Lockheed Entity Settles Charge Over Lobbying

WASHINGTON (CN) - A Lockheed Martin subsidiary will pay more than $4.75 million to settle claims that it lobbied with public funds to keep running a nuclear-weapons lab for the U.S. government.

Sandia Corp., a Lockheed subsidiary based in Albuquerque, N.M., has managed Sandia National Laboratories for the National Nuclear Security Administration's nuclear weapons complex since 1993.

The lab's main facilities are in Albuquerque and in Livermore, Calif.,

Last year, the Department of Justice informed Sandia that it was investigating the company under the Byrd Amendment and the False Claims Act for allegedly using federal funds to lobby Congress and government agencies for the noncompetitive renewal of its contract with the U.S. Department of Energy between 2008 and 2012.

A November 2014 report from DOE's Office of the Inspector General found that a consultant for Sandia had urged the company to start "working the edges" to let Sandia National Laboratories keep its $2.3 billion contract.

This included lobbying members of Congress and other public officials in order to keep the bidding on the contract closed, according to the report.

Without admitting any wrongdoing, Sandia agreed Friday to pay $4.79 million to settle the allegations.

A representative for Sandia said in a statement that the company believed at the time that its efforts to negotiate a contract extension fell inside "allowable cost guidelines."

In hindsight, however, the company acknowledges it "acted too early and too independently in planning for a possible contract extension," the representative added.

"Sandia National Laboratories has agreed to settle with the Department of Justice to put the matter behind us, take action on what we learned and focus on our important national security mission," the representative said.

Benjamin Mizer, head of the Justice Department's Civil Division, noted in a statement that Congress allocates money for the Sandia National Laboratories "to fund the important mission carried out by our national laboratories, not to lobby Congress for more funding."

"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," Principal Deputy Assistant Attorney General Mizer added.

The Byrd Amendment, signed into law in 1989, prohibits companies from lobbying using federal funds and requires the disclosure of lobbying activities when companies negotiate with the government. The False Claims Act holds companies that defraud liable and allows whistleblowers to file actions for the government.

"Using public funds to lobby for a non-competitive extension of a contract is simply unacceptable," DOE Inspector General Gregory Friedman said in a statement. "I salute the work of the Department of Justice in pursuing this matter and the work of the Office of Inspector General professionals who were responsible for gathering the facts that served as the basis for the settlement."

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