U.S. sues Lockheed Martin over alleged kickback scheme at nuclear cleanup site

A sign near the entrance to the Hanford Nuclear Reservation in Richland, Wash. The Justice Department alleges Lockheed Martin engaged in a kickback scheme to obtain favorable rates for a nuclear cleanup project there. (Manuel Valdes/AP)


Aaron Gregg
Reporter covering the defense industry and Washington-area businesses.

February 10 at 3:34 PM

The United States is suing Bethesda-based defense giant Lockheed Martin in connection with an alleged fraudulent kickback scheme related to a $232 million support contract for nuclear waste cleanup, the Justice Department announced Friday.

Federal attorneys accused Lockheed of paying more than $1 million to executives from Mission Support Alliance, a joint venture that it partially owned, in exchange for “improper favorable treatment.” MSA awarded a $232 million subcontract for management and technology services to another Lockheed Martin subsidiary, bypassing open competition to give the company inflated rates. The defendants are accused of lying to the Energy Department to cover up how much profit Lockheed would receive from the work that took place from 2010 to 2016.

One of those executives, Jorge Francisco Armijo, later left MSA and became a vice president at Lockheed.

Spokesmen for Mission Support Alliance said the company disagrees with the allegations, and they emphasized the firm’s commitment to “integrity and compliance at all levels of the company.”

“We disagree with the allegations made by the Department of Justice that MSA or its employees engaged in any wrongdoing,” an MSA spokeswoman said in an email. “We look forward to presenting a strong defense in this matter, and as always, we stand behind our team of employees who perform extraordinary work supporting the Hanford mission.”

Lockheed Martin also disputed the charges.

“Lockheed Martin categorically denies the allegations made by the Department of Justice and rejects the suggestion that the Corporation or Frank Armijo engaged in any wrongdoing. Lockheed Martin will defend this matter vigorously,” a company spokeswoman said in an email.

The federal lawsuit is the latest accusation of contractor malfeasance to emerge from the Hanford site, a decommissioned plutonium production plant in rural southern Washington, where companies handling the decades-long nuclear decontamination work have been continually accused of misusing taxpayer money.

The site was set up in 1943 to produce plutonium for U.S. nuclear bombs, including one that was dropped on Japan at the end of World War II, according to a government website describing its history. The 586-square-mile site became home to a 50,000-person workforce that maintained nuclear reactors and processing facilities.

For more than 40 years and through the height of the Cold War, Hanford was a critical piece of the U.S. nuclear arsenal. The last reactor at Hanford was decommissioned in 1987, however, and the Energy Department is tasked with cleaning up what some experts have called “the most toxic place in America.”

Two companies working on a separate contract, Bechtel National and AECOM, had earlier paid $125 million to settle allegations that they had fallen short on quality standards and lied to the government about it.

In Friday’s release, U.S. attorneys promised to clean up the nuclear cleanup effort.

« Fraud, corruption, and self-dealing at Hanford will simply not be tolerated,” U.S. Attorney Joseph H. Harrington said in the release. “The critical mission of cleaning up the Hanford Site in a safe, timely, environmentally responsible, and cost-effective manner is too important to the public and the residents of this region.”

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