2 Indicted In LANL Purchase Scandal

By: Adam Rankin, Journal Northern Bureau
Albuquerque Journal
May 28, 2004 Friday

* Ex-workers facing 28 counts, 13 of them felonies, in 2002 case

Two former Los Alamos National Laboratory employees who were at the heart of a purchasing scandal that rocked the labs in 2002 were indicted Thursday on 28 counts of theft and other charges.

The charges stem from hundreds of thousands of dollars in questionable purchases Peter Bussolini, a facilities maintenance manager, and Scott Alexander, a purchaser under him, made using taxpayer money.

LANL and federal investigators suspect that Bussolini and Alexander used their positions and their understanding of the LANL procurement system to purchase bunkers full of merchandise, from hunting gear to bathroom fixtures. The FBI found some of the purchased goods at the homes of both men, the indictment alleges.

The two men's actions, and federal concerns over a possible cover-up, precipitated a series of congressional hearings and federal investigations. Eventually, more than a dozen senior managers were reassigned or lost their jobs. Director John Browne resigned, and the University of California's 60 years of managing the labs is in jeopardy.

A federal grand jury in Albuquerque indicted Bussolini and Alexander on charges of fraud, conspiracy, theft of government property and making false statements. The federal indictments come more than 1 1/2 years after the FBI issued its first search warrants.

LANL officials estimate they discovered more than $325,000 worth of improper purchases by Bussolini and Alexander hidden away in various secret bunkers and other storage areas on laboratory property. The indictment does not address that property.

LANL spokesman James Rickman said that figure does not include items seized by the FBI at the homes of Bussolini and Alexander and elsewhere outside the laboratory.

Assistant U.S. Attorney Fred Federici said the indictment includes 13 felony and 15 misdemeanor counts covering illegal purchases from about February 2001 to October 2002.

Seven of the felony counts each carry a maximum penalty of five years in prison and/or a maximum $250,000 fine. Six of the felony counts carry a maximum of 10 years in prison and/or a maximum $250,000 fine. Each misdemeanor count carries a maximum prison term of one year and/or a maximum $100,000 fine.

Federici said Bussolini and Alexander will next be arraigned in Albuquerque before a U.S. magistrate judge. No arraignment date has been set, he said.

The indictment also charges that Bussolini and Alexander "together with others" conspired to defraud the United States and "steal, purloin, embezzle and convert property."

The indictment lists items the FBI found at Bussolini's and Alexander's homes, including a Sony 36-inch flat screen TV, among several TV sets; numerous "Hoover brand cleaners;" DeWalt power tools; Nikon Buckmaster laser rangefinders; an electric gate opener; a Weber Genesis Gold gas grill; performance tires; shock absorbers; and a motorcycle racing helmet. The indictment alleges the two stole all of the items.

Bussolini did not return phone calls, and Alexander declined to comment.

"The laboratory did everything it could under its authority, which included firing Peter Bussolini and Scott Alexander in December 2002," LANL's Rickman said. "And now the issue is in the hands of the criminal justice system."

Rickman said LANL officials have made use of or returned all but about $21,000 worth of the merchandise.

LANL officials, aware of the FBI investigation of Bussolini and Alexander, which began in June 2002, put the two on investigative leave Oct. 31, 2002. The FBI executed its first search warrants that day.

Glenn Walp, one of two whistleblowers, said news of the indictments made his day.

"The indictment is a very significant milestone because now (Bussolini and Alexander) are officially charged and they have to go through the process," he said.

Walp is the former head of LANL's Office of Security Inquiries, who, with former security specialist Steve Doran, worked with the FBI on the investigation.

Both were fired during the investigation, and both claimed the labs took that action in retaliation for their work with the FBI. The two men later settled their cases with LANL.

Walp said this week that Bussolini controlled people at the laboratory "like a mafia don."

"Bussolini just had free rein at the laboratory," Walp said. "He was well-liked and well-known and gave out presents and befriended everybody, but then he also had them beholden to him."

Walp estimated he and Doran were able to track nearly $500,000 worth of improper purchases to Bussolini and Alexander.

"It was an obvious open-and-shut case; there were documents, eyewitnesses and they were caught with goods in hand," he said.

Walp, a former Pennsylvania State Police commissioner, said the indictment signifies a victory for the American taxpayer.