Hanford contractors to pay nearly $58M settlement after whistle-blowers allege massive fraud scheme

Hanford contractors involved in the long-running effort to build the site’s Waste Treatment Plant have agreed to pay a $57.75 million settlement to the U.S. Justice Department to resolve whistleblower claims of fraudulent overcharges that inflated the hours of labor and billed for work that was not actually performed.

The settlement announced Tuesday with Bechtel Corp., AECOM Energy & Construction, and an AECOM subsidiary covers work undertaken to build the Waste Treatment Plant. This construction work has soaked up many billions of federal dollars to develop a complex able to treat and stabilize hazardous chemical and radioactive wastes for long-term storage.

Back in 2016, Bechtel and subcontractor URS agreed to pay $125 million to settle allegations of subpar work and accusations of using taxpayer dollars illegally to fund a multiyear lobbying campaign.

part of the new settlement, the contractors must submit to an independent compliance review for the next three years. And in a statement released Tuesday by the U.S. Attorney’s Office of Washington’s Eastern District, the contractors came under harsh criticism.

“It is stunning that, for nearly a decade, Bechtel and AECOM chose to line their corporate pockets by diverting important taxpayer funds from this critically essential effort,” Joseph E. Harrington, first assistant attorney general for the Eastern District of Washington, said in the statement.

Teri L. Donaldson, the inspector general for the Department of Energy, said “Bechtel National Inc., AECOM Energy & Construction Inc. and (the AECOM subsidiary) Waste Treatment Completion Company LLC, engaged in a massive scheme to submit tens of millions of dollars of false claims to the U.S. Government for unallowable and unjustified costs over a period of years — a pattern of conduct that continued even after U.S. authorities notified the defendants that these costs were unallowable,” Donaldson said.

The Justice Department statement says the contractors admitted to unreasonable and unallowable idle time for craft workers, and failing to schedule and carry out sufficient work to keep the workers productive.

Bechtel, in a statement released Tuesday, said it denies any liability under the federal False Claims Act. Barbara Rusinko, president of Bechtel’s Nuclear, Security & Environment business unit, said, “As a company, we felt it was in the best interest of the project and our customer to resolve this matter so that we can avoid the distractions and expenses of a protracted legal proceeding … “

Hanford was born of secrecy in World War II to produce plutonium for atomic weapons, including the bomb dropped on Nagasaki, Japan. For more than 40 years, it produced most of the plutonium for the nation’s nuclear arsenal. In this century, Hanford has been the focal point of a marathon cleanup.

Four whistle-blowers who worked for these contractors alleged the wrongdoing four years ago, according to Richard Condit and Knoll Lowney, two attorneys who represent them.

The whistle-blowers, no longer employed by the contractors. They are Kip Daily, a scheduler; Scott Turner a scheduler and planner; Justin Rohrer, a millwright and union steward; and Julee Leavitt, a turnover transition specialist, according to the attorneys and court documents.

The whistle-blowers were awarded a 23.8% share of the settlement, according to their attorneys.

“They saw the same thing, and their conscience required them to speak out to try to protect the taxpayer,” Lowney said. “It is not an easy thing to speak up, They did this at great sacrifice.”