Feds Settle with Contractor Facing Wrongful Lobbying Claims

Source: The Hill | Megan Wilson | August 24, 2015

Sandia Corporation, a subsidiary of Lockheed Martin, has reached a $4.8 million settlement with the Justice Department regarding claims that the firm had illegally used federal cash to lobby the government.

The company has a federal contract worth at least $2.4 billion a year to manage and operate federal laboratories. The firm first won the contract in 1993, and it was most recently renewed in 2014 for two years.

After that, the Energy Department had the option to extend the contract for another year while it planned to open the contract up to a competitive bidding process.

Sandia allegedly used federal money to advocate for keeping the deal, according to a November 2014 report by the Energy Department’s inspector general. The report was first obtained by trade publication Greenwire.

On Friday, the Justice Department announced it had reached an agreement with the company to settle the allegations.

In a release, the DOJ says that Sandia allegedly used some of the funds from the contract to keep it alive between 2008 and 2012. That would violate the Byrd Amendment, which prohibits the use of federal funds for lobbying.

“The money allocated by Congress for the Sandia National Laboratories is designed to fund the important mission carried out by our national laboratories, not to lobby Congress for more funding,” Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, said in a statement.

The settlement resolves allegations from the Energy Department’s inspector general and the Justice Department, but the New Mexico-based company has admitted no wrongdoing.

“Sandia National Laboratories has agreed to settle with the Department of Justice to put the matter behind us, take action on what we learned and focus on our important national security mission,” said company spokeswoman Heather Clark in a statement.

“At the time of the activities, Sandia believed our actions for a contract extension fell within allowable cost guidelines. However, in looking back at the activities, Sandia acted too early and too independently in planning for a possible contract extension.”

Sandia Corporation runs the government-owned laboratories used to develop and test the non-nuclear components of nuclear weapons.

The 30-page inspector report from 2014 details a Contract Strategy Team created by Sandia in an effort to keep the contract.

A presentation dated March 16, 2009, the OIG found, stated that the challenge was to “campaign aggressively (Administration and Congress) to convince [then] Secretary Chu to extend the … contract and retain the [Lockheed Martin Corporation]/Sandia team” over the following 12 months.

The presentation included a section called “Competition will be Disruptive.”

“Specifically, SNL employees who were funded under the Sandia Corporation [Management and Operations] contract were actively engaged in the implementation of the plan to influence members of Congress and Federal officials,” the report said.

In a statement to The Hill on Monday, Sandia said that it had learned its legal limits from the investigation.

“Cooperation with the Inspector General, Department of Justice, Department of Energy and the National Nuclear Security Administration on this matter has clarified Sandia’s understanding of our legal obligations on interacting with public officials, and we intend to work closely with DOE and NNSA to fully implement additional relevant guidance,” Clark, the company spokeswoman, said in an email.