The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Wednesday, November 14, 2001

DOE whistle-blower suit delayed again
The Justice Department still hasn't decided whether to join the 1999 suit against previous operators of the gaseous diffusion plant.

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650

The U.S. Department of Justice has asked for its eighth extension in deciding whether to join a whistle-blower lawsuit against Lockheed Martin Corp. and predecessors that operated the Paducah Gaseous Diffusion Plant.

The suit claims the companies filed false environmental reports. At stake are hundreds of millions of dollars in bonuses paid to Lockheed for meeting environmental milestones the suit claims were never met.

The suit was filed in June 1999 by the Natural Resources Defense Council; Thomas Cochran, nuclear program director for the council; and Paducah plant workers Charles Deuschele, Garland Jenkins and Ronald Fowler. Lockheed operated the plant for the U.S. Department of Energy.

The delay could be another indication the government and plaintiffs are trying to reach a settlement, although a Lockheed Martin spokesman downplays the possibility.

Justice investigators have reviewed thousands of pages of documents and conducted on-site investigations to determine the validity of the claims. Justice's involvement would add the full resources of the federal government to pursue the claims in court.

The latest deadline expired Monday, and Assistant U.S. Attorney Bill Campbell has filed a motion asking U.S. District Judge Joseph McKinley Jr. to extend the deadline to Feb. 15, 2002. The plaintiffs and defendants agreed to the extension, according to Campbell's motion.

Campbell was not available Tuesday, but said previously settlement talks with Lockheed Martin were one reason for past delays. Campbell said in the motion that Lockheed lawyers "have expressed a desire to meet" with Department of Justice attorneys, and the parties "believe that further discussions will be useful."

Plaintiff attorney Joseph Egan said that as the delays continue, the plaintiffs are continuing to find records and documents to strengthen their case.

In August, Campbell said he forwarded a recommendation to Attorney General John Ashcroft regarding the government's involvement. Sources at that time said government investigators found sufficient evidence to warrant intervention. But the same sources said the Department of Energy disagreed and felt the government should not get involved.

Egan said the plaintiffs will continue the case, even without the government's help. "Every extension of time has provided a wealth of new evidence that has aided our case," Egan said. "It has allowed us to uncover a vast amount of new information that is relevant to our claims."

He also hinted another whistle-blower suit could be filed. "We found enough new material recently that we are considering a whole new case," he said. "I'm not allowed to discuss what we found and what the case would involve."

If Lockheed Martin is ordered to repay funds to the government, or if there is an out of court settlement, those who filed the suit would receive up to 25 percent of the proceeds.

Egan said previously that most of the money received by the plaintiffs would be used to support the Natural Resources Defense Council, an environmental watchdog agency.

One new element that one source said could entice Lockheed to settle is that Lockheed recently was awarded a $200 billion defense contract to build new fighter jets for the military. Some on Capitol Hill have objected to the contract, the largest ever by the Defense Department, and want the work divided among several companies.

If the government gets involved in a suit claiming Lockheed falsified records while operating the Paducah plant, political opponents could use leverage to discredit Lockheed and force a change in the contract, the source speculated.

James Fetig, chief spokesman for Lockheed, said the fighter jet contract is not a factor in the Paducah case.

"We have been cooperating with the government throughout the course of their investigation," Fetig said. "There have been no negotiations for a settlement, nor do we anticipate any. We don't believe there is any basis for the suit in the first place."

Egan would not comment on settlement negotiations. He said in an interview last summer that a settlement figure was being discussed by Department of Justice attorneys. He would not reveal the figure, but said if the case goes to court, the potential cost for Lockheed "is in the hundreds of millions of dollars."

He also declined to comment when asked if Lockheed might be encouraged to settle in order to prevent the suit from becoming an issue in the fighter jet contract.

Egan expressed optimism this will be the government's final extension request.

Martin Marietta and its subsidiaries began operating the Paducah plant in 1984, merging with Lockheed in 1994 to form Lockheed Martin, and continued to operate until 1999 when the uranium enrichment operations were formally taken over by the United States Enrichment Corp.