For almost two decades General Motors (GM) has been in protracted litigation against whistleblower Roger Thacker. Unfortunately for GM and its creditors, the case just won’t die. The trouble surrounding the lawsuit, including a rollercoaster ride of resurrection through the trial and appellate courts, was, until now, drowned out by the implosion of the automotive industry and subsequent structured bankruptcies. GM and its creditors hope to distribute approximately $50 million laying in a bankruptcy trust, and the undying case of Roger Thacker won’t let that happen.
Mr. Thacker filed suit against GM in 1995, along with two other employees, under the federal False Claims Act. The Act is intended to grant whistleblowers a share of successful recoveries against corporations that defraud the government and it provides for statutory penalties that can soar into the millions. According to the allegations of the lawsuit, GM’s gas turbine division was contracted to build generators for destroyer ships and the work of the subcontracted division gas turbine division failed to meet the navy’s requirements. Essentially, the government ended up paying for very expensive equipment that failed to meet the basic terms of the contract with GM. Mr. Thacker blew the whistle and, ever since, GM has been trying to put the case to rest, albeit without paying the government back.
The suit has gone back and forth through trial and appellate courts, having already been dismissed and then revived by the 6th Circuit Court of Appeals. Even Congress stepped in to amend the plain language of the federal False Claims Act and grandfather-in Mr. Thacker’s case. It is now is pending, for the second time, before the U.S. Supreme Court, which has yet to decide whether it will yet again hear the case.
The inability of Thacker’s false claims case to simply die has now caused an additional hold-up in the ability of GM’s old creditors to receive a disbursement of funds from the bankruptcy estate. Creditors have asked an until-now-unrelated court to weigh in the value of the pending claim, hoping that a portion of $50 million that the bankruptcy trust has reserved for Thacker’s claim may be used to pay GM’s remaining pre-2009 debts.
The bankruptcy court is scheduled to hold a hearing on the creditors’ request on August 6,2013. The danger to Thacker, and the government, is that their claims could be left wanting if the court incorrectly calculates or underestimates the value of the claim.
The False Claims Act is intended to provide whistleblowers with the means to fight back against corruption and fraudulent practices that cost the government and taxpayers billions of dollars annually. It has become the single most effective fraud enforcement tool for the United States Department of Justice.
“When a company, no matter how large or how small, fraudulently obtains money from the U.S Treasury, it may go unnoticed but for the brave efforts of whistleblowers like Mr. Thacker,” commented Christopher Paulos, an attorney handling whistleblower and false claims litigation. “Sometimes, the only way that fraud like this gets exposed is when someone on the inside, someone with knowledge, speaks up. And even then, they must have unyielding determination like Mr. Thacker to see the case through to the very end.”
Joshua is a writer and researcher with Ring of Fire.