[Congressional Record Volume 143, Number 56 (Monday, May 5, 1997)]
[Extensions of Remarks]
[Pages E835-E836]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        TRIBUTE TO DR. J.C. LAUL

                                 ______
                                 

                          HON. DAVID E. SKAGGS

                              of colorado

                    in the house of representatives

                         Thursday, May 1, 1977

  Mr. SKAGGS. Mr. Speaker, I rise today to pay tribute to and to thank 
Dr. J.C. Laul, a former worker at the Department of Energy's Hanford 
facility, and a constituent of mine.
  Dr. Laul is a nuclear chemist and a nuclear engineer, with a Ph.D. 
from Purdue University. He spent 15 years at Hanford working on nuclear 
waste and environmental cleanup problems, analyzing whether that site 
was suitable for permanent storage of high-level nuclear waste.
  Dr. Laul is also a whistleblower, and a friend of the taxpayers, who 
put his career on the line when he blew the whistle on fraud and 
mismanagement by Batelle, Inc., a DOE contractor. Five days after 
disclosing that Batelle inappropriately and illegally used equipment 
paid for by the Government, Batelle fired Dr. Laul, saying he had 
improperly disposed of a hazardous waste--a violation DOE later said 
Batelle used as an excuse to lay him off and silence him.
  After losing his job, Dr. Laul brought a False Claims Act suit 
against Batelle and won, resulting in Batelle reimbursing DOE $330,000. 
Today I submit for the Record an article describing the case and 
reporting on Dr. Laul's vindication, and thank him for the important 
and honest work he did on behalf of this country. Dr. Laul lost his job 
because he had the nerve to stand up for what was right.


[[Page E836]]

                [From the Spokane Review, Mar. 16, 1997]

                    Feds Pay in Battelle Fraud Case

                         (By Karen Dorn Steele)

