The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Thursday, June 07, 2001

U.S. Justice Department may intervene

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650

A Washington watchdog group says attorneys for the U.S. Department of Justice want to intervene in a whistle-blower lawsuit that claims a former operator of the Paducah Gaseous Diffusion Plant falsified environmental records to earn tens of millions of dollars in operating bonuses.

The group Taxpayers Against Fraud also claims in memos distributed to The Paducah Sun that top officials in the U.S. Department of Energy oppose intervention and are trying to convince top Department of Justice officials to reject the recommendation by government lawyers who investigated the allegations.

The final decision is pending in Attorney General John Ashcroft's office, according to Bill Campbell, assistant U.S. attorney for the Western District of Kentucky and the government's lead attorney in the matter.

Campbell would not comment on the statements of the watchdog group, but said the government could reveal its intentions as early as today. "We have a pleading that most likely will be filed this week," he said, without revealing its contents.

It could range from requesting U.S. District Judge Joseph McKinley to extend Wednesday's deadline for making a decision, to notifying the judge the government wants to become a plaintiff.

Campbell also confirmed that a meeting was held in Washington on May 29 involving attorneys for the two cabinet departments to discuss evidence uncovered in a two-year investigation, and whether the government should join in the suit.

James Moorman, a former assistant U.S. attorney general who is president of Taxpayers Against Fraud, said the DOE argued against intervening in the suit. He said he didn't know if the arguments were successful.

The suit was filed in June 1999 under the federal False Claims Act by four current and former plant employees against Lockheed Martin, formerly Martin Marietta, which operated the uranium enrichment plant from the early 1980s until 1997 when it was privatized and taken over by the by U.S. Enrichment Corp.

The suit claims Lockheed Martin filed false reports involving environmental conditions in order to receive millions of dollars in performance bonuses from the DOE, which owns the plant.

If the claims are substantiated in court proceedings, Lockheed Martin could be ordered to repay the government millions of dollars. Those who filed the suit would receive up to 25 percent of the amount refunded.

Campbell said Wednesday and in previous court documents there have been negotiations with Lockheed Martin to settle the suit without further court action.

"The parties are continuing to talk," Campbell said. "We have a much better understanding of Lockheed's position. We are making our concerns clear (to Lockheed Martin) and will continue to exchange information toward reaching a resolution."

Jeff McCord, a spokesman for Taxpayers Against Fraud, said the source of information on the decision by investigators to join in the suit was Joe Egan, the lead attorney for the "whistle-blowers" who filed the suit. Egan, in a telephone interview, said the statements attributed to him were misleading and were made public without his permission.

After the Sun inquired about the accuracy of the statement, McCord issued a new memo which said:

"I have learned that ... (Egan) feels he cannot confirm for the record the information we attributed to him. He does, however, acknowledge the accuracy of what we said."

Taxpayers Against Fraud describes itself as a nonpartisan, nonprofit group that fights fraud against the U.S. government. McCord said his group is interested in this suit because it has the potential of forcing Lockheed Martin to return tens of millions of dollars to the U.S. Treasury.

A move by the Department of Justice to join the suit would indicate that government investigators found evidence to confirm the allegations. Justice officials have spent two years reviewing thousands of pages of documents and computer generated files, interviewing current and former employees and excavating at several locations in and around the plant.

If the Department of Justice does not become a plaintiff, the current and former employees who filed suit would have to proceed on their own, and the pursuit would likely be costly and time-consuming.

Western District U.S. Attorney Steve Reed would not comment on the statements of Taxpayers Against Fraud.