. After filing a qui tam case, the whistleblower serves a complaint and mandatory disclosures on DOJ. DOJ promptly shares those materials with the affected agency’s OIG. For example, in a health care fraud case, DOJ shares the materials with the OIG for the Department of Health and Human Services, which administers the Medicare and Medicaid programs. OIG investigators may then, in coordination with DOJ, participate in the interview of the relator. They also may issue subpoenas for documents and testimony and conduct witness interviews. In addition, OIG auditors may support the investigation by analyzing Medicare/CMS billing data and conducting statistical sampling and analyses. Further, the OIG can provide DOJ with Advisory Opinions or other agency guidance and law relevant to the investigation.
Counsel to the OIG must approve any FCA settlement. For example, in a health care fraud case, HHS-OIG signs the settlement agreement along with the relator, DOJ, and defendant. In addition to the payment of monetary damages, a settlement agreement may require the defendant to enter into a Corporate Integrity Agreement (CIA) for a period of years, during which the OIG monitors the defendant’s compliance with the law and its obligations in the CIA.
Successful FCA qui tam cases depend largely on hard work, collaboration, and coordination among government agencies. Key agencies fighting fraud against the government include DOJ, OIG, and the FBI. During our many years working as government attorneys, we developed tremendous appreciation for the important role each plays. Now, as whistleblower lawyers, we have a different perspective, but no less admiration for the important work they do to. Their efforts to investigate and support our clients’ allegations are critical to successful cases.