ML19224D601
| ML19224D601 | |
| Person / Time | |
|---|---|
| Site: | Midland |
| Issue date: | 05/22/1979 |
| From: | Jeffrey Temple DOW CHEMICAL CO. |
| To: | |
| References | |
| NUDOCS 7907130102 | |
| Download: ML19224D601 (167) | |
Text
NRC PUBLIC DOCUMENT ROOM CC NUCLE AR REGUL ATORY COMMISSION
(
IN THE MATTER OF:
CONSUMERS POWER COI9ANY (liidland Plant, Units L and 2)
Deposition of JOSEPH G. FELE Place -
Coral Gables, Fla.
Date -
Tuesday, 22 MAY 1979 Pages 1-165
[
Teecnone:
L (202)347-3700 ACE-FEDERALREPORTERS INC.
,,U o m a,-nem 365 001 Li4 North Cccitol Street Washington, D.C. 20001
~
NATIONWIDE COVERAGE - DAILY
(! - ',
d
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7 9 0713 01Flo2-
ERC 4820 1
UNITED STATES OF AMEFICA 2
NUCLEAR REGULATORY COMMISSION 3
- - - - - - - - - - - - - - - - -x r
4 In the Matter of:
5 CONSUMERS POWER COMPANY Docket Nos. 50-329 50-330 6
(Midland Plant, Units 1 and 2) 7
- - - - - - - - - - - - - - - - -x 8
DEPOSITION OF JOSEPH G.
TEMPLE i
9l Coral Gables, Florida i
Tuesday, May 22, 1979 10 11 Deposition of JOSEPH G.
TEMPLE, called for examination by agreement of counsel, at 2801 Ponce de Leon Boulevard, Coral 12 Gables, Florida, at 8:15 a.m.,
before Elisabeth R. Craft, a notary public in and for the District of Columbia, when (a) 13 were present on bebalf of the respective parties.
14 GERALD CHARNOFF, ESQ., and WM. BRADFORD REYNOLDS, ESQ.,
Shaw, Pittman, Potts & Trowbridge, 1800 M.
S treet,
N.
W.
15 Washington, D.C.,
20036; on behalf of Consumers Power Company; and 16 RONALD ZAMARIN, ESQ., Isham, Lincoln & Beale, One First I
National Plaza, Chicago, Illinois, 60603; on behalf of 17 Consumers Power Company.
18 WILLIAM C.
POTTER, JR.,
ESQ., Fischer, Franklin, Ford, i
Simon & Hogg, 1700 Guardian Building, Detroit, 19l Michigan, 48226; on behalf of Dow Chemical; and R. L.
(RON) DAVIS, ESQ., and LEE NUTE, ESQ., Michigan 20l Division, Legal Department, Dow Chemical USA, 47 Build-ing, Midland, Michigan, 48640; on behalf of Dow Chemical 21 WILLIAM J.
OLMS*EAD, ESQ., DENNIS C.
DAMELY, ESQ., and 22 JAMES TCURTELLOTTE, ESQ., Office of the Executive Legal Director, Nuclear Regulatory Commission, Washing cn, 23 D.
C.; on behalf of the NRC.
24 s& Comoanv on 25 7
365 Ol: c I
2 1
ESEEEE11
('
2 WITNESS:
DIRECT CROSS 3
Joseph G. Temple 3
60
/
4 5
6 7
8 9
10 il 12
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13 14 15 16 l
17 18 19l t
20l l
I 21 t
22l h
23 1
24'
'O em nxnno ccmcany !
25f 365 LCS
3 1
_P _R _O C_ _E _E _D _I _N _G _S
(
2 MR. POTTER:
On the record.
3 The reporter has asked that we all stipulate that
(
4 she be permitted to swear the witness since she is a notary 5
in the District of Columbia and not in the State of Florida.
6, I certainly stipulate to that.
l 7'
MR. CHATIOFF :
We will de that.
8 Whereupon, 9
JOSEPH G. TEMPLE 10 was called as a witness by agreement of counsel and, having 11 been first duly sworn, was exa.ined and testified as follows:
12 DIRECT. EXAMINATION r,
kI 13 BY MR. OLMSTEAD:
14 Q
Good morning, Mr. Temple. I am Bill Olmstead of 15 the Nuclear Regulatcry Co=nission Staff, Counsel for the NRC 16 Staff.
I 17 We are taking depositions pursuant to and Atomic r
18 Safety and Licensing Board's Prehearing Conference O.er i
19 ;
of May 3, 1979, which set forth the following issues to be 20 determined.
21 '
Issue No. 1.
Whether there was an attempt by 1
22 l parties or attorneys to prevent full disclosure of or to i
23 !
withhcid relevant factual information from the Licensing Board '
24 :
in the suspension hearings.
t at Reoorters, Inc. l 25,
Issue No.
2.
Whether there was a failure to make 365 009 i
i i
4 1
affirmative, full itsclosure on the record of the material (m
2 facts relating to Dow's intentions concerning performance of 3
its contract with Consumers.
/
4 Issue No.
3.
Whether there was an attempt to 5
present misleading testimony to the Licensing Board concern-i 6l ing Dow's intentions.
7 Issue No.
4.
Whether any of the parties or I
8' attorneys attempted to mislead the Licensing Board concerning 9
the preparation of the Temple restimony.
10 Issue No. 5.
What sanctions, if any, should be 11 I imposed as a result of affirma finds on any of the above
.e l
12 l i
issues.
O 13 Would you please state.your name and business 14 address?
l 15 A
Joseph G.
Temple, Jr.
Business address is 2801 16 Ponce de Leon, Coral Gables, Florida.
17 Q
And what is your position with the Dow Chemical i
18 i Company?
l 1
1 I
19 A
I am President of Dow Chemical Latin America.
i 20 '
Q Is this the same position you have held between l
21 Jul*f 1, 1976, and May 31, 1977?
1 l
22 l A
No.
23 l Q
Would you please state what position you held 24 l during that period and identify any changes?
\\'
- e-s al Reporters, Inc.
25 ;
A Up until the end of 1976, I was the General i
i i
g
.$ 6 h 0(.15.
9
5 Manager of the Michigan Division of Dow Chemical USA.
After x
that point in time and up until May of 1978, I was Vice Pre-3 sident in charge of Marketing for Dow Chemical USA.
4 Q
Have you reviewed the testimony you gave in the 5:
Nuclear Regulatory Commission proceeding in November-Cecember,1976,i 6
supplemented by cross examination in 1977?
7 A
Yes, I have gone through it.
I8' Q
Do you recall the testimony of Mr. Paul Oreffice 9
in that proceeding?
10 A
No, I wasn't present at his testimony.
11 Q
To the best of your knowledge, does your testimony 12 in~that proceeding still currently reflect the Dow corporate O'
13 position?
14 A
Yes; as I testified to the Dow co2porhte position.
I 15 MR. POTTER:
By " current," I dc
- t underrland.
16 By the date, does it reflect it?
MR. OLMSTEAD:
Right.
To the best of his knowl-17 l 1
l 18 ;
edge.
I 1
19 '
MR. POTTE'..
You are in a position to state that?
20 l THE WITNESS:
Yes, but I probably ought to add i
l 21 my jobs have been changed twice since then, and my intention i
22 i has been to do my job and not to get involved in the jcb i
22 which is now that of others, which is worrying about being 24 j concerned abcut nhe relationship between Dow and Consumers N-
.al Aeoorters, Inc.
25.
Power.
l 365 006
6 1
2 Q
At the time of your testimeny in November-December, 3
1976, you indicated you were not an officer of the Dow i
l I
4 Chemical Company.
Are you now an officer of the Dow Chemical 5
Compan?
6 A
No, I am not.
7 Q
Would you describe any other differences that there 8
may be in your duties or responsibilities other than those 9
you have identified?
For instance, are you a member of the 10 '
Board of Directors?
11 A
No, I am not a member of the Board of Directors.
I 12,
was in the previous job a member of the Dow USA Operating I
( i 13 Board which was another Board that got into the action.
14 MR. CHARNOFF:
You say your previous job.
15 THE WITNESS:
Vice President of Marketing for Dow 16 Chemical USA is a member of the Dow USA Operating Board.
l l
17 -
Mr. Morand held ti;st position at the time I was General l
I i
i 18 :l Manager of the Michigan Division.
I s
I i
19,
BY MR. OLMSTEAD:
i 20 Q
You indicated in your testimony before the i
21 Licensing Board that Dow was first told about a slippage in 22 i construction of the Midland Nuclear Facility near the end of r
i 23 1974.
You were told of a second slippage shortly after the 24 i starr of 1975.
- e.
ral Recorters, Inc.
I 25 !
Do you recall that testimony?
It is about at i
365 007 i
i a
7 I
transcript page 351.
m 2
A Well, I think we were told 118 days after we signed I
3' the contracts in 1974 that Consumers ' financial conditions
(
4 were such that they anticipated having to drastically reduce 5
the work on the job or shut the job down.
I think that would 6
have brought us in May of
'74.
And I think what we learned 7
thereaf ter was more of the specifics with regard to how long 8
the job would be down and what the cost impacts would be.
9 Q
And what was your reaction to learning of that i
10 l information?
11 A
I was very displeased.
12 Q
And that caused you to take some action with i
b.
13 regard to the Dow-Consumers steam contract?
14 A
No, I don't think it caused us to take any action 15 because the specifics of the circumstances were not spelled 16 out at that time.
It caused us to have a great deal more i
concern about both when the units would be online and how much -
17 l-18 the cost of the facility would ultimately be.
I 19 So we began internally to look more carefully at 20 what our own understanding of the contract was, our operations,
t 21 '
were, and what their needs were and our situation with all l
I 22 :
agencies, including the Michigan Air Pollution Control Ccm-l 23 j mission and what was recuired to operate the Division.
