Battelle’s Prior False Claims Act Violation [Laul v. Battelle]

Battelle-PNNL Litigation Cost Taxpayers over $1,000,000 - Delayed Hanford Cleanup

[Sources: DOE, Congressional Record, NBC News, Dept. of Justice, Tri-City Herald, State of Washington & GAO]

The JC Laul v. Battelle case is discussed below with exhibits due to key similarities with the Pulver v. Battelle case.

In Laul, Battelle-PNNL double-billed DOE [conducting private work using DOE equipment without reimbursing the Government].

Confirmed by many sources with exhibits cited below, the Laul case exposes the following misconduct by tax-exempt Battelle:

(i) Exorbitant litigation costs [approx. $1M (1995 dollars)] inflicted on US taxpayers despite being found guilty by DOJ;

(ii) Retaliated against Laul and covered up fraud via “theft, conspiracy and false statement” [per DOE-IG finding].

In the end, Battelle settled with Justice Dept. and Laul after being found violating the False Claims Act [31 USC §3729].

This costly incident to U.S. taxpayers was documented in Congressional Record and broadcast on NBC News Fleecing of America.

DOE didn't hold Battelle accountable; instead, it later awarded Battelle with 5 more labs to run [ORNL, INL, BNL NREL & LLNL].

Summary Points [Supporting exhibits linked below.]

· Outraged at misconduct in the Laul False Claims case, Rep. David Skaggs placed an article in the Congressional Record describing how Battelle retaliated against Laul (DOE confirmed), covered up its fraud via false statements to DOE, delayed Hanford cleanup, and soaked taxpayers with huge legal bills. Karen Dorn Steele [Spokesman Review] wrote the piece.

· After losing the False Claims case and soaking taxpayers $750K in legal fees alone, Battelle [Madia] publicly threatens future whistleblowers: “After nearly seven years, this fella is getting almost nothing. I think the message is 'don't sue us.'”

· Inspector General recommended criminal sanctions against Battelle-PNNL for ‘theft, conspiracy and false statement.’”

· GAO reports cite Congressional concerns over DOE’s reimbursing defense litigation costs of contractors that violate the law.

Note 1: JC Laul told Pulver that Battelle misused the Use-Permit [1831] when it double-billed DOE equipment in his False Claims case.

The DOE Use Permit grants Battelle the unique right to use government facilities and equipment for its private lucrative consulting work.

Note 2: FOIA documents show that Battelle has charged DOE [taxpayers] over $850K for litigation costs in Pulver lawsuit through 2010.

In a May 2009 phone call, DOE site manager [Pacific NW office] Julie Erickson summarily rebuffed Pulver’s substantiated allegations of

Battelle’s litigation fraud/perjury [RPMP falsification & hiding ventures] by DOE-funded attorney Miller and Top Secret Q clearance holder

Dorow. She stated that taxpayers will continue paying despite evidence of Battelle engaging in litigation fraud/ perjury against the court.

In 2009, Pulver filed an IG complaint against Oak Ridge and Pacific Northwest site offices for willfully funding & suborning perjury.

Laul Case Exhibits [Congressional Record, DOE, DOJ, NBC News, Tri-City Herald, Spokesman Review, WA Dept. of Ecology]

Government and media documents provide a detailed accounting of how Battelle covered up its misconduct, retaliated against whistleblower Laul [who won his False Claims case], lied to DOE, caused its IG to recommend criminal sanctions against PNNL managers, and charged taxpayers ~$1M in the protracted litigation. The explicit documents below speak for themselves.

Congressional Record re: Battelle False Claims - JC Laul Vindicated

Introduction/Background - Remarks by Rep. David Skaggs [D-CO]:

“Dr. Laul is a nuclear chemist and engineer, with a Ph.D. from Purdue University. He spent 15 years at Hanford working on nuclear waste and environmental cleanup problems...

Dr. Laul is also a whistleblower, and a friend of the taxpayers, who put his career on the line when he blew the whistle on fraud and mismanagement by Battelle, Inc., a DOE contractor. Five days after disclosing that Battelle inappropriately and illegally used equipment paid for by the Government, Battelle fired Dr. Laul, saying he had improperly disposed of a hazardous waste--a violation DOE later said Battelle used as an excuse to lay him off and silence him.

After losing his job, Dr. Laul brought a False Claims Act suit against Battelle and won, resulting in Battelle reimbursing DOE $330,000. Today I submit for the Record an article describing the case and reporting on Dr. Laul's vindication, and thank him for the important and honest work he did on behalf of this country. Dr. Laul lost his job because he had the nerve to stand up for what was right.”

Excerpts of “FEDS PAY IN BATTELLE FRAUD CASE” [Karen Dorn Steele, The Spokesman Review]

“The government made the contractor, Battelle's Pacific Northwest National Laboratory pay back $330,000 for

double-billing lab equipment--and even recommended Battelle managers be criminally prosecuted for fraud.

But who picked up the $750,000 tab for defending Battelle against Laul's lawsuit? U.S. taxpayers.

Laul's case is the most recent example of a system that allows private nuclear contractors to rack up huge legal bills fighting whistleblowers--even when the contractor's in the wrong.”

“U.S. Department of Energy's inspector general recommended criminal sanctions…against Battelle managers for covering up the lab fraud reported by Laul. Battelle improperly modified a $210,000 piece of lab equipment, fired Laul and then lied to the Energy Department in a cover-up, the inspector general's investigation found. The U.S. Justice Department made Battelle repay the government $330,000…under the Federal False Claims Act…

Battelle's treatment of Laul demonstrates the company's `inability to conduct an unbiased investigation,' said George Allen, the inspector general's investigator. Battelle repaid the government with private contract revenue, not taxpayer money. The criminal charges were then dropped.”

