CBS' 60 Minutes / CBS Network, January 16, 1994 - Excerpts from transcript of Getting Rich, produced by Howard Rosenberg, excerpt text from a copy legally purchased from Burrelle's Transcripts, Burrelle's Information Services, Volume XXVI, Number 18.

(Page 16)

Mr. STACHE: And I spent three and a half months in a hospital, so it's a very personal issue with me. (Footage of a Teledyne sign)

STAHL: (Voiceover) Stache tried to get his bosses at Teledyne to Fix the problem, but they had another solution.

Mr. STACHE: I was fired.

STAHL: They just got rid of you?

Mr. STACHE: Yes.

STAHL: You were a troublemaker.

(Footage of Stache; relays; a Teledyne sign)

STAHL: (Voiceover) Stache told the FBI about 18 Teledyne relays he thought were faulty, and sure enough, 13 of the 18 failed an FBI test. Teledyne was indicted and pleaded guilty to criminal charges of fraud, paying a fine of $17.5 million to the government. But Stache also filed a Lincoln Law suit. As we said, if he wins, it could cost Teledyne a billion dollars.

Mr. STACHE: Teledyne, the corporation, is not financially able to pay that type of a Fine, so we know it's going to be substantially less.

(Footage of Dowden)

STAHL: (Voiceover) Jack Dowden has already gotten his payoff. You probably remember him from a 60 MINUTES story earlier this year. Dowden was a salesman for a clinical laboratory. He noticed a competing company. National Health Labs, was overcharging Medicare for blood tests patients didn't need.

Mr. DOWDEN: This practice and-and similar practices probably cost between half a billion and a billion dollars a year. And...

STAHL: You're saying the fraud is-is that much money?

Mr. DOWDEN: The unnecessary tests.

(Footage of the Justice Department building; Phillips and Dowden)

STAHL: (Voiceover) Dowden tipped off the government. And while the Justice Department was investigating, Dowden contacted Phillips and sued National Health Labs as well as his own employer. Corning MetPath, under the Lincoln Law.

Mr. DOWDEN: National Health Laboratories settled in-December 18th of 1992 and agreed to pay $100 million to Medicare and $10 million to the various state programs.

(Footage of a National Health Laboratories building; a Metpath sign; Dowden; Carol Lam)

STAHL: (Voiceover) Dowden's reward for blowing the whistle was $15 million from the National Health Lab case and another $6 million when Metpath settled its Lincoln Law suit. But lawyers at the Justice Department resent whistle-blowers like Dowden walking away with so much money and (Page 17) credit for cracking their cases. Assistant US Attorney Carol Lam ran the criminal investigation of National Health Labs. Jack Dowden says that the $100 million settlement paid by NHL to the government was directly a result of his lawsuit. Is that true?

Ms. CAROL LAM

(Attorney): That is absolutely not true. We would have gotten the exact same result even if his lawsuit had never been filed.

STAHL: Then why did Jack Dowden get $15 million out of this?

Ms. LAM: Because I assume that's what the law says he's entitled to get. Basically, he got $15 million for giving the government a tip.

(Footage of the Supreme Court)

STAHL: Whatever the case, before the Lincoln Law was resurrected, the government was able to recover only $28 million in fraudulent claims.

Mr. PHILLIPS: Last year-I mean, total amount recovered, I think, under cases initiated by whistle-blowers is something like $400 million now.

STAHL: Since the law was passed?

Mr. PHILLIPS: Since it was amended in '86.

STAHL: And last year alone?

Mr. PHILLIPS: Last year alone was-was something in the range of-of a whistle-blower?of-of $250 million, something like that.

STAHL: Why do you think that there are so many people in the government who don't like this law?

Mr. PHILLIPS: Well, some do and some don't. I think a lot of people in the Justice Department think, 'This is our job. Fraud is our department. We don't need the help of other, uninvited people.' Well...

STAHL: Yeah, it's an insult to them.

Mr. PHILLIPS: That may be the case, but I'll tell you-it's somewhat of-- of an insult, but they need all the help they can get.

(Footage of Bill Barr)

STAHL: (Voiceover) Former Attorney General Bill Barr says the government doesn't need help from Phillips. And besides, he doesn't think very much of the Lincoln Law.

Mr. BILL BARR (Former Attorney General): What's bad about this statute is that it says the bounty hunter himself...

STAHL: Why do you call them bounty hunters?

Mr. BARR: Because that's what they are. They are pursuing the public's interest, but they have a mercenary motive; they get a piece of the action. Now just think, Lesley, when the government sues, we go through great pain to ensure that the agents and the lawyers have no financial interests. In fact, it's a crime for a government lawyer in have a financial interest in any matter they're looking at. But what this does is it lets any Tom, Dick and Harry get some financial interest in the matter and then bring the suit in the name of the government, and that's wrong.