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


     WASHINGTON, D.C. -- Two companies and one of their owners
have paid the United States $1 million to settle claims they
failed to properly test welds in the piping system for a chemical
weapons disposal plant in the Pacific Ocean, the Department of
Justice announced today.  The plant, about 800 miles southwest of
Honolulu, was shut down in 1991 while the welds were repaired and

     U.S. Attorney Steven S. Alm of Honolulu and Assistant
Attorney General Frank W. Hunger of the Civil Division said the
settlement resolves claims the United States could have filed
under the False Claims Act against Dillingham Construction
Pacific Ltd., doing business as Hawaiian Dredging & Construction
Company (HDCC), Finlay Testing Laboratories Inc. (FTL) and Gordon
W. Finlay, the owner of Finlay Laboratories.

     "The United States, when it awards a contract, requires that
all work be performed as specified in the contract, which was not
done in this case," said Alm.

     Hunger said, "The United States achieved a fair and
equitable settlement in this matter.  We want to emphasize that
we intend to investigate and prosecute every instance in which a
contractor fails to meet certification requirements and then
tries to conceal those actions." 

     According to an investigation conducted by the Defense
Criminal Investigative Service (DCIS), HDCC, FTL and Gordon W.
Finlay falsely certified to the United States that certain
process piping welds for the construction of the Johnston Atoll
Chemical Agent Disposal System (JACADS) satisfied all applicable
contract specifications when in fact they did not.  HDCC hired
FTL as a subcontractor to test the wells for contract compliance. 

     The Department said the settlement was achieved only after
JACADS had been shut down for several months in 1991 so the
piping welds could be retested by another firm and repairs could
be made on the welds that tested below the applicable standards.

     The matter was settled before a complaint was filed,
although the Department said HDCC, FTL and Gordon Finlay were
liable under the False Claims Act for allegedly knowingly and
recklessly performing substandard testing of the welds at JACADS,
then misrepresenting their actions to the government.  

     The settlement was achieved through the coordinated efforts
of the Civil Division, the U.S. Attorney's office in Honolulu, 
the Department of Defense and the DCIS.