This transcript has been auto generated
00;00;00;00 - 00;00;34;09
Jonathan Porter
Welcome to another episode of Husch Blackwell's False Claims Act Insights podcast. I'm your host, Jonathan Porter. The Justice Department released its 2025 False Claims Act report a few weeks ago, and it reveals some huge stats and some trends that really deserve breaking down. For those in industries that come under frequent scrutiny like healthcare, life sciences, higher ed, defense contractors, importers, you need to know not just what we lawyers say about the False Claims Act, but also what the numbers say.
00;00;34;09 - 00;00;55;18
Jonathan Porter
And those numbers, those stats are valuable data points. And so we're going to break them down. On the podcast today, we're also going to break down recent public comments by DOJ's Deputy Assistant Attorney General Brenna Jenny today. So Brenna is in charge of FCA enforcement at main Justice. And she's done an excellent job at keeping the public and the FCA
00;00;55;18 - 00;01;15;29
Jonathan Porter
bar informed of her priorities and her approaches. And I'll tell you that they are not the old let's just keep doing whatever we've been doing approach. And so today on the podcast, we're covering what the numbers say DOJ is doing, along with what Brenna Jenny says DOJ is doing and will do when it comes to the False Claims Act and its enforcement.
00;01;15;29 - 00;01;45;24
Jonathan Porter
So joining me to talk about how DOJ is enforcing the False Claims Act is my law partner, Cormac Connor. Cormac joined the podcast last year right at the beginning of the Trump administration, to prognosticate what would happen to FCA enforcement in Trump 2.0. And Cormac, you absolutely nailed it. So we'll call this Cormac’s victory lap as he tells us how he got right, all those predictions that FCA enforcement would be as strong or stronger as ever.
00;01;45;24 - 00;02;08;05
Jonathan Porter
And so Cormac, kudos for nailing it. I'll tell our listeners, for those who didn't listen to you nailing your FCA predictions. Cormac is a former DC AUSA. He practices in Husch Blackwell’s DC office, where he guides clients through all manner of government investigations. And so, Cormac, thanks for coming on the podcast today to talk about DOJ's latest FCA report and comments from Brenna
00;02;08;05 - 00;02;08;24
Jonathan Porter
Jenny.
00;02;08;26 - 00;02;12;11
Cormac Connor
Certainly, Jonathan, happy to be here. Happy to be, on your pod again.
00;02;12;13 - 00;02;19;02
Jonathan Porter
So, Cormac, let's jump right in. What do the stats say about FCA enforcement from this latest DOJ report?
00;02;19;04 - 00;02;38;29
Cormac Connor
Well, it was a record setting year in every way. Not. And that's not me you know, tooting my own horn on the prognostication. It was really a wave that had been building from the the tail end of the Biden administration and then, and then crashing this over here on 2025, that the first year of the Trump administration.
00;02;39;01 - 00;03;05;10
Cormac Connor
What the statistics announced is that there was a total all of settlements and judgments exceeding $6.8 billion. And that's that is by far the biggest total amount the DOJ, at least according to records in these records, go back to 1987 when they started publishing data on False Claims Act recoveries. But that is much larger than they've ever seen in any single year.
00;03;05;13 - 00;03;31;22
Cormac Connor
In fact, DOJ has exceeded 5 billion in total recoveries only three times. And that was in 2012, 2014 and 2021. So the next closest was all the way back in 2014, where the DOJ brought in 6.1 billion. But what we're seeing here is a massive emphasis on false claims Act enforcement across the board, health care, federal contracting, you name it.
00;03;31;28 - 00;04;04;26
Cormac Connor
They've been pushing really hard. I think what we see is that this is evidence that the False Claims Act enjoys bipartisan support. And that's, you know, something, anytime you're listening to candidates talk about fraud, waste and abuse. And we hear that from both sides of the aisle. They're really talking about the False Claims Act. And so again, these cases, as anybody who's gone through one knows, take a long time to litigate, to investigate, to build, which is why there's a big number for 2025.
00;04;04;29 - 00;04;26;14
Cormac Connor
But just by virtue of the way these cases unfold, many of those must have started in years before 2025. And so what we're seeing is the resolutions in 2025, which tells you that there was a huge ramp up during the Biden administration, and that everything we were seeing and hearing from DOJ in the past years suggests that there's more to come.
00;04;26;21 - 00;04;27;01
Cormac Connor
Yeah, and.
