If there is anything worse than making defective steel reinforcing bars,
it would have to be making defective steel reinforcing bars for a
nuclear waste treatment facility. A Georgia company has agreed to pay the United States $4.6 million to
settle a False Claims Act (FCA) lawsuit alleging that it did just that.
According to the Department of Justice’s press release, the company
also had to replace “some of the defective rebar.” (Say what?!
Some? Why not all?)
Defective Rebar for Nuclear Waste Facility
The Department of Energy is building a Waste Treatment Plant (WTP) at the
Savannah River Site nuclear waste facility, which is located outside Aiken,
South Carolina and just twenty miles from Augusta, Georgia.
DOE bought rebar from Energy & Process Corporation, a company located
in Tucker, Georgia. It will not surprise you to hear that the Department
of Energy has very stringent requirements for materials that are going
to be used in facilities that handle radioactive nuclear waste, and it
pays a premium to get materials that comply with these exacting standards.
Whistleblower Deborah Cook sued E&P under the FCA. She said that Energy
& Process was not performing most of the quality assurance measures
that the DOE requires. To make matters worse, it was certifying that it
had taken the quality assurance measures that DOE requires, which means
that DOE had no idea it should be looking for a problem.
In fact, according to the whistleblower lawsuit, a third of the rebar that
the company was supplying was defective.
As a lawyer, I represent whistleblowers, and I have seen some pretty appalling
fraud. Even so, I was taken aback when I saw these allegations.
The Government intervened in the case (a legal term that means, basically,
that it took over the case and began prosecuting the lawsuit itself),
saying that E&P had not complied with “stringent regulatory
standards” set out by the DOE. Thank goodness, given that the rebar
was going into a facility for radioactive waste that is within 170 miles
of my home and just 50 miles from where my parents live.
But you could live several thousand miles from this facility and still
be appalled by the behavior. Hats off to Ms. Cook, who had the guts to
stand up to a company that was putting profits over safety. Ms. Cook worked
for the prime contractor that had hired E&P to produce the rebar (as
a subcontractor.)
Under the False Claims Act, a whistleblower is entitled to between 15%
and 30% of the amount that the Government receives because she revealed
the fraud. When the Government intervenes in a case, as it did in part
of Ms. Cook’s case, the range is 15% to 25%; if the relator must
continue the case on her own without the Government’s assistance,
the range is between 25% and 30%. In its press release, DOJ said that
Ms. Cook would receive a percentage of the case, but it did not specify
how much that would be. Her work in blowing the whistle is extremely important
to millions of people, and I hope the Government agrees she should receive
the maximum amount of 25% of the $4.6 million settlement as well as the
value of the replacement of the defective rebar (which is an “alternate
remedy” under the False Claims Act statute).
The case was filed in the Northern District of Georgia. The Defendant did
not concede that it was liable, but did pay $4.6 million to settle the suit.