Settlement Reached in Time Card Fraud Case
WC Monitor
12/19/2014
Charges related to timecard fraud are expected to be dropped for two former high-level managers and a former supervisor of CH2M Hill Hanford Group after they agreed to pay civil fines, according to the Department of Justice. Ryan Dodd, who was vice president of the former Hanford contractor, and Terrence Hissong, who worked as the tank waste retrieval director, have each paid a fine of $44,000 to settle allegations. Stephanie Livesey, a worker supervisor who approved timecards for the former contractor, has agreed to pay a fine of $22,000. The settlement agreements are not an admission of liability by any of the three defendants nor a concession by the federal government that its claims were not well founded, according to legal documents.
Dodd, Hissong and Livesey each say that they did not knowingly aid in timecard fraud. “I’m glad the charges are dropped,” Dodd said after the Department of Justice announced the settlement agreement this week. “I’m glad to be done with this long ordeal that’s been extremely unjust to me and my coworkers.” Dodd, Hissong and Livesey were scheduled to go to trial in federal court in February in the case.
The settlement agreement follows a jury decision this fall that four other former employees of CH2M Hill Hanford Group (CHG) were not guilty of charges related to timecard fraud. The U.S. Attorney’s Office for the Eastern District of Washington respects the decision of the jury, said U.S. attorney Michael Ormsby. But “we do not understand it to be a rejection of what nearly a dozen former employees, including supervisors, have admitted to along with their former employer CHG — that there was a systemic pattern of timecard fraud at CHG that stole millions from the taxpayers,” he said in a statement. Dodd called the earlier verdict and the decision to drop the case against him “further evidence of these made-up and fictitious charges by the Department of Justice.”
CH2M Hill Paid $18.5 Million Settlement in 2013
CH2M Hill agreed in spring 2013 to pay $18.5 million to settle civil and criminal allegations of defrauding taxpayers through widespread timecard fraud at Hanford. CHG was the Department of Energy’s Hanford tank farm contractor from fall 1999 to fall 2008. Workers at Hanford were accused of refusing to work overtime unless it was offered in eight-hour blocks. When overtime assignments were completed they would go home, but claim a full eight hours of overtime that would be paid with taxpayer money, CH2M Hill acknowledged in 2013.
The settlement agreement said that the Department of Justice believes that Dodd and Hissong received bonuses from their employer that they would not have received if they had not authorized overtime hours that the government alleged they knew would not actually be worked. Both denied having knowledge of timecard fraud and believed that reasonable management processes and procedures were in place to deter and detect such fraud, the settlement agreement said. The agreements say that the provisions of the settlement do not release 23 other former employees of CHG from possible liability, including some who have not been charged.
The settlement agreement signed by Livesey was not immediately available, and neither Livesey nor Hissong, who also worked as tank farms management director for CHG, could be reached for comment. One former employee of CHG remains scheduled to go to trial in February. In addition, 11 former employees of CHG, including two former supervisors, have pleaded guilty to charges related to timecard fraud and could be sentenced this spring.
Bechtel National Settles Suit Filed by Subcontractor at WTP
WC Monitor
12/19/2014
A lawsuit brought against Bechtel National by one of its subcontractors at the Hanford Waste Treatment Plan has been settled through mediation. American Crane and Equipment Corp. sued Bechtel in 2013, saying problems at the plant had added $3.9 million to its costs that would not be compensated. Judge Lonny Suko in Eastern Washington District U.S. Court dismissed the case earlier this month after the two companies reached a settlement. Terms were not disclosed. “It was resolved through mediation, which by definition is a consensual resolution,” said John Person, attorney for American Crane. Bechtel takes legal claims seriously and worked diligently to resolve the matter, said Bechtel spokeswoman Suzanne Heaston. American Crane had agreed in 2003 to design and manufacture eight cranes for $13.2 million. The cranes are to be used in the vitrification plant’s High Level Waste Facility, where they will be remotely operated as they perform work in hot cells.
Since 2003, the Department of Energy has had a “never-ending” increase in mandates that Bechtel passed on to suppliers without consideration of cost or schedule impacts, American Crane said in its legal complaint. One of the major disruptions for American Crane was the shutdown of its work for more than two years starting in 2005 as Bechtel and DOE re-examined and re-set the design criteria for earthquake safety, the lawsuit said. Not only did the company have restart costs, but the design criteria for the cranes, the inspection procedures and the standards Bechtel set for accepting the cranes were drastically changed, according to American Crane. An even larger driver of the cost increase was the continual ratcheting up of Bechtel’s interpretations of contractual, technical and regulatory requirements that American Crane believes have been unwarranted, according to the lawsuit.
Because the work to design and build the cranes spanned a decade, American Crane is left with substantial risk to its warranties, the lawsuit said. It expected manufacturing warranties for parts American Crane purchased, such as brakes, bearings and electrical drives, to expire before the cranes would be shipped to Bechtel, it said in 2013. Bechtel had not filed documents outlining its defense when the lawsuit settled and declined to respond to allegations after the lawsuit was dismissed.