00;04;27;01 - 00;04;44;23
Jonathan Porter
Speaking more to come. Cormac, you wrote an article analyzing these numbers, and that's why we're doing this podcast. You've already done the heavy lifting on this. So, borrowing your brain for this episode. And one of the things that stands out to me that I think our listeners would want to know about is the fact that in 2025, there were a record number of qui tams filed.
00;04;44;23 - 00;05;05;13
Jonathan Porter
And so the obvious thing goes there is that those are likely not settled yet. So these big record setting settlement dollars that we're seeing, that's not looking at anything involving things that were filed this year, usually qui tams take several years to investigate and settle. And so I think what these numbers tell me is that this is just the beginning.
00;05;05;13 - 00;05;16;16
Jonathan Porter
And this is on top of, I think you wrote that the number of dollars that were settled last year that stemmed from qui tams itself was a record. And so, I mean, we're off to the races. You're right. When it comes to False Claims Act enforcement, right?
00;05;16;19 - 00;05;43;12
Cormac Connor
I have to think you're right. And as you pointed to the total number of qui tams recoveries for last year was 5.3 billion. So that's you know, obviously the vast majority of cases were brought by whistleblowers. What we also are seeing in watching DOJ announcements over the last year is that at least two instances, namely civil rights fraud allegations and compliance regulations related to important export duties.
00;05;43;14 - 00;06;05;19
Cormac Connor
There has been an explicit invitation by DOJ to whistleblowers basically sending out the call to anybody in the country. If you think you have a case, bring it to us. And as you alluded to, how long these cases can take on the investigation stage, that's all baked into the statute. So if a whistleblower is going to bring a case, the DOJ, it's not like just sending an email.
00;06;05;19 - 00;06;38;19
Cormac Connor
They have to have first have filed a complaint. That complaint gets lodged in a court, is put under seal, so no one knows about it. And then it goes to DOJ. Then once DOJ gets it, they're statutorily obligated to do an investigation. So we have to believe that if we saw such a huge amount of recoveries and whistleblower generated cases last year, when, you know the DOJ is issued or laid out the welcome mat for more cases, that there's going to be more of the same coming and maybe even significantly more for 2026.
00;06;38;26 - 00;06;57;11
Jonathan Porter
Yeah. And you're you're absolutely right. The way that I think these things typically go is this is a bit of a snowball effect. So DOJ announces these big splashy numbers. They'll announce settlements as they reach them that talk about what the whistleblower makes. That's going to attract more and more whistleblowers. Learning about this and thinking about contacting a lawyer to file something.
00;06;57;11 - 00;07;16;23
Jonathan Porter
And so these things really do snowball. I think what we're seeing Cormac here is, is just the beginning of a snowball of new key times. You were successful in predicting something last year. We try to get on your bandwagon now and get some predictions done. I want to say that 2026 numbers will see a new record number of qui tams, because people will respond to everything that's going on.
00;07;16;23 - 00;07;30;06
Jonathan Porter
So that's my prediction, and I bet we'll see what we saw this year. I think you wrote that health care and defense and then sort of Covid, PPP, those types of cases, those are leading the way. Any other predictions that you want to make for us, Cormac, since you're taking your victory lap here?
00;07;30;08 - 00;07;48;23
Cormac Connor
That's right. I jump on the bandwagon. I mean, look, this is not any real rocket science here. It's looking at the momentum that DOJ has gained already, plus their announcements on priorities. I think that that's you know, calling this to be a big year is really no offense, but it's, you know, for either us not really a big stretch.
00;07;48;26 - 00;08;16;00
Cormac Connor
I think that's something we can really count on. A significant piece of that. As we looked at the previous few years between 2020, with the beginning of the Covid pandemic, there was a big shift in proportion of cases that tilted a lot of those recoveries away from healthcare, which usually occupies, you know, as you track this stuff, it's usually in the 70s and 80s as far as percent of the volume of recoveries.
00;08;16;02 - 00;08;35;08
Cormac Connor
All those people on investigations pushed the percentage of healthcare down to end of the 60s. And I think what we're seeing is that while there are still a lot of people on investigations in the pipeline, health care has been catching it up, and it's kind of back to where you used to be in the last year. When we look at that.
00;08;35;08 - 00;08;55;26
Cormac Connor
Plus, I was just talking to somebody I know who's at the Small Business Administration. They're still getting a huge number of cases. And when I asked him, does that detract from your ability to investigate the sort of pre pandemic type of cases? He says, oh no, those are our priority. But we just are also swamped with these other cases.
