Consumer Fraud

U.S. Government Sues Lockheed Martin, Alleging Hanford Nuclear Cleanup Fraud

whistleblower USA U.S. Government Sues Lockheed Martin, Alleging Hanford Nuclear Cleanup FraudThe notorious Hanford Nuclear Reservation in Southeastern Washington has been mired in fraud and corruption for decades, ever since the U.S. government started paying contractors billions of dollars to clean up and convert 56 million gallons of radioactive sludge.

On Feb. 8, the U.S. Department of Justice (DOJ) announced it has lodged a False Claims Act lawsuit against Bethesda, Maryland-based Lockheed Martin, alleging the company and its executives used a $232 million support contract for nuclear waste disposal to enrich themselves.

According to federal prosecutors, Lockheed Martin engaged in a fraudulent kickback scheme by paying more than $1 million to executives from Mission Support Alliance (MSA), a joint venture that Lockheed Martin partially owned. In exchange, MSA provided Lockheed Martin “improper favorable treatment” when it awarded the $232 million cleanup contract to another Lockheed Martin company, Lockheed Martin Services Inc. (LMSI).

The DOJ alleges that MSA subcontracted Lockheed Martin Services Inc (LMSI) without open competition and at inflated rates.

The defendants “fraudulently obtained tens of millions of dollars from DOE [the Department of Energy] through a series of false statements, half-truths, material omissions, corrupt kickbacks, and outright lies,” federal prosecutors allege. The government accuses the defendants of using these false statements “to fraudulently obtain DOE consent to [the] $232 million subcontract between MSA and LMSI …”

When the defendants billed the U.S. Department of Energy for the cleanup and remediation work, they lied about the amount of profits Lockheed Martin received throughout the duration of the 2010-2016 contract, the government claims.

One of the defendants, Jorge Francisco “Frank” Armijo, who was head of MSA at the time, is now a vice president at Lockheed Martin.

Hanford is a decommissioned plutonium production plant that occupies a sprawling 586-mile site in rural southeastern Washington state. The site contains 177 massive underground storage tanks that hold nuclear waste from the production of bombs and other nuclear devices stretching back to 1943.

Bechtel, another contractor involved in the Hanford cleanup efforts, found a third of the Hanford waste tanks have leaked about one million gallons of radioactive waste into the ground.

According to The Washington Post, a 2015 report from the Government Accountability Office (GAO) states that the DOE spent more than $19 billion over 25 years on the “treatment and disposition of 56 million gallons of hazardous waste” at the Hanford site, “without actually treating hazardous waste.”

“Over the last 25 years, (the) DOE has considered and abandoned several different approaches to treating and disposing of this waste but, to date, no waste has been treated,” the GAO wrote in 2015.

“Where Congress has allocated money for specific purposes, we will not tolerate unlawful conduct by contractors who seek to enhance their profits at the expense of taxpayers,” said Assistant Attorney General Jody Hunt, DOJ’s Civil Division in announcing the False Claims Act allegations against Lockheed Martin and the other defendants. “This lawsuit demonstrates that the Department of Justice will work tirelessly to ensure that public funds are used for the important purposes for which they are intended.”