[Congressional Record Volume 141, Number 35 (Friday, February 24, 1995)]
[House]
[Pages H2220-H2222]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                              {time}  1520
HUGE SAVINGS POSSIBLE FROM ELIMINATING WASTEFUL EXPENDITURES ON HANFORD 
                        NUCLEAR FACILITY CLEANUP

  The SPEAKER pro tempore (Mr. Bateman). Under the Speaker's announced 
policy of January 4, 1995, the gentleman from Oregon [Mr. Wyden] is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. WYDEN. Mr. Speaker, I rise today to discuss how $274 million in 
wasteful expenditures can be cut from 
[[Page H2221]]  the budget for cleaning up the Hanford nuclear facility 
in Washington State.
  This matter obviously has great implications for taxpayers across the 
country, but it certainly has special implications for the 1 million 
Oregonians who live downstream from Hanford.
  Last year the Energy Department made a binding commitment to citizens 
of the Northwest and to the American people to make progress in 
cleaning up the Hanford nuclear facility. Now, only 1 year later, the 
Department of Energy is threatening to break Hanford's contract with 
America by failing to fund critical cleanup work, while allowing its 
contractors to waste taxpayers' money on low priority projects and out-
and-out boondoggles.
  Working with the Hanford watchdog group, Heart of America, I have 
carefully reviewed Hanford's $1.5 billion cleanup budget for fiscal 
year 1995, and have identified over a quarter billion dollars of 
wasteful spending in this budget.
  My staff has independently reviewed the budget data with Department 
of Energy officials and confirmed that the current budget figures in 
this report are accurate. Some of the areas where significant budget 
savings could be realized include significant contractor overhead 
costs.
  The current overhead budget is more than $450 million, which is 30 
percent of Hanford's total clean-up budget for fiscal year 1995. 
Reducing these overhead costs from 30 percent to 20 percent of the 
budget would yield a savings of $150 million alone.
  Second, Hanford contractors should be prevented from claiming a bonus 
for purported cost savings from not constructing six new double-shelled 
waste tanks. The need for these tanks and the contractor's cost 
estimate of $435 million to contract them has always been a 
questionable expenditure.
  The Department of Energy has now determined that it is not necessary 
to construct all of these tanks. Under the current contract, 
eliminating the questionable expenditure for constructing these tanks 
could be considered a so-called cost savings for which the contractor 
could claim a bonus equal to 15 percent of these so-called savings.
  Eliminating any contractor bonus for purported cost savings for not 
constructing the tanks would yield a savings of $63 million.
  Third, the Hanford Advisory Board has recommended that the use of 
cleanup funds to subsidize defense and energy programs at Hanford be 
ended, and that this would save $39 million.
  Mr. Speaker, this waste of taxpayer money ought to be stopped, and 
the funds immediately redirected to urgent clean-up projects, such as 
preventing high-level waste tanks from leaking radioactive waste, and 
protecting the Columbia River. In these tight budget times, there is 
not a single dollar to waste on bloated contractor overhead, excessive 
legal fees, or flashy media production services.
  Certainly there is money to be saved on museums, on economic 
development, and a variety of other services which is not related to 
cleanup at Hanford at all. Every cleanup dollar ought to go to fund 
real cleanup.
  The money that is being wasted now, if it was put to more productive 
use, might allow Hanford to actually meet its cleanup obligations.
  With all of the wasteful spending that we have been able to identify 
in the Hanford cleanup budget, Hanford is almost certain to come up 
short in meeting its cleanup milestones. That means greater risk to 
Hanford workers and it means greater risks to the public.
  What is more, it also means greater expense to the taxpayers down the 
road, because as the groundwater contamination spreads, the cost of the 
cleanup will increase significantly.
  For the past 2 years, I have worked to obtain information from the 
Department of Energy and its contractor, the Westinghouse Hanford 
Company, about how the cleanup money is really being spent. The 
Department of Energy repeatedly delayed in providing this information, 
and when it finally did come, a significant amount of the information 
was simply omitted or blacked out.
  The reason for failing to disclose this budget information really was 
not clear during all that time that we struggled to get it, but it 
certainly is now. The reason the information was not forthcoming is 
that it is embarrassing, it is embarrassing to hear that the Department 
of Energy spent over $450 million on overhead last year at Hanford. 
That is more than twice the amount that was spent on actually cleaning 
up the soil and the groundwater.
  This spending on contractor overhead is robbing Hanford of the funds 
needed to protect the public from the threat of a high-level waste tank 
explosion and to protect the Columbia River and the 1 million 
Oregonians who live downstream from the Hanford facility.
                              {time}  1530

