A POLITICAL & ENVIRONMENTAL DISASTER WAITING TO HAPPEN:

HOT PROPERTY
Influence-peddling was at the root of a near disaster at the Hanford nuclear plant in Washington State.

by Jeffrey St. Clair


On May 14, 1997 at 10:47 p.m., a chemical tank exploded in a deserted factory at the Hanford Nuclear Reservation outside Richland, Wash., the final resting place for more than two-thirds of the nation's high-level nuclear waste.

The explosion was extraordinarily powerful, blowing down steel doors and shattering windows throughout the building. The blast shredded the steel liner of a 1,500 gallon chemical drum laced with plutonium, sending the heavy metal lid hurtling through the ceiling, where it ruptured a water main and burst through the roof. Water poured into the room, streamed down four flights of stairs and flooded the nearby parking lot. A yellow-orange plume of toxic gases drifted over the Hanford site and nearby communities.

The explosion occurred less than 20 yards from a silo holding nearly 10 tons of plutonium, one of the largest caches of this deadly material in the world. If the blast had breached the plutonium silo, the destruction would have rivaled Chernobyl.

By all accounts, the scene in the wake of the explosion was chaotic. Plant managers were giving conflicting orders, emergency response codes were ignored, workers were ordered into contaminated areas without protective gear, other agencies were kept in the dark for hours and the public highway that runs near the site remained open to traffic.

At first, some suspected sabotage. The Department of Energy (DOE) has spent tens of millions of dollars to protect the plant from terrorist attacks. Black-suited guards with machine guns slung over their shoulders constantly patrol the site, which is ringed by electronic monitors, TV cameras and razorwire fences.

However, it soon became clear that the explosion was the result not of a bomb but of mismanagement by Hanford's lead contractor, Fluor Daniel, a wholly owned subsidiary of the Irvine, Calif.-based Fluor Corporation, a booming global construction company with annual revenues of more than $10 billion.

An internal DOE assessment of the near-disaster skewered Fluor for numerous safety and reporting violations, noting that the chemical tank had not even been inspected for over six months despite signs that such an "autocatalytic explosion" was possible. Lloyd Pipe, a former acting manager of the plant, calls the DOE review "downright ugly." "We failed in some key areas of responsibility," he says. "Across the board, our actions in the wake of the explosion did not meet our expectations." Before the internal review was released to the public, Fluor's lawyers edited out key findings relating to possible violations of federal law, risks to human health and the extent of off-site contamination.

Gerald Pollet, director of the Hanford watchdog group Heart of America Northwest, sums up the incident more succinctly: "Fluor Daniel violated every rule in the book, put thousands of lives at risk and then, in the great Hanford tradition, tried to cover it all up and accuse the workers and nearby residents of mass hysteria."

For many long-time Hanford watchers, the explosion at the plutonium finishing plant wasn't a surprise. Environmentalists and seasoned DOE employees contend that Fluor snared the lucrative Hanford contract not because of its expertise in environmental cleanup, but due to the firm's inside connections to the Clinton administration and the six-figure contributions it made to the Democratic National Committee (DNC).

Hanford first burst into the national spotlight on August 9, 1945, when the Fat Boy bomb, armed with plutonium concocted at Hanford, incinerated Nagasaki, killing more than 39,000 people. Over the next 40 years, Hanford's atomic engineers churned out 54 tons of plutonium, 65 percent of America's nuclear arsenal. The engineers were proud of the bombs they had created, but much more cavalier about the toxic debris of the arms race. At Hanford, only the highest level nuclear waste-thick plutonium sludge-was tucked away into 177 underground tanks, each the size of Carnegie Hall. Nearly half of these tanks now are leaking plutonium in a steady drizzle toward the aquifer that lies beneath Hanford, while others are bubbling away in a dangerous and uncontrollable "self-boil." Most of the toxic waste-an estimated 400 billion gallons of contaminated liquid-was simply dumped, poured and sprayed right into the soil at Hanford, just meters from the Columbia River.

