The United States Department of Energy (DOE) is a Cabinet-level department of the United States Government. Its responsibilities include the nation’s nuclear weapons program, nuclear reactor production for the United States Navy, energy conservation, energy-related research, radioactive waste disposal, and domestic energy production. It also directs research in genomics; the Human Genome Project originated in an iniative between DOE, NIH and international collaborators. DOE sponsors more research in the physical sciences than any other U.S. federal agency, the majority of which is conducted through its system of National Laboratories.
Former Governor of Texas Rick Perry has been nominated as the next Secretary of Energy, and a vote is anticipated in the next few weeks. April Stephenson currently serves as Acting Inspector General United States Secretary of Energy and will continue to head the department, unless Secretary Perry makes a change. As a practical matter, DOE is unlikely to get a permanent Inspector General installed for many months. This means that its roughly 70 investigative agents in roughly 12 US cities will engage in enforcement that is somewhat skewed by perceptions about what a future Secretary of Energy will want. For these reasons, I would project that investigative agents will believe they will ultimately receive more overhead support for investigations developed now.
Based on basic familiarity with DOE contracts and DOE-OIG investigative activity in the past as well as reasonable assumptions about how agents will interpret statements made by Trump Administration officials, I see three primary areas where agents will likely focus current efforts to develop cases:
1) Clean-up Sites.
Clean-up sites are viewed as cash cows with poor oversight. I have lost track of how many there are, but there are more than half a dozen prime ones including Hanford, Idaho Falls and Savanah River. The Hanford site is an example of a site that has had longstanding troubles. CH2MHill took a hit back in 2013 for an $18.5 million qui tam and, just recently, at the same site, BNI and URS agreed to pay $125 Million for false claims regarding deficient nuclear quality procurements and improper payments to lobby Congress. Internal conjecture is that there are more false claims being made at these and at other clean-up sites and it would behoove any companies involved at these sites to brush up on compliance and internally investigate around vulnerabilities or weaknesses.
2) Management and Operational (M&O) Contracts
Management Operations Contractors, whether deserved or not, are a source of frustration to enforcers. These are huge, large dollar volume contracts that are viewed by enforcers as having poor oversight. Other sources of frustration is that enforcers believe that they have no visibility with indirect contractors. This feeling is even generally held in regard to direct contractors where transparency is lacking and contractors are perceived as foot dragging. Because of lack of appetite in some US Attorney’s Offices for these complex investigations, there was less support in the past few years than perhaps there could have been, but I believe this will begin to change as the Trump Administrations enforcement priorities becomes more clear.
3) Green Grants
Although these are smaller dollar volume contracts, legal theories are easier to fashion around bite-sized grants and the story around each is usually more accessible to prosecutors and potential juries. There is lingering resentment that politics adversely affected investigations that adversely impacted potential prosecutions (see Solyndra as an often cited example in the opinion of some) and there is a view among enforcers that investigations involving more than $2 billion in green grants and associated loans guaranteed by the government were never pursued appropriately.