  In fact, the Department of Energy and Westinghouse are cutting funds 
needed to properly characterize the contents of Hanford's nuclear waste 
tanks. This violates the recommendations of the Defense Nuclear 
Facility Safety Board and the intent of the law that I authored 
requiring the Department of Energy to identify the dangerous tanks that 
pose serious safety hazards.
  Scaling back contractor overhead from current bloated levels to about 
20 percent of the budget would yield $250 million in savings that could 
be used to fund this critical work.
  Another area where there is rampant wasteful spending involves 
contractor legal fees. Again, most of this money has nothing to do with 
cleaning up Hanford. Taxpayer money is really being used to clean up 
contractor legal messes at a cost of over $40 million last year. So 
what happens is the taxpayer gets taken to the cleaners and the 
contractors' lawyers go to lunch and dinners on the taxpayers' dime.
  These are just a few examples of how the cleanup dollars are being 
wasted. I have sent a letter to the Committee on Appropriations urging 
that the committee redirect the $274 million of waste in Hanford's 
budget toward urgent cleanups that are not funded, and also I have 
indicated to the committee involved in overseeing the budget at the 
Department of Energy, I serve as the ranking Democratic Member on the 
Investigations Subcommittee, that I believe that our committee should 
further investigate these examples of waste in Department of Energy 
cleanup budgets.
  If the Energy Department wants to get its cleanup program on track, 
then the first thing that the agency has to do is clean up its own 
House to get rid of the waste.
  I would like to conclude by talking a bit about what the response of 
the contractor, the Westinghouse Corp., has been to our proposal. 
Without even looking at the proposal, Westinghouse sent out a message 
to its employees about the various findings in our report. Westinghouse 
seems to be saying in its statement that I am calling today for the 
elimination of all of Hanford's overhead budget. That is not what I am 
saying at all. What I am saying is that there is waste, that there is 
more than a quarter billion dollars' worth of waste in that Hanford 
cleanup budget, and, frankly, the way they have dealt with this report, 
spending dollars on trying to spread more misinformation, suggests to 
me that they are not getting the message.
  For example, to put into perspective some of the statements made in 
Westinghouse's message in response to the report that we did, that they 
did not write, I would like to make just a few points. Westinghouse 
says that the term overhead covers some expenses that are in reality 
indirect cleanup costs. I agree with that statement. Therefore, if the 
cleanup budget is going down, the overhead budget ought to be going 
down proportionately. The Hanford budget is being reduced by 20 percent 
over the next 2 years, so that means that the contractor should be 
reducing overhead at least 20 percent. Plus, Westinghouse has claimed 
that bringing Bechtel in as an additional cleanup contractor would 
lower overhead by 13 percent and that there would be additional 
overhead savings from the merging of Kaiser into the Westinghouse 
contract. Therefore, we should be seeing at least a 33 percent overhead 
reduction, which is almost exactly what I have been calling for.
  Westinghouse also admits that the fiscal year 1994 overhead budget 
totaled $451 million, but the examples of legitimate overhead they cite 
only account 
[[Page H2222]]  for $148 million, which is less than one-third of the 
total. That means that two-thirds of the overhead is unaccounted for. 
We say one-third is wasted. Maybe we should be looking at the remaining 
third of the overhead budget more closely to determine if maybe some of 
that constitutes additional waste.
  Westinghouse cites a number of specific overhead expenses that they 
say are legitimately needed for their operations. For example, they 
talk about their utilities, they cite steam plant expenses and 
replacement of antiquated facilities. The steam plant replacement 
project included a 20 percent contingency, double, double the normal 
construction contingency. This project is not any different from 
building a steam plant in Ohio or Florida or New York.
  Should the contractor get an exorbitant contingency for building a 
steam plant? The contractors were already paid for the design work on 
the steam plant so the taxpayers are paying to indemnify the 
contractors against the risk that their own design is faulty.
  With respect to safety and insurance, we have not questioned any of 
their expenditures in their area, but certainly we have asked some 
questions about the services budget. Westinghouse cited costs of bus 
service as a legitimate expense. Recently the manager of the Department 
of Energy's Hanford operations, John Wagner, told congressional staff 
that the bus service could not be justified because it costs $4,000 per 
user per year to provide this service.
  On the administrative side, Westinghouse cites its communications 
expenses as legitimate. In the past, this budget has been used to pay 
for expenses like having contractors attend our press conferences and 
doctoring photos to make drums of waste disappear from the photo, while 
in reality the drums have not been cleaned up. Certainly public 
relations expenditures that we have outlined today show again how 
cleanup dollars are being misspent on work that is unrelated to cleanup 
of the Hanford facility.
  Westinghouse also cites regulatory analysis and compliance. This 
category includes expenditures for cleaning up those legal messes which 
I mentioned earlier, such as $8 million to defend litigations from 
those who live downwind from the facility. It also includes $2.5 
million for Westinghouse lawyers and
 outside counsel whose overbilling and expense account padding was 
exposed last year by the Oversight and Investigations Subcommittee.

