Government Intervenes In Tetra Tech Whistleblower Lawsuit
Last week the United States intervened in a whistleblower lawsuit concerning a contractor hired to cleanup radioactive waste. Several contract workers filed the lawsuit in 2013 when they accused Tetra Tech EC, Inc of billing the Navy for radiation remediation services at the Hunters Point shipyard. They say the cleanup was never done.
Hunters Point has a long history of service as a shipyard. Located in San Francisco, the shipyard was first opened in 1870. It became a U.S. naval shipyard between 1940 and 1974 and again between 1986 and 1989. The shipyard was then decommissioned and slated for cleanup.
For many of the years under government control, Hunters Point was used to decontaminate radiation from naval warships. Not only was facility used to cleanup ships, the government also used the facility as a radiological defense laboratory and as a storage facility for radioactive waste produced at other facilities.
Unfortunately, the resulting radioactive waste contaminated the shipyard itself. In 1989 the facility was declared a Superfund site.
The government agreed to clean up the facility and then turn it over to San Francisco for residential and commercial development. Tetra Tech and several of its predecessor companies were awarded government contracts for cleanup, remediation and monitoring.
The contracts required Tetra Tech to “investigate radiological contamination of soil and buildings, remediate and remove waste as necessary, and provide status reports to the Navy documenting its activities to support the redevelopment of radiologically impacted sites and buildings at Hunters Point for non-military use.”
Several former employees filed a whistleblower lawsuit claiming the company was cutting corners on the contract. In January 2019, the Justice Department intervened in their lawsuit.
According to the government’s complaint,
“Tetra Tech violated the False Claims Act [whistleblower law] and breached its contracts with the Navy by (1) mispresenting the source of soil samples submitted to the laboratory for testing; (2) manipulating data from radiological testing of buildings; and (3) reporting false results from the soil and building tests. Tetra Tech submitted false claims to the Navy for this work as if it was properly performed when it was not. The Navy relied on Tetra Tech’s misrepresentations in concluding that the remediation of radiologically impacted areas at Hunters Point was complete.”
Although the government just joined the case as an intervenor in 2019, the story begins in 2006. The date was shortly after cleanup work began on the site. That year whistleblower Bert Bowers first complained to upper management that the company was not complying with its responsibilities. He was especially concerned when he saw a resume of someone applying for a nuclear radiation mediation position. He thought the resume was a fake and alerted HR.
Like so many other whistleblowers, Bowers complaints were ignored. According to him, a very unqualified woman was hired for a critical position.
Another whistleblower shared similar concerns. Art Jahr, a qualified nuclear remediation specialist, was asked to lie about the qualifications of the same employee that drew Bert Bowers attention. He refused. His complaints also fell on deaf ears.
Instead of having 9 years of highly technical nuclear decontamination experience, the woman hired real experience allegedly consisted of working in “barbeque and sandwich establishments.”
Normally padding one’s resume is not a federal offense except the Navy was paying the unqualified worker to oversee nuclear remediation on a site that would soon be a housing development occupied by families including children.
The alleged fraud didn’t end there. By 2011, the whistleblowers said several employees were padding their time cards. Since the company billed for time and materials, taxpayers were footing the bill for hours never even worked.
There was yet even more fraud.
The whistleblowers reported that Tetra Tech was certifying soil and building samples were decontaminated when in actuality they were failing contamination tests.
The Navy had an inspector, Laurie Lowman, on premises which made Tetra Tech’s alleged fraud more difficult to conceal. When Lowman’s son Thorpe was fired from a Target store allegedly for theft, Tetra Tech’s management team jumped into action. Despite the glaring conflict of interest and Thorpe’s lack of radiological remediation experience, he too was hired by Tetra Tech.
The whistleblowers believe Tetra Tech hired Lowman’s side so that she would look the other way when the company was conducting its soil inspections.
The whistleblowers say that soon after hiring Thorpe, the company began to worry that they would get caught having such an obvious conflict of interest. Instead of alerting the Navy or terminating Thorpe, they concealed Thorpe’s employment by having him hired by a subcontractor. He still did the same work and at the same job site, but now he had a “new” employer, one without an obvious conflict of interest.
That subcontractor would next hire Thorpe’s wife to work on the project. The hope was to make the Navy’s onsite inspector, Lowman, even less likely to question Tetra Tech.
Government Intervenes, Accuses Tetra Tech of Fraud
The government investigated the case for several years before finally intervening in January 2019. A government intervention generally means it believes the whistleblowers’ allegations are true.