24 l Secause we could see that we were getting into serious con-e-
at Reporters, Inc.
25 ditions with regard to --
lij p i
74q lvJ jus l
8 1
Q Who were the princi-members of your staff that 2
you looked to for that?
3 A
At that point in time, it was really our negoti-4 ating team which wan composed of, I think, Mac Whiting, St Parke Brown, Lee Nute, Jim Burroughs and myself.
6 Q
On transcript page 358 --
7 A
Should I be looking at these?
Q You may, yes.
a,
.l 9 I
-- you indicated in answer to a question that one 10 of the problems not related to the alternatives of what is 11 l going to be your source -- and I assume that should mean your 12 source of steam -- is the fact that we have a contract.
And s
13 you say, "We are going under the assumption that it is con-14 tinuing.
/.11 parties are operating in good faith under that i
15 contract."
16 MR. POTTER:
I am asking him to read 357 and 358 j
i 17l together so he gets the context of how the testimony came up.
I I
18 THE WITNESS :
All rignt, would you try the question l 19 again?
20 BY MR. OLMSTEAD:
i 21,
Q Okay.
You indicate that one of das problems no:
22 '
related to the alternatives of what your source is going to be,'
23 a which I assume is the steam source, is the fact that Dow has 24 a contract.
m 2-
.i neoomn. ine. '
25 You further indicate that you are going under the t
9 1
assumption that it is continuing and all parties are operating
~
2 in good faith under that contract.
3 Then, you say, "It is also a fact that we have been 4
threatened with a massive lawsuit on two occasions recently 5'
if we repudiate or cancel that contract."
l, 6l Can you identify those two occasions?
1 7
A Yes, I think I can.
On one of the occasions, I 8
was present, and on one of the occasions, I was not present.
9 I believe there was a meeting of attorneys on 10,
Spetember 21 where I was not present, where I was told that 11 Mr. Falahee indicated that we would be faced by one helluva 12 i lawsuit if we failed to be supportive of Consumers.
l
(>- )
(
13 Q
Who told you chat?
14 A
I assume it was one of the attorneys that was 15 there -- perhaps Mr. Nute.
Most probably Mr. Nute.
But I 14 don't really recall.
I 17 ;
Q What was your response to that?
i i
18 ;
A Well, I guess the way he said it indicated that i
19 he felt very strongly about it or at least the way it was 20 i told to me that he said it.
I 21 And then, when it was followed up on the 24 th by 22 Mr. Aymond who is the Chairman of the Board, who went through 23,
a number of cases and indicated that if we repudiated the t,
D' contract or breached the contract cr frustrated their efforts as " ral Reporters, Inc.
25 in any way to sustain their construction permit and that i
365 0i0 i
10 l
i i
l 1
resulted in a whole series of damages that he went through and i
-s i
2 added up, that they would take whatever courses were open 3
to them to recover all that money from Dow.
4
.Q That was the second?
5 A
That was the 24th where I was present.
And I 6
guess -- well, I consider it, I consider the threat of a 7
lawsuit sericus.
And when the Chief Counsel of a company 8
comes up and tells you like on Wednesday you are going to have 9
a helluva lawsuit, and then the Chairman of the Board comes j
10 up on Friday and explains it to you, I have to have the f eeling Il that the top management in Consumers is fairly serious about I
i 12 '
the whole thing.
CJ l
i 13 So, yes, I took it seriously, which I think was i
i 14 the question.
i And did you have the occasion to formally or infor l
15 Q
16 mally ccmmunicate these threats to someone senior to you in i
17 the Dow organization?
18,
A Well, Mr. Oreffice was cresent at the second meetinc.
19 l Q
Had you brierec him on the first meeting?
I
\\
l 20 l A
I don't know whether I did, but I'm sure he had 21 been briefed because Mr. -- well, I think Lee Nute was there, i
i 22 j And think Jim Hanes was there at that meeting on the 24 th.
23 :
MR. CHARNOFF:
You mean the 21st?
24 lj THE WITNESS:
Well, one or both of them were also C$n
.al Recorurs, Inc.
25 ;
there on the 24 th, I believe.
So I'm sure Mr. Oreffice was I
i l
- -(*
n i
11 1
briefed.
I don' t know that I did it.
I can't remember.
2 3Y MR. OLMSTEAD:
3 Q
And what was his response?
i l
1 4
A He doesn' t like to be threatened.
I think I have 5
heard him make that statement.
I haven't seen his testimony; 6
I don't know whether he testified like that, but 7
Q Were these threats communicated to the Dow USA 8
Soard to your knowledge?
9 A
Yes, I'm quite sure that they were.
And I think 10 there was a subject on the corporate review to determine the 11 I legal aspects or the implications of a decision that if Do 12 made the same decision that the Michigan Division made, what
(')
13 would the legal implications -- I think it was the obligation 14
-- of that group to report it there?
15 It has been a long time ago; to the best of my 16 knowledge, they did.
l 17 Q
Going back to your testimony, you just prior to i
l 18 i making mention of the threatened lawsuit said that all parties ;
19 are operating in good f aith under the contract.
How did t
1 20 !
you reach that conclusion?
21,
A I guess what I would say today is that everybody i
22 j was going along and doing what they felt was required on a 23 day-to-day basis with regard to their understanding of the 24 contract.
.rai R eporters, Inc. I 25 Q
Was it your feeling that that was a good-f aith 3[j 6 L l.9 i.
1*
l?
1 effort to meet the terms of the contract?
2 MR. POTTER:
Are you talking about Dow or Consumers 3!
at this point?
/
J BY MR. OLMSTEAD:
5 Q
Dow.
6 A
We weren't doing anything.
They were building 7,
the plant.
We were trying to negotiate with them.
Negoti-8 ations had been stopped at that point in time as I recall.
9 So our role was not really an active one.
10 0
Well, it is true that Dow was not happy with the 11 contract?
12 A
Absolutely.
13 Q
And it is also true, is it not, that Dow had sought 14 concessions from Consumers prior to the Court of Appeals 15 Remand?
16 A
That 's true.
17 Q
Ead Dow considered suing Consumers prior to that i
18 '
time?
I 19 MR. POTTER:
Prior to the remand?
I 20 ;l 3Y MR. OLMSTEAD:
f
'l 21 Q
Prior to the remand.
l 22 l A
The remand is the hearings that I testified at?
I 23 l C
July 21, 1976,
- urt of Appeals Decision.
24 l MR. POTTER:
Excuse me.
The remand refers to the es.
ral Reporters. Inc.
25 ;
Court of Appeals Decision in Washington in July of 1976 as i
l i
365 013
13 1
it has heen used c.t leas - in the deposition.
2 MR. CHARNOFF:
It is the remand order.
3 MR. POTTER:
Can we have the question back?
I 4
(The question on page 12, line 17, was read by 5'
the reporter.)
6 THE WITNESS:
The remand is July of --
7 MR. POTTER:
'76.
8 THE WITNESS:
Okay, I will answer that in this way:
9 frcm the time that we were told the job was going to shut down 10 in 1974, we contemplated that there was a reasonable chance 11
-- it was very reasonable or slim -- that we would end up in 12 court with Consumers and. therefore, our entire part of our
~
13 strategy with regard to everything that we did was considering 14 the fact that ultimately, we could end up in court with 15 Consumers, including the f act that we could be the ones who i
l 16 sued them en a best-efforts basis and/or it could go the j
i i
17 i other way.
j I
i i
18 l So I would answer, yes, there was discussion as 19 f we talked about all of the various things that could happen I
i 20 !
in this, what I call, a sea of unknows to try to make sure l
1 21 that Dow was prepared for that contingency amon J others.
l 22 '
BY MR. OLMSTEAD:
23 Q
Assuming that Dow might have had to sue Consumers 24 '
at that point in time, what did you expect the financial impact
.i neoonen.inc.'
25 !
on Consumers t: be?
l 365 014
14 1
A I had never contemplated beyond looking at that as 2
a possibility.
3 Q
You had communicated to Mr. Youngdahl of Consumers 1
4 Power the possibility that Dew might sue if you didn't g e '.
5 concessions in negotiations?
6l XR. POTTER:
I will object to that.
Where is that 7
in the testimony?
8 MR. OLMSTEAD:
Well, I will back up and show him 9
some letters.
10 MR. POTTER:
If you have a document that shows that, Il let's tender it to the witness and see what he says on it.
12 BY MR. OLMSTEAD:
(~1 13 Q
I will show you this letter of June 30, 1976, 14 frcm Dow Chemical Company to Mr. Russell Youngdahl signed by 15 Mr. Joseph Temple.
l i
16 A
Can you point out --
l i
17 Q
Well, I am particularly interested in the language la at the end of page 2.
i i
19 ;
MR. POTTER:
Which particular paragraph on page 2 4
l t
20 are you referring to, Bill?
21 l BY MR. OLMSTEAD:
1 22 i Q
The end of page 2 and carrying over to page 4.
23 I am going to ask you scme cuestions about that.
l 24 l A
Two, three and four?
ei aeoorters. inc. '
25 '
Q Right.
365 015
15 1
Off the record.
2 (Discussion off the record.)
3 BY MR. ODiSTIAD :
4
.Q Back on the record.
5 On page 3 of your letter, June 30, 1976, you out-6!
lined a little bit of the histcry of the discussions between 7
Consumers and Dow with regard to Dow's feelings that they 8
need some modifications to the contract.
You reference the 9
September 10, 1974, letter to Consumers, your December 11, 10 1975, letter which you quote from at the bottom of page 3 11 and the top of page 4, and then the June 30, 1976, letter.
12 Do you believe that those letters indicate to
(
13 Consumers fairly clearly that Dow might take legal action 14 against them if they failed to negotiate with Dow?
15 MR. POTTER:
I object to the form of the question.