00;08;55;26 - 00;09;11;12
Cormac Connor
So you know, the answer is yes to all the above when you add to that again we talked about civil rights. We talked about terror enforcement. DOJ is putting a lot of resources behind those investigations. So I got to believe that there's going to be more of that come in 2026. Yeah.
00;09;11;19 - 00;09;30;29
Jonathan Porter
Totally agree. And Cormac, you mentioned that part of what qui tam relator's respond to, not just the numbers but also DOJ public statements. And that's thanks for making my segue for me. So you were in attendance for a recent conference where Brenna Jenny talked about FCA enforcement. So why don't you tell us about what Brenna said at that conference and what our listeners need to know about it?
00;09;31;02 - 00;09;58;11
Cormac Connor
Sure. Yeah. So this is a conference sponsored by I up in New York back in January. Brenna, Jenny has been in the role for now, going on six, eight months as the deputy assistant attorney general. She handles the civil division, which also in turn handles FCA cases for DOJ folks that have been listening to your pod for a long time, we're probably familiar with the name of her predecessor, a guy named Michael Granston, and he had her job since 2019.
00;09;58;14 - 00;10;28;21
Cormac Connor
One of the things that Michael Granston was famous for was he issued a memo in 2019 that really, for the first time, outline DOJ priorities and policies when they're considering affirmative dismissals of false claims that cases. So those are situations where DOJ looks at a key term case and says, you know, either we're worried this is going to make bad law or the issues are so complicated, it's going to consume too much time and resources for the government, things like that is laid out for prosecutors.
00;10;28;22 - 00;10;58;04
Cormac Connor
Consider when deciding whether to affirmatively reach out and dismiss the case. The reason I flagged that as being something that Jenny emphasized is for two reasons. One, she didn't say this, to be clear, but I suspect that part of the reason she was pointing back to that dismissal policy is that the average number of dismissals had dropped during the Biden administration to about six per year, and she made a point of identifying that statistic.
00;10;58;06 - 00;11;20;05
Cormac Connor
She then pivoted to say that there had been 25 cases dismissed in 2025. Now, granted, there's a much larger volume, so there are many ways to slice and dice that, but it's a significant increase no matter how you look at it. And she made a point of talking about it. And I'll talk a minute about that because it relates to the constitutionality questions that are spinning around about the key provision.
00;11;20;08 - 00;11;45;11
Cormac Connor
But she did make a point of talking about DOJ leaning in on some of these dismissal decisions, which is pro-business, but it's also caseload volume management, things like that. So she talked about that. She also spoke and highlighted some of her priorities in the health care space. She noted the cases in the resolutions that had happened the previous year that dealt with secretive kickbacks.
00;11;45;11 - 00;12;09;18
Cormac Connor
So these are like situations where a kickback gets paid, but the participants in that payment try to conceal their relationship with each other, she noted. That is something that DOJ is going to be looking for this year. She noted inflated prescription prices where there were several resolutions, some of which closed in on billion dollars all by themselves, where prescriptions were being issued without medical purpose.
00;12;09;19 - 00;12;34;24
Cormac Connor
This gets back to the opioid crisis and concerns about fraudulent prescriptions. There, she noted that is a focus for the coming year. She also talked about something that she described as a personal interest for her, and that is the example she gave were medical device manufacturer owners or groups of providers that work together where the resulting products or delivery of services substandard.
00;12;34;26 - 00;12;55;13
Cormac Connor
And she explained this as being something that she wanted to really focus on as a, again, personal interest of hers because, in her words, that substandard care, those substandard products not only don't make patients quality of life better, it actually makes it worse. That was something that she really talked about during that presentation in the health care space.
00;12;55;19 - 00;13;38;13
Cormac Connor
As regard to tariffs and trade enforcement, she echoed the policy directives that we've been seeing from the white House and from DOJ over the past year. She noted that she personally this is Brenna. Jenny said that she had personally been a founder of a task force in 25 that would bring resources to DOJ to focus on those specific issues, and that she emphasized one of the areas that this task force would be looking at are situations where an employer, for example, would misstate the country of origin of a product that's coming into the country, presumably in an effort to lower their import duties or avoid sanctions, things like that.
