04/04/2014 // Justice News Flash: Featured Column (Press Release) // Kathleen R. Scanlan // (press release)
The Senator who originally sponsored the False Claims Act famously said he believed in ‘setting a rogue to catch a rogue.’ A federal False Claims Act suit recently filed in San Francisco against a telecommunications giant puts a modern spin on his famous turn of phrase about taking a thief to catch a thief. It seems one of the telecom companies the government hired for wiretapping services to help catch thieves in action was actually a thief itself, defrauding the government for providing the service.
For almost as long as there have been telephones, the federal government has tapped them in an effort to collar the bad guys. Federal wiretapping statutes dictate how those taps happen and how telecommunications carriers are reimbursed for their cooperation. It’s an often-uneasy partnership.
Now the Justice Department says Sprint Communications, Inc. has been abusing that arrangement. Between January 2007 and July 31, 2010, Sprint overcharged the government by $21 million dollars, the suit claims. Under federal law, Sprint and other phone (and Internet) carriers are allowed to charge government agencies for the “reasonable expenses” incurred in complying with a wiretap, pen register, or trap device order. However, a Federal Communications Commission (FCC) ruling says they are not allowed to pass on the costs of these upgrades to the government.
That is just what Sprint did, the Justice Department alleges. The false billing caused “a significant loss to the government’s limited resources,” U.S. Attorney Melinda Haag said in a recent statement.
Sprint says it has done nothing wrong and will fight the suit.
The FCA suit against Sprint concerns wiretaps ordered by public courts, mostly for police work done by the Drug Enforcement Agency. According to the Administrative Office of the U.S. Courts’ “Wiretap Report 2012,” of the 1,354 federal wiretaps issued in 2012, 1281 (95%) of them were for narcotics. Of the 633 federal wiretaps actually installed, 624 (99 percent) of them were for landline or cell phones. In 2012, the average cost per federal wiretap order was $50,452, suggesting that wiretaps can be a lucrative and insidious way that companies “tap” into government coffers.
The Government’s case against Sprint conspicuously does not involve government surveillance under the auspices of the secret FISA (Foreign Intelligence Surveillance Act) court or the vast expansion of the government’s secret warrantless surveillance with the aid of telecom companies in recent years which was famously exposed by Edward Snowden’s leaks of NSA documents. The Sprint case raises an interesting question, though. If it’s possible for a telecom company to make false claims for wiretaps ordered by public courts, is it possible the secret surveillance programs were victims of the same kind of fraud? And how does that fraud get exposed? It seems highly unlikely the government is going to come forward and say it got defrauded in the process of doing secret surveillance as it has in the Sprint case. That’s a job for a whistleblower. The irony is almost delicious.
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