Lincoln signs the False Claims Act to punish contractors who defraud the government

President Abraham Lincoln signed the False Claims Act on March 2, 1863, creating the first federal law to penalize contractors who defrauded the government. The law authorized private citizens — called relators — to file suit on the government's behalf under qui tam provisions and collect a portion of any recovered funds. Contractors faced double damages and a $2,000 fine per fraudulent claim. Congress enacted the law after widespread reports that Union Army suppliers were delivering diseased mules, counterfeit gunpowder, and rotten rations at inflated prices.