FRAUD Act

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9588 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                                H. R. 9588

 To require certain State officials to report fraud involving Federal
                     funds, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              July 2, 2026

 Mr. Stauber (for himself, Mr. Emmer, Mr. Finstad, and Mrs. Fischbach)
 introduced the following bill; which was referred to the Committee on
                    Oversight and Government Reform

_______________________________________________________________________

                                 A BILL

 To require certain State officials to report fraud involving Federal
                     funds, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Responsibility and
Accountability for Unchecked Dereliction Act'' or the ``FRAUD Act''.

SEC. 2. DUTY TO REPORT FRAUD INVOLVING FEDERAL FUNDS.

    (a) Reporting Requirement.--Not later than 180 days after receiving
a fraud warning involving covered Federal funds, a covered official
shall report such warning to the Director of the Federal Bureau of
Investigation.
    (b) Condition of Receipt of Federal Funds.--In order to be eligible
to receive Federal funds for a fiscal year, the chief executive of a
State shall certify to the head of the Federal agency providing such
funds that during the previous fiscal year the covered officials of the
State have substantially complied with the requirement under subsection
(a).
    (c) Offense.--Whoever, being a covered official, knowingly--
            (1) violates the requirement under subsection (a); or
            (2) obstructs, interferes with, or impedes a Federal,
        State, or Inspector General investigation involving fraud
        involving covered Federal funds,
shall be fined under title 18, United States Code, imprisoned for not
more than 10 years, or both.
    (d) Debarment.--The head of an agency that oversees the
distribution of Federal funds, with respect to which a covered official
has been convicted of an offense under subsection (c), may prohibit
such covered official from overseeing the distribution of such funds.

SEC. 3. RULE OF CONSTRUCTION.

    Nothing in this Act shall be construed to--
            (1) authorize the Federal Government to remove a State
        official from elected office; or
            (2) violate principles of federalism under the Tenth
        Amendment to the Constitution of the United States.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Covered official.--The term ``covered official''
        means--
                    (A) the Governor of a State;
                    (B) the head of a State agency that administers,
                oversees, distributes, or certifies expenditures of
                covered Federal funds; and
                    (C) any State Inspector General, or equivalent
                State official established by law, with statutory
                responsibility for investigating, auditing, or
                overseeing covered Federal funds.
            (2) Fraud warning.--The term ``fraud warning'' means a
        written allegation of a specific instance of fraud involving
        covered Federal funds, supported by documentary evidence, which
        may include a written finding, a referral, an audit, an
        investigative report, or a whistleblower complaint, alleging
        the misuse, theft, diversion, or improper expenditure of not
        less than $250,000 in covered Federal funds.
            (3) Covered federal funds.--The term ``covered Federal
        funds'' means any Federal funds provided to a State or State
        agency through a grant, cooperative agreement, reimbursement
        program, direct appropriation, or other Federal funding
        mechanism.
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