By George Lobsenz
Due to conflict-of-interest concerns related to his past employment at the University of California, Energy Secretary Steven Chu has been forced to substantially recuse himself from contract and management decisions regarding Los Alamos and Lawrence Livermore national laboratories, two of DoE’s most sensitive nuclear weapons facilities–and biggest management challenges, sister publication The Energy Daily has learned.
Chu’s recusal, detailed in a Jan. 6 letter to DoE’s ethics officer, is required because the university is the co-leader with Bechtel of two consortia that operate Los Alamos and Livermore–Los Alamos National Security LLC (LANS) and Lawrence Livermore National Security LLC (LLNS).
Chu also appears likely to have to recuse himself from a considerable range of DoE decisions on energy and scientific research funding because he previously was director of Lawrence Berkeley National Laboratory, a civilian research facility operated for DoE by the University of California that has a broad research portfolio. Los Alamos and Livermore also have sizable civilian research programs in addition to their weapons work.
In a particularly ironic twist, it would appear Chu may not be able to participate in DoE funding decisions on some of the cutting-edge clean energy technologies that Chu championed at Berkeley and that prompted President Barack Obama to name him as DoE secretary.
For example, under his recusal statement, the secretary will not be able to participate in DoE decisions about awarding, extending or approving any grants, contracts, cooperative agreements or technology transfer agreements that involve the Berkeley, Los Alamos and Livermore labs, all of which routinely partner with private sector companies to apply for millions of dollars of DoE clean energy research grants.
Further, Chu will not be allowed to participate directly in the negotiation of “financial arrangements” between the three labs and DoE.
Susan Beard, assistant DoE general counsel for general law and DoE’s designated ethics officer, told The Energy Daily that Chu’s recusal would not significantly crimp his authority because most of the decisions covered by his recusal statement are made by lower-level DoE officials and never rise to the level of the secretary.
“Secretary Chu can be actively engaged in oversight and management of the labs, regularly briefed on security matters there, and regularly in contact with lab directors–all of which is well within the scope of his recusal letter,” Beard said in a statement.
“Based on almost 20 years of experience at the agency, the areas that Secretary Chu has recused himself from are the kinds of things that would almost never rise to the level of secretarial involvement anyway. The only exception is contract extensions–decisions that won’t be made until after the recusal expires.”
However, the restrictions on Chu in regard to the Los Alamos and Livermore labs could be problematic because those facilities are not only integral to the nation’s nuclear weapons program, but also have presented recent DoE secretaries with their biggest management headaches.
Notably, Los Alamos has suffered a string of security and safety lapses in recent years, prompting the last energy secretary, Samuel Bodman, and his predecessors in the Bush administration to spend much of their time reviewing operations at the New Mexico lab and seeking effective corrective action. In fact, Bodman made the decision to hire LANS in hopes of fixing problems at Los Alamos that were not resolved by the previous Los Alamos operator–the University of California.
More recently, Livermore recently generated major concern at DoE and in Congress when its guard force failed to pass a security inspection drill in which mock terrorists succeeded in breaking into the San Francisco Bay-area lab and taking control of simulated plutonium. And last month, the U.S. Environmental Protection Agency fined LLNS, citing lack of good-faith efforts to meet its groundwater cleanup commitments.
The restrictions on Chu at Los Alamos and Livermore add to the significant limitations already imposed on DoE secretaries by statutory language enacted by Congress in 2000 in creating the National Nuclear Security Administration (NNSA), the semi-autonomous DoE agency that oversees the department’s nuclear weapons complex.
Because some lawmakers believed that excessive meddling by DoE officials–particularly safety inspectors–was bogging down weapons complex operations, the law creating NNSA bars all DoE officials except the secretary and the deputy secretary from intervening in NNSA affairs. Bodman in 2007 urged Congress to revise the law to make it easier for DoE secretaries to effect change in NNSA.
Neither the NNSA act nor Chu’s recusal statement limits his ability to set broad policy and regulatory requirements for NNSA and, thus, Los Alamos and Livermore.
However, unlike past secretaries, Chu will face restrictions on his ability to evaluate operations at the weapons labs and to weigh in on contract management decisions affecting LANS and LLNS. This is significant because DoE officials repeatedly have said their major tools for managing Los Alamos and Livermore are contractual provisions allowing them to withhold fees paid to LANS and LLNS for poor operations or failure to fix problems.
In addition, Chu also will have no say on DoE decisions involving provisions of the LANS and LLNS contracts that allow the department each year to reward those contractors for good operations by extending their contracts.
Specifically, Chu’s recusal letter to Susan Beard, the designated ethics officer at DoE, says that in relation to the Berkeley lab, LANS, LLNS and the University of California, Chu is barred from participating in:
“(1) any evaluation of the work performed; (2) any award fee process; (3) any extension of a grant, contract or cooperative agreement; (4) any re-competition of a grant, contract, or cooperative agreement; (5) any competition for a new grant, contract or cooperative agreement; (6) any approval of technology transfer transactions (e.g., licenses); (7) any approval of any real property transactions with the Department of Energy; (8) any approval of other specific agreements with the Department of Energy, or; direct negotiations with any of these entities related to financial arrangements between that entity and the Department of Energy.”
Those specific terms of Chu’s recusal also extend to the University of Rochester, where Chu previously served as a board member.
Chu’s recusal letter also says he will resign positions with three companies, Helicos Biosciences Corp., NABsys and Nvidia, and that he will not participate in any DoE decision affecting the financial interests of those entities unless he receives a written ethics waiver or qualifies for a regulatory exemption.
Chu’s potential conflicts of interest and his recusal commitments did not come up during his confirmation hearing last month in the Senate, except in a brief statement by Chu saying he would recuse himself from decision-making on an underground research project in South Dakota in which the Berkeley lab is involved.
A spokesman for Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) said Chu discussed his potential conflicts in private meetings with senators on the committee. No senator raised questions about those matters or their possible impact on his authority at DoE.
A Senate Republican source indicated that no GOP senators raised questions about Chu’s conflicts because they liked and respected him and thought he brought needed scientific expertise to DoE.