16 Jan 1994
Tonight on 60 Minutes they had a piece on the "Lincoln Law".
Abraham Lincoln created the law to help find military
procurement fraud in the civil war. The original law allowed a
whistle blower to collect 50% of any settlement the government
got for a case the whistle blower brought. In 1986, the law
was dusted off and put back in use after reducing the reward to
25%. I thought this worth mentioning as a follow-up on the
thread that Chris started.
A few people have earned $10M's. The justice department does
not like the law (at least those people at the justice
department that 60 Minutes interviewed) because in William
Barr's (ex-AG) words "It turns people into bounty hunters." I
want to ask: what's wrong with that? In this case, the numbers
speak for themselves. The amount of damages that the
government recovered jumped from $40M to over $100M after
reviving the law (I may have misremembered the exact figures,
but it was something like this). This is total recovery, after
paying the whistle blower.
The only downside I see is the whistle blower has an incentive
to fabricate data. It would not do to let the case turn on the
whistle blower's testimony. It was not clear how that was
handled. The cases 60 Minutes covered were proven on other
grounds once the whistle blower said where to look.
This is a specific case of the general point that I tried to
make before: if you give people incentive propotional to the
crime at issue, private policing (at least certain aspects
thereof) can be effective.