A front-page story in my local newspaper, The Journal News, piqued my interest yesterday. An employee of Indian Point, a nuclear-power plant 30 miles north of New York City, has filed a lawsuit with the New York State Supreme Court. He alleges that the plant’s emphasis on profits over security has made it vulnerable to a terrorist attack.
The employee, Clifton Travis Jr., claims security measures are lax and that the company has failed its mock terrorist-attack drills for the past two years. Although he is still employed, Travis also charges that because of his criticism of the company to state and federal officials, among others, he has been kept away from the worksite for months after having taken a leave of absence for unrelated personal reasons. The lawsuit seeks $20 million in compensatory damages and $1.5 billion in punitive damages, which his lawyer says is appropriate, since the plant is believed to make $4 million a day.
Travis, a security officer, also wants Indian Point closed until it can prove that security staffers are adequately trained. He states the company is guilty of encouraging employees to falsify records about how much security training they have received. He also says the plant cancelled a security drill just a few days before it was scheduled because it was so concerned about failing.
Unfortunately, these charges come as no surprise, as Indian Point and its owner, Entergy, have been criticized for years over alleged lax security and safety oversights. Many who live in the area have long called for the plant’s closure. That Travis’s job status is unclear is particularly unsurprising because, despite the Dodd-Frank Act and other laws designed to protect whistle-blowers from retaliation, being fired and later being unable to find work has been these folks’ usual fate over the past many years.
Richard Chambers, president and CEO of the Institute of Internal Auditors, says that while employees should be able to expose company wrongdoing without fear of retaliation, laws enabling them to get rich for doing so could make it standard behavior to report their suspicions to federal agencies first, rather than giving the company an opportunity to take corrective action.
But isn’t that something like telling the fox to go ahead and keep up residence in the hen house?
In fact, the federal whistle-blower program gives organizations more incentive to do a good job, says Chris Giovino, fraud expert and partner at forensic-accounting firm Dempsey Partners. From a legal standpoint, he notes, the burden is now on companies to make sure employees are comfortable coming forward and confident the company will take appropriate action.
That doesn’t necessarily mean companies have changed their ways, though. It’s unfortunate that yet another one is charged with bad management and secretive behavior, both high on the list of important reputational risk factors.
The lawsuit comes just a month before a panel of U.S. Nuclear Regulatory Commission judges begins considering issues raised by critics trying to convince them not to relicense the plant, according to The Journal News. Whatever actions are taken, the consequences are huge for the surrounding community, Entergy, and potentially the nuclear-power industry.