Construction firm files $15M defamation suit against FERMCO

Action claims company being made 'scapegoat'


BY MICHAEL GALLAGHER
The Cincinnati Enquirer

A Cincinnati construction company has filed a $15 million defamation suit against the company in charge of cleaning up Fernald, claiming it is being made a scapegoat for problems at the former uranium enrichment plant.

R.E. Schweitzer Construction Co. and owner Ronald Schweitzer claim Fernald Environmental Restoration Management Co. (FERMCO) and its parent firm, Fluor Daniel, have slandered the quality of Schweitzer's work to cover up their own serious problems at Fernald.

According to the suit, FERMCO - Fluor rejected a Schweitzer bid and barred the subcontractor from future work at Fernald last August because Schweitzer had failed to follow proper bidding procedures.

But the suit claims the rejection ''was part of the Defendants' conspiracy to scapegoat (Schweitzer) in order to hide Defendants' deficiency of performance,'' in its cleanup contract with the U.S. Department of Energy.

A series of Enquirer articles beginning in February have detailed serious problems with the finances and safety of FERMCO's operation and the lack of oversight of FERMCO by the U.S. Department of Energy.

Those stories have resulted in an investigation of the operation by the U.S. General Accounting Office.

Since the stories broke, the Department of Energy's inspector general and its Ohio field office's auditors have issued reports critical of FERMCO's performance and the energy department's oversight.

On March 3, The Enquirer quoted a Schweitzer official saying he had warned FERMCO of defects in a pilot vitrification plant at the site, but that FERMCO had refused to allow the subcontractor to fix the flaws because it would slow the job.

On March 6 FERMCO issued a press release that blasted the story, saying Schweitzer had ''an ax to grind'' because of a pending legal action against FERMCO. The release also said Schweitzer was barred because of poor performance. In fact, no legal action was pending and FERMCO corrected its release the next day.

''The basic charge is scapegoat, as not only The Enquirer but the DOE has pointed out, FERMCO has some serious problems out there,'' said Tom Luken, attorney for Schweitzer. ''We will leave it to any judge as to who has the shoddy performance out there.''

FERMCO spokesman Rick Maslin declined to comment, saying the company had not yet reviewed the suit.

The suit, filed Wednesday in Hamilton County Common Pleas Court, asks for $11.6 million in compensatory damages and $4.2 million in punitive damages.

It also asks for a declaratory judgment that Schweitzer is a subcontractor in good standing whose bids must be considered in the federally funded project.

Published July 26, 1996.