The Department of Energy (DOE) indiscriminately reimburses the legal costs incurred by contractors who committed illegal conduct. In several cases, the contractors engaged in discrimination or whistleblower retaliation.
According to an audit released in February by the DOE Inspector General (IG), the Department authorized payments without adequately determining their allowability almost 80 percent of the time, ultimately reimbursing contractors $62 million in legal fees.
Last week, Senator Ed Markey (D-MA) wrote to the DOE to express concern about the reimbursement of legal fees and settlement costs in cases where contractors are found to be at fault, which he pointed out goes against the provisions he sponsored in the Energy Policy Act of 2005.
Weak oversight of contractor reimbursements may encourage contractors to wage endless, and baseless, legal battles against whistleblowers and other litigants with limited resources. The DOE IG reported the need to conduct pre-reimbursement settlement reviews in a 2009 audit, but the DOE did not fully implement the IG’s recommendations.
The DOE IG audit found that of 46 cases, only 10 were reviewed according to DOE policy. In those 10 cases, contracting officers discovered over $1 million in non-allowable costs. Half of the completed reviews received additional scrutiny by the field office counsel after the settlement agreement.
Senator Markey asked Secretary of Energy Ernest Moniz to explain what his office has done in response to the IG’s findings and to ensure that the DOE will recover taxpayer funds used to reimburse contractors who engaged in illegal conduct.
Senator Markey’s letter outlined a number of additional requests for the Secretary of Energy to address:
- Logistics and existing plans for conducting post-settlement reviews of reimbursement agreements for the 36 un-reviewed cases
- Detailed explanations for the lack of formal reviews of 78 percent of the settlement agreements and actionable recovery plans for reimbursements of legal fees and costs that should not have been allowed
- Greater transparency of DOE’s efforts to ensure whistleblower protection and to penalize contractors that discriminate or retaliate against whistleblowers
- Inquiry into contractors’ requests for reimbursement of settlements and legal fees regarding instances of whistleblower retaliation at the Hanford Waste Treatment Plant against Dr. Walter Tamosaitis, Shelly Doss, Donna Busche, and Kirt Clem and Matt Spencer, and most recently at the Savannah River Site against Sandra Black.
The Project On Government Oversight previously worked with Senator Markey to support nuclear security whistleblowers against retaliation by a subcontractor of Bechtel Corporation and to create recommendations to reduce waste in the DOE budget.
Hopefully, the pressure from Senator Markey following the DOE IG audit will spur the Department to formally evaluate the rest of the cases. Contractors do not need further encouragement to retaliate against whistleblowers by having the government pick up the tab on their legal costs once they are caught.