16 If you are asking for Mr. Temple to testify as to how Con-17j sumers might act to the letter, I think he is certainly com-I 18 '
petent about what he intended by what he put in that letter.
19,
MR. OLMSTEAD:
That's 'that I am asking.
i 20ll MR. POTTER:
Okay.
21 THE WITNESS:
I hate to do it, but would you ask 22,
the question again?
23 i BY MR. OLMSTEAD:
I 24 Q
Well, there are three letters here -- the June e 9econen, inc. !
- 3-
((6 25 30, 1976 --
1 l
16 l
1 A
I only have two.
p_
2 Q
The June 30, 1976, references to previous letters 3
to Consumers Power concerning Dow's desire to negotiate 4
changes to the steam contract.
It quotes extensively from 5
the December 11, 1975, letter and indicates -- and correct 6
me if I am wrong -- that Dow is not satisfied with the pro-7 gress of the negotiations between Consumers and Dow.
Is 8
that true?
9l A
That's true.
There hadn' t been any negotiations 10 for some time pric; to the December 11, 1975, letter.
11 !
Q Then, you had negotiations in early '76?
l c
12 A
Correct.
13 Q
And by June, 1976, you were not satisifed that
(
14 sufficient progress was being made; is that correct?
15 A
That's corract.
16 Q
And did you expect through these letters -- I 17 l assume scme phone conversations with Mr. Youngdahl of Con-l 18 ;
sumers Power -- to indicate to them that legal action might l
i 19 '
be taken by Dow
'.f satisfactory negotiations were not con-20 cluded?
21 :
A Well, I viewed these letters -- the letter of the 22 !
11th, December 11, 1975, as one which was a message from me 1
23 [
to Rus Youngdahl going over some of the thing that we were l
24 i dissatisfied with, brt suggesting that -- and at that time,
=-
.ai neoomn. im 25 I think the job was going again -- it is time for us to gec f
l 365 017
17 1
together and address some of the issues and see if we can't 2
come up with a better contract that recogni =s the environment 3
in 1976 as being different than the envirecment in 1967 and 4
the environment in 1974 when most of the contract language 5
was put together and bring the two ecmpanies back together.
6 so that we can progress witn the work that needs to be done and 2
we can get both companies back on the track to fulfill a
the obligations of a new contract that makes more sense to 9
bo th of us.
And these are the things we need to have in order 10 to have a contract that we think eflects our needs in today's 11 environment.
12 The letter of June 30 was an attempt by us after a 13 very, very, very, very, very frustrating negotiating session la at the end of April to get our tesm to put something together.
l And the "our team" again is Lee Nute and Jim Burroughs and 15 16 myself and either Parke Brown or Ray Gaska, I'm not sure, who f
17 was involved at the time, where we said, "Look, we are not l
18 getting anywhere; why don' t we find out what it is that we t
19 would specifically propose, and then let Consumers react i
i 20 to that.
And hopefully, we will take out some of the stuff 21 that we wanted, soue of the things that we felt were important, 22 l and ask them to try to accommodate us in these areas. "
1 23 That letter was written on December er June 30.
24 MR. PCTTER:
1976?
j 7
a-s a# Amorten, lmc. !
I 25 i THE WITNESS:
1976.
t
18 i
l 1
And eleven weeks later, we still hadn't had any 2
response until we finally got together on September 13.
So 3
I felt those were positive letters, not negative letters.
I 4
BY MR. OUiSTEAD:
I 5
0 Well, if you will look at the December 11, 1975, 6
letter, on page 3 just before the portion of it that you quote 7
from the June 30 letter, there is a paragraph that relates to 8
a legal clean bill of health.
What did you mean?
i l
9 A
That is on page 3?
l 10 0
I'm sorry, page 4.
11 What did you mean by a legal clean bill cf health?
I 12 '
A Well, we had also, Mr. Youngdahl and I, exchanged
(-
13 a series of letters before this where we asked for assurances 1
14 with regard to their being able to supply steam and power, but l'
mos tly, primarily, steam, to us on the dates that they agreed 16 to supply it to us in the contract, which at that time were i
17l
'79 and
'80.
i 18 i We asked for assurances.
They wrote us back a l
l 19 letter which was unsatisfactory.
We wrote them back a letter,l I
20 '
told them we thought it was unsatisf actory, but we didn' t i
21 feel the need to do cnything.
22 And if you ask me whether there was a threat of l
23 l li.igation in those letters, I would certainly agree with 24 li ycu than there was.
at Reoorters, Inc. I m-25 :l And this paragraph talks about one of the things l
365 019
19 1
that the Consumers people, to the best of mi
.;owledge, had
^
2 been talking about as being one of their desires.
That is, 3
wipe the record clean if we are going to come up with a new 4
contract.
And we agreed that we would give them what we 5
came to call a legal clean bill of health with regard to i
I 6
everything that had gone on in the y.._,
which really referred 7
back to those much earlier letters.
8 Q
I believe you had indicated just a few minutes 9
previously that not much had changed between that December 10 letter and June 30 letter of 1976.
11 MR. POTTER:
Which December letter are you refer-12 ring to?
14 0
I 15 A
Well, the clean bill of health comments in the I
1 16 ;
December, 1975, letter --
17 '
Q Yes, I understand, but had the circumstances between !
I i
i i
18 l the two companies between that time and June 30, 1976, improvedj t
19 '
to your satisfaction?
20 ;
A Absolutely not.
Which, may I add, didn't diminish I
21 our desire to negotiate and try to find a contract that we 22 could live with.
We weren't any happier, but we were still 23 i trying to get together a document wh2ch represented what we 24 !
could live with and what Consumers could.ive with and what x-as nwomn. w.
25 was reasonable in the eyes of both.
l
- 3. 6 R uz0 i
l i
1 Q
After the Court of Appeals Remand in July, 1976, m
2 did Consumers then indicate a desire to negotiate further 3
with Dow?
4 A
They certainly did on September the 13th.
We 5
heard -- I think I got one call from Youngdahl around the 1
6 fifth or sixty of August which was primarily for the purpose 7
of telling me that they had a new estimate on the cost of 8
the plant of $1.670 billion which was the same time, I think, 9
he indicated that they had also figures as high as $2 billion 10 from Bechtel, but they didn't believe in that figure.
11 I think we talk:d.
I asked about the impact of 12 the remand hearings which to us were very,,very serious.
(
13 And I can't really recall what the substance of the conversation 14
.was on that particular subject.
15 Then, on the prior to the 13th, I think Youngdahl I
i 16 called me, told me that they were ready to respond to our I
17 l June 30 1.etter, and they were very anxious to ecme up and i
i 13 l negotiate.
I 19 By that time, we had essentially reached the con-20,
clusion in the Division that is written up in that letter l
21 that I wrote to Oreffice on the 8th which included a position 22 '
subject to hearing what Consumers had to say at that meeting 23 on C:e 13th.
I 24 l Q
But it was not your intention at least until that at Reporters, Inc. I
- e-25 l meeting to further negotiate on the contract; is that correct?
P" ilk-
.,6'r3a
21 1
Following the Court of Appeals Remand and prior to the 2
September 13 meeting.
3 A
I think when we got word of the remand hearing, we i
4 were.in a state where we felt we had to again look at what 5
the situation was because we didn't really know where the 6l thing was going.
And we evolved the position in the Division 7
that is reported in thrt letter.
I 8'
We then tock the position that certainly we did 9j not want to negotiate _ with Consume s at the meeting on the 10 13th, having just told them what we were going to tell them, 11 unless they gave us some information that caused us 12 rethink our position.
k 13 MR. POTTER:
Excuse me.
In that response you just
(
14 referred to some letter which contained the Division --
l 15 l
""?
WITNESS:
That is the September 8 letter from l
16 me to --
1 17 MR. OLMSTEAD:
Board Exhibit 1.
l l
18 THE WITNESS:
Yes, I think it is Board Exhibit 1.
t i
19 3Y MR. OLMSTEAD:
i 1
20 Q
Okay.
During that period prior to the decision of i
21 the Dow Corporate Board, but after you had communicated your i
22 '
position to Consumers in the September 13 meeting, I believe --
23 l A
That is correct.
That is when we communicated our I
24 Division decision to Consumers.
l a-r.: neoo,wn, ine. l 25 '
Q
-- was it your conremplation that you would have t
l p ') 7 i
3b'J d i, b
22 1
to sue Consumers in connection with that?
l
^
l 2
A I don't think I personally went through the thought 3
processes as to where we would go from that point in time that 4
Dow.nighu, if they did say the Division decision is the 5l corporate decision.
I was fully aware that the whole legal i
I i
6l field with regard to this contract and us and them was extremely 7
complicated.
So I can't say that I contemplated a course of 3
9 action which would follow what we specifically concluded in 10 the Division other than a course of action which would allow i
11 other parties not involved with the Division to make.iure that l 12 we hadn't overlooked something, we didn '.t misinterpret some-13 thing, we didn't use the wrong set of bases for something 14 which would have caused us to want to rethink our conclusions.
15 Q
On transcript page 391, you were asked whether i
16 you were aware of any discussions dealing with different l
17 viewpoints by Consumers and Dow as to the content of the l
18 affidavit of your testimony for the remand proceeding.
I i
19 A
This is page 391?
20 '
Q Right.
It probably --
21 !
MR. PCTTER:
Let him just take a minute to read f
22 1, 390 and 391 together.
l 23 3Y MR. OLMSTEAD:
24 '
Q It probably continues over --
co-al Reporters, Inc.
25 i A
Can I stop with the questions of whether I regard C?3 36r3
23 1
Rosso as my attorney or not?
i s
2 Q
You indicated you were not specifically invo.l.ved i
I 3
in that in answer to the question.
