Bechtel Corp. and AECOM Energy & Construction Inc. have agreed to pay $58 million to resolve allegations that they billed the government for work that was never performed under a nuclear weapons plant cleanup contract.
Bechtel and AECOM were hired by the federal government to provide cleanup services at Hanford Nuclear Reservation in Washington. Dating back to the times of the Manhattan Project, Hanford is the most polluted nuclear site in the country.
The contractors spent several years trying to build a nuclear waste treatment plant. The construction project was no easy task, considering Hanford was once the top plutonium-producing plant in America. But it would seem that corporate greed got in the way of the plant's completion. Prosecutors found evidence that, over the years, the defendants billed the federal government for thousands of hours of work that was never performed.
According to Assistant U.S. Attorney Joseph Harrington, “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.”
The companies have made no admission of guilt. “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,” a spokeswoman for Bechtel commented.
Hanford was once dedicated to the development of an atomic bomb. In fact, the plutonium produced there was used in the bomb the U.S. dropped on Nagasaki during World War II. After the war, the facility went on to produce massive amounts of the metal, eventually generating 56 million gallons of radioactive waste.
Billions of dollars of taxpayer money have gone into Hanford cleanup efforts, but without the Waste Treatment Plant that Bechtel and AECOM were supposed to build, the project cannot be completed. Two decades after the cleanup operation began, the WTP is still in the works.
The alleged misconduct was brought to light by a group of whistleblowers in 2016. The insiders came forward with allegations of timecard fraud, which allegedly resulted in inappropriate billings. Employing hundreds of skilled workers, Bechtel and AECOM allegedly saw the opportunity to overbill the Department of Energy by falsifying hours-worked data.
Idle Workers Billing Scheme
Executives from both companies have admitted they overcharged the government for "unallowable idle time" between 2009 and 2019, prosecutors said. The executives also admitted that the misconduct continued even after Bechtel and AECOM became aware that an investigation into their billing practices was ongoing. The whistleblowers, Kip Daly, Julee Leavitt, Gene Turner, and Justin Rohrer are all former employees of the defendants'.
According to prosecutors, Bechtel and AECOM also admitted that skilled workers at the plant were idle for long periods due to scheduling failures, and that they improperly billed the Department of Energy for labor costs corresponding to times when the workers were idle.
The First Assistant United States Attorney for the Eastern District of Washington said in a statement, “Completing the WTP is not only critical to public safety and the environmental health of the Pacific Northwest, but is an urgent and critically important ongoing public health concern, which the DOE and the State of Washington have appropriately made a top priority.” The prosecutor went on to lament the role of corporate greed in the story, and how it had hindered cleanup efforts at Hanford.
This is not the first time the defendants have settled a lawsuit over the questionable quality of the services they provided at Hanford. In 2016, they jointly agreed to pay $125 million to resolve claims that they “knowingly violated quality standards at Hanford and used substandard materials.”
A Multimillion-Dollar FCA Whistleblower Award
The four whistleblowers filed a lawsuit against the defendants under the False Claims Act. This legislation enables insiders with original information about fraud to sue wrongdoers and obtain a share of the recoveries. Daly, Leavitt, Turner, and Rohrer will collectively receive a $13.7 million whistleblower award.
Commenting on the settlement agreement, the director of Hanford Challenge, a citizen watchdog organization, said in a statement, “Hanford needs–and indeed fights for–every dollar it receives to accomplish its cleanup mission. We cannot afford this egregious fraud to get in the way of a safer, cleaner future." The activist was critical of the Hanford contractors' ability to "buy [their] way out of trouble.”
A spokesperson for the tipsters commented that the Hanford project "has often been victimized by unscrupulous contractors who chose to cheat the taxpayers for their own personal gain,” and referred to the whistleblowers as, "the heroes in this story."