The two most senior DOE officials in OCRWM’s Yucca Mountain Project at the time—the Project Manager (1987-Oct. 1993) and the Deputy Project Manager (Oct. 1990-Jan. 1994)—had personal relationships with contractor employees that violated Executive Order 12674 and DOE regulations by creating at least the appearance of a loss of impartiality. . . avoid any action, whether or not specifically prohibited by the regulations, which might result in, or create the appearance of: (1) using public office for private gain; (2) giving preferential treatment to any person; (3) impeding government efficiency or economy; (4) losing complete independence or impartiality; (5) making a government decision outside official channels; or (6) affecting adversely the confidence of the public in the integrity of the government.”

		Appearance of Loss of Impartiality and DOE’s Untimely Response

			Then Project Manager’s Actions Violated DOE Ethics Regulations

DOE’s Manager for the Yucca Mountain Project from 1987 to 1993 had a personal relationship with a female official of a major project contractor, SAIC. Our investigation and an April 1995 report by the DOE Office of Inspector General (OIG) concluded that because of this relationship, the Project Manager, as the Fee-Determining Official and the Contracting Officer’s Technical Representative for the SAIC contract, had lost the appearance of impartiality in the performance of his official duties, contrary to regulations regarding the ethical conduct of employees. During the Deputy Project Manager’s relationship, the previously discussed Project Manager did not act on his deputy’s potential ethical problem. In doing so, it exposed a number of other relationships between DOE and contractor employees that posed potential ethical problems. By mid-1994, an internal memorandum by the Yucca Mountain Project Chief Counsel listed 14 relationships between DOE employees and employees of several contractors that might have posed the appearance of the lack of impartiality and independence. These were in addition to the previously discussed relationships of the Project Manager and Deputy Manager and represented almost 18 percent of the 80 DOE Yucca Mountain Project employees. Upon examination, the Chief Counsel determined that four of these relationships required a recusal or waiver. Specifically, he precipitated SAIC’s hiring of a project subcontractor, Integrated Resources Group (IRG), primarily because of IRG’s political connections that could provide him an opportunity to promote his positions, which were contrary to those of DOE. Further, the Project Manager’s lobbying activities included his improper attendance at a meeting with congressional and contractor officials to discuss the project’s future. SAIC’s Second Subcontract Award

SAIC awarded a second subcontract in July 1990 to IRG for over $224,000 after receiving consent from a DOE Contracting Officer pursuant to F.A.R. That part prescribes policies and procedures for consent to subcontract. Scope and Methodology

We conducted this inquiry between May 1994 and April 1996 at several locations including the DOE/Office of Civilian Radioactive Waste Management, Washington, D.C.; DOE/Yucca Mountain Project Office and Nevada Operations Office, Las Vegas, Nevada; SAIC Corporate Headquarters, LaJolla, California, and SAIC, Las Vegas, Nevada; and IRG, Metairie, Louisiana, and Las Vegas, Nevada. DOE awarded the management contract to TRW in February 1991.
Why GAO Did This Study

Pursuant to a congressional request, GAO investigated allegations of conflicts of interest at the Department of Energy's (DOE) Yucca Mountain Project, focusing on whether: (1) the DOE Office of Civilian Radioactive Waste Management (OCRWM) properly implemented and adequately enforced federal standards of ethical conduct and DOE ethics regulations; and (2) failure to implement DOE ethics standards may have contributed to contract award and management abuses.

What GAO Found

GAO found that: (1) the Principles of Ethical Conduct for federal employees contained in Executive Order 12674 and DOE's regulations for ethical conduct by its employees prohibit, among other things, any action that might result in or create the appearance of the loss of impartiality or independence; (2) however, GAO's investigation and DOE's own reviews revealed the appearance of the loss of impartiality by DOE officials at the Yucca Mountain Project; (3) for example, both the Manager of DOE's Yucca Mountain Project from 1987 to October 1993 and the Deputy Manager from October 1990 to January 1994 had long-term personal relationships with personnel of major project contractors, including the Science Applications International Corporation (SAIC); (4) moreover, by 1994, DOE had learned that 14 additional, or almost 18 percent of, DOE employees at the project were engaged in relationships that might have created problems concerning the lack of impartiality and independence; (5) DOE determined that four of these relationships represented potential ethical problems, requiring recusal or waiver; (6) although senior OCRWM officials in Washington, D.C., knew by 1991 that potential ethical problems existed at the Yucca Mountain Project, they did not act to resolve the situation until late 1993; (7) further, GAO's investigation disclosed that this Yucca Mountain Project Manager had engaged in other questionable actions; (8) evidence shows that he encouraged SAIC to hire a certain subcontractor largely because of the subcontractor's stated political connections that could be used to promote the Project Manager's, as well as SAIC's, priorities for the project rather than DOE's priorities; (9) SAIC awarded a small subcontract to the firm after soliciting bids from it and a second firm in which SAIC held a major interest; (10) within a few months, and after soliciting bids from the same two firms, SAIC received DOE's consent to award a second contract, much larger in cost and different in scope, to the same subcontractor; (11) the Project Manager also violated DOE policy by improperly participating in a meeting with congressional and contractor officials, where he lobbied for his own positions concerning the project without, as required, first notifying his superiors.