00;13;38;15 - 00;13;59;18
Cormac Connor
She said that this task force is going to be looking at those kinds of scenarios, looking at situations where products are being trans shipped from one country to another again, and presumably in an effort to avoid higher tariffs or sanctions. So that was going to be a focus that she said her group and her task force would be looking at in the coming year in cybersecurity.
00;13;59;18 - 00;14;22;15
Cormac Connor
I think that's something we've all been kind of watching here in the last few years. But there were several big announcements last year, you know, multimillion dollar settlements. And these were coming often from whistleblowers, where, for example, a contractor had certified that they were going to be able to provide certain types or levels of data security parameters in the delivery of their services, but then failed to do so.
00;14;22;17 - 00;14;43;24
Cormac Connor
And that, of course, puts government programs that puts data, all of that at risk. So that is going to be a continuing point of emphasis. And then on the civil rights fraud issue, this has gotten a lot of attention and has been controversial since it was announced back in May. I suspect that a lot of folks at this conference I attended were kind of waiting to see what Brenna Jenny might say about it.
00;14;43;27 - 00;15;11;28
Cormac Connor
And while there was no mention in the 2025 data about civil rights fraud cases, she confirmed that these are coming and that the DOJ Civil Rights Fraud Initiative that casts its net to include state, local and federal agencies across all agencies. So it's not just DOJ, but looking for instances where there's been discrimination on any kind of a protected class.
00;15;11;28 - 00;15;36;29
Cormac Connor
Whether that discrimination hurts or harms majority or minority groups is irrelevant. But what her group is going to be looking for are, in particular, contractors that have certified compliance with federal civil rights laws, but then have instances where discrimination has popped up in hiring decisions, promotion decisions, pay decisions, things like that. Those are all areas that she talked about in her remarks.
00;15;37;02 - 00;15;40;01
Cormac Connor
As signals of what we can, expect here in the coming year.
00;15;40;06 - 00;15;55;18
Jonathan Porter
Thanks, Cori. That's just incredible Intel. So thanks for sharing that with our listeners. And I think a bunch of what you just said, we could spend a whole different podcast episode digging deep in the civil rights fraud enforcement is something that a lot of people have talked about when it comes to the False Claims Act. And we have on this podcast as well.
00;15;55;25 - 00;16;15;19
Jonathan Porter
I personally have a lot of takes when it comes to substandard care, being a FCA predicate in the health care space, so that there's been some pushback by the courts. And we'll probably talk about that at some point. Then cybersecurity is a really fascinating one, because the question there is, where do you draw the line? What point is cybersecurity not sort of a material part of a claim.
00;16;15;19 - 00;16;44;08
Jonathan Porter
And so there's a ton we could talk about me personally. The thing that she said that stands out the most is that she's taking seriously what was promised in the grandstand memo, which is that if there are if there are predatory key terms out there, she wants DOJ to act. I think that's something that we on the defense side should hear it and realize, because I think with Michael Granston, no offense to him, but he was a career DOJ guy and just didn't realize the impact the key teams can have, especially ones that are just plainly not right.
00;16;44;10 - 00;17;00;07
Jonathan Porter
This is great that she's going to put teeth to the grandstand memo. I think that's gonna be well-received by a lot of people. Not to say that all key jams should go away. The vast majority of key teams filed by well-intended people, but there are bad apples out there. And so recognizing that, I think it's going to be a really nice thing.
00;17;00;07 - 00;17;15;21
Jonathan Porter
So tell me, we've talked about the stats. We talked about Brennan's statements. So do you think based on those things tell us in terms of the law, like do you think there are big contentious issues on the horizon in terms of how DOJ is enforcing the False Claims Act?
00;17;15;23 - 00;17;44;04
Cormac Connor
Well, I think we've been you and I both and our colleagues have been watching challenges that are working our way through the courts right now as to the constitutionality of the key to and provision. That was really until a couple of years ago, treat it as a not a contentious issue, but we've seen in recent Supreme Court decisions that there seem to be at least three justices that are signaling that they're open to the concept that the key to provision might be unconstitutional.
00;17;44;04 - 00;18;15;15
Cormac Connor
And the basis for that, in general terms, is the argument that giving a unelected and therefore unaccountable to the populace civilian ability to watch what is that amounts to a law enforcement prosecution is an unlawful extension of the executive authority granted to the executive branch under the Constitution. So their argument is we can't allow whistleblower to be deputized essentially as prosecutors.
