Audit of state nuke office criticized obscene buttons

CARSON CITY -- A San Francisco public relations firm, paid $625,449 by the state to wage a media war against a proposed nuclear dump at Yucca Mountain, suggested producing 100,000 buttons.

The buttons would contain two words, one of them being Yucca. The other would be a made-up adjective, alliterative of Yucca.

Kamer, Singer and Associates also proposed a letter to the editor of a Las Vegas newspaper, criticizing the Department of Energy and its contractors. The draft of the letter was written on behalf of "Jimmy Joe Bob Smith Jr.," a "likely fictitious name."

These are two of the findings in an audit that reported the Nevada Nuclear Waste Project Office misspent federal money. As a result of the audit, conducted by the KPMG Peat Marwick accounting firm, the federal government froze its remaining budgeted funds for the office, amounting to $691,000.

Since 1982, the federal government has provided the office with $72.5 million for the purpose of reviewing the Department of Energy's scientific studies and informing Nevada citizens of developments relating to Yucca Mountain, which is 90 miles northwest of Las Vegas.

The state Legislative Interim Finance Committee responded to the federal freeze by providing $375,000 in emergency funds.

Payments of federal money were made to the Kamer company from May 1992 to September 1995 as the firm conducted a national blitz against the repository and the U.S. Department of Energy. And during that time, the state paid much of the bill without ever receiving sufficient information on the expenses, the auditors said.

The audit said the state office spent money across the nation to gather allies to oppose the dump. The law setting up the Project Office, however, prohibited spending federal money to influence federal legislation, to build coalitions outside Nevada and to conduct a media campaign outside the state, the audit said.

The proposed "Phucca Yucca" buttons were never made, but the auditors said "this demonstrates the negativity of Nevada's campaign against Yucca Mountain and the inappropriate use of federal funds for such activity."

The proposed letter to the editor with the apparent fictitious name was never sent. But again it was a disallowed expense.

Bob Loux, head of the Nevada Nuclear Projects Office, has sent a 33-page letter answering the Feb. 13 audit. Loux said the auditors misinterpreted what is allowed to be spent by the state.

"The role of the state was not intended as a passive overseer of DOE activities, but rather as an institutional critic ..." he wrote in a letter to Eric Fygi, acting general counsel of the Department of Energy.

The state, Loux said, has "broad latitude" to develop information on the potential impacts of the dump.

Loux said the suggestion for the buttons was an "extra-contractual suggestion" from Kamer-Singer and he questioned how this could be an unallowable activity as the buttons were never made. The draft letter to the editor was "another unsolicited suggestion for which no costs were incurred," he said.

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