Originally created 05/31/97

SRS to repay funds



AIKEN - The Department of Energy is the winner in a squabble with Westinghouse Savannah River Co., and its parent company, Westinghouse Electric Corp., over more than $11.7 million in tax dollars.

Federal Judge Kenneth Harkins ruled from Washington on Friday that Westinghouse must repay the money with interest to the Energy Department. He rejected the company's claims that it had a legal and contractual right to keep the fees, which were drawn down from a letter of credit.

in July 1993 by Westinghouse and Westinghouse Electric against the United States was held in Aiken County last week.

"We're pleased with the judge's decision and we'll move forward with our good relationship with Westinghouse," Energy spokesman Jim Giusti said Friday.

Westinghouse spokesman Jack Hermann said company officials were reviewing the judge's decision before deciding if an appeal will be made.

There are no hard feelings resulting from the lawsuit, he said.

"It's a professional relationship. It's always has been. These things are part of doing business," Mr. Hermann said. "The relationship now is no better and no worse than before or after the lawsuit."

The judge's decision is that the Energy Department is owed $11.7 million from Westinghouse plus interest. Mr. Giusti said the exact amount is "still to be determined."

The funds covered special income-tax allowances, or "gross ups," for relocation money given out by Westinghouse to its employees as well as employees of its subcontractor, Bechtel National, between October 1989 and March 1992. The relocation expenses given to the employees were additional income on which employees had to pay income tax, and the "gross ups" paid the tax for them.

Westinghouse negotiated a management contract with the Energy Department in 1989 to take over operations of the New Ellenton-based nuclear facility from DuPont. Several witnesses at the trial testified that general counsel Joseph Wise negotiated with the Energy Department to get the money for the "gross ups," but Energy officials said no such agreement ever existed, and wasn't legally allowed under federal regulations anyway.

The lawsuits were filed after the department issued its final decision in April 1993 that the payments weren't allowed under the initial contracts negotiated between the energy agency and Westinghouse.

Currently, the Energy Department and Westinghouse are operating under a new contract, and Mr. Guisti said, "At this time I don't know of any disagreements going on."