Wednesday, Oct. 29, 2003 | 11:22 a.m.
WASHINGTON -- A federal appellate court's opinion that the Energy Department did not adequately prove it ruled out conflict-of-interest problems with former legal counsel Winston & Strawn mirrors what the department's inspector general said almost two years ago.
The federal court ruling echoed the questions raised in the inspector general's report, which said the Energy Department didn't answer questions about the potential conflict of interest.
After two years, the agency still has yet to make a public statement clearing up the issue.
That does not sit well with Nevada lawmakers, who say it's another clear sign of the department's blind push for the project.
Sen. John Ensign, R-Nev., said the apparent conflict of interest "blinds" the department from any objective science that recommends anything other than going forward with the site.
"This is very significant news and should be proof to people that think Yucca Mountain is inevitable that the fight is not over," Ensign said.
Rep. Jim Gibbons, R-Nev., said the court's decision supported Nevada's arguments.
"It's no surprise that the department also chose to ignore a blatant conflict of interest of a contractor working for both the DOE and the nuclear industry as well," he said.
Energy Department spokesman Joe Davis said the department's legal team is still reviewing the case so he could not speculate on what could happen next or provide comments on the case's outcome since it is still ongoing.
He emphasized that the department is still aiming for the December 2004 license application submission to the Nuclear Regulatory Commission.
The court ruling, though, could push that back. If the lower court finds that the department didn't handle the conflict issue and brings in a new legal counsel to prepare the license, the new attorneys may have to review all of the work Winston & Strawn did over two years.
A Nov. 13, 2001, inspector general report examining the alleged conflict of Winston & Strawn, which had a $16.5 million contract to review Yucca Mountain documents while lobbying for the Nuclear Energy Institute, the project's top supporter, says the firm did not disclose its lobbying when it applied for the department contract, but also that DOE "was not entirely successful in managing these issues."
The report stemmed from requests by the Nevada congressional delegation and Gov. Kenny Guinn to examine Winston & Strawn after the Sun discovered the firms registered lobbying records in July 2001.
Inspector General Gregory Friedman wrote that any law firm with the required experience to get the department's contract to review the Yucca documents could have some conflict but that how all the "intersections and potential conflicts were identified, disclosed, addressed and resolved by the law firm and the Department" were not clear.
Friedman discovered that Winston & Strawn said it could not answer a lot of the questions about its work for NEI because of attorney-client privilege. The report said that hurt the department's efforts to evaluate its eligibility.
However, the inspector general said DOE should "promptly evaluate" what the report found and if any conflict existed that it should "pursue remedies to ensure the integrity of the Yucca Mountain project."
In the report the inspector general found 14 Winston & Strawn employees billed for work on the Yucca legal contract while working on NEI matters. The firm had been a registered lobbyist for NEI from January 1995 through July 2001, which also included time when it was serving as a subcontractor to TRW Environmental Safety Systems, Inc. but did not tell Energy Department about these activities until July 2001, when it withdrew from the contract.
When the inspector general interviewed the firm two years ago, members said they "didn't think of it (the NEI work)" according to the report.
A message left at Winston & Strawn's Chicago office was not returned.
Tuesday's opinion by the U.S. Circuit Court of Appeals for the District of Columbia sent a lawsuit filed by a competing law firm back to the federal District Court. It said the Energy Department must provide evidence that the law firm was qualified to bid despite the conflict.
LeBoeuf, Lamb, Green and MacRae bid was $3.6 million higher for the contract than Winston's at the time. The firm sued on the conflict of interest charges and now the case will go back to the lower court.
Gibbons said he looks forward to the court's action. "It is my hope that the courts -- an impartial forum based on the law -- will once and for all hold the DOE accountable for rushing head-long toward opening Yucca Mountain for the nuclear industry at the cost of the health and safety of Nevadans," Gibbons said.
Mike Bauser, associate general counsel for the Nuclear Energy Institute, called the court's action a "highly procedural" and "technical" decision and that it was too early to tell what the case's exact effect on the Yucca project would be.
He noted that the court decision handed down did not say all of the work Winston completed needed to be readdressed but simply told the district court to look at the conflict of interest issues and take it from there.
But Ensign said "It gives our side much more ammunition."
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