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Saturday, December 01, 2001
Copyright © Las Vegas Review-Journal

Law firm retreats from DOE contract

Conflict-of-interest allegations dogged company

WASHINGTON -- Dogged for months by allegations of a conflict, the Winston & Strawn law firm announced Friday it has withdrawn from a $16.5 million contract to advise the Energy Department on license preparations for a nuclear waste repository in Nevada.

The firm's chairman, former Illinois Gov. James R. Thompson, said Friday the firm did no wrong in counseling the government while being registered to lobby Congress for the Nuclear Energy Institute, a pro-repository group. But Thompson concluded the matter was becoming a distraction.

"We really felt the controversy over our representation that's been engendered in Nevada and other places was diverting energy from the main task before (the Energy Department), which was to focus on the Yucca Mountain Project," Thompson said.

"They were our client and they were a good one, and we didn't want them to be hampered in their work," he said.

Thompson said the firm has collected about $1 million from its contract, which was awarded in 1999, and will forfeit the remainder.

It was not immediately clear how the firm's departure would affect the Yucca Mountain program, which is studying the feasibility of storing the nation's high-level nuclear waste 100 miles northwest of Las Vegas. Winston & Strawn was hired to review the department's preparations to submit a repository license application to the Nuclear Regulatory Commission.

DOE spokesman Joe Davis said the department will soon decide its next move.

"We've got some decisions to make and we haven't decided, but that will happen relatively soon," he said.

James Neis, the firm's managing partner, withdrew Winston & Strawn from its contract in a letter Thursday to Lee Liberman Otis, the Energy Department's general counsel. Otis accepted the withdrawal. Neither side said whether other financial issues existed in terminating the contract.

Thompson confirmed that Winston & Strawn had not performed work under the contract since late July, after news reports said the firm had possible conflicts of interest. He said the decision to cease work was made with the Energy Department.

Following a 3 1/2-month investigation, the Energy Department's inspector general concluded Nov. 15 that Winston & Strawn failed to disclose to the Energy Department that it was registered to lobby Congress for the Nuclear Energy Institute at the same time it was working for the government.

The Justice Department deferred on pursuing the matter, and the Energy Department was in the midst of reviewing the report and developing a response to it.

Winston & Strawn told the inspector general it had no conflict of interest and it had not compromised the Yucca Mountain program.

In any case, the episode provided fodder for critics of the Yucca Mountain Program. Rep. Shelley Berkley, D-Nev., sought a follow-up investigation by the District of Columbia Bar Association.

Sen. Harry Reid, D-Nev., said through a spokesman Friday that Winston & Strawn "didn't quit. They were fired." Nevada Attorney General Frankie Sue Del Papa said the Energy Department "terminated its contract" with the firm.

Thompson said reports the firm was fired "are not true."

"It was our idea to withdraw and the department accepted that," he said. "If they wanted to fire us they could have fired us at any time. They treated us fairly and any suggestion they fired us is just wrong."

Energy Department spokesman Davis said those reports "are fundamentally wrong."

Reid and Sen. John Ensign, R-Nev., said Friday that Winston & Strawn should never have taken the DOE contract.

Ensign hinted at further action: "The work Winston & Strawn has done for DOE and the money it took are issues that are not going to go away."