$4.7 million settlement resolves allegations of government fraud related to lobbying activities

posted on:
October 20, 2015

Archie Grubb

On Aug. 21, 2015, the U.S. Justice Department announced that Sandia Corporation, a subsidiary of Lockheed Martin, agreed to pay $4,790,042 to resolve allegations it used federal funds for lobbying, violating the Byrd Amendment and the Federal False Claims Act.

The federal funds Sandia allegedly used for lobbying were intended to fund the important mission held by our national laboratories to enhance national security through the military application of nuclear science. The funds, however, were allegedly used to lobby congress and other federal officials to obtain a non-competitive extension of a government contract that allowed Sandia to operate a laboratory connected with the National Nuclear Security Administration’s (NNSA) nuclear weapons complex.

The Byrd Amendment prohibits the use of federal funds for lobbying, and the Federal False Claims Act gives the government a vehicle for detecting and correcting fraud. Sandia allegedly violated both. First, using federal funds for lobbying clearly violates the Byrd Amendment. Second, the government granted Sandia funds for a particular purpose, the operation of the laboratory conducting important research. If the funds were then used in another way, lobbying for more money, then Sandia committed fraud against the government.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division, stated, “This resolution demonstrates that the Justice Department will work to ensure that public funds are used for the important purposes for which they are intended.”

When money is recovered through the Federal False Claims Act, it’s a win for taxpayers and the government alike. The $4.7 million of tax money was recovered in this case because the government has an interest in funding research for national security, not lobbying. Taxpayers pay for national security, not lobbying.

The Federal False Claims Act includes a whistleblower provision to incentivize taxpayers to report fraud to the government. The incentives allow the whistleblower to recover 15 to 30 percent of the funds recovered. The whistleblower provision has helped the government to (1) detect more fraud, (2) ensure taxpayer money intended for scientific research and security is properly spent on that research, and (3) deter other defense contracting companies from committing the same fraud.

Since January 2009, the United States has recovered more than $24.9 billion through Federal False Claims Act cases.

If you are aware of fraud being committed against the federal or state governments, you could be rewarded for doing the right thing by reporting the fraud. If you have any questions about whether you qualify as a whistleblower, please contact an attorney at Beasley Allen for a free and confidential evaluation of your claim. There is a contact form on this website, or you may email one of the lawyers on our whistleblower litigation team: Andrew Brashier, Archie Grubb, Larry Golston or Lance Gould.

U.S. Department of Justice
National Nuclear Security Administration

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