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US sues Lockheed Martin over suspected kickback scheme at nuclear cleanup site

A sign warns visitors approaching the B Reactor on the Hanford Nuclear Reservation in south-central Washington in 2016.

MARK BOSTER/LOS ANGELES TIMES/TNS

By AARON GREGG | The Washington Post | Published: February 10, 2019

The U.S. is suing Bethesda, Md.-based defense giant Lockheed Martin in connection with a suspected fraudulent kickback scheme related to a $232 million support contract for nuclear waste cleanup, the Justice Department announced Friday.

Federal attorneys accused Lockheed of paying more than $1 million to executives from Mission Support Alliance, a joint venture that it partially owned, in exchange for “improper favorable treatment” when MSA awarded the $232 million subcontract for management and technology services given to another Lockheed Martin subsidiary, bypassing open competition to give the company inflated rates. The defendants are accused of lying to the Department of Energy to cover up how much profit Lockheed would receive from that work, which took place from 2010 to 2016.

One of those executives, Jorge Francisco Armijo, later left MSA and became a vice president at Lockheed.

Spokespeople for Mission Support Alliance said the company disagrees with the allegations, and they emphasized the firm’s commitment to “integrity and compliance at all levels of the company.”

“We disagree with the allegations made by the Department of Justice that MSA or its employees engaged in any wrongdoing,” an MSA spokeswoman said in an email. “We look forward to presenting a strong defense in this matter, and as always, we stand behind our team of employees who perform extraordinary work supporting the Hanford mission.”

Lockheed Martin also disputed the charges.

“Lockheed Martin categorically denies the allegations made by the Department of Justice and rejects the suggestion that the Corporation or Frank Armijo engaged in any wrongdoing. Lockheed Martin will defend this matter vigorously,” a company spokeswoman said in an email.

The federal lawsuit is the latest accusation of contractor malfeasance to emerge from the Hanford site, a decommissioned plutonium production plant in rural southern Washington, where companies handling the decades-long nuclear decontamination work continually have been accused of misusing taxpayer money.

The site was set up in 1943 to produce plutonium for U.S. nuclear bombs, including one that was dropped on Japan at the end of World War II, according to a government website describing its history. The 586-square-mile site became home to a 50,000-person workforce that maintained nuclear reactors and processing facilities.

For more than 40 years and through the height of the Cold War, Hanford was a critical piece of the U.S. nuclear arsenal. The last reactor at Hanford was decommissioned in 1987, however, and the Department of Energy is now tasked with cleaning up what some experts have called “the most toxic place in America.”

Two companies working on a separate contract, Bechtel National and AECOM, earlier had paid $125 million to settle allegations that they had fallen short on quality standards and had lied to the government about it.

In Friday’s release, U.S. attorneys promised to clean up the nuclear cleanup effort.

“Fraud, corruption, and self-dealing at Hanford will simply not be tolerated,” U.S. Attorney Joseph H. Harrington said in the release. “The critical mission of cleaning up the Hanford Site in a safe, timely, environmentally responsible, and cost-effective manner is too important to the public and the residents of this region.”

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