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IG report criticizes Wilson work for labs

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Copyright © 2013 Albuquerque Journal

Sandia and Los Alamos national labs improperly used federal funds to pay former Rep. Heather Wilson about $422,000 for possibly engaging in prohibited lobbying and other work the labs failed to document, according to a Department of Energy inspector general report.

The use of DOE funds by the labs to lobby the federal government to increase lab funding or expand lab missions, known by the labs as “business development,” is prohibited, according to the report released Tuesday.

“Despite these prohibitions, our examination of relevant documents at both Sandia and Los Alamos tend to indicate such activities did occur,” the report says.

Wilson, a Republican who represented the Albquerque-based 1st Congressional District from 1998 to 2009, said in an email Tuesday that she did not lobby for the labs and that the work she did complied with the contracts she signed.

Officials at Sandia and Los Alamos also said Wilson’s contract work was to advise lab managers on national security issues – for which she at times was being paid $10,000 a month by each – and did not include prohibited lobbying or business development.

The labs did, however, acknowledge that their documentation of the work performed was inadequate and agreed to reimburse the DOE for the payments to Wilson, which were made with federal money.

The DOE inspector general’s report says lab managers failed “to meet even minimum standards” for documentation of the work they hired Wilson to complete that later was billed to the federal government. The report says Sandia created a list of activities Wilson completed after the inspector general’s request for documentation.

The labs did not ask Wilson for reimbursement.

Established LLC

Within a month of leaving Congress, Wilson created her consulting business, Heather Wilson and Co. LLC, and entered a contract with Sandia National Laboratories. She added Los Alamos as a client months later.

She ended her consulting work for the labs in 2011 before her unsuccessful bid for the Senate in 2012.

In total, Wilson was paid more than $226,000 from Sandia, nearly $196,000 by Los Alamos and another $30,000 by the Nevada National Security Site and Oak Ridge National Laboratory.

The national labs are owned and managed by the U.S. Department of Energy but managed by private contractors. Lockheed Martin manages Sandia, and a partnership led by Bechtel manages Los Alamos.

The report also faults contracts the Nevada National Security Site and Oak Ridge National Laboratory established with Wilson.

Although Los Alamos and Sandia each paid Wilson $10,000 per month for the consulting work, they “did not receive evidence that work performed under the agreements had been completed,” according to the report.

“We also determined that contractor officials failed to exercise due diligence to ensure that the government received value for the payments made to” Wilson, the report says.

The report goes on to say the DOE should consider additional penalties for Sandia and Los Alamos national laboratories “because of the overt nature” of their actions and “their failure to fully comply with federal direction in this case.”

The Department of Energy did not return a request for comment on possible penalties and who in the agency would have final say on whether to take further action.

Labs response

Sandia spokeswoman Heather Clark said the lab felt it received value from Wilson’s work, although that work was deemed improperly documented.

“Sandia acknowledges that elements of our oversight on Wilson’s contracts did not meet our own high standards for documenting such agreements,” Clark said. “The government made a decision that these contract costs were not allowed, so Sandia Corporation has reimbursed the government the entire $226,378 that Wilson earned.”

Wilson, a graduate of the Air Force Academy and a Rhodes Scholar, was considered a national security expert after serving on the House Permanent Select Committee on Intelligence and the House Committee on Armed Services. Los Alamos spokesman Fred deSousa said the lab benefited from hiring Wilson as a consultant, but said the lab is working to ensure that future contracting work is properly documented.

“We believe it was reasonable and appropriate to seek the services of Ms. Wilson. She is uniquely qualified to advise the lab on a variety of issues related to our national security missions,” deSousa said. “… Nevertheless, we acknowledge we did not document her services consistent with our own expectations for subcontract management.”

Wilson defended her work for the labs.

“DOE’s criticism concerns what documentation the lab should require and maintain internally to satisfy regulators,” Wilson said. ” My work was done in full compliance with the contracts we signed and under the direct supervision of lab sponsors. The labs reconfirmed today that they valued my work.”

Lobbying questions

Wilson and lab officials dispute claims that Wilson engaged in prohibited lobbying or business development work for the labs.

“I also never met with or contacted any clients or potential clients on behalf of the labs as part of any business development effort,” Wilson said.

But the inspector general’s report highlighted evidence that Wilson was hired in part to round up new work for Sandia and Los Alamos.

At Sandia, the lab justified the no-bid contract it awarded to Wilson citing the need for “high-level connections and critical engagement with key individuals,” according to the report.

The lab later was told by a DOE official that its statement about why Wilson was hired might indicate that “the agreement would be used for the purpose of developing new business for Sandia” and warned that those activities were “specifically prohibited.”

Asked why Sandia needed a national security consultant with “high-level connections,” the Sandia spokeswoman said, “I’m not going to get into high-level connections and what they’re talking about.”

“…We did not ask her to engage in business development activities or lobbying activities, and the contract prohibited that,” Clark said.

For Los Alamos, the report said Wilson “arranged meetings with and/or site visits by senior federal officials who had the ability to impact both funding and future work at the laboratory in the intelligence arena.” The source cited was an unidentified Los Alamos official.

That action occurred after Los Alamos “made a strategic decision to increase the market share” of work the lab completed for other federal agencies to expand its mission and budget, a move the lab director believed Wilson could aid, the report said.

Looking forward

Wilson in April was named president of the South Dakota School of Mines and Technology, a position she is scheduled to start next week.

Announcing Wilson’s hiring, university regents praised her connections on Capitol Hill, her work for the national labs, and her ability to work with the federal government to attract new federal funding to the university.

Jack Warner, executive director of the South Dakota Board of Regents, said Tuesday that the state’s university governing board did not find concern in the DOE report.

“From what I’ve been able to see, we do not have concerns about that,” Warner said. “It looks to me like the labs themselves needed to more carefully document the scope of work. … Unless some other revelation takes place, I think we’re OK.”

Wilson was appointed earlier this year by U.S. House Speaker John Boehner to serve on a new advisory panel to recommend ways to improve the performance of the National Nuclear Security Administration, an arm of the DOE that oversees nuclear weapons programs at the labs.

Tuesday’s inspector general’s report prompted one anti-nuclear weapons advocacy group, Nuclear Watch New Mexico, to call for Wilson’s resignation from the panel, citing a conflict of interest as a former consultant.

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