  Finally, it includes two contracts totaling $20 million for second 
and third layers of redundant review.
  Now Westinghouse says they have greatly reduced the costs that are 
not directly related to cleanup. What I have to say today is if that is 
the case, they certainly should not be against the recommendations I am 
making to save $274 million in addition.
  Westinghouse goes on to say that they are committed to increasing 
cost savings through their productivity challenge. EPA and the 
Washington Ecology Department say that Westinghouse's productivity 
challenge relies too heavily on the elimination and deferral of 
required work. Cutting the required work is precisely where they should 
not be cutting, but they ought to be making savings in the $274 million 
in wasteful expenditures we have found and report on today.
  Westinghouse says that they are working with the regulators to 
streamline the regulatory process and the compliance requirements at 
the facility. The Hanford Advisory Board found that regulatory 
processes where streamlining is needed the most are not the ones 
imposed by law or the regulatory agencies, but the ones that are 
imposed by the Department of Energy's own orders. Without the statutes 
and the legislators, it is questionable how much cleanup work would 
actually be taking place.
  Let me conclude by saying that the Federal Government hastened into 
an agreement with Hanford that really constitutes the Federal 
Government's contract with the people of the Pacific Northwest. More 
than 1 million Oregonians live downstream from Hanford.
  It is not acceptable that the Federal Government breach its contract 
with the people of the Northwest in order to fund public relations 
projects, lawyers' fees, free lunches, and unnecessary overhead. I am 
very hopeful that the Department of Energy will move to deal with these 
wasteful expenditures that we have identified.

                              {time}  1540

  Many of my colleagues from the Pacific Northwest and other parts of 
the country ran for this body on campaigns to streamline the 
government, to root out waste, to make the government more efficient. I 
offer to them, the Members from the Pacific Northwest, both sides of 
the aisle, and Members of this body from other parts of the country, a 
specific analysis going through line by line the Hanford cleanup 
budget. It shows how $274 million in wasteful expenditures can be 
saved, and I hope the Members who have spoken so often about cutting 
waste will look seriously at this report and move on a bipartisan basis 
to make these savings, to redirect them so that the cleanup work that 
is necessary at Hanford is completed and to make sure that the 
taxpayers of the Northwest and of our entire country are not ripped off 
in the process.


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