4 A
That's correct.
5 Q
Did you meet with Messrs. Nute, Wessel, Rosso and i
6l Renfrow in regard to preparation of your testimony?
7 A
I don' t think I ever met Rosso until af ter the 8
written testimony was completed and there was witness 9
preparation -- preparation of the witness for cross examination, i
10 a couple sessions in November.
II l I think the one meeting I attelded, I think, was I
12 !
the 29th.
13 MR. CHARNOFF:
2 f
'1 of?
14 WEE WITNESS:
September.
15 Renfrow was there, but I think all the rest of the l
16 lawyers were Dow lawyers to the best of my recollection.
17 BY MR. OLMSTEAD:
i 18 j Q
So that remark that I just quoted to you about not l
19 being specifically involved in that refers to your written j
20,
direct testirany prior to its being filed?
i 21 MR. PCTTER:
Well, I am a little -- let me go back 22 l a step.
The question on 391 which the witness has heen asked i
23 to read, among others, are you aware of any discussions dealing 24 l with different viewpoints by Consumers and Oow as to the
,ce-cal Recorwrs, Inc. ;
contentsofyouraffidavitortestimonyforthisprocepdin(((il 25 I
J )"
l g
ll
24 6
1 or for the matters filed here in wasnington, unfortunately, s
2 the question was in the conjunctive.
And we are talking about 3
two separate matters.
4 One is an affidavit, and the other is the actual 5;
preparation of testimony.
I thi Jc we have to clarify which 6,
one we are talking to so he can answer.
i 7
BY MR. OLMSTEAJ:
8, O
Let's talk about both.
I i
9l A
Take one at a time.
i 10 l Q
Let's take one at a time.
Let 's take thn af fidavit.
11 !
A Okay.
That comment was directed primarily at the i
12 affidavit, the written document.
i 13 MR. CEP.2NOFF :
Can we identify which affidavit 14 was the subject of that question?
l l
15 THE WITNESS :
The one that I submitted.
The question i
16 and answer.
The one that ended up in the question and l
l l
17 !
answer form.
i i
18 MR. POTTER:
Off the record just a minute.
i 19 (Discussion off the record.)
20 LY MR. CLMSTEAD:
21 Q
Mr. Temple, we are showing you a copy of type-22 written direct testimony appearing at transcript page 220, i
23,
or is it 230?
Just a minute.
220.
And I ask you if that 24 !,
is the testimony to which you referred on the pages I cited 2 -.
al Repar'ers, Inc. ll 25 to you?
bL-}
mq l
'b' bi b i!
I
- o I
1 A
Yes.
2l Q
And were you referring to any o_her documents?
3 A
No.
4 Q
I am going to show you an affadavit filed October 5,
30, 1976, by Lee Nute and ask you if you recognize that.
I i
6l MR. POTTER:
Excuse me.
For the record, I don't i
7 believe Mr. Nute filed that affadavit.
It was filed by 8
Consumers Power Company.
It was prepared by Mr. Nute at the 9
request of Consumers Power Company.
10 MR. OLMSTEAD:
Okay.
11 THE WITNESS:
I signed it.
12 BY MR. OLMST W :
- (
13 Q
And the date of that is?
s 14 A
It looks like the 20th of October.
15 Q
20th of October?
So now, the first document ;cu i
l 16 identified was the direct testimony that was actually put in l
1 17 the record.
And the second one is an affadavit that was i
18 i not filed in the record; is that correct?
l t,
i 19 '
A Well, these are the two documents.
i 20 Q
And your testimony refers to both when you say 21 '
"I was not specifically involved in that"?
22 !
A Well, to the best of my abi?.ity, I recall ny 23 l testimony refers to the one that was filed at the time.
I 24 don't know that I was even thinking of that one.
i co-al Reporters. Inc. ;
25 ;
MR. POTTER:
Ev "that one," yet are referring to i
t I
36(]
l
27 I
I l
1 the affidavit?
2 THE WITNESS:
The affidavit.
3 BY MR. OLMSTZAD:
4 Q
Then, when you met with Messrs. Nute, Wessel, 5
Rosso and Renfrow on November 8, November 15, 1976, that 6
testimony was already prepared; is that correct?
7 A
These were the meetings on the 8th of November 8
and --
9 Q
15th of November.
10 A
Ycs.
11 Q
.IP 'ng the course of any of the meetings you had 12 following the Court of Appeals Remand, considering what i
13 options Dow had, did anyone indicate to ycu during the course 14 of any meetings or conversations that it was likely that 15 Consumers might ultimately lose its licenses?
16 A
Yeah, I think that came up frequently.
I i
l i
17 0
Who made such indications?
l i
18 j A
I think Consumere made comments at the September i
l i
19 13 meeting.
Certainly, Mr. Aymond made comments at tne 20 September 24 meeting.
I i
21 I assume comments were made at the lawyers meeting 22,
that Fa2anee was in attendance.
I think lots of comments were l
23 made to that effect at the meeting before we communicated on i
24 l the 13th what the Division conclusion was.
Ccmments were m amon n. inc. ;
i
=-
25 l made, and lots of comments were made a number of places after e
36]
28 l
i 1
the 13th meeting.
2 Mi. CHARNOFF:
Pardon me.
Where the comments that 3 !
were made comments a.= articulated by Mr. Olmstead just now l
4 that it is likely Consumers will lose the licenses or were the comments that were made related to the possibility that j
i Sl 6l Consumers might lose its license?
7 THE WITNESS:
I guess if I were to characterize 1
l 8
it, I would choose your word.
l 9
MR. POTTER:
By that, you mean the second alter-10 native that Mr. Charnoff gave you there was a possibility?
j i
11 THE WITNESS:
There was a possibility that they l
t 12 could lose their license.
(
12 Of course, there were lots of comments with regard 14 to Dow's ultimate position with this, i.e., what those odds i
15 of losing were.
l 16 BY MR. OLMSTEAD:
l'7 Q
Did those comments have a significant impact on i
i 18 !
your thinking about what posi; ion the Michigan Division i
19 '
should take?
20,
A The main --
21 i MR. POTTER:
Excuse me.
I understand the question, t
22,1 if I understood the previous cuestion, I think he indicated 23 l the cccments came after September 8, 1976, when the Division I
a 24 j decision had already been made.
2 -*
31 Reporters, !nc. ;
1 25,
MR. OLMSTEAO:
Oh, I didn't understand they came i
i i
078 c
3t]
29 1
after September 8, 1976.
2j THE WITNESS:
Certainly the preponderance of those l
I 3l comments..
4 BY MR. ODiSTEAD:
I 5
Q Did you have that belief yourself?
6 MR. CEARNOFF:
Excuse me.
Which belief?
7 MR. OLMSTEAD:
It might be likely Consumers would a
lose its license.
9 MR. CHARNOFF:
I think the way he answered the 10 +
earlier question af ter our interruption was there were I
i 11 1 discussions concerning the pcssibilities of losing the l
12 l license, but he did not, I think, testify that the comments 13 stated it is likely Consumers would lose the license.
i 14 Now, when you say "his belief," I don't think l
i 15 l there has been any testimony he had any belief that he would l
16 lose the license.
l i
l 17 BY MR. OLMSTEAD:
l 1
i 18 Q
What was your belief as to the likelihood Consumers i
19 might lose its license?
20,
A I thought it was a possibility.
21 !
Q A strong possibility?
No opinion?
22 A
No real opinic.i.
23 Q
What prcmpted you to take such rapid action during i
24 the first week of September, 1976, to request a corporate
- n-al Aeoorters, Inc.
25 !
review cf the Midland Division position?
LJDJ
30 I
i i
l l
1 MR. POTTER:
I will object to the characterization j
l 2
of " rapid," but go ahead and answer the question.
i r
3 3Y MR. OLMSTEAD:
i 4l
,Q Let me rephrase the question.
What prompted you I
l 5'
to recuest a cor orate review during the first week of l
6' September of the Midland Division position, September, 1976?
l 7'
A Well, I think I commented earlier on some of the 8
reasons.
We considered the position that the Division reached i
I 9
to be one that was articulated which was considerably different' 10,
and more definitive than any position we had had prior to that I
11 point in time and to be a very serious matter for both Dow 12 i and potentially Consumers Power.
l k-12 1 It seemed prudent to all of us who made up the 14 negotiating team for Dow, including the lawyers who were 15 consulted throughout this thing, that we ask people who we l
I 16 felt had some degree of expertise in certain areas and wno l
17,
didn't work for me and who were not in the Division to l
1a i thoroughly look into all of the things that we had done, all i
19 of the things that we had concluded, look far enough back into 20 such things as the economics to make sure that they agreed 21 that the way we put them together, the way we analyzed them, 22 the conclusions we drew, the answers we got, were indeed 23 a rignt to the best of anybody's ability to ascertain that.
d U
24 We were also concerned that if the conclusion reached
=cs-raf Reporters, Inc.
25 j hv the Michican Civision became the corporate decision h
b,;:Q t,s r
3 6s
31 i
I that people outside of those who knew did not conclude that 7_..
i I
2 there were reasons for making that decision which were indeed i
t 3l not reasons such as safety factors in the plant.
We did not I
l 4 i want.to see somebody conclude that sa. ety was a significant I
3, reason and that we had a concern, therefore, we didn' t want l
I I
6 any part of the plant.
I 1
7 Neither did we want to have our decision, if it a;
became a Dow decision, to be interpreted by people that Dow I
9l did not have confidence in the technology of nuclear power 10.
-- that is, aside from electric utility involved in this.
I l
l 11 And I think these are the main reasons that we i
I l
I i
wanted to do that.
12 l 13 Q
You say "we."
