Beware of the Big Stick Carried by the Government

Beware of the big stick carried by the government. Its called the False Claims Act and contract and environmental managers have long known that they can’t just sign the myriad of required certifications to the government without risk of organizational and personal prosecution. You can’t just cross your fingers and hold your breath, hoping no one notices if your certified statement isn’t true. In many instances, the penalty for admitting a compliance failure or weakness up front may be small, but the cost of filing a false statement or false claim (a false statement tied to a government payment) can be huge. Now, Chief Compliance Officers and other GRC executives are learning it the hard way.

The complaint filed this week against Christi Sulzbach, who was the Associate General Counsel and Corporate Integrity Program Director at Tenet Healthcare Corporation (Tenet) makes that point loud and clear. Sulzbach is alleged to have signed and provided to the Government declarations that falsely stated that to the best of her knowledge and belief, Tenet was in material compliance with all federal program legal requirements, despite her allegedly having received legal opinions to the contrary. The government also alleges that these false declarations allowed Tenet to bill Medicare for millions of dollars in claims that it was not legally entitled to receive.

It’s just a signature on a standard required clause, right? WRONG. It’s a signature that now is exposing Ms. Sulzbach to hundreds of millions of dollars of potential liability PERSONALLY, even after Tenet has settled with the government for more than $920 million dollars.

I used to jokingly call the Chief Compliance Officer job the “designated scapegoat,” but cases like this one highlight the importance of taking the job seriously. Understand what government contract laws and regulations apply to you and your organization. Use a consistent approach to manage compliance. Don’t sign things that put your personal reputation, assets and possibly even freedom on the line – unless you have undertaken the necessary investigations to know that what you are saying is true. Don’t assume that no one checks. Don’t step into the line of the swing of that big stick.