Is the federal government paying to defend a company against a whistleblower?

Joe Davidson
Columnist December 21, 2011

Remember the story about Walt Tamosaitis, the federal contractor consigned to a basement office after detailing safety and technical issues with the Energy Department’s Hanford Waste Treatment Plant in southeastern Washington state?

This month, when he told a Senate subcommittee about the troubles his whistleblowing generated, he said that Bechtel Corp., the prime contractor on the nuclear waste job, was being reimbursed by Energy for the company’s defense against legal action by Tamosaitis.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

At the hearing, he said he “learned that in the [Department of Energy] contracting world, the legal costs incurred by the companies are reimbursed by the DOE. Since this is taxpayer money, I began to feel that I was battling myself. It is unclear to me that if a company loses a retaliation case, whether they have to pay DOE back for the funds they received. Further complicating it, if the company chooses to settle but admits no guilt, it appears they do not have to pay DOE back for any of the legal costs. I felt like everything was stacked to support the companies.”

This raises an important question. Should the federal government pay to defend a company against whistleblowers whose actions might well be in the best interests of taxpayers?

The inquiring mind of Sen. Claire McCaskill (D-Mo.) wants to know.

On Tuesday, she sent a letter to the department’s National Nuclear Security Administration (NNSA) to determine if what Tamosaitis said about reimbursement is correct.

If his allegation is true, “this raises serious concerns,” she wrote to Thomas P. D’Agostino, the department’s undersecretary for nuclear security and NNSA administrator.

“The federal government relies on whistleblowers to report information about waste, fraud, abuse, and mismanagement of taxpayer dollars and has mandated whistleblower protections, including protections for employees of contractors of the National Nuclear Security Administration (NNSA), to ensure that employees are not retaliated against for their disclosures. Reimbursing a contractor’s legal costs for defending against these types of claims appears to contravene these policies.”

She told the agency to let her know how much it has paid to defend companies against Tamosaitis’s claims. The department said no final decision on reimbursement has been made.

A Bechtel statement says its agreement with the department “includes a standard contract provision for reimbursement of legal expenses. DOE’s final determination on the allowability of costs in the Tamosaitis matter will occur after the case is resolved. The criteria for reimbursement afforded to BNI [Bechtel National Inc.] does not differ from that of other DOE contractors and is not unique to the WTP [Waste Treatment Plant] contract.”

Energy’s practice of reimbursing contractors to defend the companies against whistleblowers, however, is not the norm in the federal government.

“DOE’s financial cushion for contractors to fight whistleblower lawsuits is unique, in GAP’s experience,” said Tom Devine, legal director of the Government Accountability Project, a nonprofit whistleblower advocacy organization. “The practice is so outrageous that in the 2005 Energy Policy Act, Congress passed a law requiring re-payment when there is a judgment against the contractor in whistleblower cases.”

Tamosaitis works for URS Corp., a partner with Bechtel on the project. URS said Tamosaitis’s “reassignment had nothing to do with his expression of any safety concern. He was offered a comparable position at another URS project but turned it down. He was moved to the company’s downtown Richland corporate building and given the only available office at the time, which was one of the offices in the basement. Dr. Tamosaitis has since worked on several important assignments for the company and, until November 2011, had declined on multiple occasions the opportunity to move to the first floor of the two-story office building.”

Bechtel says Tamosaitis’s claim against it “is fatally flawed in five separate respects, any one of which would, by itself, necessitate entry of summary judgment.”

Report on disclosures

Speaking of whistleblowers, separately, the Merit Systems Protection Board (MSPB) recently issued an interesting report on federal whistleblowers, not directly related to the Tamosaitis case.

According to “Blowing the Whistle: Barriers to Federal Employees Making Disclosures,” in “1992 and 2010, approximately one-third of the individuals who felt they had been identified as a source of a report of wrongdoing also perceived either threats or acts of reprisal, or both.”

The MSPB also said “the most important factors for employees when deciding whether to report wrongdoing are not about the personal consequences for the employee. Saving lives is more important to respondents than whether they will experience punishment or a reward, and whether the agency will act on a report of wrongdoing matters more than any fear of an unpleasant consequence for the employee making the report.”

And speaking of the MSPB, several weeks ago it and the Office of Special Counsel (OSC) reported conflicting data on the number of stays, which temporarily block agency action against federal whistleblowers. OSC said it had won no stays from MSPB in 2008, 2009 or 2010.

Not so, said the MSPB. The OSC requested no stays in fiscal 2008, according to the board. “In [fiscal year] 2009, there was one initial stay request, and it was granted by the board. In FY 2010, there were two initial stay requests, and they were both granted by the board,” the MSPB said.

Closing the loop on this dispute, the OSC has since said it defers to the MSPB, explaining that an internal coding error caused its inaccurate data.

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