CH2M Hill managers indicted for Hanford timecard fraud

By Annette Cary, Tri-City HeraldMarch 23, 2013 

A federal grand jury has indicted 10 current or former upper managers and supervisors at Hanford, accusing them of enabling timecard fraud at the nuclear reservation.

The indictment said an independent audit in 2004 advised former Hanford contractor CH2M Hill Hanford Group to install new timecard equipment to verify that workers were on the job the hours they claimed.

However, the recommendation was not followed during the remaining years of the company's contract, which expired in 2008, according to documents filed in federal court.

CH2M Hill's Ryan Dodd was indicted on 34 counts, including conspiracy, submission of false claims, major fraud against the United States, wire fraud, violation of the anti-kickback act and document alteration.

He was the vice president of retrieval and closure operations for CH2M Hill when the company operated the Hanford tank farms, where 56 million gallons of radioactive waste is held in underground tanks.

Terrence Hissong, who was the tank farms management director, was indicted on 32 counts.

Patrick Bradley Brannan, base operations radiological control manager under CH2M Hill, was indicted on 34 counts.

Radiation control supervisors Stephanie Livesey and Glenda Davis were indicted on 34 counts. They were responsible for reviewing timecards, according to court documents.

The remaining indictments were against five field work supervisors, who each were indicted on 32 counts. They are Kenneth Baird, James Michael Hay, Perry Mark Howard, Mark Norris Johnson and Daniel Niebuhr. The five also are accused of claiming overtime pay for hours they did not work.

With the exception of Dodd and Hissong, most, if not all, of the other workers continue to work at the Hanford tank farms under current contractor Washington River Protection Solutions.

Previously eight radiological control technicians and a lead radiological control technician, who assigned overtime, have pleaded guilty to felony charges related to the timecard scheme.

In addition, CH2M Hill agreed earlier this month to pay $18.5 million to the federal government to settle civil and criminal allegations of defrauding taxpayers through widespread timecard fraud at Hanford.

Overtime for radiological control technicians was voluntary. To get them to agree to evening and night overtime work, CH2M Hill offered shifts to radiological control technicians in eight-hour blocks, even though the work often could be done in less time, according to court documents. However, workers would claim a full eight hours of overtime worked on their timecards.

Timecard fraud also was committed on regular shifts, according to court documents. A Voluntary Protection Program report warned upper management and direct supervisors that a steady stream of workers began leaving work at 2:30 p.m. on shifts that should have lasted until 4:30 p.m.

The 2004 audit recommended that proximity card readers be installed at various locations and employees be required to "proxy" in and out of job locations to validate time records.

CH2M Hill prepared a management response agreeing with the recommendation and setting a target date of March 2005 for implementation, according to court documents.

But in September 2009, a member of upper management who has not been indicted filed a final response to the audit saying the proposed monitoring system was not feasible because of budget reductions and labor relations issues, according to court records. Vice presidents were told to monitor overtime and a monitoring system would be reviewed for future use.

No substantive feasibility study or cost-benefit analysis was done by CH2M Hill and instructions to vice presidents were not formalized, according to court documents.

CH2M Hill's corporate office repeated a statement released earlier this month when contacted by the Herald Friday.

Timecard fraud was going on before it started work at the Hanford tank farms in 1999 and a lack of steps during its tenure threatened the good reputation of the productive Hanford workforce, the statement said.

"This conduct was not consistent with CH2M Hill values, but it happened on our watch and we should have rooted it out sooner," the statement said.

CH2M Hill's labor costs were reimbursed by the federal government. It made profit on its contract by meeting goals, which could not be met without overtime work by hourly workers, who would not volunteer for less than eight hours of overtime pay, according to court documents. Some upper managers then could earn bonuses based on the amount of profit the company made.

The counts of altering records filed against four of the 10 defendants stem from a May 15, 2008, incident.

Davis and Livesey were at an evening family party at Dodd's house when Davis received an anonymous text saying that she should get all the technicians working overtime that evening to return to work or face disciplinary action, according to court documents. She showed the text to Livesey and then left the party and went to the tank farms, finding several of the technicians she supervised had left for the night.

She told the workers only to record the actual hours worked, contrary to their usual practice, according to court documents. Dodd, Brannan and Livesey were told that workers had changed their timecards. None of those involved formally disciplined the workers.

The Herald called many of the indicted workers Friday on their work, mobile or home phones, but they declined to comment or calls were not returned.

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