Fluor won the five-year, $5 billion contract to supervise the cleanup of Hanford in the summer of 1996, after a string of disastrous accidents cost Westinghouse, Hanford's previous contractor, its contract. The government awarded Fluor the contract over the objections of several senior DOE officials who felt that the company was not experienced enough for such a complex and dangerous operation. "Fluor is basically a big construction company with a get-in and get-out quick mentality," says a longtime DOE staffer. "But Hanford is something else entirely. This is a 100-year cleanup where the slightest mistake could spell disaster and put a million lives at risk."

Fluor's recent experience with the DOE was another cause for concern. In 1993, the company was awarded a contract to manage the Fernald nuclear site outside Cincinnati. Fluor agreed to clean up the toxic residue at this former uranium processing plant, which houses more than 20 million pounds of radioactive materials, for $2.2 billion. But in Fluor's four years at Fernald, the company has been accused of massive overbilling, shoddy work performance and false record keeping. Fluor was also cited by the DOE for more than 1,000 serious safety violations, ranging from lax rules to exposure to radiation.

The allegations against Fluor surfaced in a remarkable series of stories by investigative reporter Mike Gallagher in the Cincinnati Enquirer beginning in February 1996. Gallagher's exposés prompted a DOE investigation, an audit by the General Accounting Office and congressional hearings. Fluor's Fernald operation has been hit with a record $34 million in fines for worker injuries, poor job performance and bad bookkeeping. Most disturbingly, Fluor has been cited for violating guidelines on nuclear criticality, the potentially explosive buildup of radiation that occurs when tanks of radioactive waste are stored too close to each other.

DOE officials knew Fluor's record at Fernald when they awarded it the contract to oversee operations at Hanford. How, then, did a company with Fluor's reputation for shoddy and reckless work end up with such a lucrative and dangerous deal to oversee the cleanup of what the DOE itself calls "the single largest environmental and health risk in the nation?"

The answer is political connections. At the onset of the Clinton era, Fluor recognized the potential for huge deals involving the cleanup of hazardous waste sites on federal properties. For help, the company turned to Peter S. Knight, a key Washington, D.C., fixer with close ties to Al Gore. For 13 years, Knight served as chief of staff for Gore during his tenure in the House and Senate. Knight ran Gore's failed 1988 presidential campaign and headed his 1992 vice-presidential run.

After the election, Knight was named to Clinton's transition team where he oversaw appointments of subcabinet positions at the Environmental Protection Agency and the Interior and Energy departments, including the choice of Thomas Grumbly as assistant secretary of energy. It was Grumbly who awarded the Hanford contract to Fluor, gave the company money to design part of the controversial Yucca Mountain nuclear waste storage plant and resisted demands that the company's troubled Fernald contract be canceled.

Knight left the transition team in January 1993 to join the powerful Washington law firm of Wunder, Diefenderfer, Cannon and Thelen. Knight was startlingly upfront about using his ties to Gore and other high-ranking Clinton officials as a way to recruit clients. In a solicitation letter to one client, Knight boasted he was "very familiar with DOE and close to Secretary Hazel O'Leary's new team." Knight soon became one of the outfit's top lobbyists, racking up an impressive roster of high-profile clients including Disney, Lockheed Martin and Molten Metal Technologies. In his first year, Knight registered more than a million dollars in billings. His standard fee was between $10,000 and $25,000 a month.

By the end of 1994, Knight and his clients were poised to make a killing off of his pal Gore's Reinventing Government Initiative, which proposed to "streamline" government programs and hand over some functions to the private sector. The scheme to privatize many of the DOE's most sensitive operations was particularly lucrative. The DOE offered more than 200 different projects, where private firms would be handsomely paid to run government operations like the cleanup at Hanford. For corporations such as Fluor and Lockheed, this was a no-lose situation: fat government contracts and minimal oversight. "These contracts are one of the great scandals of the Clinton era," says Pollet of Heart of America Northwest. "There's no financial risk no matter how badly you botch the job."

