Whistleblower helps secure $2 million settlement over contract rigging at Hanford

A whistleblower has been paid $470,000 out of a $2 million settlement after successfully challenging what she and government prosecutors say was a shell company at the Hanford Nuclear Reservation.

The subcontractor charged with setting up the shell company, Federal Engineers & Constructors, worked under the huge, three-headed joint venture Washington Closure Hanford (WCH), which between 2005 and 2016 received a multibillion-dollar contract from the U.S. Department of Energy to operate the site. The contract paid for cleanup following decades of plutonium production.

WCH was comprised of engineering powerhouses AECOM, Bechtel National and CH2M Hill, which were required as part of the contract to funnel a percentage of those funds to small, disadvantaged and women-owned businesses.

In 2009, Federal Engineers & Constructors awarded a $2 million contract to Sage Tec. Sage Tec, however, was owned by Laura Shikashio – the wife of former company vice president Larry Burdge. “Ms. Shikashio knowingly misrepresented Sage Tec to be a qualified disadvantaged small business in order to be eligible for” the contract, court records state.

Federal prosecutors wrote that Sage Tec should not have received the contract and instead “was a pass-through front company for FE&C, which performed substantially all of the work on WCH’s improperly awarded subcontracts,” court records state.

“Small business fraud not only harms the taxpayers and the vital cleanup mission at Hanford,” Acting U.S. Attorney Joseph Harrington wrote, “but legitimate, small, disadvantaged businesses that do not have the opportunity to fairly compete for and perform subcontracts.”

The whistleblower in the case was Salina Savage, who discovered the scheme and filed a lawsuit that was later joined by federal prosecutors. In her suit, Savage wrote that she learned that WCH’s contracting officer, Dennis Houston, began shopping for shell companies that would qualify for the contracts that otherwise would go to small or disadvantaged businesses.

In a related case, Federal Engineers and Constructors awarded a subcontract to Jonetta Everano under the business name Phoenix Enterprises NW. But Everano worked for and in the same office as Federal Engineers and Constructors and had no employees. She was awarded millions of dollars worth of contracts that FE&C then carried them out.

Savage, who said she was qualified to carry out the contract in question but was denied, met with the management of WCH in 2009 and threatened to turn them in to federal regulators.

“Dennis Houston told her ‘how dare she question’ him,” court records state, “and that he would see that she never got another contract.”

Attorneys for WCH denied those allegations in the ongoing case, but Savage never again received a contract for work.

The $2 million represents only a portion of what could ultimately be paid out; the fraud case is ongoing.