[CPEO-MEF] Lockheed Settlement

[Lenny Siegel <lsiegel@cpeo.org>]

Government to Reimburse Lockheed for Burbank Cleanup

Several years ago the reimbursement of military contractors for
environmental cleanup costs was a hot issue. Activists organized around
it in Sacramento. Congress held hearings. The question was: When should
the Defense Department pay to clean up contamination at facilities owned
or operated by its contractors?

The issue resurfaced today (Friday, January 21, 2000) in Southern
California. The Los Angeles Times
(http://www.latimes.com/news/state/20000121/t000006623.html) reported,
"The U.S. government agreed to reimburse Lockheed Martin for at least
$155 million for toxic cleanup costs stemming from decades of
manufacturing at the firm's Burbank defense facilities." The government
will pay half of the $265 million Lockheed Martin has paid out since
1992 to clean up contaminated ground water and soil in Burbank" and it
"also agreed to assume half of the estimated $110 million cost the
Bethesda, Md.-based defense firm will incur over the next 20 years to
clean water supplies under the city."

I believe that the Pentagon is no longer reimbursing its contractors who
merely claim cleanup costs as ordinary business expenses. That always
seemed outrageous, since those companies could have avoided incurring
the costs simply by operating their facilities properly. Firms that sell
to the civilian market can't just hike their charges to cover such
costs. They risk losing customers.

In Burbank, however, Lockheed appears to have based its claim on two,
more legitimate arguments. First, the government owned the Burbank plant
from World War II through 1973. The government has a greater
responsibility for contamination at its own bases, but  the level of
liability at government-owned contractor-operated (GOCO) facilities
still depends both on the contractual arrangement and the degree to
which the operator exercises control.

Second, even after Lockheed regained ownership of the plant, "federal
officials exercised daily control over operations at the site as
Lockheed Martin employees worked on top-secret military projects
including the Stealth fighter," according to the company's lawsuit. I
don't know exactly who was in charge, but while it's easy to believe
that the government required Lockheed to use cancer-causing solvents, I
tend to doubt that it required the company to dump those chemicals on or
into the ground.

It's difficult, without full access to the facts, to judge whether the
government's reimbursement of Lockheed Martin is simply its fair share,
or it's another unjustified raid on the federal treasury. At least, a
major cleanup operation was put into place before it was clear who would
end up paying for it, and that's good news for local residents.

It's possible, however, that the new settlement will make it more
difficult for facility neighbors, many of whom are seeking damage
payments for health problems and property losses resulting from the
contamination, to recover those damages from Lockheed Martin.

Lenny Siegel

-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 222B View St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/968-1126
lsiegel@cpeo.org
http://www.cpeo.org


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