The $5 billion Hanford "integrated management" contract was the biggest prize of all. Thirteen big firms put in bids for the Hanford project, led by defense giant Raytheon. Knight pleaded Fluor's case. It was a hard sell, given the company's track record at Fernald. But as a final inducement, Fluor sent a check to the DNC for $100,000 on May 3, 1996. (Fluor gave the Democrats a total of $203,000 during the 1995-96 election cycle.) A few weeks later, Grumbly awarded Fluor the contract. "Everyone thought Raytheon had the deal sewed up," says Todd Martin from the Hanford Environmental Action League. "Raytheon certainly did. They'd already opened an office near Hanford. When DOE gave the contract to Fluor, it came as a total shock."

Fluor assumed control of operations at Hanford on October 1, 1996. The company was supposed to have developed an integrated work safety plan prior to that date. After requesting several extensions, Fluor finally produced in January 1997 what one DOE staffer described as a "mishmash of confusing and conflicting guidelines." It wasn't until the following September, nearly a year after being awarded the contract, that Fluor finally produced an acceptable safety plan. But over that year, the company's safety record was riddled with accidents, including explosions, electrical fires, injuries and chemical spills.

"They haven't met with the community, haven't consulted with public interest groups and don't listen to their workers," says Tom Carpenter, a lawyer with the Government Accountability Project in Seattle. "Many of Fluor's managers are former military men who remain mired in a Cold War mentality. They're addicted to secrecy and dismiss safety questions as a secondary concern. This is a non-union company that isn't used to listening to its workers and isn't comfortable with even the slightest criticism. When workers speak up, they're simply fired."

Carpenter has represented numerous Hanford workers who have risked their careers to expose dangerous operations at the site. This summer, Carpenter filed a whistleblower complaint with the Department of Labor on behalf of seven pipefitters who were fired by Fluor after they objected to the use of faulty valves on a pipe used to carry high-level nuclear waste from one storage tank to another.

How much will it cost to mop up the mess at Hanford? The Department of Energy says $40 billion over the next 30 years. But other economists estimate that the figure may soar to as high as $300 billion in an operation that could drag out over the next 75 to 100 years. Over the past decade, more than $10 billion has been spent at Hanford with almost nothing to show for it. Fluor is already more than $100 million over budget, and the DOE, in an internal review in November, rated the company's performance in key areas as "marginal" (the equivalent of a D). Fluor even submitted bills to the DOE for two lobbyists it hired to weaken Washington state's hazardous waste laws.

Despite this sordid record, the DOE has no plans to terminate the contract. In fact, Fluor seems poised to cash in on performance bonds that could net the company a $54 million bonus for its first year at Hanford and, according to sources inside the DOE, the company may be in line to get a five-year extension of the contract, worth another $5 to $7 billion.

Meanwhile, in September 1997, congressional investigators subpoenaed 64 boxes of records from the DOE and Fluor regarding the Hanford contract. Knight and Grumbly have been forced to undergo grueling depositions. They both deny any wrongdoing. The Republicans in Congress have used the scandal as a way to bludgeon Gore.

There's a joke going around Hanford these days. What has Fluor done in a year that Westinghouse couldn't do in 10? Make Westinghouse look good. To those who live downwind from Hanford, the punch line carries a morbid edge. "I'm afraid to go out there now," says Carpenter. "Fluor's management of the place is simply incompetent. At Hanford, the slightest screw-up can have the deadliest consequences."

Reprinted with permission from the January 11, 1998 issue of In These Times, published biweekly by the Institute for Public Affairs, 2040 N. Milwaukee Ave., Chicago, IL 60647. Subscriptions $36.95/year. Call 800-827-0270.


Copyright © 2003 The Baltimore Chronicle and The Sentinel. All rights reserved. We invite your comments, criticisms and suggestions.

Republication or redistribution of Baltimore Chronicle and Sentinel content is expressly prohibited without their prior written consent.

This story was published on January 7, 1998.