April 5, 2013 Military Contractor Fraud
Government Settles Whistleblower Suit with Texas-Based Corporation for $1.1 Million
The Department of Justice recently announced the settlement of a whistleblower lawsuit against the Texas-based Fluor Corporation and its parent company, Fluor Hanford Inc., for $1.1 million. The whistleblower lawsuit alleges that Fluor violated the False Claims Act by improperly using federal funds for the purpose of lobbying. Fluor provides services to both the government and private customers. They offer professional engineering, procurement, construction, maintenance, and project management services on a global scale.
Details of the Qui Tam Action
According to the DOJ, Fluor obtained a contract with the United States Department of Energy. From 1999 to 2008, the company was to provide maintenance, security, and operational services for the DOE’s Hanford Nuclear Site, located on the Columbia River in the state of Washington.
According to the terms of the contract, one of Fluor’s main responsibilities was the operation and management of the Hazardous Materials Management and Emergency Response (HAMMER) Center. The HAMMER Center is a federally-funded facility where each of the Hanford site workers, first responders and law enforcement personnel receive their training.
Fluor’s contract with the DOE allegedly contained express conditions that the company would not use any federal funding to support lobbying activities. The “Byrd Amendment” prohibits federal contractors from using federal funds to lobby government agencies in connection with awarding, extending, or modifying a contract. Contractors must certify that they will comply with this prohibition. According to the whistleblower’s official False Claims Act complaint, during the years of 2005 to 2008, Fluor ignored the stipulations of the contract by using DOE funding to lobby congressional and executive branch political officials. Fluor lobbied multiple politicians in an effort to receive more funding for the HAMMER Center.
According to the DOJ, Fluor hired two lobbying firms, Secure Horizons LLC and Congressional Strategies LLC, and paid each company using DOE funds. Fluor and the lobbying firms then lobbied members of Congress and the executive branch agencies to obtain additional HAMMER funding via agency appropriations. The United States intervened in the False Claims Act (whistleblower) lawsuit with respect to Fluor, but declined to intervene with respect to additional defendants, including Secure Horizons LLC and Congressional Strategies LLC.
Whistleblower Loydene Rambo, a former Fluor employee, originally filed the False Claims Act lawsuit, alleging Fluor had committed fraud by failing to comply with the terms of its contract with the Department of Energy. According to Rambo, Fluor spent approximately $670,000 in DOE funding in order to lobby government agencies.
Whistleblower lawsuits allow private citizens to engage a False Claims Act attorney, sue on behalf of the United States and then share in any monetary recovery. The False Claims Act also authorizes the United States government to intervene in a whistleblower lawsuit, then take over the responsibility for litigating the False Claims Act case in a court of law.
Rambo will receive $200,000 from the settlement and still has claims pending against several other entities, including the two lobbying agencies hired by Fluor. The settlement also leaves the door open for the possibility that the government may pursue criminal charges and administrative remedies, including suspension and debarment, against Fluor and its current or former employees.
Fluor’s public statement about the False Claims Act settlement emphasizes that it did not admit to any wrong doing. “To the contrary, Fluor Hanford’s contract with the Department of Energy obligated the Company to encourage other government agencies to use the HAMMER facility….Fluor was prepared to prove that the use of consultants to contact other government agencies to market the HAMMER facility was fully known to and overseen by ranking Department of Energy officials, who themselves were involved in meetings and communications with the consultants, and other government agencies.”
“The taxpayer money Congress allocated for this program was for training federal emergency response personnel and first responders, not to lobby Congress and others for more funding,” said Stuart F. Delery, Acting Assistant Attorney General for the Civil Division of the Department of Justice. “When public funds are misused, as alleged in this case, the Justice Department will work to restore them to the Treasury.”
“The allegations set forth in the whistleblower complaint are troubling and very serious,” said Michael C. Ormsby, U.S. Attorney for the Eastern District of Washington. “My Office will continue to work with the Justice Department to ensure a just resolution of these alleged violations of federal law.”
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