BNI and URS to Pay $125 Million Resolving Alleged False Claims Regarding Deficient Nuclear Quality Procurements at the Waste Treatment Plant and Improper Payments to Lobby Congress

Richland, WA – Today, the United States Attorney’s Office (USAO) for the Eastern District of Washington and the Department of Justice Civil Frauds Section (DOJ) announced a settlement agreement with federal contractor Bechtel National Inc., Bechtel Corp., (BNI) and AECOM, on behalf of URS Corp., and URS Energy & Construction Inc. (URS) (collectively “the defendants’). The settlement resolves allegations that BNI and URS, in the design and on-going construction of the U.S. Department of Energy’s (DOE) Waste Treatment & Immobilization Plant project (“WTP”) at the Hanford Site, falsely represented and charged DOE for deficient goods and services, which failed to be of the highest quality for nuclear facilities.

The settlement agreement, which requires BNI and URS to pay $125 million, also resolves allegations that BNI illegally used taxpayer dollars to pay for a multi-year Congressional lobbying campaign to acquire, among other things, more taxpayer dollars for BNI’s continued work on the WTP project.

The WTP is located at the DOE’s Hanford Site near Richland, Washington. Between 2001 and the present, the DOE has paid billions of dollars to the defendants to design and build the WTP, which is being built to treat hundreds of millions of gallons of dangerous radioactive waste currently stored at the Hanford Site. Key to the Plant’s ultimate ability to function is the requirement that certain

project components of the facility purchased by BNI and URS, and paid for by DOE, comply with the nuclear industry’s rigorous quality assurance standards and procedures. According to allegations accepted by the United States, for over 13 years -- from January 1, 2001, to June 30, 2013 -- BNI and URS knowingly submitted false claims for payment while failing to comply with the rigorous nuclear quality requirements for the DOE’s WTP project. It is further alleged that BNI’s and URS’ knowing false claims were not limited to just deficient parts, but also extended in some cases to testing used to resolve various technical issues in the proper design and/or construction of the WTP.

According to court documents, the case began in February of 2012, when whistleblowers (known as Relators) Gary Brunson, Dr. Donna Busche, and Dr. Walter Tamosaitis, filed a qui tam complaint under seal alleging, among other things, that BNI and URS had provided deficient goods and services to DOE on the WTP Contract. At that time the relators also alleged that BNI illegally used taxpayer dollars to lobby Congress.

When a relator(s) files a qui tam complaint, the False Claims Act requires the United States to investigate the allegations and thereafter elect to either intervene and take over the lawsuit or to decline to intervene and allow the relator(s) to go forward with the litigation on behalf of the United States. In this case, court documents show that on November 1, 2016, after more than a three and a half year investigation, the United States chose to “partially intervene” and adopt some of the Relators’ allegations, specifically, those allegations involving deficient nuclear quality procurements and illegal lobbying. Court records show that after the United States’ decision to partially intervene, the defendants, the Relators and the United States reached a negotiated settlement that provides for the global resolution of all of the Relators’ False Claims Act (FCA) allegations. In exchange for dismissal of the qui tam lawsuit, the defendants have agreed to pay $125 million to the United States, but denied any wrongdoing.

Michael C. Ormsby, United States Attorney for the Eastern District of Washington, said: “The allegations the United States chose to intervene in, including claims that BNI – URS recklessly purchased deficient materials and services with taxpayer money for more than a decade, are deeply concerning given the obvious importance of nuclear safety at the WTP. The WTP, once completed, is supposed to work safely to clean Hanford once and for all of millions of gallons of radioactive waste.” U.S. Attorney Ormsby also said: “With this settlement it is our hope that DOE will continue to move forward in its mission of environmental clean-up and restoration at Hanford, and will have greater confidence that its

contractors will not undermine those important efforts for their own short-term financial gain.”

The allegations resolved by the settlement agreement also include claims that BNI illegally used taxpayer dollars to improperly lobby Congress in direct violation of, among other things, the Byrd Amendment (1989), which prohibits federal contractors from using tax dollars to influence or attempt to influence federal officials in connection with their contract. BNI’s improper lobbying efforts allegedly included, but were not limited to, using taxpayer dollars to pay D.C. lobbyists to actively downplay to specific members of Congress the significance of concerns raised in 2009 by the Defense Nuclear Facilities Safety Board (“DNFSB”) relative to the design – construction of the WTP. Based on internal BNI emails referenced in the relators’ qui tam complaint, BNI’s alleged taxpayer funded lobbying of Congress also included an attempt to secure an additional $50 million in public funds in 2011 which was thought to be put in jeopardy by the DNFSB’s concerns. These alleged lobbying efforts - as well as others - were in direct violation of the Byrd Amendment (31 U.S.C. § 1352).

U.S. Attorney Ormsby said: “The use of federal taxpayer dollars to pay lobbyists in an attempt to elicit more taxpayer dollars is unacceptable.” USA Ormsby went on to say: “Illegal lobbying contravenes the established lawful process that is designed to provide independent federal oversight of contractors’ performances. As alleged, Defendants’ attempts to lessen the effectiveness of the Defense Nuclear Facility Safety Board (DNFSB), the only federal government agency with independent technical oversite on the WTPS project, and charged with identifying the nature and consequences of potential threats to public health and safety at Hanford, is shameful and must be blunted, penalized and deterred in the starkest manner possible.”

This case was investigated by the Department of Energy Office of Inspector General (DOE - OIG) and the Federal Bureau of Investigation. The United States was represented by the United States Attorney’s Office for the Eastern District of Washington and the Department of Justice Civil Frauds Section. The DOE and its Office of General Counsel also provided assistance. The relators were represented by the Lambert Firm.

The case is entitled: United States ex rel. Brunson, Busche, and Tamosaitis v. Bechtel National, In., Bechtel Corp., URS Corp., and URS Entergy & Construction, Inc., Case No. 2:13-CV-05013-EFS (E.D. Wash). A copy of the settlement agreement is attached.