Did somebody suggest a corporate f
(
l 14 review to you?
I i
15 !
A Most of the things that we did over this whole l
l i
I 16 l two-year period were done with lots of discussion amongs i
i 17 the people on the negotiating team and the attorneys.
I am I
i la not sure that somebody didn't suggest that.
I am not sure t
19 that didn't come from one of the attorneys.
20 I am not sure that it didn't evolve as a group 21 discussion.
i 22 I was particularly concerned that somebody didn't 23 feel safety was an issue.
was particularly concerned that 2
24 somebody didn't conclude we thought nuclear power was a bad
=.
<= n ewn.n. inc.
25 rechnology.
- 6 g-a 0]I c
y
32 I
r I
i i
1 Some of the other aspects, I'm not sure how we 1
I l
2' ended up jelling what we ended up calling a corporate review.
l I
3I It seemed like a good idea.
l I
i 4'
O What did you think the corporate review stould do 5
for you in the meeting of September 13?
I believe you 6,
indicated to Consumers that you expected them to accept the l
I I
Midland Division position; is that not correct?
7 l
8 MR. POTTER:
I will object to that.
I think the l
9 witness ought to be shown the document rather than characteri-f 10 l zing.
If you don't want to show him, I will.
l 11 MR. OLMSTEAD:
Okay.
Do you have a page reference l
12 where ' you say that that is what he said?
(
13 Your own speaking notes of September 13 on page i
l i
14 2,
Item 11.
15 THE WITNESS:
Wait a minute.
I don't have those.
i I
16 3Y MR. OLMSTEAD:
17 Q
If you will look at item 11 and item 12 --
18 MR. POTTER:
Excuse me, Bill.
You are referring 19 i to that 3-page set of notes?
l 20 !
MR. OLMSTEAD:
Three-page.
It says "JGT's Notes /
l 21 '
Consumers / September 13, 1976, meeting."
22 !
MR. POTTER:
Fine.
l 23 !
THE WITNESS:
My recollection of --
24 MR. POTTER:
Wait and get the question back.
u
.co.
rei Reporters, Inc. '
i 25 ]
What is the question?
i 0
365 032
33 i
1 BY MR. OLMSTEAD:
I t
i i
2l Q
Okay, if you will read item 12, it says, "Our i
i 3
Division conclusion and this recc=mendation for a corporate i
4 review was discussed at the Dow Board of Directors meeting on 5l Tharsday, September 8, and were accepted."
j I
6!
Was it your intent to indicate to Consumers follow-7 ing what you had heard at the September 13 meeting, to indicate 8
that Dow's corporate position would in all likelihood be 9
the Dow Midland Division position?
10 A
No, it was not.
11 Q
What do the words "and were accepted" mean?
12 !
A I think if you refer to Burroughs ' meeting notes 13 which reflect what he believes was said and what the intention la was is that Oreffice discussed the Division's conclusion and I
i i
15 the Divisiun's re onsmendation that a corporate review be con-l i
i 16 ducted to determine the validity, if you will, of the 17 '
Division's conclusions, 1
i t
18 l My statement, I think, was the recommendation for l
19 l the corpcrate review was, accepted and may even be the Division's 20,
conclusions were accepted subject to the corporate review.
l t
21 l But the recommendation that we made to Creffice to 22 discuss with the Board was that he have a corrorate review i
1 23 !l and to consider tne Division's conclusion.
I i
24 l C
Okay.
You referred to the Surroughs' notes, I
- e-cal Recorurs, inc. l 25 believe.
Jim Burroughs?
f)b -
377
~) U I
34 1
A Yes.
i 2
Q If you will look at page 9 of those notes, the l
3 bottom of the page where the paragraph begins, " Paul Oreffice 4
communicated the Division's recc.mmendation" --
l 5
A Yes.
6l 0
-- the last sentence of that paragraph says,
l 7'
"Nothing that Consumers has told Dow today has changed Dow's 8
opinion of the project."
9 A
Okay, but the sentence you didn't read was, "The i
10 Board accepted the Division's recommendations contingen* cpon l
i l
11 1 what Dow learned from Consumers today that could change the i
i l
12 l Divisiun's views."
l l
k 13 Nothing that Consumers told Dow today -- well, the 14 "Dow today" was the Division people.
And my view is that what i
15 Burroughs is talking about, what I was talking about, was i
l 16 1 if they told us something we didn't know pricr to the 13th i
l l
17 l that would cause the Division to change their mind, then we l
l 18 l wanted to consider that.
i 19 q We heard nothing from the Consumers group that was l
20 ;
new and/or significant that caused the Division group to 21 i change the Division's position.
The recenmendation to the al Board was to have the cor orate review to look at the Division's 22 pl n
23 ;l conclusion and see whether that Review Ecard agreed with it q
24 and whether Oreffice agreed with it and whether the Dow
.al Reporters, Inc. !
- r.
25 Soard would accept it.
D ff 0J
!l
35 1
Q So it was your arcicipation that if the Division's
/
2 position changed as a result of what Consumers said at the i
I 3'
September 13 meeting that a corecrate review would or would l
4 not be necessary?
I Sl A
If Consumers told us that everything was fine and l
6, gave us good reasons to believe that, and we felt that it 7
contained information we hadn't had then we would have held 8
Lack on the Division's conclusicas and reassessed that.
9 But regardicss if the Division reach =d a conclusion 10 l as described in the letter in Board Exhibit No it was i
11 !
always our view to have that looked at by a corporate review l
12 !
team.
13 Q
Regardless of whether you changed your position or t
14 not?
l 15 A
I guess if it was just a continue on -- I con't know!.
I, 16 '
I really didn't contemplate -- as we went into-that, we didn't' l
i l'7 think we would hear anything new from Consumers.
So I guess 18 l I really didn't contemplate what we would do if they told us i
19 something that where we had to say, "Well, stop."
i 20 I think we would ha'e gone back and reconsidered 21 the changed circumstances, and we would have -- I don't know i
22 !
what we would have done, frankly.
l 23,
Q But what was your contemplation as to what the r
24 corporate review would do?
What was the purpose of the 2.,
.i aeoon m.ine.4 25 corporate review?
i I
if l
365 035
36 1,
1 A
Well, the purpose of the corporate review, as I 2
said, was to make sure that everything was investigated and l
3 including everything that we did, and really was designed 4
for the use of Oreffice to help him arrive at a conclusion l
1 5
as to what the Dow Chemical Company's position should be.
l 1
l I
6; Q
Were you surprised at the conclusion that the Dow l
l i
i 7
Corporate Board reached?
8 A
No.
Not based on what took place.
9 Q
Did your views as the Chief of the Michigan Division i
l 10 cnange as a result of what took place?
11 A
In what way?
12 O
rou said you weren' t surprised that the Dow Cor-I I
k.
13 porate Board's decision was what it was based on what took
/
14 place.
And that decision was to, in essence, not accept your i
15 recommendation.
16 I am asking you if you thought your recommendation 17 ;
should have been changed based on what took place.
i l
18 A
Well, when we put cur reccmmendation together, ;etween 19 the time we put our reccmmendation together and told Consumers 20 Power and the time the Dow USA Board met with the Cor orate
,'l 21 j' Review Team, we had been threatened with this $600 million i
22 '
lawsuit by the General Counsel of Consumers Power and the t
23 l Chairman of the Board of Consumers Power.
That is a new 24 '
- element, aia memsinc.l ce.
25 Q
Did that surprise you?
0'50 l
- -E
$bJ
~
l
i 37 1
A Well, they came on awfully strong.
Did it 2
surprise me they would contemplate legal action?
No, I guess i
30 f
didn't really surprise me.
But they came on awfully, i
4 j; awfully strong.
5 i!
5]
Q Dow had been contemplating some legal action by F
l this time, and then the Court of Appeals Remand occurred.
6 7
And the legal climate was uncertain; is that correct?
In gl your view.
l' pl MR. POTTER:
Again, I am going to have to object.
I i
10 ll The question is leading.
l 11' MR. OLMSTEAD:
Absolutely.
i MR. POTTER:
Okay.
I am going to object because 12 y u are saying Dow cor/emplated some legal action.
I don't
(
13 I
g i
~
know what you are referring to in the record.
34 MR. OLMSTEAD:
I am referring to his earlier testi-g many.
He indicated Dow contemplated some legal action.
g i
MR. POTTER:
The objection stands.
The record will 171 l
show.
18 ;;
n 19 ]
THE WITNESS:
Would you repeat the question?
l 20 h
I; Q
Prior to the Court of Appeals Remand, you testified 21 Jfi l
22 :li that even thcugh Dow sought a negotiated agreement thac they had looked into the legal rights that they had under the 23 g
,4 [;
contract, and I believe you testified you recognized a law-1 !
ei:leconen,inc.]
suit micht be necessary.
Is that correct?
- e >
25 q lj st c
3; 33 I
38 1
A It could have been one of the r.ossibilities.
2
?
Af ter the Court of Appeals Decision in July of
'76, 3i circumstances had changed, correct?
4 A
Yes.
i 5i Q
And Dow was more concerned about its legal position i
6 vis-a-vis Consumers; is that correct?
7' A
There were many more unknowns in addition to lots 8
of the old ones.
9 Q
So did you seek legal advice as to Dow's rights under 10 the contract?
11 A
I can't recall specifically saying I think we ought 12 to seriously bring up the subject of how we would go about
(
13 suing Consumers Power at this point in time, for instance.
(
s_
14 Q
Was that subject brought up?
15 A
I really can't remember.
16 0
You don't recall any discussions about possible 17 legal action against Consumers?
l l
18 A
You are talking about from July 21 or whatever 19 '
that datc was?
i 20 i Q
Right.
