General Electric Hitachi Nuclear Energy Americas LLC (“GE Hitachi”) has agreed to settle allegations of False Claims Act violations contained in a qui tam case filed by a whistleblower in North Carolina. North Carolina-based GE Hitachi is a subsidiary of General Electric Company, headquartered in Connecticut, and is partially owned by Hitachi, Ltd., based in Tokyo, Japan. GE Hitachi provides nuclear energy products and services including nuclear reactors.
In 2012, a former employee of GE Hitachi, LeRay Dandy, filed a qui tam lawsuit in the United States District Court for the Eastern District of North Carolina. In his complaint, the whistleblower alleged that GE Hitachi submitted false claims to the Department of Energy (“DOE”) and the Nuclear Regulatory Commission (“NRC”) concerning its application for design certification for the advanced nuclear Economic Simplified Boiling-Water Reactor (“ESBWR”).
According to the Justice Department, one component of the ESBWR is known as the steam dryer. The steam dryer operates by removing liquid water droplets from the steam generated by the nuclear reaction that creates electricity. According to GE Hitachi’s website, ESBWR can cool itself by natural circulation without AC electrical power for seven days. GE Hitachi claims that ESBWR is designed to produce electricity with virtually no greenhouse gas emissions.
In the qui tam complaint, the whistleblower alleged that GE Hitachi concealed known flaws in its steam dryer component and made misrepresentations that the steam dryer had been properly analyzed using reliable data. According to the Justice Department, the NRC requires that nuclear reactor design certification applicants provide clear evidence that the vibrations produced by its steam dryer will not cause damages to the nuclear plant.
The government claimed that GE Hitachi received federal funding from 2007 to 2012 towards the cost of developing, engineering, and obtaining design certification for its ESBWR. According to the Justice Department, GE Hitachi’s application for design certification is still pending before the NRC.
GE Hitachi has agreed to pay $3.7 million to settle the whistleblower’s allegations that it violated the False Claims Act in connection with its pending application. The whistleblower will receive a percentage of the settlement proceeds as his reward under the qui tam provisions of the False Claims Act.
You can learn more about the False Claims Act here.