UC-Run Labs Hit by New Charges of Waste, Impropriety : Research: GAO tells Congress that one of facilities was used to manufacture ‘trinkets’ and that taxpayers were charged double the normal rate for leased vehicles.

Federal auditors leveled new charges of waste and impropriety Wednesday at three laboratories managed by the University of California, charging that lab officials inappropriately spent millions of dollars and even used their facilities to manufacture “trinkets.”

In addition, investigators for the General Accounting Office of Congress were scheduled to release yet another report today accusing officials at Lawrence Livermore National Laboratory of leasing vehicles from the university at more than double the normal rate.

The alleged mismanagement at Lawrence Livermore, Lawrence Berkeley and Los Alamos national laboratories is attributable to lax oversight on the part of both the UC system and the U.S. Department of Energy, federal investigators told a House panel Wednesday.

“We’re not attacking the scientific credentials of Lawrence Livermore or Lawrence Berkeley,” said Victor Rezendes, director of the GAO department supervising the investigation. “We’re attacking their administrative controls.”

The information presented to lawmakers this week follows earlier disclosures of problems at the laboratories. Last year, for example, more than 27,500 items valued at more than $45 million were determined to be missing in an inventory at Lawrence Livermore.

The new allegations surfaced amid negotiations between university and federal officials to extend UC’s contracts to operate the facilities, which it has managed for about 50 years. The three labs, two of which are used for the design of nuclear weapons, employ 20,000 people and have a combined annual budget of nearly $3 billion.

The university’s oversight of the three laboratories was defended by UC spokesman Rick Malaspina, who said that UC officials are working to strengthen their management policies and have always quickly ordered improvements when past problems surfaced.

“What we’re hearing is an unfair attack on the university based on inaccurate, incomplete and dated material,” Malaspina said.

The new charges were outlined by a GAO investigator and an Energy Department inspector Wednesday to members of a House Science, Space and Technology subcommittee. The two officials are scheduled to testify again today before the Senate Governmental Affairs Committee.

Millions of dollars in Energy Department funds were spent on unauthorized programs to encourage lab employees to retire early and to pay non-university attorneys to help UC administrators, including President David P. Gardner, prepare to answer questions at a congressional hearing, the auditors said.

More than $500,000 worth of souvenir medallions, pen sets, and chess pieces were manufactured in Livermore’s advanced weapons engineering lab, apparently with the approval of one of the facility’s managers, the investigators said.

The auditors said they believe that a lack of oversight and a series of unusually “lax” contracts between UC and the Energy Department are the principal causes of the alleged waste. The UC contracts give the department less authority to disallow controversial expenses than standard Energy Department contracts, they said.

In addition, the Energy Department’s San Francisco field office, which is responsible for overseeing the contracts, authorized payment for controversial charges because of a “least-interference, limited-accountability” philosophy, the auditors said. They said that the problem was compounded by a clause in the UC contract permitting “after-the-fact authorizations,” which apparently led the laboratories to assume that their funding requests would receive automatic approval.

The San Francisco office had only enough funding to use 1 1/2 staff positions to oversee institutions under contract to manage Energy Department facilities, agency officials told the House panel.

The GAO report to be discussed by the Senate panel today says that Livermore officials allegedly circumvented Energy Department procurement procedures by leasing 58 vehicles from the University of California at about 2 1/2 times prevailing rates.

The report, a copy of which was obtained by The Times, notes that UC administrators also charge the Energy Department a $70-a-month administrative fee for each car.

Livermore employees said that they were unable to comment on the car leasing charges because they had not seen the GAO report.