00;18;15;18 - 00;18;41;15
Cormac Connor
Now, Brenna, Jenny didn't say this in so many words, but I suspect that her emphasis on the amount of dismissals and her discussion about DOJ dismissals was a tip of the hat to that issue, because way she focused on it was describing how robust that review is and how important that is, because this is what the counter argument is on the constitutionality question.
00;18;41;17 - 00;19;13;03
Cormac Connor
The DOJ retains ability to dismiss cases and jump in and dismiss them if they want to. If they don't like the way the case is going and therefore those qui tam whistleblowers are not really, you know, acting on their own as executive power. It's always with DOJ looking over their shoulder. And so I think I suspect again, she didn't say this, but I suspect that's part of what she was doing in emphasizing the number of dismissals that had come in the last year, the fact that those have persisted did over previous years.
00;19;13;05 - 00;19;56;16
Cormac Connor
And recognizing that that is a significant part, in her words, of DOJ enforcement capabilities, that they retain that ability to jump in if they see a case is going in a direction that they don't like to shut it down. So I think that's a big issue that we're all going to be watching as we look at the volume of recoveries from the False Claims Act, and that are the clear majority of those come from qui tam or whistleblower initiated cases, the thought that it might somehow be rendered unconstitutional would be an earthquake in the legal market, for sure, and in the enforcement space, because that would be Hamstringing DOJ ability to initiate these investigations.
00;19;56;19 - 00;20;15;15
Cormac Connor
I have to believe that either it's found to be constitutional or there will be some legislative step. If it seems like it's heading in that direction to remedy it. So anyway, that's something we'll all be watching here in the coming year. And again, I feel like while she didn't say it, she was definitely alluding to that issue. We talked a little bit about civil rights fraud.
00;20;15;15 - 00;20;51;07
Cormac Connor
And in that initiative I mentioned that that's something that she has been or the practitioners like you and me have been watching the past year to see where those cases might go. I've been hearing through the grapevine of instances where those types of investigations have started to bubble up. Not many has been made public. But again, as we look at the runway for qui tam investigations, I expect that we're going to start seeing them come to the surface, either through cases filed in federal court or, I should say unsealed in federal court or press releases that touch on resolutions and settlement.
00;20;51;07 - 00;21;13;20
Cormac Connor
So that's that area is, again, one that she made very clear. DOJ is not backing away from. So I expect we're going to see some of that. The issuing the Bat signal tickets and relator's generally is something new in my experience. Right. The DOJ would go out of its way to roll out the welcome mat for whistleblowers and invite, you know, affirmatively invite cases.
00;21;13;22 - 00;21;38;06
Cormac Connor
One of the things that's interesting about the civil rights fraud arena is when you think about an ordinary employee at a company who's going to be a potential whistleblower, would they be able to spot an issue that's really complicated, for example, like how Medicare billing records are being handled or cost accounting records are being handled? And where does break disclosures are being made?
00;21;38;09 - 00;21;58;26
Cormac Connor
Is an ordinary employee going to be more likely be able to spot that, or are they going to be able to say, hey, you know what, somebody got promoted. And I think that was discriminated or it's an easier fact pattern to identify, if you will, and easier for people to articulate. So I got to believe that that invitation is going to generate a lot of cases.
00;21;58;26 - 00;22;28;16
Cormac Connor
Whether or not they're going to be viable is another question. Again, easier to spot. So I have to believe that there's going to be a higher volume. Another interesting point that Brenda Jenny made was recognizing how many cases are coming to her desk and her team's desk through AI tools, and I think we've all been watching that. And and knowing that there have been a variety of different tools deployed to spot potential False Claims Act cases.
00;22;28;19 - 00;23;00;06
Cormac Connor
But she made it very clear the DOJ is using these tools and things that they're looking for as they run data sets through their various tools is they're looking for things that are unusual right then, which is not a no real surprise, but using AI to spot anomalies or outliers where the fact that they're a company is showing up on a results report as being outside the norm, she suggested that that's going to be an area that they will dig into and say, well, why is this?
00;23;00;06 - 00;23;22;01
Cormac Connor
And is it because they're playing fast and loose with the rules is because they're not compliant? Is they're false claims? That case there. So I think that's a signal to everybody that is a recipient of federal funds that's pushing boundaries, is going to be even harder, because now they've got computer brains out there looking for these types of anomalies.