1 21 '
A I assume there were probably discussions, but as 4
22 Chairman of the Negotiating Committee, did I say this was 23 something I wanted to seriously censider pursuing at this time, ;
24 don't think I said anything like that.
Reporters, Inc. j
- s.6 at 25 Q
Was this discussed at the Board of Directors i
t O
-r
~~
- [
39 i
1 n.eeting following the corporate review?
I,,
2 MR. CEARNOFF:
Which Board of Directors?
3 MR. POTTER:
Let me correct that.
That was not a I
i 4
Board of Directors Dow USA Board.
5 BY MR. OLMSTEAD:
1 6l Q
Corporate Review Board, is that Dow USA Board?
l 7
A I can't remember.
8 Q
Do you recall what Mr. Wessel's views were with 9
regard to Dow's position on the contract?
10 l A
Well, I think his position was that we are going 11 to continue to regard the contract as in effect, keeping e.1 i
12 i our options open.
i f
k 13 Q
Did it occur to Dow at.a..y time during the course M
of the negotiations on this contract subsequent to the Court l
15 '
of Appeals Remand?
I 16 A
Af ter the Court --
l l
17 ;
Q Right, af ter the Court of Appeals Remand, before l
i l
18 your testimony on November of
'76, that Dow might offer to 19 share costs with Consumers and abandon the project?
20,
A First of all, there were no negotiating sessions 21.
during that period of time.
l 22 I Q
I'm talking about your own thinking.
i 23 l A
I can ' t recall that kind of discussion.
24 I Q
Was that suggested to you?
w e Amomo. ix. !
25,
MR. CHARNCFF:
I'm not clear at the moment what the i
G 0J' i
36;
40 t
question is.
2 BY MR. OLMSTEAD:
3<
Q The question is whether it occurred to Dow to offer 4
to Consumers a settlement where they might share part of the I
5 costs and abandon the project totally.
6 A
As head of Dow's negotiating team, I never recall l
l 7
that kind of proposal.
I 8
Q In Febursry,1977 -- and this would be abou -
9 transcript page 2602 --
l 10 l MR. POTTER:
I'm sorry, Bill?
t i
Il }
BY MR. OLMSTEAD:
I, 12 !
Q 2602 -- you are asked a series of questions con-r
\\-
13 cerning what you discussed with the Dow Executive Board.
14 And you indicate that you didn't discuss the impact with the 15 Dow Executive Board of entering in these contracts on the i
16 !
State of Michigan.
i I
(
I 17 :
MR. POTTER:
Could I ask what period of time aro l
I I
18 :
you talking about now?
I i
19 '
MR. OLMSTEAD:
I am talking about the testimony on 20 2602 and 03.
l 21 MR. POTTER:
Bill, what period of time are you l
22 talking about when Mr. Temple did or did not do something?
i t
23 MR. OLMSTEAD:
I am talking about what he had in mind 24 when he made those statements.
- e.,
at Reporters, Inc, l t
25 ;
MR. CEARNOFF:
If you look back at the previous i
i 36b-nE1 t
41 l
1 page, this. discussion is in connection with Renf 7W's questions!.
's l
2 And on line 8, apparently, the discussion is in terms of l
3 1974.
4 MR. POTTER:
The witness has now read from page 5,
2600 to 2603.
Do you want to pose your question again, Bill?
6l BY MR. OLMSTEAD:
7 q
You testified concerning whether the impact of l
i I
8 entering into the steam contracts was considered by the Dow 9
Executive Board as relates to the State of Michigan.
10 MR. POTTER:
In 1974?
I 11 l BY MR. OLMSTEAD:
li 12 Q
Yes.
And you had also been asked whether you dis-b 13 cussed with the Dow Executive Board the impact of nuclear 14 power in the United States.
i 15 A
Yes.
16 Q
And you were asked whether the Executive Committee i
i 17 '
considered the impact of the national energy program.
I 18 A
Right.
I 4
19 l Q
And as I gather, you answered that you either I
20 l didn ' t know or didn' t discuss those s; is that correct?
i A
I think I indicated I didn't discuss those items 21 !
i 2' '
4
'074.
I 23 ;
I also indicated that we had 13 extensions of an 24 agreement.
And this was really the finalizing of what all 34 e secomn. ine. !
25 the parties had intended to do over the period from whenever i
i l
365 041
42 I
we began this thing, 1965, until 1974.
p 2
So it wasn't really a significant -- it wasn't a 3
change at all in Dow's position with regard to' nuclear power 4
or safety or anything else.
S 0
What I would like to know is whether you know whether i
6 Mr. Renfrow knew what discussions had been taking place at 7
the Executive Board.
8 MR. POTTER:
I am going to cbject to that.
There is 9) no way Mr. Temple can answer that question as to what Mr.
10 Renfrow would have known.
I1 3Y MR. OLMSTEAD:
12 Q
Well, did you know whether Mr. Renfrow had met O
g 13 with any members of the Executive Board?
14 A
No.
15 Q
Transcript page 2616, Mr. Wessel indicates that I
i i
16 lawyers drafted the responses to interrogatories to reflect 17 the company position.
Do you see that reference?
I 18 A
Yes.
l 19 '
Q Were you consulted concerning the answers to be i
20 given by Dow Chemical Company to interrogatories propounded 21,
to Dow in the Midland Remand Proceeding?
I 22 l A
Could you explain whether interrogatories is my i
23 {
testimony?
I 24 !
Q It goes beyond _ hat.
The questions in written si A oomn. inc. l c.,
25 '
form directed to the Dow Chemical Company for response.
i
-, f f) b [k l
50
43 1
MR. CHARNOFF:
Off the record.
m 2
(Discussion off the record.)
i i
3 MR. CHARNOFF:
Back on the record.
I t
4 THE WITNESS:
Wha t was your question?
5 BY MR. OLMSTEAD:
6 Q
The question.is:
were you consulted by Mr.
7 Wessel, Mr. Nute or other attorneys for Dow concerning the 8
answers to be given by the Dow Chemical Company to inter-9j rogatories propounded in the Midland Remand Proceeding?
10 A
Well, although I can ' t remember the specifics, i
I 11 anything that I signed, I read and I agreed with or I wouldn't -
i 12 have signed it.
Whether that is an answer to your question 12
.or not --
14 Q
I would like you to refer to the September 24, 1976, I
Lee Nute meeting notes which is Midland Intervenors Exhibit 15 16 No. 27.
j l
i 17,
A It is hard to read.
l t
I 18 j Q
On page 3, the paragraph beginning "Mr. Aymond 19 asked Mr. Temple" --
3 20 A
Excuse me.
Does somebody have a better copy?
21 Q
Those notes indicate that you asked what Con-l 22 '
sumers excects from Dow in the way of testimony so that l
23 l Dow can fulfill its obligations in the contract.
24 l What does Consumers want Dow to say?
Had you been
.a-al Reoorten, Inc. '
25 ;
informed that Dow should say only what Consumers wanted it I
7 1
t JJa
44 1
to say?
2 A
No, and I think Mr. Aymond made a statement at I
3 some point in time in the meeting that the Dow witness has 4
to tell the truth and should tell the truth and he expected 5
him to tell the truth or else he would go to jail.
6-Q So no one suggested to you that you should only 7
say what Consumers wanted you to say?
8 A
No one ever suggested that.
It would have been 9
repulsive.
10 Q
You testified at the remand hearings that there was 11 a question as to what type of Dow witness should be provided 12 '
and that Dow determined ". hat the most knowledgeable witness
(
13 would be provided.
Do you recall that testimony?
14 A
Yes, I recall that being part of the hearings.
f I
15 Q
Was there any suggestion made D your presence that l 16 you are aware of that Dow should supply an unknowledgeable i
17 !
witness?
I i
la !
A Not in my presence, I don't recall.
l 1? l Q
How did you, learn or sucn a suggestion if you did?
l 20 i A
My recollection is that it came up in meetings of 21 I attorneys, and I was told about it by one of the Dow I
22 ;
attorneys.
l 23 I Q
Do you remember who?
l 24 l No, I can't really say.
It may have been more than *
.i Reporters, ire l
>+
25 I one.
We were surprised.
6r 064
$3 4
45 1
Q Did you take any steps to verify the suggestion?
2 A
Nope.
3 MR. OLMSTEAD:
Off the record a moment.
4 (Discussion off the record.)
5 BY MR. OLMSTEAD:
6:
Q The last paragraph --
7 A
I would like to read the letter.
8-I have read the letter.
9, O
In the last paragraph, Mr. Wessel says that it l
10 might be a good idea to ask Jack Friedman to draft some language 11 l assur_ g it is without prejudice to whatever rights we may t
t l
12 have to sue for breach or otherwise and including best l
(~ ^.
13 efforts.
i I
14 Do you know Jack Friedman?
I i
15 MR. CHARNOFF:
Off the record.
16 (Discussion off the record.)
17 l THE WITNESS:
Yes, barely.
I 18 l 3Y MR. OLMSTEAD:
n 19 Q
Who is he?
t I
20 MR. POTTER:
I would advise the witness not to i
21 answer the question on the grounds of attorney / client 22 l privilege.
l 23 i MR. OLMSTEAD:
Well, I think that answer is required-l L
24 {
since I can give you transcript reference to Mr. Wessel
- e-4 at Recor ers, Inc. '
25 )
identified him on the record.
I 4
'$'6]
I 1
4
.i
46 I
1 MR. FOTTER:
Then let's rely on Mr. Wessel's I
-~.
7 I
2 transcript.
3 MR. OLMSTEAD:
I am asking Mr. Nute if he knows 4
who he is.
I 1
5 THE WITNESS:
I am Mr. Temple.
6 MR. OLMSTEAD:
I mean Mr. Temple.
7 THE WITNESS:
If I --
8 MR. POTTER:
And he has answered the question, 9
yes.
