Department of Justice Seal

FOR IMMEDIATE RELEASE

CIV

THURSDAY, JUNE 15, 2000

(202) 514-2007

WWW.USDOJ.GOV

TDD (202) 514-1888


PIPE MANUFACTURER WILL PAY U.S. $500,000 FOR SELLING UNTESTED

POLYVINYL CHLORIDE PIPE TO FEDERAL AGENCIES


WASHINGTON, D.C. -- North American Pipe Corporation (NAPCO) has agreed to settle allegations that the company supplied the government untested polyvinyl chloride pipe. NAPCO, a subsidiary of Westlake Chemical Company, will pay $500,000 to settle claims that the company sold the untested pipe to the Defense Department and the Federal Bureau of Prisons. The company will also provide a 30 year warranty to loan and grant recipients from the Departments of Agriculture and/or Housing and Urban Development for selling pipe that had not been pressure tested in conformance with applicable industry standards and government contract specifications.

"Today's settlement is an example of the Justice Department's determination to ensure that work contracted for the federal government is carried out at the required standards," said Acting Assistant Attorney General David W. Ogden, in charge of the Civil Division.

The settlement resolves charges brought against NAPCO and the Westlake Chemical Company by Stan Price, an independent salesman who formerly sold pipe manufactured by the company. The case was brought under the whistleblower or qui tam provisions of the False Claims Act in the U.S. District Court for the Southern District of Texas in 1996.

Under the qui tam provisions of the Act, a private party can file an action on behalf of the United States and receive a portion of any recovery if the party satisfies certain requirements. Under the settlement terms, Mr. Price will receive $100,000 from the cash settlement and an additional $300,000 from NAPCO, which constitutes 20 percent of the value of the 30 year warranty.

The case was investigated by the Houston, Texas Office of the Department of Defense's Defense Criminal Investigative Service, the Department of Justice's Office of the Inspector General and the United States Department of Agriculture's Office of Inspector General. The Civil Division and the United States Attorney's Office for the Southern District of Texas negotiated the settlement.

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