The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Tuesday, June 12, 2001

Settlement of whistle-blower lawsuit closer
Justice lawyers have been huddling with Lockheed-Martin officials about an out-of-court settlement.

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650

Attorneys for three workers at the Paducah Gaseous Diffusion Plant and the U.S. Department of Justice are discussing how much Lockheed-Martin would have to pay to settle a whistle-blower suit that accuses Lockheed of filing false reports that earned it millions of dollars in operating bonuses.

Joe Egan, the Washington attorney who represents the employees, said a settlement figure is being discussed as Justice attorneys talk with Lockheed-Martin about an out-of-court settlement.

Most of the settlement would go back to the federal government, but up to 25 percent would go to those who filed the suit. Egan would not reveal a possible settlement figure, but said the potential cost for Lockheed is "in the hundreds of millions of dollars" if the case goes to court and the plaintiffs win.

Lockheed-Martin, formerly Martin Marietta, operated the plant from the early 1980s until the early 1990s under contract with the U.S. Department of Energy, which owns the plant.

Lockheed also operated it for about four years for the United States Enrichment Corp., which now operates the plant under lease from DOE.

The suit claims Lockheed-Martin filed false and misleading reports about environmental conditions that earned the company multi-million-dollar performances bonuses paid by DOE.

The potential for an out-of-court settlement is one reason government attorneys filed a motion Monday asking U.S. District Court Judge Joseph McKinley Jr. for a 60-day extension of the government's time to decide whether to join the litigation as a plaintiff.

The deadline extension request was filed by Bill Campbell, assistant U.S. attorney for the Western District of Kentucky. Egan and Lockheed attorneys agreed to the extension, pushing it from Wednesday to Aug. 13, according to the motion.

The deadline has been extended five times since the suit was filed in June 1999.

A recommended course of action has been forwarded to Washington, but Campbell is not saying what it was.

Other sources have said Campbell and the investigators found sufficient evidence to warrant government intervention.

The motion requesting the extension also said DOE attorneys and top Justice officials need more time to review the findings and recommendations.

"We are consenting to a 60-day extension of time that the Justice Department has requested ... because they have advanced good rationale to us," Egan said. "In a case like this, it is better to proceed with the victimized government agency thoroughly appraised of what is going on."

Egan thinks something will be decided by August.

The suit was filed by the Natural Resources Defense Council; Thomas Cochran, nuclear program director for the the council, and three plant workers Charles Deuschele, Garland Jenkins and Ronald Fowler.

Egan said the plaintiffs would receive 15 to 25 percent of any amount Lockheed-Martin pays back to the government, but said "no one is going to get rich" if there is a settlement.

"They (the plant workers) have agreed to give a large portion of any recovered money they may receive to the Natural Resources Defense Council," Egan said, adding that the environmental watchdog group would use its proceeds for "arms control initiatives." He said none of the money would be used to fund additional lawsuits against DOE.

The fact that negotiations are continuing with Lockheed-Martin is considered by some, including Egan, to be significant.

"We always try working with potential defendants to settle a case short of litigation," Campbell said. "In this case, we all have an interest in seeing if the litigation can be brought to a close sooner, rather than later."

He said attorneys for Lockheed-Martin "have expressed to me a continued desire to talk with us."