00;23;22;04 - 00;23;48;04
Cormac Connor
Now, what we hope then is that DOJ is not going to be just robotically issuing civil investigative demands, but will first take the time to evaluate what its AI tool is doing, scrutinize the results, crunch the data, make sure they're not, again, just launching investigations for less than optimal reasons. So that's an area. And then within that space is really kind of the DOJ capacity.
00;23;48;07 - 00;24;15;18
Cormac Connor
Just living here in D.C. and knowing a lot of people that work in and around DOJ, the word is that the civil division headcount on attorneys is down about 20% from last year. Now, maybe these AI tools will make it easier for fewer attorneys to do more work. But when we look at a record setting volume of settlements and judgments last year, we look at the anticipated flood continuing this year.
00;24;15;21 - 00;24;37;18
Cormac Connor
It just stands to reason that, you know, if you have fewer attorneys and more cases, it's going to be harder for those attorneys to get their work done. That's going to create all kinds of questions in the strategic issues for people on the defense side, as we consider, if your client is operating a kind of a gray area, does it give us an opportunity to really push that?
00;24;37;18 - 00;24;46;22
Cormac Connor
Because we know that the attorneys reviewing it may not have the bandwidth to really dig in. So anyway, all things to be thinking about as we head into 26.
00;24;46;25 - 00;25;09;16
Jonathan Porter
Yeah, Cormac, those observations are excellent. The thing that I see coming since we're going to, you know, get more on this podcast with a record number of qui tams and civil DOJ numbers down. And by the way, not just numbers down, but like reallocated. I mean, as DOJ is needing to spend more and more time on defensive things that sometimes pulls bodies away from affirmative, which is what FCA is.
00;25;09;18 - 00;25;29;11
Jonathan Porter
The fact that you've got a record number of qui tams and fewer DOJ civil lawyers to handle them, could mean that a lot more things are going to get declined. And while that may sound good to a lot of people, that's not always in our client's best interest. Sometimes DOJ lawyers, sometimes people complain about them. I mean, they're not getting a portion of the recovery.
00;25;29;13 - 00;25;51;00
Jonathan Porter
And so they have different incentives. Then a whistleblower is looking at this saying, I'm going to get rich off of this. That's going to just create some different things. And it's worth us talking about it and thinking about that, because the landscape is going to shift a little bit. So with that shifting landscape, why don't you close this out by telling us what should companies in FCA and forced Industries do about all of these developments?
00;25;51;00 - 00;25;52;10
Jonathan Porter
Do you have any closing tips for us?
00;25;52;18 - 00;26;36;10
Cormac Connor
This may sound obvious, but I mean whistleblower reports that come across hotlines, HR departments, compliance departments, audit committee that the board level things like that, I mean, whistleblower complaints or compliance complaints that get elevated that have kind of hints or flavors of fraud or other types of false claims acts, conduct in them should be taken very seriously because there's a distinct chance now with again, with DOJ making it very clear that they want whistleblowers to bring them cases, that a disgruntled employee is going to do exactly that and see this as an opportunity to cash in by bringing a case, the DOJ, for investigation.
00;26;36;10 - 00;27;01;00
Cormac Connor
So that is something to be very wary of. And of course, the caraway to that is making sure that our clients and companies in these regulated industries are also being cautious about anti retaliation provisions and policies to make sure that when these whistleblower complaints come up, that they're handled appropriately and there's no evidence of retaliation, because that makes a problem a much worse problem.
00;27;01;02 - 00;27;28;27
Cormac Connor
The civil rights case that I talked about because they're easier to spot or potentially easier to spot, that's something to keep your antenna up for checking certifications in this space. If the company made a certification of compliance in December of 2024 versus February 2025, so that's the months before and after Trump was inaugurated. And the focus on civil rights fraud was really watched through executive orders in January 25th.
00;27;28;29 - 00;27;53;14
Cormac Connor
You know, the government's looking at those certifications in a different way now. And so our colleagues in this space should be very cautious and be checking those certifications in light of today's developments to see where they stand and making adjustments, contacting counsel, legal departments, etc., to make sure that there's lower risk and if there is any risk, they've identified it and try to mitigate it.
00;27;53;17 - 00;28;21;27
Cormac Connor
Same thing with cybersecurity. I mean, this is only going to get more emphasis with AI tools not just coming from DOJ, but it's everywhere, right? You can't get away from AI. It's all around us. It's in everything we use. It seems like it touches every aspect of our lives. And so those cybersecurity requirements that contracting authorities are taking into their contracts, into their proposals are going to be an even more important with each passing year.
