- The Washington Times - Monday, December 29, 2003


The Energy Department spent $330 million to reimburse its private contractors for legal bills during a 5-year span, including for lawsuits they lost and settlements of sexual harassment and whistleblower accusations, congressional investigators reported yesterday.

The department said the reimbursements were legal and that it scrutinizes each legal bill before deciding to pay. But a key congressman said the reimbursements amounted to a “get-out-of-court free” card for contractors who engage in wrongdoing.

“When a contractor for the DOE gets sued, 95 percent of the time its legal fees and settlement costs get reimbursed by the federal government,” said Rep. Edward J. Markey, Massachusetts Democrat and a member of the House Energy and Commerce Committee.

The Energy Department is atypical among federal agencies because private contractors run many of its facilities, including national defense labs and former sites where nuclear weapons production took place.

The department’s reimbursements came in 1,895 cases from late 1997 through March of this year, according to a report released by the General Accounting Office, the investigatory arm of Congress.

There were 814 cases involving workers’ compensation, 268 on equal employment opportunity, 100 from whistleblowers, 99 stemming from personal injury, 50 on wrongful termination of employment, 40 on radiation and different types of toxicity and 524 on other matters, the GAO said.

Of those, 563 cases are pending, including 290 on workers’ compensation and 56 on equal employment opportunity, the investigators reported.

The University of California is one of the department’s contractors, operating three laboratories including the one at Los Alamos, N.M. Drawing fire from Mr. Markey, the university in some cases invoked the 11th Amendment providing for state immunity from lawsuit by a private party in federal court.

“UC identified eight out of about 35 federal cases where it invoked immunity,” the GAO report stated. “Two were dismissed without further litigation because of this argument.

“Officials at the University of California estimated that the university, in its role as a DOE contractor, has asserted other immunity-related defenses in at least 62 of about 137 cases, predominantly to defend against punitive damages,” the GAO said.

Mr. Markey said that underwriting the costs of defending against lawsuits provides little incentive for Energy Department contractors to act within the law.

Mr. Markey said that one case of contractor reimbursement involved a $1 million jury award to a woman who sued Lawrence Livermore National Laboratory for wrongful termination. She had testified in a sexual harassment case on behalf of other lab workers.

One legal analyst disagreed with Mr. Markey.

“You would expect in any large-scale operation like this to find a fair number of personnel actions, workers’ comp claims and the like,” said Steve Schooner, co-director of the government procurement law program at George Washington University law school.

Mr. Schooner said the Energy Department’s rules on reimbursing contractors’ legal bills are more stringent than those at the Pentagon and at the National Aeronautics and Space Administration.

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