Swords into bankshares - nuclear weapons industry and radioactive waste clean-up contracts

Washington Monthly, March, 1992 by Katie Hickox

It seemed like a government weapons contractor's worst nightmare: Energy Secretary James D. Watkins, the keeper of the nation's $12 billion nuclear weapons industry, announced this winter that he planned to permanently shut down at least four nuclear weapons factories, placing thousands of government and private weapons-contractor jobs at risk. The Department of Energy's (DOE) weapons production requirements had already been cut in half, and further reductions are expected. Gone is the Cold-War urgency that pushed leaky reactors and rickety bomb factories to pump out nuclear progeny under the veil of national security, and gone too are defense contractor's multibillion-dollar plutonium-processing contracts.

But as America's nuclear swords are beaten into plowshares, don't feel too sorry for Boeing and Westinghouse.

"Would you like to get a bigger share of the only growth industry in defense spending?" reads an ad for a new trade publication. The answer: "Defense waste cleanup! ... Discover how to profit from $400 billion in federal spending."

Just as the government spent billions to make bombs during the Cold War, it's now laying out breathtaking sums to clean up the byproducts of the munitions splurge: radioactive and hazardous waste spread over 3,150 square miles of earth. The commitment to cleanup is the good news. The bad news is to whom we're handing the broom.

The contractor charged with undoing the environmental disaster at Fernald, Ohio's Feed Materials Production Plant has a hell of a job on its hands: More than three million pounds of uranium dust were exhaled by the nuclear rod production plant into the surrounding area for more than 35 years. The first step is a 25-year scrubbing of the 1,050-acre site. But when the Department of Energy sought a contractor for this awesome billion-dollar project, it didn't look far. It selected a subsidiary of Westinghouse, the very firm that environmentalists blame for helping create the mess in the first place.

"At the time," says Ray Morrow, a Westinghouse spokesman, "we didn't have an environmental waste management firm. so we created one to clean up the plant." Playing corporate three-card monte, Westinghouse shuffled a few documents, offered a couple of management "retraining" courses, and voila, a cleanup giant.

But it's not just Westinghouse. In fact, almost all of DOE's 52 major contractors are doing some level of cleanup work at sites where they now produce, or once produced, nuclear weapons components. The cleanup packages are strictly for the heavy hitters of the defense world: companies such as Westinghouse (which leads with six such contracts), EG&G (four), Rockwell International (three), General Electric (two), Boeing, Bechtel, AT&T, and so on.

To the bureaucrats and the contractors chosen to do the cleanup, the thinking is perfectly logical: Those who made the mess should know best how to unmake it. Moreover, the contractors argue, they have the resources and the technoloyg to do the job right. "If our expertise is in cleanup, then I think there's not a problem. We do have the capability to take care of cleanup," explains Morrow.

But what Westinghouse and the government appear to ignore are the disincentives that such double-contracting implies--disincentives that promote precisely the kind of contract corruption that plagued the 40-year, spill-filled nuclear weapons buildup. To think that a contractor would deliberately dump toxins to bilk more millions in cleanup funds from Uncle Sam might be a little paranoid, but how much competitive interest is there in running the cleanest, most cost-effective production operation when you're also getting paid to manage the waste it churns out? It's like grading your own exam: Sure, you want to do the right thing, but there's plenty of temptation not to--especially when you know you won't get caught.

On that score Westinghouse and other contractors can rest easy, because DOE, plagued by a shortage of trained auditors for the burgoening cleanup program, relies heavily on the contractors' own "performance self-assessments" of how well they're mopping up. The result, the General Accounting Office (GAO) warns, is that, just a few years into the cleanup program, taxpayers may already have been billed millions in "unreasonable and unallowable" costs. The system is so lax, and the stakes so high, it's even chafing at Secretary Watkins, who has uttered plans to eliminate such double-dipping. Yet an examination of the agency's recnet actions suggests that cleaning up the program may be as difficult as cleaning up Fernald.

Double drippers

To DOE's cousins across town at the Environmental Protection Agency (EPA), the scenario probably sounds familiar. In 1980, Congress anointed the EPA to direct the massive, nationwide scouring of thousands of acres contaminated from decades of indiscriminate toxic waste disposal under a program optimistically labeled "Superfund." Ten years and more than $ 10 billion later, it was revealed that nearly 50 percent of the chemical companies hired to determine the scope of the cleanups had been involved in creating the messes they were evaluating. Sure enough, an investigation of these firms' practices found that some were cutting corners--advocating remedies far less stringent than those proposed by the government and other observers.