When federal prosecutors want to root out fraud from a complex web of contractors and subcontractors that take in the river of money that flows into the decades-old cleanup at Hanford Nuclear Reservation near Richland, they turn to a law enacted during the Civil War.
The False Claims Act was passed in 1863 to prevent con artists from profiting from the sale of faulty guns, munitions, and horses to the U.S. Army. That law now has been used to go after multinational corporations with billion-dollar contracts to clean up radioactive waste, including in a settlement announced Tuesday with construction and engineering giants Bechtel International Inc. and AECOM Inc., the second-largest ever centering around work at Hanford.
“Since 1863, (the False Claims Act) has been the people’s primary weapon against fraud involving taxpayer and public funds,” Assistant U.S. Attorney Dan Fruchter said. “That is exactly what happened here.”
Tuesday’s settlement centered around billing the government for hours that weren’t actually worked at Hanford.
The biggest civil settlement ever reached there involved familiar names: Bechtel and AECOM.
In 2016, those corporations agreed to pay a $125 million fine after federal prosecutors uncovered a wide-ranging scheme by the companies to “knowingly violate” quality standards, and after they used substandard materials in constructing the Waste Treatment Project, federal prosecutors said.
With the two biggest settlements ever impacting Hanford tied to the same companies, questions remain over how they kept their contracts and why they didn’t face criminal penalties.
Fruchter was one of a team of federal prosecutors who worked for four years investigating the companies. Tuesday’s settlement saw the parties agree to pay about $58 million after admitting to widespread time-card fraud as part of the Waste Treatment Project, federal prosecutors said.
That multi-billion-dollar effort by the U.S. Department of Energy started in 1989 to clean up about 56 million gallons of radioactive waste in 177 underground tanks, many of which are single-walled containers that are past their designed dates of effectiveness.
The effort to stabilize decades of plutonium production that fueled much of this nation’s nuclear weapons arsenal is of “critical importance … to the people of the Pacific Northwest and to our nation,” Fruchter said. “We do not believe it was appropriate for Bechtel and AECOM to simply cut a check and deny everything. We required them to admit to their conduct in a detailed statement of facts.”
Asked why Bechtel should be allowed any future government funding following the total of $183 million worth of settlements for alleged fraud in four years, Bechtel spokeswoman Staci West did not directly answer.
“The track record is one of steady progress toward completion of a massive and complex facility to treat liquid radioactive waste that threatens the environment,” West wrote in an email. “The first phase of the plant is nearly complete and scheduled to begin operations in 2023.”
Jason Marshall, a spokesman for AECOM, noted that its parent corporation sold AECOM Energy and Construction Inc. in January 2020 and now operates as Amentum.
“AECOM, therefore, was not party to these settlement agreements,” Marshall wrote in an email. The three-year agreement to monitor the time-card billing “bind the defendants and not AECOM. AECOM has no current or future involvement in the WTP project.”
Asked which company, AECOM or Amentum, committed the alleged fraud, Marshall replied with the same answer: AECOM is not currently involved at Hanford.
Assistant U.S. Attorney Joseph Harrington noted that about $25 million of the $58 million settlement will be used to reimburse the Department of Energy for overbilling. The remainder went to the four whistleblowers who made prosecutors aware of the time card overbilling in 2016.
Harrington said the $25 million represents more than two times the amount that Bechtel and AECOM, which was Bechtel’s primary subcontractor, fraudulently overbilled over a period of about 10 years.
The settlement was one of nine major cases, and several smaller spinoff cases, that has resulted in the return of $219 million in fraudulently obtained profits and penalties. Those cases have also produced 16 felony fraud convictions and two corporate monitoring agreements, he said.
“Overall, these efforts have changed the enforcement environment at the Hanford site,” Harrington said. “It holds wrongdoers, whether individual employees or multinational corporations, more accountable. With each successful enforcement action, we deter and prevent exponentially more Hanford fraud from ever occurring.”
While prosecutors celebrated the civil settlement, they were asked Wednesday why, especially since company executives admitted they overbilled the government, Bechtel and AECOM officials were not criminally charged with fraud.
Assistant U.S. Attorney Tyler Tornabene said the case remains under investigation.
“The way we investigate these cases … is to look at all the options both civilly and criminally in terms of resolution, and we simply follow the facts where they lead,” Tornabene said. “Here, that resulted in a very aggressive civil settlement … and a corporate monitoring agreement.”