According to the Justice Department,
“Tetra Tech’s fraudulent course of conduct has caused substantial disruption, uncertainty, and delay in the plan to remediate and transfer Hunters Point to the City and County of San Francisco for redevelopment, as well as fear in the community regarding the effects of any continued contamination at the site. Because of Tetra tech’s fraud in investigating the radiological contamination, the Navy will have to pay another contractor to re-test much of the soil and buildings in the Parcels where Tetra tech worked in order to determine whether further remediation is necessary. Tetra Tech’s fraud has also caused the Navy to devote substantial resources to address the health and safety concerns of San Francisco residents. As a result of Tetra Tech’s fraud, the transfer of Hunters Point to the city and county of San Francisco will be delayed by many years. The government has also had to devote substantial resources to investigate the extent and impact of Tetra Tech’s fraud.”
The good news is that several Tetra Tech workers stepped forward and blew the whistle early in the process before the contaminated site was declared radiation free. But for their actions, it is entirely possible that families would be living in contaminated buildings and children would be playing on lawns laced with invisible (but deadly) radiation.
Many people think that contractors that rip off the government are simply committing an economic crime. Their crimes affect all taxpayers, however. And as this case points out, their actions can also endanger human lives.
The government’s intervention comes immediately on the heels of the criminal convictions of two former Tetra Tech supervisors. Stephen C. Rolfe and Justin E. Hubbard, pleaded guilty to falsifying records and were sentenced to eight months in prison. As part of their guilty pleas, both men admit that rather than taking proper soil samples from contaminated areas, they instead substituted clean, non-radioactive dirt.
In a prepared statement, San Francisco’s United States Attorney said, “It is of paramount concern to this community and the United States that the radiological remediation at Hunter’s Point Naval Shipyard be completed properly and lawfully.”
Tetra Tech has denied the allegations and said in a statement that any “isolated” issues were the fault of two rogue employees. (We remind everyone that the claims in the whistleblowers’ and government’s complaints are merely allegations at this point until a judge or jury decides otherwise.)
Tetra Tech Not the First Remediation Contractor Accused of Fraud
In October 2015, a federal judge in Tacoma, Washington refused to dismiss a False Claims Act whistleblower complaint filed in connection with clean up and remediation of the U.S. Department of Energy’s Hanford facility. The company winning the position of lead contractor on a $4.5 billion contract was CH2M Hill Plateau Remediation Co. Unfortunately, with a contract that big there is bound to be fraud.
As part of the contract, CH2M was required to insure small, women owned and disadvantaged businesses got a piece of the pie. A whistleblower filed a lawsuit claiming that the company conspired with others to form a small, woman owned business called Phoenix Enterprises Northwest.
When a real woman owned business was denied the contract, the woman owning the legit business began to get suspicious. Ultimately, she believed that Phoenix was simply a shell with no assets, no employees, no address or even a phone number. Its sole purpose seemed simply to get the set aside contract monies. She then both challenged the award of the contract and filed a whistleblower lawsuit.
While not deciding the merits of the case, the court ruled the whistleblower’s claims could proceed and refused to dismiss the case.
Defense Contractors, Whistleblowers and Cash Rewards
The cases against Tetra Tech and CH2M were filed under the federal False Claims Act. That law allows private individuals to bring claims on behalf of the U.S. government. If the action is successful, the whistleblower is entitled to an award of between 15% and 30% of whatever the government recovers.
Tetra Tech has billed and collected millions and millions of dollars. Taxpayer dollars. If the allegations are true, the company could be on the hook for the monies they have been paid and the amount of money the government must pay to fix the problem. The law allows those amounts to be tripled. That means the potential awards are huge.
The False Claims Act was passed during the Civil War as a method of helping the Union Army deal with rampant fraud. Back then the military was defrauded with lame mules, uniforms filled with moth holes and gunpowder laced with sawdust. Defense contractor fraud has grown far more sophisticated today but the False Claims Act remains the government’s number one tool in the fight against fraud.
To see if you qualify for an award or simply to learn more, visit our defense contractor fraud whistleblower information page. Have questions or ready to make a claim? Contact us online, by email or by phone at (414) 704-6731 (direct).
Worried about retaliation? All inquiries are protected by the attorney – client privilege and kept confidential. Retaliation is also illegal and carries additional damages and attorney’s fees too. Even if you aren’t sure if you want to proceed, call us so we can walk you through the pro’s and con’s.