“Battelle was `double billing' Hanford's former site contractor, Westinghouse Hanford Co., for the equipment by seeking reimbursement from both the civilian nuclear waste project [Yucca] in Nevada and the Hanford cleanup program, the report said. The lab flap delayed progress in nuclear waste cleanup…the inspector general noted. Those delays cost taxpayers $300,000, according to the report. That's in addition to the legal fees.”

“Energy Department records show…Hanford's top manager, was told by his own investigator…Battelle should settle with Laul because Battelle was at fault and likely would lose a jury trial…DOE's safety concerns manager, said in a report…that Battelle fired Laul because he reported the fraud, not because he mishandled the chemical. DOE should 'direct PNL (Battelle) to quit spending contract funds to defend this case' and order a settlement…, Abernethy said in his report.”

“DOE inspector general report recommended criminal sanctions against Battelle for ‘theft, conspiracy and false statement.’”

[John Layton was IG when that report was written; Greg Friedman succeeded him.] “A grand jury was convened last year in Spokane to consider criminal charges. But they were dropped when Laul won his Federal False Claims Act case, forcing Battelle to reimburse the government, said Assistant U.S. Attorney James Crum.”

This above article is also downloadable at http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=1997_record&page=E836&position=all

Dept. of Justice: http://www.usdoj.gov/opa/pr/1996/Jun96/250.civ.htm

“BATTELLE AGREES TO PAY U.S. $330,000 FOR MISUSING DOE EQUIPMENT”

NBC News Transcript: “FLEECING OF AMERICA” - Re: Laul v. Battelle Case

Excerpt [Andrea Mitchell]: “After years of legal wrangling, Battelle settled with him; Laul got $235,000 in back pay.

Case closed, Battelle appears to pay, right? Not exactly. The big loser here is you, the taxpayer.

This entire episode cost you nearly three-quarters of a million dollars, and this is where the fleece begins.”

WA Dept. of Ecology Report to Laul: Chemical He Poured Down Drain Was Not Hazardous or Dangerous Waste

WA Dept of Ecology invalidates Battelle’s statements that Laul misused chemicals [pouring HAZMAT down the drain]...

Appeals Court: Decision in Laul's Favor [Tri-City Herald]

Ninth Circuit Overturns Eastern District Court of WA --> Awards jury trial for Laul.

Excerpt: “‘In fairness to taxpayers, PNNL should reimburse all the litigation costs in has received from DOE

and use its own corporate money to defend its misconduct.’ Laul said.”

Tri-City Herald: After Settling with Laul, Battelle Publicly Threatens Future Whistleblowers

Excerpt [Page 4]: Battelle’s Bill Madia [former VP Lab Ops] blunt warning to others after many years of taxpayer-funded

litigation against Laul: "After nearly seven years, this fella is getting almost nothing. I think the message is 'don't sue us.'"

GAO Reports and Letters from House & Senate Committees - Re: Contractor Litigation Costs to Taxpayers

In last six years, GAO reports and Rep. Waxman’s letter indicate ongoing Congressional concern over how DOE practice of subsidizing contractors engaging in willful misconduct or illegal activity will needlessly protract lawsuits at significant taxpayer expense. The Laul and Pulver cases pertain to concerns in the GAO reports and Rep. Waxman’s letter cited below.

http://mccaskill.senate.gov/?p=press_release&id=1431 [12/21/11 Letter to DOE]

“Are Taxpayers Reimbursing Federal Contractor Accused of Wrongdoing?”

“The federal government relies on whistleblowers to report information about waste, fraud, abuse, and mismanagement of taxpayer dollars and has mandated whistleblower protections, including protections for employees of contractors of the National Nuclear Security Administration (NNSA), to ensure that employees are not retaliated against for their disclosures.

Reimbursing a contractor's legal costs for defending against these types of claims appears to contravene these policies.”

http://www.gao.gov/new.items/d04148r.pdf [2003 GAO Report]

Excerpt: “DOE reimbursed contractors for $330.5 million in litigation costs associated with 1,895 cases from fiscal year 1998 though March 2003…DOE does not pay litigation costs when the contractor’s actions involved either willful misconduct; lack of good faith”

http://oversight.house.gov/Documents/20040611105423-75598.pdf [Rep. Waxman 6/23/03 Letter to DOE]

Excerpt: “I am writing to request information on the Department of Energy’s policies for reimbursement of DOE contractors for litigation defense costs…[Question 4c] On what basis has DOE determined that …exercised prudent business judgment, acted in good faith, and did not engage in willful misconduct with respect to each of the actions at issue in this litigation? How is such a determination consistent with the evidence of misconduct uncovered in the government investigation?”

http://www.gao.gov/new.items/d02418r.pdf [2002 GAO Report]

Excerpt: The Department of Energy (DOE) contracts with non-for-profit universities and private companies to operate its facilities…you [Rep. Gibbons] expressed concern that the federal government may be subsiding contractors that violate the law…you asked…what laws and regulations provide for DOE to reimburse its contractor for the litigation, settlement, and judgment in cases brought against them…Such costs are not reimbursable if there is liability related to the contractor’s willful misconduct, lack or good faith or failure to exercise good judgment…“Willful misconduct” and ‘lack of good faith” are determined on a case-by-case basis by DOE”

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