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Faked Safety Claims Draw Prison Term

Wednesday, April 17, 2013

A former Shaw Group safety manager will serve more than six years in prison for hiding scores of broken bones and other worker injuries at three nuclear plants to gain the company more than $2.5 million in bonuses.

Walter Cardin, 55, of Metairie, LA, was sentenced Thursday (April 11) to 78 months in prison, followed by two years of supervised release for his role in the scheme.

A federal jury convicted Cardin in November of eight counts of major fraud against the Tennessee Valley Authority (TVA). The jury heard evidence that Cardin had lied about injuries at the Brown's Ferry Nuclear Site in Athens, AL, where he was safety manager for the Shaw Group (formerly Stone & Webster Construction). Brown's Ferry, TVA's first nuclear site, began operation in 1973.

NRC

Walter Cardin misrepresented injuries to more than 80 employees at Brown's Ferry Nuclear Site (pictured) and two other nuclear plants, to help the Shaw Group draw a $2.5 million safety bonus.

Cardin also provided bogus information about injuries at the Sequoyah Nuclear Site in Soddy Daisy, TN, and at Watts Bar Nuclear Site near Spring City, TN, the jury found.

The Shaw Group had a contract with TVA, which owns the facilities, to provide maintenance and modifications to the plants and to provide construction for the Brown’s Ferry Unit Number 1 reactor restart.

Broken Bones, Hernias, Torn Ligaments

Cardin was convicted of generating false injury rates, which the Shaw Group used to collect more than $2.5 million in safety bonuses from TVA. He was convicted of providing false numbers at the three plants in 2004 and 2005, and at the Brown’s Ferry and Sequoyah plants in 2006.

The jury heard evidence of more than 80 injuries, including broken bones, torn ligaments, hernias, lacerations, and shoulder, back, and knee injuries that Cardin did not properly record or report.

CB&I

The Shaw Group was recently purchased by energy infrastructure concern CB&I of Texas.

Cardin underreported both the number and severity of the injuries, authorities said. Some employees testified that they had been denied or delayed proper medical treatment as a result of Cardin’s fraud. Evidence showed that Cardin intentionally misrepresented or simply lied about how the injuries had occurred and how serious they were.

Cardin had faced up to 10 years in prison and a $1 million fine on each count, the Department of Justice said.

Company Settlement

As part of a civil agreement filed with the United States in 2008, the Shaw Group—then a Fortune 500 company with $5.7 billion a year in revenues— paid back twice the amount of the ill-gotten safety bonuses. In February 2013, energy infrastructure giant CB&I acquired the Shaw Group for an undisclosed amount.

“These convictions will put all Tennessee Valley Authority contractors on notice that criminal violations to maximize profits with TVA will not be tolerated in the Eastern District of Tennessee,” said U.S. Attorney Bill Killian.

The case was investigated by the TVA-Office of Inspector General.

Comment from Tom Schwerdt, (4/18/2013, 9:18 AM)

This illustrates the biggest concern with having cash incentives tied directly to injury rates. The incentive to "cover up" injuries.

Comment from John Fauth, (4/19/2013, 8:46 AM)

Agreed, Tom. I think it further illustrates that anyone paying cash incentives better have the means to adequately supervise the program. Time after time, government and government entities prove themselves incapable of doing so.