Kenneth Fletcher
WC Monitor
5/8/2015

There is no evidence that former Deputy Energy Secretary Dan Poneman broke any ethics rules while at the Department of Energy regarding his future post as CEO of uranium enrichment firm Centrus Energy Corp., DOE Deputy General Counsel Eric Fygi said in an April 30 letter to Sen. John Barrasso (R-Wyo.). Poneman, who left DOE last fall, drew scrutiny upon taking the new position at Centrus and becoming a member of the Board of Directors of the metal commodities trader Traxys. The move led Barrasso to question DOE on whether Poneman may have violated conflict of interest rules for former DOE employees. Last week, Fygi responded on behalf of DOE. “An examination of appropriate documents does not reveal any indication that former Deputy Secretary Poneman violated any ethical obligations applicable to Federal employees with respect to potential employment with Centrus at any time during his service at the Department of Energy,” the letter states.

Poneman’s appointment to Centrus raised questions from lawmakers including Barrasso and Sen. Dianne Feinstein (D-Calif.), and also has prompted a probe led by Rep. Cynthia Lummis (D-Wyo.) of the House Oversight and Government Reform Committee. During Poneman’s five-year tenure at DOE, the Department took numerous actions that benefitted Centrus, then known as USEC. That includes $260 million in support of the American Centrifuge technology as part of a cost-share RD&D program, as well as a transfer of uranium tails valued at hundreds of millions of dollars aiming to extend the company’s operations at the Paducah Gaseous Diffusion Plant. In 2014, DOE requested a $33 million reprogramming for American Centrifuge, as well as a $23 million extension to the RD&D program and backed a contract to the firm maintain the technology at Oak Ridge National Laboratory.

DOE’s designated agency ethics official “personally and directly advised then-Deputy Secretary Poneman of the restrictions that would apply to his employment activities” upon leaving DOE in October, according to Fygi. Any former government employee responsible for “personally making any decision resulting in a payment, award modification, or overhead or other rate, or settlement” valued at more than $10 million to a company is restricted from “receiving compensation from the successful bidder/contractor” for a period of one year after performing that function, according to a Sept. 18, 2014, memo to Poneman from DOE Designated Agency Ethics Official Susan Beard attached to DOE’s letter to Barrasso.

Poneman is also prohibited for two years from communications with the Federal government on matters that were “under his official responsibility,” including all matters at DOE. Also, Poneman is prohibited from “lobbying any covered executive branch official or non-career Senior Executive Service appointee for the remainder of the Administration.”

Centrus: Poneman Employment Doesn’t Trigger Restrictions

None of those post-employment restrictions apply in Poneman’s case, Centrus spokesman Jeremy Derryberry said this week. “Prior to joining Centrus, Mr. Poneman was advised by the DOE Designated Ethics Officer that his work did not trigger the Procurement Integrity Act post-employment restrictions with regards to Centrus. This means that the prohibition on receiving compensation from Centrus did not apply,” Derryberry said.

‘DOE’s Response Does Little to Ease … Concerns’

However, Barrasso is not fully satisfied by DOE’s response. “Senators from both sides of the aisle have expressed grave concerns about Mr. Poneman’s career choice following his resignation as Deputy Secretary of Energy. DOE’s response does little to ease those concerns,” Barrasso spokeswoman Emily Schillinger said in a written response this week. “DOE still owes the American people an explanation of exactly how Mr. Poneman must comply with his ethics obligations, especially in reference to DOE’s transfers of publicly-owned uranium, which have financially benefitted his two new employers.”