AECOM stockholders had a rocky ride Wednesday after the company disclosed government investigations and litigation it is involved in at the Hanford nuclear reservation in a filing with the Securities and Exchange Commission.
AECOM became a large player in Hanford projects when it acquired URS in fall 2014. Issues disclosed in the SEC filing occurred before then and are well-known to those familiar with Hanford. However, reports that AECOM is under investigation in regard to some of those issues had not been widely disclosed.
The price of AECOM stock fell almost 3.7 percent to $29.46 after the disclosures of Hanford issues. During the day, it fell as much as 11 percent, but rebounded by the close of business.
Legal firms responded by announcing investigations, including the possibility of a class-action lawsuit for shareholders.
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The SEC filing said the federal government is investigating circumstances surrounding the response of Washington River Protection Solutions — an AECOM joint venture company — to a tank leak at Hanford. The filing did not specify which underground tank.
One of Hanford’s 149 single-shell tanks is known to be leaking radioactive waste into the soil beneath it in central Hanford, and one of Hanford’s 28 newer double-shell tanks has waste leaking between its shells. The tanks hold 56 million gallons of waste from the past production of plutonium for the nation’s nuclear weapons program.
The federal government is conducting another investigation regarding timekeeping by employees at Washington River Protection Solutions when it took over the Hanford tank farm contract from CH2M Hill Hanford Group.
CH2M Hill agreed to pay $18.5 million in 2013 to settle civil and criminal allegations of defrauding taxpayers through widespread timecard fraud at the Hanford tank farms.
The SEC filing also briefly discussed a federal investigation into URS Energy and Construction, the primary subcontractor at the Hanford vitrification plant, regarding contractual compliance and technical issues in the design, development and construction of the plant.
Construction has been stopped on key parts of the plant to resolve possible technical issues that could affect the efficient and safe operation of the plant. It is being built to glassify much of the waste held in underground tanks to prepare it for disposal.
In addition, two former employees of URS Energy and Construction at the vitrification plant have filed employment-related claims, saying they were retaliated against and lost their jobs after raising safety concerns.
After the SEC filing Wednesday, the attorney for Walt Tamosaitis, the former research and technology manager at the vitrification plant, announced that URS Energy and Construction had agreed to settle his whistleblower lawsuit filed in federal court for $4.1 million. AECOM told the Herald it had not retaliated against Tamosaitis, but settled to avoid the cost of litigation over events that occurred five years ago.
The federal government also has partially intervened in a false claim act complaint filed in federal court in December 2013, questioning the subcontracting procedures of Washington Closure Hanford, another AECOM joint venture.
The federal government accused Washington Closure Hanford of falsely claiming credit for awarding small-business subcontracts worth millions of dollars to meet its requirements to award subcontracts to small businesses, including certain categories of small businesses, such as those owned by women. The small businesses that were awarded the subcontracts in question passed the work on to another company rather than doing the work themselves, according to federal claims in the lawsuit.
Three legal firms — Levi and Korsinsky, Pomerantz and the Rosen Law Firm — each announced plans to investigate AECOM Wednesday based on the SEC filing.
The Rosen Law Firm said it was preparing a class action lawsuit to recover losses suffered by AECOM after the price of stock shares dropped during the day after the SEC filing disclosed Hanford information.
Such announcements are not unusual. Another legal firm announced plans Wednesday to investigate the board of Precision Castparts Corp. concerning its proposed acquisition by Warren Buffett’s Berkshire Hathaway.