GAO Says DOE Should Assess Ways to Add Extra Tank Space
WC Monitor
12/19/2014
The Department of Energy should assess alternatives for adding additional tank waste storage capacity at Hanford, the Government Accountability Office recommended in a report released this week. The report raised questions about how much DOE knows about the condition of Hanford waste storage tanks and concluded that if another double-shell tank corrodes and needs to be emptied, DOE could be out of space to securely hold the waste. “The tanks at Hanford — both single shell and double shell — are in deteriorating condition and the schedule for addressing the problem is slipping inexorably into the future,” Sen. Ron Wyden (D-Ore.),who requested the GAO review, said in a letter to Energy Secretary Ernest Moniz this week. Wyden asked for a schedule and plan for DOE to implement all of the report’s recommendations within 90 days. “Agreeing to recommendations is one thing. Implementing them is another thing entirely,” Wyden said after sending the letter. “The DOE’s watch-and-wait strategy for these tanks leaking nuclear waste into the soil is completely unacceptable.”
The GAO report recommends a more complete assessment than DOE has so far completed of the extent to which Hanford’s double-shell tanks may be at risk of developing leaks after Hanford’s oldest double-shell tank, AY-102, developed a leak between its shells and must be emptied. The report also calls for an updated plan for emptying Hanford’s single-shell tanks. The most recent plan dates from 2011 and does not take into account changed conditions, including both single- and double-shell tanks that are in worse condition than was known in 2011. In addition, work at the Hanford Waste Treatment Plant, being built to treat the stored waste for disposal, has fallen further behind schedule since 2011. Some construction has been halted until technical issues at the plant can be resolved. The updated schedule for emptying tanks should consider the impact of the delays at the vitrification plant, the risks of continuing to store waste in aging tanks and an analysis of available double-shell tanks, the report said.
Water Infiltrating Some Tanks
At least one of Hanford’s single-shell tanks, Tank T-111, is leaking waste into the soil. The GAO report says the waste is leaking at a rate of 640 gallons annually, which is more than the initial DOE report of up to 300 gallons a year but less than a 2013 DOE estimate that had the leak at nearly 1,000 gallons a year. A series of DOE assessments of the single-shell tanks in 2013 and 2014 concluded that water is leaking into at least 14 of the single-shell tanks, including Tank T-111. It can enter through the risers that allow access to the tanks and through the joints at the edge of their concrete-tops, among other ways. The additional water in the tank not only increases the liquid in the tanks that can leak into the soil but it can make it difficult to assess whether tanks are leaking by looking for changes in the volume of the tank.
The water is adding from less than 10 gallons to more than 2,000 gallons of waste to individual tanks annually. DOE finished pumping as much liquid as possible from all single-shell tanks in 2005 to reduce the risk of leaking. But likely because of the water intrusion, five single-shell tanks again have more than 50,000 gallons of liquid, an amount that DOE considers pumpable, according to the GAO report. DOE has not committed to pumping more of the liquid waste from the tank, as Wyden wants. Instead, it will test using an exhauster in a single-shell tank this spring to see if that can evaporate off some of the liquid.
DOE Needs to Assess Possible Corrosion Factors in Other Tanks, GAO Says
DOE already is short on space to empty waste from single-shell tanks into double-shell tanks with waste from Tank AY-102 scheduled to be emptied into one of the other 27 double-shell tanks. “Additional leaks cannot be ruled out,” given the decades longer that the double-shell tanks will have to hold waste until it is treated and growing concerns about the integrity of double-shell tanks, the GAO report said. “Given the current condition of the tanks, it is unclear how long they can safely store the waste,” the report said.
DOE determined that construction flaws in Tank AY-102 and the type of waste in the tank likely caused the inner shell to corrode and leak. But earlier this year a panel of experts concluded that the corrosion was more likely caused by water collecting beneath the tank during construction and a six-year outage of the ventilation system. DOE has looked at whether the other 27 tanks also had construction flaws and has found problems to a lesser extent in at least 12 more of them. However, DOE needs also to assess whether the factors that led to corrosion in Tank AY-102 also are present in the other double-shell tanks, the GAO report said.
Rough DOE Estimate Puts Cost of Eight Tanks at $800 Million
DOE will know more about the cause of the leak in Tank AY-102 when it is emptied and that will provide information on maintaining the other double-shell tanks, DOE told the GAO. But that will not happen until March 2017, “an unacceptably long time from now,” according to Wyden. As the tanks age, there will be an increasing risk of tank failure, the report said. The single-shell tanks were built as temporary storage from the ’40s to the ’60s and all have been used far longer than the 25 years planned. Four of the newer double-shell tanks also already have held waste beyond their design life. DOE is required by law to empty double-shell tanks with interior leaks, according to the state of Washington, but GAO officials were told that Hanford would have nowhere to move the waste from another leaking double-shell tank.
DOE now has no plans to build new tanks and estimates it would take about eight years before new tanks were built, licensed and ready to hold waste, the GAO report said. DOE has estimated the price of eight new tanks at $800 million. The state of Washington already has asked a federal court to amend the 2010 consent decree to require DOE to build new storage tanks. Representatives of local governments near Hanford have argued that money should go toward the end goal of treating the waste for disposal rather than for more storage capacity.
DOE Says It Has Increased Monitoring, Working to Optimize Space
DOE told the GAO that it has stepped up its program to monitor tanks for leaks and also is taking steps to optimize the space available in double-shell tanks. It has made improvements to the 242-A Evaporator and this fall used the facility to reduce the volume of waste in double-shell tanks by 750,000 gallons. It has plans to reduce the amount of waste by 3 million gallons more over the next three years. It also is making a technical case for allowing the double-shell tanks to be filled to a higher level. DOE now has 5.3 million gallons of space left in double-shell tanks, not including space from evaporation campaigns and other efforts. But space reserved for an emergency, planned transfers from single-shell tanks and the waste that will be emptied from double-shell Tank AY-102 bring the remaining capacity down to 200,000 gallons, the report said.