10 MR. OLMSTEAD.
I am asking who is he.
11 MR. POTTER:
I have advised the witness not to 12 answer any further questions on the grounds of the attorney /
-m i
13 client privilege.
14 BY MR. OLMSTEAD:
t 15 Q
Was Mr. Friedman present at the Dow Corporate l
l 16 Review meeting with the Dow Company Board of Directors?
i 17 1 MR. POTTER:
The Dow USA Board.
l f
18 l THE WITNESS:
I believe he was.
19 '
BY E.
ODiSTEAD:
20 '
Q Did Mr. Wessel address some comments to the Dow h
21 Board to the best of your recollection?
l 22 '
A To the Dow USA Board?
l 23 l Q
Yes.
I 24 l A
He probably did.
si a. corms, ine. I 25 '
Q Did Mr. Friedman address scme ccmments to the I
ait k41g O'
})fb)
47 1
Dow USA Board?
2 A
I don't remember.
3 Q
At the meeting to discuss you testimony on 4
November 8, 1976, which was the meeting among attorneys, 5
do you recall a discussion cf coal costs at that meeting?
6 A
I recall the discussion of coal costs at one of 7'
those two meetings.
I'm not sure which one.
It could have 8
been bo th,
i 9
Q Had it been suggested to you by a Dow employee or 10 had it occurred to you personally that Consumers was inflating I
I I
11 I coal costs?
l 12 '
A Well, I would say it appeared strange that since la the coal costs that we use in making the economic study of 14 the alternative to nuclear power came from Consumers quite 15 i recently, as I recall that, late in September, we got word I
from Consumers that they had new coal costs to give us, and 16 l
I 17 '
they were considerably higher.
j I
18 '
As I recall, the main degree to which they were t
19,
higher was in the escalation area.
It seemed strange, and I 20 wouldn't preclude, as I recall, from my thinking that they 21,
jacked them up to make the nuclear alternative look better.
22 I have no basis for that other than my historical i
23 l relauionship with Consumers Power.
I 24 f Q
Do you recall Mr. Rosso indicating that he was not e.e al Recor ers. Inc.
2S "
happy with your attitude?
)
48 1
A He said I was a lousy witness for Consumers.
2 Q
Can you relate your impression of that moment?
3 Was it said jokingly, seriously?
4 A
I think it was more jokingly.
He meant it, but 5
I think it was -- that 's the way it is.
It reflected the 6j general feeling, I think, of all of the Consumers, most of 7
the Consumers, people that they wished they had somebody how 8
was basically more enthusiastic about the Dow/ Consumers 9
relationship than I was.
10 Q
At the later meeti ng on November 16, 1976, you i
11 !
met with attorneys Nute, Pribila, Duran, Rosso and Renfrow.
l 12 !
And I would like to ask your counsel to show you Mr. Wessel's n
(
13 memo to files dated November 16, 1976.
14 MR. POTTER:
What was the date again?
15 l THE WITNESS:
November 16.
16 MR. OLMSTEAD:
November 16.
l I
17 l Particularly, I wish to direct your attention --
i i
I 18,
THE WITNESS:
May I read it first?
19 {
I have read it.
20 l SY MR. OLMSTEAD:
21 Q
Do you recall Mr. Dave Rosso's concern cver your 22 volunteering responses suggestive of dissatisfaction with l
23 Consumers?
24 A
Yes.
- s.5 al Reporters, Inc. j t
25 Q
What was your response to that?
g[{d '
l 5b3
49 1
A Well, I felt I ought to answer the question com-2 plete, and I understood that volunteering lots of information 3i gratuitously was not one of the things that he felt the I
I 4
witness should be doing.
51 Q
Did you make any change in the way you anticipated l
6' you would answer questions as a result of that suggestion?
i I
l 7!
A I think the record shows that I was fairly rsponsive.
I 81 0
The meeting evidently concluded in a further dis-l 1
9I cussion of coal prices.
Do you recall any further discussion 10 of the Dow methodology subsequent to this meeting?
11 A
Not on methodology, I don't think.
I think we i
l 12 did agree to let the experts get toge ther.
We didn't agree
(
13 to use their coal costs.
14 We buy lots of coS1, too.
We thought we knew what i
I 15 we were doing.
l 16 Q
Even af ter the experts got together, you stayed j
l 1-7 with the lower figures?
l 18 '
A With the right figures, the figures which in our l
l 19 view were the right figures and the figures which Consumers 20 Power also agreed were the right figures thirdy days earlier.
a 21 l Q
So the meeting of experts to the best of your 22 i recollection didn' t result in the supplying of more recen:
l 23,
information by Consumers which resulted in a substantial change:
l 24 l in Dow's analysis of coal costs.
2,
..e n.oorwn. ine. +
i 25 A
I think the experts agreed to disagree.
And the l
i i
% g l
30J
50 1
f actor of disagreement was the degree to which coal prices i
2 would escalate in the forthcoming years.
l 3
MR. TOURTELLOTTE:
Excuse me.
The Court Reporter 4
has been taking these notes for a couple of hours.
Maybe this 5
would be a good time to take a break.
6 (Whereupon, a recess was taken.)
7 BY MR. OLMSTEAD:
S Q
Mr. Temple, you have asserted the attorney / client 9'
privilege with regard to questions concerning Mr. Jack Friedman.
I 10 i Do you arsert that you had any conversations which are pri-11 vileged with Mr. Friedman?
~
l r
12 !
A I really can't remember whether I did or I didn't.
(
13 Q
Do you assert that any infor=ation which was 14 '
privileged concerning Mr. Friedman's advice to the Dow 15 Chemical Company had been communicated to you at any time?
l I
16 MR. POTTER:
Would you read that question back please?
i 17 (The pending question was read by the reporter.)
I 18 MR. POTTER:
You are talking about Mr. Temple 19 personally now?
20,
Or in your presence.
I 21 MR. POTTER:
Do you understand the question?
22 THE WITNESS:
I don't really know whether I had i
23 any conversation with him.
I don't remember whether he spoke i
!l 24 at the U.
S. Area Board meeting or the Corporate Review a-at Rwornn. lm.
25 members reported.
1 h
o-u e
})N
51 I
1 BY MR. ORISTEAD:
2 Q
Do you remember any representations being made by l
l 3
anyone else to you concerning what his views might have been?
l 1
i A
I can't remember any.
l 4l l
I 5!
Q Have you discussed this matter with anyone besides j
i i
6 your attorney?
l i
7' A
What matter?
8 O
The testimony you are giving in this proceeding.
9 MR. POTTER:
Today's testimony?
10 BY MR. OLMSTEAD:
11 O
Yes.
12 A
No, I can't recall discussing it with anybody.
13 Q
Do you consider yourself to be represented by l
i 14 counsel today?
I 15 A
Mr. Potter, I think, represents me.
l t
16 Q
At the beginning of the deposition, I referred to i
17 l the five issues set down by the Licensing Board for hearing
\\
1 18 ;
in this matter.
And I would now like to ask you whether you 4
i 19 know to your own personal knowledge whether any of the 20 parties -- the parties being in this case Consumers Power and 1
21 ]
Dow Chemical Company, Intervencrs other than Dow, and the NRC
!l 22li Staf f -- whether any of those parties or their attorneys i
23 !
attempted to mislead the Licensing Board concerning the 1
24 '
preparation and presentation of your testimony.
- .-4
.i aeoen.n. ir.c. ;
25 l A
No.
i a
1 e
,bJ (D' \\
$ r.
52 1
Q That is, no, you didn't have any personal knowledge?
2 A
The answer to your question was no.
3 0
Do you know whether anyone in your opinion attempted 4
to mislead the Licensing Board concerning the preparation and 5
the presentation of your testimony?
6; A
I guess I don't know what was in the minds of all 7
of the other people that were involved.
s Q
So your answer is you have no opinion as to 9i whether --
10 A
I guess that's right.
I 11 Q
I have got one last matter I would like to go 12 over with you.
(
13 A
Okay.
14 0
I hand you a document that is typewritten and i
15 double spaced.
It has at the top, "Youngdahl, and I guess 16 that is JGT's side only 3/1/76.
And I ask you if you recognize:
17 the document.
18 !
A Yes.
s 19 Q
Can you identify it?
20 ;
A It is one side of a phone call which I made to 21 Youngdahl following a very frustrating meeting which I thought i
22 ;
was later in the year than that, i
6 23 l Q
Can you tell me what the curtose of tne anone call I
24 ;
was?
cz-at Recorters, Inc.
25 A
Mav I co throuch this a little bit?
b
(* ?
t su bJ w
i
53 l
1 Q
Sure.
i 2
MR. POTTER:
For the record, this appears to 7e a 3
13-page collation of papers which the witness is now reviewing.
i 1
4l MR. KAMARIN:
It appeares to be a transcription of i
l Si a tape of a one-sided telephone conversation.
I 6
THE WITNESS:
This was a phone call that I made to l
7 Youngdahl to express serious reservations about the way 8
negotiations were going with regard to coming up with a mean-9, ingful contract, and for the expressed purpose of commenting i
10 specifically on some of the things that the Dow negotiating 11 team perceived to be not going well at all and being in many 12 !
cases counterproductive to trying to resolve the issues in i
('
13 '
a meaningful way so both parties could get on with the job.
(
14 BY MR. OLMSTEAD:
1 15 0
And did you have any personalities in mind whe-I l
16 you made these remarks to Mr. Youngdahl?
l i
17 A
Yes.
a 18 !
Q Were you concerned about certain members of l
1 19,
Consumers negotiating team?
20 A
Yes.
21 Q
Who specifically?
22,
A Mr. Bacon.
23 Q
What was tne nature c: your concern?
24 A
Well, it was our impression that -- mine as well vJ M Recomrs, Inc.
