Consumer Fraud

Nuclear contractor settles whistleblower allegations for $2.7 million

osha whistle Nuclear contractor settles whistleblower allegations for $2.7 millionGeneral Electric Hitachi Nuclear Energy has agreed to pay the U.S. government $2.7 million to resolve allegations made by a whistleblower under the False Claims Act that the company concealed potentially disastrous flaws in an advanced nuclear reactor it designed and made false statements and claims to federal authorities and agencies about the reactor.

General Electric Hitachi Nuclear Energy Americas LLC (GE Hitachi), headquartered in Wilmington, N.C., provides nuclear products and services to the federal government. The company is a jointly owned subsidiary of Fairfield, Conn.-based GE and Hitachi of Tokyo, Japan.

According to the U.S. Justice Department, GE Hitachi received funding between 2007 and 2012 from the Department of Energy to cover up to half of the cost of developing, engineering, and obtaining design certification for an advanced nuclear reactor. The Nuclear Regulatory Commission (NRC), which regulates the civilian use of nuclear power in the U.S., is responsible for determining whether to approve GE Hitachi’s application for the reactor design.

The whistleblower lawsuit alleges GE Hitachi made false statements to the NRC and Department of Energy about a component of the reactor known as the steam dryer, which removes water droplets from steam produced by the nuclear reaction.  The NRC requires all nuclear design contractors to demonstrate that vibrations caused by the steam dryer will not damage the nuclear plant.

The U.S. says that GE Hitachi concealed known flaws in its steam dryer analysis. The government also says that the company falsely claimed that it had properly analyzed the steam dryer in accordance with federal standards and had verified the accuracy of its modeling using reliable data.

“Transparency and honesty are absolutely critical when dealing with issues relating to the design of a nuclear reactor,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart Delery.  “The Department of Justice will protect federal funds and the Nuclear Regulatory Commission’s crucial mandate of ensuring public safety.”

Glenn Tracy, Director of the NRCs Office of New Reactors, said that the Commission “supports the settlement and appreciates the [Justice Department’s] close coordination during its investigation of these allegations.”

The allegations resolved by the settlement were made in a lawsuit filed against GE Hitachi under the False Claims Act by LeRay Dandy, a former GE Hitachi employee. The False Claims Act allows private individuals to sue on behalf of the U.S. government when they have evidence of fraud, waste, mismanagement, and other wrongdoing. In return, receive a percentage of the recovery.

The percentage Mr. Dandy will receive for his role in exposing GE Hitachi’s handling of its federal contract has not yet been determined.


U.S. Justice Department