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Another nuclear weapons contractor pays millions to settle charges of illegally diverting federal funds

Getting $45 million in new work

In the complaint, the whistleblowers said that when they originally lodged accusations of mismanagement — several years earlier — Bechtel project leaders launched a coordinated lobbying campaign to defend their work and also to collect new revenues for additional work on the waste treatment plant project. It then billed the department for the costs of this lobbying, the complaint said.

In January 2010, it said, a Bechtel manager on the WTP project sent the company’s top lobbyist for nuclear programs a letter meant to be delivered to key congressional staff to “determine their ‘anxiety’ level” about criticisms of the company’s performance. After his investigation, the lobbyist became convinced that there would be no immediate, adverse consequences, and the company decided to ask for $50 million on top of the $690 million already slated for the project, according to the complaint.

In an email sent by one Bechtel manager to another — along with a chart detailing the work that the company could say the additional revenue would finance — the manager said “in reality if we did not receive the additional $50m … most of these activities would still likely happen,” according to the whistleblowers’ complaint. The company subsequently got $45 million added to its contract.

The full emails detailing these actions have not been publicly released, by either the government or the plaintiffs, because the messages are part of an investigation that remains “open and ongoing,” according to Felicia Jones, spokeswoman for the Energy Department Office of Inspector General. She declined to say whether her colleagues consider the whistleblowers’ description of the emails accurate.

The Justice Department’s statement affirmed that it had “alleged that Bechtel National Inc. and Bechtel Corp. improperly claimed and received government funding for lobbying activities.” But Justice Department spokeswoman Nicole Nava declined to comment about the whistleblower’s account of specific emails.

Lobbying Congress for new work isn’t against the law. But billing the government for lobbying is, according to the federal Byrd Amendment, approved by Congress in 1989. Court records state that Bechtel will pay $67.5 million of the settlement, and AECOM will pay $57.5 million; the amount of money that will go to the whistleblowers — who are entitled to a portion of any funds they help the government recover — has not been determined yet.

Charles Curtis, who oversaw the Energy Department’s nuclear weapons work from 1994 to 1997 while serving as undersecretary and then deputy secretary, said he was not aware of any improperly-funded lobbying during his tenure. But he expressed surprise that multiple contractors within the past three years have been caught doing it. “These are for-profit enterprises. They can use their shareholders’ money for lobbying, but to use congressionally appropriated money [is] a diversion of funds,” Curtis said. “It’s not only unethical … it’s illegal.”

Three years ago, it was the Fluor Corporation and its subsidiary Fluor Hanford Inc., which at the time held the contract to manage the Hanford site, that agreed to pay $1.1 million to settle a separate complaint that its officials lobbied with government money from 2005 to 2010 to drum up business for a federally funded training facility there. Loydene Rambo, a Fluor employee, triggered the settlement by filing her own whistleblower suit, based on what she described as records of the lobbyists being paid with federal funds. She received a $200,000 reward, and Fluor denied any wrongdoing.

The Justice Department’s August 2015 settlement with Lockheed Martin Corporation, which runs Sandia, similarly followed improper billing of the government for a more complex and elaborate lobbying effort to extend its management contract, according to a special investigation report released by the Energy Department Office of Inspector General. Lockheed agreed to pay $4.7 million in 2015 to settle the Justice Department’s complaint about the billing. Like Fluor before it and Bechtel and URS since, Lockheed Martin in a written statement denied it had done anything wrong.

Asked by the Center about how the lobbying settlements have affected the department’s relationship with its nuclear weapons contractors, Energy Department spokeswoman Bridget Bartol said in an email that “the Department has taken and will continue to take vigorous action against any contractor who spends federal funds on improper lobbying activities.”

Bechtel remains the primary contractor on the WTP project, and Lockheed Martin still holds the contract to operate Sandia National Laboratories.

Cleanup of the Hanford site was authorized 25 years ago, and as of 2000 it was expected to cost $4.3 billion and be completed in 2011. The Department now estimates it may not be fully operational until 2037, according to pleadings filed in federal court by government lawyers defending the Energy Department in a lawsuit brought by the state of Washington to force an acceleration of the cleanup. If the job is funded at its current level of about $690 million a year until 2037, the cost would exceed $15 billion.

President-elect Donald Trump’s transition team is mindful of the project’s problems and growing price tag. A recent memo to top Energy Department officials from the transition team he appointed asked them to describe “your alternatives to the ever increasing WTP cost and schedule, whether technical or programmatic.”

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