American Greatness contributor Steve Cortes, founder of the League of American Workers, said the False Claims Act (FCA) — a Civil War–era law enabling citizens to expose fraud against the federal government — is being used by profiteers instead of for its original intent to protect American taxpayers.

“The False Claims Act was born in the blood of the Civil War to protect taxpayers, but today it’s been hijacked by profiteers who treat justice like a hedge fund,” Cortes told American Greatness. “This is not about rooting out fraud; it’s about harvesting fortunes.”

“A noble safeguard has become a hideous scam,” Cortes added.

Cortes was responding to an August 14 American Greatness report highlighting a new study from the Prosperity for US Foundation. That study argued that the FCA, once viewed as a vital whistleblower tool, is increasingly being leveraged as a profit-making venture for a range of players — including whistleblowers themselves, government prosecutors, and even venture capital firms.

The Prosperity for US Foundation report found that private entities and financiers are increasingly funding FCA lawsuits with the expectation of large settlements, treating the cases as “financial instruments.” This shift, the report argued, has moved the law away from its original mission of protecting taxpayer dollars and toward an industry of litigation-driven enrichment.

The FCA, also known as “Lincoln’s Law,” was first enacted in 1863 to combat rampant fraud by defense contractors during the Civil War. It allows private citizens, known as “relators,” to file qui tam lawsuits on behalf of the government against entities accused of defrauding federal programs. If successful, whistleblowers can receive a portion of the recovered damages, sometimes amounting to millions of dollars.

But the Prosperity for US Foundation report warned that this incentive structure has fostered what it called a “profit center” for opportunistic actors. The report pointed to examples of hedge funds and specialized investment groups backing FCA cases, seeing them as low-risk, high-reward opportunities given the potential for massive payouts when cases succeed.

Cortes said this transformation undermines the law’s legitimacy and places taxpayer dollars at further risk. “The law was designed to safeguard the public purse, not to enrich lawyers and financiers who have discovered how to manipulate the system,” he said.

The Prosperity for US Foundation recommended reforms to restore the FCA’s original intent, including tightening requirements for whistleblower standing and imposing stricter oversight on outside funding of cases. Without such changes, the report cautioned, the FCA risks devolving further into what it described as a litigation market divorced from justice.

For Cortes, that shift is already underway. “A noble safeguard has become a hideous scam,” he said, urging lawmakers to rein in the exploitation of a statute created more than 160 years ago to defend the American taxpayer.