Consumer Fraud

Nuclear Weapon Contractor Settles False Claims Act Case Alleging Misuse Of Funds

whistleblower 5 370x210 Nuclear Weapon Contractor Settles False Claims Act Case Alleging Misuse Of FundsThe U.S. government has recovered nearly $5 million from a corporation hired to operate Sandia National Laboratories, the largest national research laboratory in the U.S. charged mainly with overseeing the development and manufacture of non-nuclear components of nuclear weapons.

According to the U.S. Justice Department, Sandia Corporation, a privately owned company contracted by the federal government to run Sandia National Laboratories, agreed to pay $4.79 million to resolve allegations that it illegally used taxpayer money to lobby for an extension of its $2.4-billion-per-year management contract – a violation of the False Claims Act and the Byrd Amendment.

Sandia Corporation is headquartered in Albuquerque, N.M., and is a wholly owned subsidiary of Lockheed Martin Corporation. Sandia National Laboratories’ primary campus is on Kirtland Air Force Base in Albuquerque, and it maintains another facility in Livermore, Calif. The Laboratories are part of the National Nuclear Security Administration, which oversees the production of nuclear warheads.

Sandia Corporation has received one-year contract extensions for the management and operation of Sandia Laboratories since 2012.

The settlement followed a report by the Energy Department’s Inspector General that asserted Sandia Corporation of trying to win an extension of its government contract without competing for it. To achieve this, it took funds from its existing federal contract and used them to court senior government officials, including former Energy Secretary Steven Chu, his family, friends, and colleagues, and key members of Congress.

“The money allocated by Congress for the Sandia National Laboratories is designed to fund the important mission carried out by our national laboratories, not to lobby Congress for more funding,” said Benjamin Mizer, head of the Justice Department’s Civil Division.  “This resolution demonstrates that the Justice Department will work to ensure that public funds are used for the important purposes for which they are intended.”

According to the Center for Public Integrity, Inspector General Gregory Friedman described the company’s alleged misuse of funds as “highly problematic,” “inexplicable and unjustified,” and recommended that the Energy Department seek a recovery of the funds.


U.S. Department of Justice
Center for Public Integrity