FOR IMMEDIATE RELEASE                                         CIV
WEDNESDAY, SEPTEMBER 3, 1997                       (202) 616-2765
                                               TDD (202) 514-1888

                                 
     U.S. JOINS SUIT AGAINST BASIN ELECTRIC POWER COOPERATIVE

     WASHINGTON, D.C. -- The United States has intervened in a
suit filed against Basin Electric Power Cooperative of Bismarck,
North Dakota, that accused Basin of overcharging the government
millions of dollars on a contract at a 185 million watt power
plant, the Department of Justice announced today.

     Assistant Attorney General Frank W. Hunger of the Civil
Division said Robert J. Norbeck, a former chief auditor of Basin,
originally filed the qui tam action on behalf of the United
States.  The original complaint has been sealed since 1995 to
allow the government to investigate and decide whether or not to
intervene.  The court unsealed the complaint Tuesday. 

     "We are saddened to bring this action against an electrical
cooperative because such cooperatives historically have been the
government's partners in bringing affordable electricity to rural
America," said Hunger.  "Nevertheless, we are committed to
ensuring the integrity of this program and to protecting the
taxpayer, and must aggressively pursue fraud whenever and
wherever we find it."

     In an amended complaint filed in U.S. District Court in
Bismarck, the Department alleged that Basin billed the Department
of Energy's Western Area Power Administration for costs that were
not allowed under a 1986 contract or were falsified.  As a
result, Western overpaid Basin approximately $23.8 million,
excluding interest. 
 
     According to the complaint, Basin breached its contract with
Western and, on some of the overcharges, fraudulently billed
Western. 

     One of the allegations of fraud involved Basin's use of a
10-year amortization period for certain costs it charged the
government under the contract, which ended in 1990.  Basin
customarily used 20-year amortization periods for those same
costs at other power plants and, in fact, switched back to a 20-
year amortization period when the contract ended, which meant
that Western paid a disproportionate share of costs. 
 
     The complaint also alleged that Basin used a wholly-owned
subsidiary, Dakota Coal Company, to fraudulently charge profit
margins to Western that were not allowed under the contract.  The
complaint also set forth several breach of contract claims. 

     Pursuant to the qui tam provisions of the False Claims Act
(31 U.S.C., Sec. 3730), private parties may bring fraud actions
on behalf of the government and receive a portion of any damages
if the government takes over the case and prosecutes it
successfully.  

     Under the False Claims Act, the government is entitled to
treble damages plus civil penalties ranging from $5,000 to
$10,000 per violation.

     The Department's Civil Division will pursue the case.  The
Department of Energy's Office of Inspector General investigated
the matter.
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97-363