Respondents, electrical contractors, were employed to work on P.W.A. projects in the Pittsburgh area. Their contracts were made with local governmental units rather than with the United States government, but a substantial portion of their pay came from the United States. Charging the respondents with defrauding the United States through the device of collusive bidding on these projects, the petitioner in the name of the United States and on his own behalf brought this action under § 5438 (18 U.S.C.A. §§ 80, 82 86), and §§ 3490-3493 (31 U.S.C. §§ 231-234, 31 U.S.C.A. §§ 231 234), of the Revised Statutes.
These sections, now distributed through the statutes, are parts of what was originally the Act of March 2, 1863, 12 Stat. 696. Section 5438 contains that portion of the original Act which makes certain efforts to defraud the government a crime punishable by fine and imprisonment. Section 3490 separately provides that whoever commits 'any' of the prohibited acts shall 'forfeit and pay to the United States the sum of $2,000, and, in addition, double the amount of damages * * * sustained * * * together with the costs of suit; and such forfeiture and damages shall be sued for in the same suit.' Under §§ 3491, 3493, this latter action may be instituted by 'any' person in behalf of the government, and where such a qui tam action is brought, half the amount of the recovery is paid to the person instituting the suit while the other half goes to the government.
In the instant case verdict and judgment for $315,000 were rendered against the defendants, of which $203,000 was for double damages and $112,000 was an aggregate of $2,000 sums for 56 violations of § 5438. 41 F.Supp. 197. The Circuit Court of Appeals was of the opinion that the government had been defrauded-a conclusion not challenged here -but held that the particular fraud was not reached by § 5438. It accordingly reversed. 127 F.2d 233.
First. The Court below, construing § 5438 with 'utmost strictness' on the premise that qui tam or informer actions 'have always been regarded with disfavor' by the courts, emphasized the absence of a direct contractual relationship between the respondents and the United States, and held that 'The claims of the defendants then were simply against the local municipalities. Since the defendants had no claim upon or against the United States, this action was not authorized by the informer statutes.'
We can not accept either the interpretive approach or the actual decision of the court below. Qui tam suits have been frequently permitted by legislative action, and have not been without defense by the courts. Moreover, this interpretation of 'utmost strictness' narrows not only the qui tam aspect of the Act, but also the criminal provisions. The decision below treats the language of § 5438 in such fashion that no criminal proceedings could be brought against the respondents, a result to which the policy on qui tam actions is immaterial even if it exists or could properly be applied. This 'qui tam policy' cannot be used to detract from the meaning of the language in the criminal section; and we cannot say that the same substantive language has one meaning if criminal prosecutions are brought by public officials and quite a different meaning where the same language is invoked by an informer.
Congress has power to choose this method to protect the government from burdens fraudulently imposed upon it; to nullify the criminal statute because of dislike of the independent informer sections would be to exercise a veto power which is not ours. Sound rules of statutory interpretation exist to discover and not to direct the Congressional will. True, § 5438 is criminal and for that reason in interpreting so much of its language as it shares in common with Sec. 3490 we must give it careful scrutiny lest those be brought within its reach who are not clearly included; but after such scrutiny we must give it the fair meaning of its intendment. Cf. United States v. Raynor, 302 U.S. 540, 552, 58 S.Ct. 353, 358, 82 L.Ed. 413.