House Minority Leader Nancy Pelosi has asked the U.S. Navy and the U.S. Environmental Protection Agency to account for how a massive and ongoing fraud scandal, now jeopardizing San Francisco’s largest development project in a century, managed to evade regulators from both agencies.
Redevelopment of the 450-acre former Navy shipyard at Hunters Point—a working-class, disadvantaged neighborhood of color in the city’s southeastern corner—into desirable waterfront property with more than 12,000 housing units has been a major city priority since the 1990s.
Since the shipyard is still Navy property and is also a heavily polluted EPA Superfund site, with radioactive and toxic contamination, the Navy and the EPA are the lead public agencies in charge. Regulators from both agencies were tasked with overseeing nearly all aspects of work at the site, including plans to clean the shipyard in preparation for development.
And somehow, a “massive manipulation and falsification of data by Navy contractor Tetra Tech EC,” a contractor paid more than $250 million to perform environmental cleanup at the shipyard, managed to elude both agencies until 2012, when the Navy first noticed problems with the company’s data.
Even then, it wasn’t revealed until earlier this year, after complaints from whistleblowers and environmental advocates, that as much as 97 percent of Tetra Tech EC’s data at two parcels at the site showed signs of potential fraud, according to an EPA review of a draft Navy report.
This has fueled questions from community advocates and environmental watchdogs, who suggest that regulators were at best incompetent, sacrificing oversight in order to speed along a major real-estate development deal—or, at worst, complicit, and aware that the cleanup job was being faked.
So far, two former supervisors with the company have pleaded guilty to fraud and have been sentenced to federal prison.
The Navy is preparing to re-test areas at the shipyard where Tetra Tech EC did work, a project with a timeline and a price tag that are still unknown. Meanwhile, the California Department of Public Health is currently scanning an area with more than 350 built and occupied homes for radioactive contamination, after it was reported that this area was never scanned for such contamination.
All this has “left an unacceptable cloud of fear and doubt over the Hunters Point community,” Pelosi noted in a letter sent Friday to the inspectors-general of both the EPA and the Navy.
Pelosi is asking both agencies to “investigate whether [they] provided the appropriate levels of oversight during the original clean-up and testing process, how they handled whistleblower accusations, whether any further or false reporting is present in other Tetra Tech EC contracts, and whether they are following best practices” now, during the re-testing and investigations.
Pelosi was present in San Francisco Tuesday to receive an in-person briefing on progress from representatives from the EPA, Navy, and other agencies, including a local citizens’ oversight entity called the Hunters Point Shipyard Community Advisory Committee, according to spokeswoman Taylor Griffin.
“The fraud committed by Tetra Tech EC was universally acknowledged as unprecedented and wholly unacceptable,” Griffin said in a statement to Curbed SF. “All parties agreed that it is essential to hold Tetra Tech EC accountable for their monumental failures and that progress must be made expeditiously and as safely as possible.”
An e-mail sent to Veronica Hunnicutt, a former dean at City College of San Francisco who chairs the CAC, was not returned Wednesday.
Board of Supervisors President Malia Cohen, who represents the area, did not immediately return a text seeking comment Wednesday morning. Her legislative aides did not respond to an e-mail, either.
The Navy first became aware of problems with Tetra Tech’s data in 2012, Navy representatives told the Board of Supervisors at a May hearing.
That triggered an internal investigation in which Tetra Tech produced an explanation—suggesting that the problematic data might be the fault of a few rogue workers—but then was allowed to continue working at the site.
That triggered whistleblowers who either worked for the company or for subcontractors hired by Tetra Tech to step forward with specific allegations of additional fraud.
Even so, Tetra Tech as a company has yet to be punished.
A proposed $7,000 fine imposed by the Nuclear Regulatory Commission, which licenses companies to handle radioactive material, was waived on appeal. And other entities of Tetra Tech, a massive company with thousands of employees, have been awarded other government contracts.
And it was only in May that the Navy formally told Tetra Tech EC that it was dissatisfied with the company’s work, according to a letter obtained by Curbed SF via a Freedom of Information Act request.
This is “important but insufficient progress,” said Pelosi in her letter. And, in a rare instance of accord, community advocates agree with the congresswoman, who has long presented herself as a booster of the project, even amid criticism.
“It’s about time,” said Bradley Angel, executive director of Greenaction, an environmental nonprofit that has been criticizing the shipyard project since almost the beginning. “Community pressure and advocacy pressure is working.”
But, Angel said, it’s the same “government agencies who are up to their eyeballs in guilt” who are currently being asked to investigate themselves. And until recently, Pelosi herself “has been supporting a development project without supporting due diligence,” he added.
Update, August 2, 2018:
Sam Singer, spokesperson for Tetra Tech EC, issued the following statement on behalf of the company shortly after Pelosi’s comments:
“The work that Tetra Tech EC completed at the former Hunters Point Naval Shipyard was done properly and to the standards established by the U.S. Navy. We are disappointed that Representative Pelosi has been misled by fraudulent accusations by a group of self-motivated plaintiffs against Tetra Tech EC, the Navy and the EPA, of not doing a proper job.”
Singer went on to say that the statements made by Pelosi are “based upon false accusations against Tetra Tech EC, concocted by plaintiffs desiring to extract money based upon their fraudulent claims that the shipyard wasn’t properly cleaned.”
He adds: “The city of San Francisco’s own Department of Public Health has said numerous times, as recently as the past few months, that the shipyard is safe and meets public health standards, directly contradicting Rep. Pelosi, the plaintiffs, and others.”
Correction appended: The whistleblowers’ accusations against Tetra Tech have not been sustained and the accusations of fraud, a crime with a specific legal definition, against Tetra Tech have yet to be proven. The article has been corrected and updated to reflect these errors on our part. Tetra Tech’s public statement has also been added.