       U.S. government investigators agreed that scientist Jagdish 
     C. Laul was fired for turning in his managers for fraud.
       A federal appeals court agreed Laul could sue the Hanford 
     contractor for whom he worked for wrongful termination.
       The government made the contractor, Battelle's Pacific 
     Northwest National Laboratory pay back $330,000 for double-
     billing lab equipment--and even recommended Battelle managers 
     be criminally prosecuted for fraud.
       But who picked up the $750,000 tab for defending Battelle 
     against Laul's lawsuit?
       U.S. taxpayers.
       Laul's case is the most recent example of a system that 
     allows private nuclear contractors to rack up huge legal 
     bills fighting whistleblowers--even when the contractor's in 
     the wrong.
       Battelle settled with Laul in January to head off a federal 
     jury trial in Spokane.
       The cost of his case to taxpayers includes the $250,000 
     settlement paid to Laul; $400,000 in legal fees to Battelle's 
     outside law firm, Davis Wright Tremaine of Seattle; and about 
     $100,000 in legal work and other Battelle costs to fight 
     Laul.
       If Laul had won at trial, taxpayers would have paid that 
     bill, too. That's because of a Cold War agreement in which 
     the U.S. government promised to pay all legal costs of its 
     nuclear weapons contractors when they agreed to run the 
     government's weapons plants.
       The agreement, called indemnification, is still in effect 
     today. It applies to Battelle, which works on Hanford cleanup 
     and other government nuclear programs.
       Under contract reforms pushed by the Clinton 
     administration, the government plans to stop reimbursing 
     contractors when a court rules against them, or if they're 
     found guilty of reprisal in a whistleblower case.
       The reforms don't yet apply to Battelle. Under its current 
     contract, the company's top manager has to be involved in 
     illegal retaliation before taxpayers won't pay their legal 
     bills, said Carolyn Reeploeg, DOE's assistant chief counsel 
     in Richland.
       That will change in Battelle's new contract, currently 
     under negotiation, Reeploeg said.
       The reforms, which also apply to other Hanford contracts, 
     ``broaden protections for whistleblowers,'' she said.
       But they don't go far enough, said Alene Anderson, Laul's 
     attorney from the Government Accountability Project, a group 
     that represents whistleblowers.
       ``The system is stacked against whistleblowers. They still 
     let these cases get to the courthouse doorstep. Millions of 
     taxpayer dollars can be spent before that,'' Anderson said.
       Despite its settlement with Laul, Battelle still isn't 
     admitting any wrongdoing in his firing. The company even 
     denies Laul's a whistleblower.
       ``In our view, the taxpayers are served when contractors 
     defend themselves from frivolous lawsuits,'' said Battelle 
     spokesman Greg Koller.
       But newly disclosed reports show the U.S. Department of 
     Energy's inspector general recommended criminal sanctions in 
     1993 against Battelle managers for covering up the lab fraud 
     reported by Laul.
       The confidential reports were obtained under the Freedom of 
     Information Act.
       Battelle improperly modified a $210,000 piece of lab 
     equipment, fired Laul and then lied to the Energy Department 
     in a cover-up, the inspector general's investigation found.
       The U.S. Justice Department made Battelle repay the 
     government $330,000. Laul got $60,800 of that for his role in 
     identifying the fraud under the Federal False Claims Act. He 
     brought the claim in 1995.
       Battelle's treatment of Laul demonstrates the company's 
     ``inability to conduct an unbiased investigation,'' said 
     George Allen, the inspector general's investigator.
       Battelle repaid the government with private contract 
     revenue, not taxpayer money. The criminal charges were then 
     dropped.
       The dispute goes back a decade.
       In 1987, Battelle purchased two $210,000 mass spectrometers 
     to analyze chemicals for a government program at Hanford, 
     Nevada and Texas to build a tomb for commercial wastes from 
     nuclear power plants.
       Laul, a 57-year-old geochemist, was a project manager doing 
     groundwater studies for that program. It was canceled in 1988 
     when Congress decided to build a repository at the Nevada 
     Test Site.
       In 1990, Battelle illegally modified the spectrometer in 
     the Hanford nuclear waste cleanup program, the inspector 
     general's report said.
       Battelle was ``double billing'' Hanford's former site 
     contractor, Westinghouse Hanford Co., for the equipment by 
     seeking reimbursement from both the civilian nuclear waste 
     project in Nevada and the Hanford cleanup program, the report 
     said.
       The lab flap delayed progress in nuclear waste cleanup, 
     including Hanford's single shell tank program, the most 
     urgent and riskiest in the nation's weapons complex, the 
     inspector general noted.
       Those delays cost taxpayers $300,000, according to the 
     report. That's in addition to the legal fees.
       In October 1989, Laul reported the equipment misuse to DOE 
     because he was angry his work would be jeopardized by 
     modifying the machine.
       Battelle fired Laul in May 1990, saying he had improperly 
     disposed of hazardous waste--a violation DOE later said 
     Battelle used as an excuse to fire him.
       On at least two occasions, Battelle's legal spat with Laul 
     could have been stopped.
       Energy Department records show that John Wagoner, Hanford's 
     top manager, was told by his own investigator in April 1991 
     that Battelle should settle with Laul because Battelle was at 
     fault and likely would lose a jury trial.
       Steve Abernethy, DOE's safety concerns manager, said in a 
     report to Wagoner that Battelle fired Laul because he 
     reported the fraud, not because he mishandled the chemical.
       DOE should ``direct PNL (Battelle) to quit spending 
     contract funds to defend this case'' and order a settlement 
     with Laul, Abernethy said in his report.
       Battelle strongly disagreed.
       ``We think there's no connection'' between Laul's firing 
     and his reporting the lab equipment dispute to DOE, Koller 
     said in an interview last week.
       An early DOE investigation by contractor Stone & Webster 
     supported Laul's termination. But Abernethy said Battelle's 
     legal department ``may have obstructed'' the investigation by 
     having Battelle lawyers present at all employee interviews 
     about Laul's conduct.
       Laul used ``very poor judgment'' in disposing of the 
     chemical, but that didn't justify firing him, Abernethy's 
     report said. Termination ``is a rather harsh and 
     unprecedented punishment for a senior scientist that has had 
     a distinguished 15-year career at PNL,'' he added.
       The inspector general later agreed, saying Laul's 
     complaints to DOE about the lab equipment led directly to his 
     firing.
       Wagoner referred the issue to an internal Battelle 
     committee to decide whether Laul's treatment was consistent 
     with DOE and Battelle whistleblower policies.
       Battelle said the committee was ``united'' in concluding 
     Laul was fired for ``severe misconduct,'' Koller said.
       But the inspector general's report disputed that.
       ``At least half of the six committed members found evidence 
     of fraudulent management of the (Battelle) Lab. However, 
     those findings were not reported back to John Wagoner,'' by 
     Battelle managers, the inspector general's report said.
       The committee's legal counsel was from Davis Wright 
     Tremaine, the law firm taxpayers later paid $400,000 to 
     litigate against Laul.
       ``This was a conflict of interest,'' Laul said last week. 
     Battelle's Koller said it's ``standard practice'' for 
     Battelle to use its outside law firm on such issues.
       The DOE's inspector general report recommended criminal 
     sanctions against Battelle for ``theft, conspiracy and false 
     statement.''
       ``The U.S. attorney's office intends to prosecute the 
     violations detailed in the July 1993 report,'' the report 
     said.
       A grand jury was convened last year in Spokane to consider 
     criminal charges. But they were dropped when Laul won his 
     Federal False Claims Act case, forcing Battelle to reimburse 
     the government, said Assistant U.S. Attorney James Crum.
       Laul sued Battelle in 1993 for wrongful termination. His 
     claim was initially denied in U.S. District Court in Spokane. 
     But he appealed to the 9th U.S. Circuit Court of Appeals, 
     which ruled in his favor and ordered a jury trial.
       A whistleblower trial was justified because Laul's 
     immediate supervisor ``drafted a memorandum only five days 
     before Dr. Laul's termination calling for (his) termination 
     because of his complaints to the DOE,'' the court said last 
     June.
       That's when Battelle offered to settle, Laul said.
       He got the inspector general reports after he agreed in 
     January to accept the offer.
       ``These reports show I could easily have prevailed at 
     trial,'' Laul said.
       Laul is now living in Boulder, Colo. He's taken loans 
     against his house and depleted his savings in his long fight 
     with Battelle.
       Now, he's talking to Congress in an effort to make his case 
     an issue in DOE contract reform.
       ``I stood up in the interest of DOE and had Battelle pay 
     back $330,000, and then DOE turns around and pays back all 
     the litigation costs to Battelle to fight my lawsuit.
       ``This just does not make any sense,'' Laul said.

       

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