Hanford whistleblower case settles for $5.5 million in total fines

Eight years ago, Salina Savage took on government contractors who had used a shell company to prevent legitimate businesses from receiving lucrative jobs at the Hanford Nuclear Reservation.

The Richland-based whistleblower’s case finally settled this week, generating more than $5.5 million in fines against the company and a total of $690,000 paid to Savage for alerting the government to the swindle.

“Small-business fraud not only harms the taxpayers and the vital cleanup mission at Hanford, but legitimate, small, disadvantaged businesses that do not have the opportunity to fairly compete for and perform subcontracts,” U.S. Attorney Joe Harrington said.

U.S. District Court Judge Salvador Mendoza on Thursday signed the settlement, ending the case Savage filed in 2010. She took legal action after learning that a Hanford subcontractor had awarded a lucrative deal to an executive’s wife, who was falsely posing as a woman-owned small business.

In 2009, Federal Engineers & Constructors awarded a $2 million contract to Sage Tec. Sage Tec, however, was owned by Laura Shikashio – the wife of company vice president Larry Burdge. “Ms. Shikashio knowingly misrepresented Sage Tec to be a qualified disadvantaged small business in order to be eligible for” the contract, court records state.

Federal prosecutors, who joined Savage’s suit, wrote that Sage Tec should not have received the contract and instead “was a pass-through front company for FE&C, which performed substantially all of the work on WCH’s improperly awarded subcontracts,” court records state.

Shikashio has agreed to pay $235,000 to resolve allegations that she violated the False Claims Act. Federal Engineers & Constructors earlier agreed to pay $2 million as part of the same investigation, and Savage earned $47,000 for her efforts as a whistleblower in that case.

On Thursday, as part of the final settlement, the prime contractor, Washington Closure Hanford LLC, which FE&C worked under, agreed to pay an additional $3.2 million to resolve allegations that it had violated the False Claims Act in connection with a number of similar deals. The agreement also paid Savage another $643,000 for bringing the case.

The full details of the settlement were not disclosed in court records, but Harrington said it will be left to the U.S. Department of Energy to decide whether it will award future contracts to WCH, which is jointly owned by engineering powerhouses AECOM, Bechtel National Inc. and CH2M Hill Companies Ltd.

April Stephenson, the DOE’s principal deputy inspector general, said her organization “will continue to investigate allegations of fraudulent diversion of tax dollars throughout DOE programs.”

“This settlement is a result of our staff’s dedicated work to ensure public funds are used for the mission-related purposes for which they are intended,” Stephenson said in a news release.

Hannibal “Mike” Ware, the Small Business Administration’s inspector general, said his organization is committed to stopping the activity that Savage’s suit uncovered.

“Providing false representations to the Government in order to conceal the true nature of small business subcontractor involvement will result in severe consequences,” Ware said in the release.

Savage’s attorney, Bruce Babbitt of Seattle, did not immediately return a phone call Friday seeking comment.