Audit flags former director's reassignment

ROGER SNODGRASS Monitor Assistant Editor

When former laboratory Director G. Peter Nanos gave a week's notice and disappeared from Los Alamos in May 2005, tongues clucked and blogs blabbed. Two year's later, a federal auditor with the Department of Energy filled in a little more of the story in a report this week on the department's reassignment policies.

Without naming names the Inspector General cited an example of DOE's failure to ensure the cost-effective use of contractor Intergovernmental Personnel Act (IPA). The lab, wrote IG Gregory H. Friedman in a memorandum for the Energy Secretary, "agreed to pay 100 percent of the estimated $289,000 in costs for an IPA assignment that appeared designed to simply resolve a challenging personnel decision."

By mentioning the reassignment to the Defense Threat Reduction Agency, the salary and the circumstances, the case in point implicated Nanos. A University of California spokesperson defended the decision this morning.

"We disagree with the IG's interpretation that this was done as a personnel matter," said Chris Harrington from Washington. He said UC recognized the need for a change of leadership at the laboratory during the transition to a new team.

"We felt that Bob Kukus was the right person to lead the lab through that transition, and everyone agrees that it was a successful transition."

UC's special treatment for Nanos also came up in a PricewaterhouseCoopers audit for the board of regents that found a series of questionable pay and benefit arrangements had been made with 64 past and present senior management employees.

The audit said Nanos had received a "signing bonus" of $25,000 for coming to work at the lab in 2002. As part of his separation agreement, the university agreed to compensate him for as much as $200,000 on a loss from the sale of his home and gave him an additional $26,462 relocation payment.

In a memo to employees at the laboratory, Nanos wrote, "I believe it is now time for my path and the laboratory's path to diverge." He said he was stepping down to pursue a new opportunity with the Department of Defense in Washington.

But the path did not diverge completely, as LANL continued to pay his salary for the first year of reassignment and UC assumed his salary since May 31, 2006, Harrington said.

He said the Departments of Energy and Defense, UC and LANL have all benefited by having Nanos at the Defense Threat Reduction Agency because of his expertise at DOD and intimate knowledge of Los Alamos.

"The American taxpayer can see the value of having these types of arrangements where an individual may have a certain level of knowledge and expertise about a particular agency or institution," he said.

"We're going through the process of closing this out, as part of closing out the contract," he added.

The IG audit focused on six of DOE's national laboratories, but found most of the problems at the three nuclear weapons labs. The audit found a total of about $11.3 million had been spent on assignments that were too long, resulted in excessive costs or were not appropriately cost shared with agency where the employee worked.

Only 77 of 250 assignments were given a detailed review; and of those 31 had "questionable components," the IG stated.

Lawrence Livermore National Laboratory, with $5.4 million in assignment costs was responsible for nearly half the total. LANL was second with about $3.2 million. Sandia had about $2.8 million.

Nearly half of Livermore's total assignment costs can be ascribed to one employee who has been on loan to a foreign research facility since June 1998, and at least through June 2006. The laboratory has paid for house or cost of living adjustments, furniture rental, renter's insurance, car allowance, private school for a dependent and foreign language lessons for a spouse.

- originally printed in the Monitor on March 31, 2007.