Nuclear Security & Deterrence Monitor Vol. 28 No. 17
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Nuclear Security & Deterrence Monitor
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April 26, 2024

CNS pays $18.4M to settle allegations of nearly six years of timecard fraud at Pantex

By Dan Leone

Consolidated Nuclear Security paid $18.4 million to settle allegations of timecard fraud at the Pantex Plant that date back to the company’s takeover of the facility, the Department of Justice said this week.

“[B]etween July 1, 2014, and June 30, 2020, [Consolidated Nuclear Security] knowingly submitted false claims to the National Nuclear Security Administration (NNSA) for time not worked at NNSA’s Pantex Site near Amarillo, Texas,” the Department of Justice wrote in a press release published Tuesday.

CNS, in an unsolicited statement emailed to media Tuesday evening, said it “agreed to repay the government” for the overcharging, which the company reported to the government in 2019.

A CNS spokesperson on Friday declined to say how many employees were fired in connection with the alleged timecard fraud, but according to documents from a federal lawsuit filed in 2022 by a former CNS employee, the company fired at least 43 people at Pantex, including 39 production technicians and three production section managers.

According to the lawsuit, filed by former production section manager Stephen “Cobey” Monden, CNS fired these people after the company discovered timecard irregularities in late 2018.

The CNS spokesperson on Friday said the company noticed the irregularities after “[c]hanges to the payroll system led to data being presented in a new format, which raised questions about the accuracy of some employees’ time entries.” 

The CNS spokesperson declined to say how often and when, following its takeover of Pantex in 2014, the company compared biometric data collected at the facilities where the fired employees worked with the employees’ timecard data, or whether the company had fired more people than the 43 mentioned in Monden’s lawsuit.

Monden presented himself as a whistleblower in his lawsuit, but the U.S. District Court for the Northern District of Texas disagreed and in 2023 threw out his case. He subsequently lost an appeal in the U.S. Fifth Circuit Court of Appeals, which ruled against him in early March, court papers show.

According to Monden’s lawsuit, the Department of Energy’s Inspector General interviewed at least 120 people at Pantex after CNS reported timekeeping irregularities at the main U.S. nuclear weapons service center.

Monden said that he and some of these people “identified to the [Inspector General] members of CNS’s management who … instructed employees to enter time in a manner contrary to government requirements.”

Monden said CNS subsequently conducted its own interviews with employees who had spoken to the Inspector General. According to Monden, “CNS interviewers told one employee to tell them ‘everything I had told Mr. Gomez (an IG agent) during my interview with him.’”

CNS, in its answer to Monden’s complaint, admitted that it asked employees what they had told the DOE Inspector General, and that it told employees they had a “duty to cooperate in disciplinary investigations.” 

However, the company in court papers denied that its management fostered a culture of timecard fraud. CNS also said that “union representatives attended interviews” with employees.

The trial court that threw out Monden’s suit said that while CNS’s head of human resources, who recommended Monden’s firing, knew that Monden had spoken to the Inspector General, human resources did not know what Monden had told the Inspector General and did not recommend his termination because he had talked to inspectors.

Monden also admitted committing and aiding with timecard fraud, papers filed in the district court show.

Monden is now an operations manager at the Los Alamos National Laboratory in New Mexico, according to his LinkedIn profile, which says he was hired at the lab in June 2023.

CNS, a Bechtel National-led team that includes Leidos, Northrop Grumman and others, said this week in its unsolicited statement that it is “[u]ndertaking extensive measures to guard against the possible reoccurrence of similar misconduct.”

The CNS spokesperson on Friday told the Exchange Monitor that the company “installed attendance verification devices in parts of both Pantex and Y-12, updated and improved timekeeping entry and approval procedures, and routinely audits timekeeping records to ensure timekeeping policies are being followed.”

CNS manages both the Pantex Plant and the Y-12 National Security Complex in Oak Ridge, Tenn. The NNSA is splitting up management of the sites and planned in November to award a standalone Pantex contract, on which at least four teams bid

The NNSA has said it will keep CNS on until 2027 at Y-12, where the agency still holds a pair of one-year options on the company’s contract.

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