More concern raised about Yucca Mountain law firm

LAS VEGAS " The Justice Department is raising more concerns about a law firm hired last fall to handle Energy Department licensing for the Yucca Mountain nuclear waste repository in Nevada.

In a letter obtained by a Las Vegas newspaper, the Justice Department's commercial litigation chief blamed Energy Department managers for failing to check with justice lawyers before entering a four-year $47.7 million contract with Morgan Lewis & Bockius LLP.

"Neither DOE nor Morgan Lewis consulted with or even notified the Department of Justice before entering into an agreement that involved significant conflicts of interest affecting the United States," Justice Department official Jeanne E. Davidson said in the June 16 letter to Gregory Friedman, Energy Department inspector general.

Davidson indicated the Justice Department would have had the authority to block the contract, but it was not immediately clear what action the department might take.

Several Nevada lawmakers renewed their call for the Morgan Lewis contract to be suspended.

"The Justice Department has finally recognized that this conflict of interest extends beyond the DOE and that it's the American taxpayer who stands to lose at the end of the day," said David Cherry, a spokesman for Rep. Shelley Berkley, D-Nev.

Sen. Harry Reid, D-Nev., said through a spokesman that it was suspicious "that DOE went around the DOJ on a legal matter related to the largest government contract for legal services in history."

In addition to helping the Energy Department win a construction license for the proposed nuclear waste site 90 miles northwest of Las Vegas, Morgan Lewis represents more than a dozen utility companies that have sued the Energy Department for missing project deadlines dating to 1998.

The Justice Department represents taxpayers in the utility lawsuits that the Energy Department has estimated could cost at least $7 billion in settlements and judgments.

Davidson said Morgan Lewis is pressing the federal Court of Claims for damage payments to utilities that continue to store their nuclear waste on site.

At the same time, Davidson said, the firm will play a role in determining when a Yucca repository might open.

That means Morgan Lewis has the ability to affect the amount of damages its utility clients will receive, she said.

Energy Department managers granted a conflict of interest waiver to hire Morgan Lewis after deciding they needed a firm with experience in licensing proceedings before the Nuclear Regulatory Commission. They concluded that any firm with such experience would have similar conflicts.

The firm said it erected firewalls to shield lawyers handling various nuclear waste projects.

Davidson said the Justice Department has asked Morgan Lewis to explain safeguards it installed to protect against conflicts.

The Morgan Lewis contract includes five one-year options that could raise its total value to $109 million, an amount lawyers said could be a record for a nuclear venture.

Friedman's office issued a report in April faulting the Energy Department for not fully documenting its selection process. Other than that, inspectors said the department managers appeared to follow proper procedures in obtaining the waiver to hire Morgan Lewis.

More recently, the Nuclear Regulatory Commission rejected a state of Nevada effort to have the firm disqualified from handling Yucca Mountain matters.