00;28;21;27 - 00;28;48;04
Cormac Connor
And therefore, DOJ is going to be even more sensitive to making sure that contractors are compliant. Just last year, there's a whole fact sheet that comes out with DOJ statistics, and it's sort of like the shout out to nobody wants, right? Because they lay out all their big cases and they were just in the cybersecurity space, three multimillion dollar cases announced from last year, all relating to companies that had failed to meet their cybersecurity requirements.
00;28;48;04 - 00;29;11;04
Cormac Connor
So there again, it's a major issue and one that everybody needs to be careful about. Tariffs. We talked about they're watching what's the Supreme Court going to do with a petition that was filed last year was argued last year. I mean everybody that follows the Supreme Court follows these tariffs and trade enforcement space is waiting with bated breath to see when this decision is coming down.
00;29;11;07 - 00;29;30;19
Cormac Connor
Whichever way it goes is going to have an impact on the False Claims Act space, because if the tariffs are invalidated, there's going to be questions. If a client is investigated for not paying a tariff in 2025 that was later invalidated, what's that going to mean legally? The other thing is that it's not every tariff that's before the Supreme Court.
00;29;30;19 - 00;29;55;17
Cormac Connor
There are whole categories. They're they're not being challenged. So we can't just automatically assume that if the Supreme Court rules in this one particular space, that it's going to have applications all across the board. So there again, companies that are involved in international trade, whether export import need to be watching these developments, need to be very careful about their compliance operations and their certifications.
00;29;55;19 - 00;30;20;21
Cormac Connor
The last point I'll make on this is that middle of last year, DOJ announced that it was shifting its steel team of prosecutors out of the market integrity and major frauds, criminal unit and shifting them over to tariff enforcement. Now that's criminal, right? FCA is a civil statute, but it is a very strong signal that DOJ is pushing a lot of resources over the tariff side.
00;30;20;24 - 00;31;01;19
Cormac Connor
And that's signal coming on criminal. Plus, Brenda Jenny's announcement that she's got a task force that she founded. It's just again, anybody who's operating in the international trade arena needs to be hyper focused on making sure their certifications are correct. Finally, I think looking ahead at small businesses, set aside contracts that's been getting a lot of scrutiny in the last year, especially because there are some types of small businesses that were based on certain types of minority groups that, given the shift that we've seen coming out of the White House, as far as how those types of programs are going to be evaluated, it remains to be seen, what DOJ is going to do
00;31;01;19 - 00;31;30;14
Cormac Connor
with allegations where small businesses, for example, aren't small or aren't actually controlled by, say, a service disabled veteran. Those types of compliance issues have always been an issue, but I expect are going to come even more to the fore as we move into 2026. So there again, for those out there that are either working with small businesses as subcontractors or vendors or running small businesses, they're seeking federal funds.
00;31;30;16 - 00;31;49;25
Cormac Connor
Again, be very, very cautious about your compliance submissions, your certifications of your size, of your volume of work, who you're working with because DOJ is very is picking at these and using AI tools to do it. So there again an area to keep your antenna up and give it very close scrutiny.
00;31;49;28 - 00;32;09;05
Jonathan Porter
Thanks, Cormac. All good observations and the one that I'll focus in on here as we close is you mentioned that you go on the Seal team from now looking at tariffs. When you're thinking about FCA enforcement, if you've got the Seal team on the criminal side talking about indicting executives or even a company on those things, suddenly your FCA liability looks a little bit different.
00;32;09;05 - 00;32;28;11
Jonathan Porter
And so that totally changes the dynamic of how our clients should be thinking about FCA liability. When you're staring down that idea, that's why parallel proceedings are such a dangerous thing. And so that being implemented, the tariffs base should be a huge thing that those who are filling out those certifications as the country of origin and everything, you've got to be looking at that really, really carefully.
00;32;28;11 - 00;32;39;12
Jonathan Porter
And same with everything else. You know, DOJ is running a lot of this parallel. And so Cormac your observations, all very helpful. All spot on. So Cormac, thanks for coming on the podcast and sharing all this with our listeners.
00;32;39;14 - 00;32;40;26
Cormac Connor
You bet. Always happy to do it.
00;32;40;28 - 00;32;59;12
Jonathan Porter
To close, we're going to continue to talk about these important things on the podcast. Big year for qui tams means more enforcement coming. We're going to continue to keep you posted on these big developments. But until next time, to our listeners, thanks for listening and we'll see you next time.