Freeze on nuke funds linked to lawmaker

Tuesday, May 12, 1998 | 9:43 a.m.

Correspondence between an angry Texas congressman and then-Energy Secretary Federico Pena led to a federal decision to freeze money Nevada was using to monitor a study of a proposed repository for nuclear waste.

It was announced earlier this month that the Department of Energy decision could force the Nevada Nuclear Waste Projects Office, which monitors the study of the Yucca Mountain site 90 miles northwest of Las Vegas, to shut down July 1.

The DOE decision can be traced to a June 12, 1997, letter from Rep. Joe Barton, R-Texas, to Pena. Barton, chairman of the House Commerce Subcommittee on Oversight and Investigations, complained that the DOE failed to act on audits in 1990 and 1996 that found Nevada misused federal funds to monitor the study.

Barton, whose subcommittee oversees DOE spending, implored Pena to take action on the audits. The congressman wrote that "it involves the intentional squandering of appropriated dollars by the State of Nevada as documented by the General Accounting Office and the apparent refusal of DOE to address the issue."

"Mr. Secretary, it has been over one year since I first contacted the Department of Energy over this issue," Barton wrote. "After a half dozen calls from subcommittee staff to the (DOE) General Counsel's office, we are still no closer to learning what action DOE proposes than at the beginning of this inquiry.

"Mr. Secretary, this reflects poorly on the department at a time when DOE can ill afford to have another example of gross incompetence come to light. I urge you in the strongest possible terms to take immediate action."

In response, Pena wrote on Sept. 30, 1997, that the 1996 General Accounting Office audit identified improper activities on Nevada's part "but did not in most cases identify the amounts of expenditures for those particular activities.

"It is likely that a complete audit will be necessary in order to proceed, and the Department (of Energy) intends to have such an audit conducted," Pena wrote. "Second, based upon the audit results, DOE will determine the extent to which any funds were unlawfully expended, and, if so, what recovery remedies are appropriate."

Nevada received millions of federal dollars to monitor the study between 1983 and 1995 before Congress decided to cut off the funds to the state. The 1996 audit, which Barton encouraged, found that Nevada inappropriately spent federal money on anti-nuclear public relations.

Nevada officials, including Gov. Bob Miller, countered that they were within the law to disseminate information about the nuclear waste study, which the state opposes. They complained that the nuclear power industry, which wants to ship high-level nuclear waste to Nevada, spends millions of dollars annually to lobby Congress.

But Barton, one of the leading House recipients of campaign contributions from the nuclear power industry, wanted the DOE to follow up on a recommendation from the General Accounting Office that it identify the misspent funds and "seek repayment."

So on May 1, 1996, the congressman wrote to then-Energy Secretary Hazel O'Leary asking how she intended to implement audit recommendations to recover improperly spent funds. O'Leary responded on July 25, 1996, that the authority to investigate misused funds rested with the DOE's inspector general.

Later that year, according to Barton, his inquiry was transferred to the DOE's Office of the General Counsel. On Nov. 19, 1996, that office wrote to Bob Loux, executive director of the Nevada Nuclear Waste Projects Office, asking him to furnish information to help the DOE determine a proper course of action.

Loux, who said he had no new information to give to the DOE, is not a big Barton fan.

"He is in the pocket of the nuclear industry," Loux said. "He is just doing their bidding. Between me and the General Counsel and the General Accounting Office, we had it all worked out. But he (Barton) was kept out of the loop, and he went ballistic. Frankly, I don't care what Congressman Barton thinks."

Barton concluded his letter to Pena with a series of hard-hitting questions aimed at putting the DOE on the defensive. The congressman wanted to know the steps the department planned to take to recover misspent funds.

"Early in the process, DOE appeared to indicate that it had no authority to recover funds improperly spent under its watch," Barton wrote. "Is it still DOE's contention that it is incapable of identifying and recovering taxpayer dollars that are illegally spent under its authority?"

Pena responded that a new audit would be necessary because the 1996 audit didn't specify the amounts of money Nevada spent improperly.

"The Office of the General Counsel is of the view that there are means available to recoup expenditures determined to be unlawful based on such an audit," Pena wrote. "It is not DOE's position that it has no authority to recover unlawful expenditures.

"Please accept my assurance that the department will determine a proper course of action, based on the merits, and pursue it."

Barton thanked Pena for his response in a March 25 letter but wanted an update on the status of the new audit. The congressman also said his subcommittee learned that DOE was about to transfer as much as $875,000 to Nevada that the state hadn't yet spent from prior federal allocations.

"If true, I urge the department to delay transfer of the above funds to the State of Nevada until the audit has been concluded," Barton wrote.

Last month, the DOE froze $691,000 in federal funds, part of a 1995 allocation that Loux planned to spend this year. The government action was based on a preliminary audit yet to be released to Nevada officials.

DOE's decision left the state's Nuclear Waste Projects Office with enough money to operate only through July 1. Loux has said he plans next month to ask the state Legislature's Interim Finance Committee for enough money to keep his office open through next year.