I 25 as other members of cur negotiating team -- that Bacon was 363 c
54 i
1l not doing his homework adequately prior to the negotiating 2
sessions so that negotiations could proceed in a meaningful 3i way was one point.
4
,Q Was that the extent of your concern?
I said that was one point.
5
.s I
6; Q
What were sons of the other points?
l 7l A
Well, I raised the question with regard to who was 8
really chairman of Consumers negotiating team, Youngdahl or l
9 Bacon.
Bacon seemed to be more of a spokesman at times than 10 Rus did.
And the negotiating strategy seemed to be at that j
i i
11 l point in time for Consumers to bring up a lot of things on I
i 12 '
their side of the table so that they could bargain them over I'
r 13 at a later date.
i l
l 14 Judd seemed to be extremely inconsistent with i
I I
15 j regard to things which were in the contract.
And there were i
l 16,
three exam =les of this where a clause in the contract or some I
t i
17 words in the contract when reread in 1976 didn't seem to make
\\
18 ;
sense, but favored Consumers or, let's scy favored Dow.
Mr.
19 '
Bacon's approach was, well we will have to put some words 20 L in the contract to fix that.
a 21 l And at the very same meeting, at a later time, 22 when it came to our attention that there were some words in 23 the contract that favored Consumers as we looked at it in 24 !
today's light, Mr. Sacon's response was, "Well, that is what
- e k
. at Reportert, Inc.
25 the contract says," like we are not going to fix that cae.
1 I
i 365-034
55 1
And he really made me mad when he expressed an i
2 !
ability to tell me what the principles' in*.entions or the I,
3i parties' intentions were in 1974 when I never laid eyes on 4
Bacon until af ter the 1974 regetiations were completed and i
5 a contract was signed.
6 I assumed Judd was doing the legal work, but he i
7l didn't know what the hell I thought, and I thought I wc' one i
I ai of the parties.
t i
9j 0
So what were you hoping Mr. Youngdahl was going to 10 do?
11 A
Well, I was hoping he would at least counsel Judd 12 i to do his homework before the meeting.
I was hoping he would (m
t 13 at least asscme the role of leadership of his negotiating 14 team.
And I hoped that by conveying to him the perception of I
15 the Dew people who were trying to negotiate of Judd and his i
i l
16 actions that he could kind of get Judd to maybe change his i
1) style a little bit or take a more productive roll, the result l
i l
18 bcing that we night have a better chance to get at the issues i
19,
which were inportart.
20 Q
And what was his responsa, Mr. Youngdahl's 21 response?
22 l A
I don't know that I got a response frem him other i
23 '
than acknowledging that he had heard my ccmplaints.
I don't 24,
think -- I really think that is more like a May date.
co-.
.at Reporters, Inc.
25 q MR. POTTER:
For the record, in making that statement, I
+
9 i
t i
56 P
l 1
you have referred to the date that appeurs at the front c_
2 that transcript.
You think it may be incorrect?
3 THE WITNESS:
I think this was after the last inl 4l negotiating session we had prior to my June 30 letter where, 5j my view, everytning came apart here.
And I think this is the 6;
meeting.
7 3Y MR. OLMSTEAD-8 Q
Do you recognize the writing on the front?
9t A
Yes.
It is my writing.
i 10 MR. POTTER:
Excuse me.
In answer to that question, I
11 you pointed to the front page of the exhibit, on the right-l t
12 !
hand side; is that ct riect, Mr. Olmstead?
(^1 l
(
13 '
Mr. OLdSTEAE:
Which has the date.
An.d that date 14 is?
l 15 TEE WITNESS:
It says March 1.
j q
I 16 BY MR. OLMSTEAD:
l 17 Q
1976?
18 l A
1976.
And I think it could be checked for its l
i 19l accuracy by referring to me3 ting notes.
3 20 l Q
Is it your practice ~" have notes taken of your 21 side of the conference when you are on the telephone?
22 l A
I have never taped my side of any telephone con-i 23 ;
versation in my life excep-for this one.
And I wanted to I
24 i make sure that I knew what I had said and my team knew what e
af Reoarters, Inc.,
25 ;
I had said to Youngdahl about the way we felt about that I
l i
365 056 l
57 i
1 meeting, about Bacon, and about the totally new proposal ti.a t i
1 2
they brought up at that meeting with regard to steam casts 3
which their negotiating team had to recess for an hour to
/
4 even,get their own people to understand.
5 I felt the meeting was an absolute disaster.
6 And I think up here, it says that I felt we made much negative 7
progress.
8 Q
And it was --
9 A
And I think it is indicative of the general level 10 the trust had dropped to between me and Consumers Power and 11 particularly me and Rus Youngdahl.
12 Q
And it was as a result of this conversation and
[l i
's 13 that meeting that led to your June, 1976, letter that we 14 were referring to earlier?
15 A
That's my belief.
16 Q
One last document I wish to show you is a memorandum 17 from Joe Temple, dated March 12, 1976, to Levi.
I 18 {
Is that your writing?
I 19 !
A Yes.
20 f Q
Who is Levi?
l l
21 A
Levi at the time was my boss, and he was Operations j i
22 l Manager, I think Vice President of Operations, for Dow 1
23 l Chemical USA.
And he was
'no a member of the Dow USA e
1 24 Operating Board and a member of the Dow Chemical Company Board :
sI R morun, W.,
a-25 l of Directors.
He is my boss.
I 057 36c3
58 Would you identify him by his full name please?
1 Q
l 2
A J. M. L.
Leathers.
l l
l 3
Q Do you have negotiating meeting No. 2 notes?
4 Is that the second negotiating meeting in what 5
time period?
6' A
I guess the meeting that took place that caused me 7
to call Youngdahl.
And I assume that is the second meeting 8
we had in 1976, following up my letter of December, 1975, 9
suggesting that the teams come together and try to negotiate j
a responsible agreement.
10 11 O
You note in'there, as I reviewed with you, "Rus 12 l was very apologetic."
You had had previous discussions with
(
13 Mr. Leathers concerning that meeting?
(
14 A
Apparently, I did.
He was my boss.
I periodically 15 communicated to him about things that were going on.
16 Q
And you referenced a phone call to Rus.
Is that 17 the ore we were just discussing?
18 !
A Yes, it is.
9l Q
And these notes are datec March 12, and these are 1
l 20 ;
dated March 1.
Does that refresh your recollection as to the i
21 i timing of these notes?
l l
l 22 !
A I guess that must be the right date.
I 23 MR..CTTER:
In answering that question, you referred 24 ;
to the notes of the one-sided recorded phone call with Mr.
l at Reporters, Inc. l
- n-25 Youngdahl; is that correct?
I C ~D
$rb]
59 1
SY MR. OLMSTEAD:
s Q
And you indicate in that memo that Rus was very 2
ap 1 geti D es that refresh your recollection of his 3
I responses to your concerns as expressed in this phone convers-ation?
A Based on this note, I assume he was apologetic about the conduct of the meeting and admitted that Consumers 7
- ##Y
'*E" 8
Well, no.
It says, " Consumers Power Company was 9
i also ill prepared when our man went to Jackson a week or so 10 l
later to have them then explain to the Dow guy the proposal
,j l
that they had made to us at the negotiating session whch they 12 l
[
didn't understand at the time."
33 Q
And so even after your phone conversation, they j,
continued not to be responsive to your concerns; is that 15 i
correct?
16 A
Yes, that's right.
g 1
One final question on the September 29 meeting i
j9 be tween attorneys, 1976.
We have some rather extensive notes g,
-- the Duran notes, the Nute notes, the Wessel notes.
And 41 gl you were at a portion of that meeting; is that correct?
A I don't think so.
23 Q
You were not?
24 co-at Recorters, Inc.
A No.
2cl 6c 059 33 l
l
60 1
Q In conclusion, I would like to ask you whether to 2
your knowledge, there is any information other than what appears i
I 3
in your testimony in the remand proceeding and what we have 4
covered today which bears on the issues concerning preparation 5
of testimony that the Licensing Board is undertaking which I 6;
feel is needed to provide a more complete record with regard l
7l to the questions of misrepresentation or misleading testimony 8
before the NRC?
9 MR. POTTER:
Before the witness answers, I under-10 stand the tenor and reason why that question is being asked, 11 but to protect the witness, I want to put an objection on the 12 record.
You are asking this witness who is not a lawyer to 13 try and define what the scope of the issues were before the i
14 Nuclear Regulatory Licensing Board.
15 He will answer that question and as honestly as he 16 can, but I want you to understand he is not a lawyer.
17 MR. OLMSTEAD:
I accept it.
18 I THE WITNESS:
I don't know of anything, i
i l
19 '
MR. OLMSTEAD:
Off the reccrd.
l l
20 '
(Discussion off the record.)
l i,
21 l MR. OLMSTEAD:
Back on the reccrd.
l t
22 !
CROSS EXAMINATION 4
l l
23 l BY MR. CEARNCFF :
l 24 l Q
Mr. Temple, my name is Gerald Charnoff.
And I am
- s
. a.mmes, inc. j 25 of the law firm of Shaw, Pittman, Potts & Trowbridge in On0 c
J
$bJ
61 1
And we represent the Consumers Power Company in 2
this special proceeding.
3 Are you aware of any contacts between Consumers
/
4 Power. Company and Mr. Cherry during the period lollowing the 5
decision in the Aeschliman case?
That is the July, 1976, i
6 Court of Appeals Decision remanding the Midland case to the 7
NRC.
8 I'm sorry, between Dow and Cherry.
9 A
Yes.
10 Q
Would you tell me what those were and when they 11 were?
12 A
Well, I think there was a letter, and there may n
\\ '
13 have been some phone conversations.
14 Q
Do you know the date of the letter?
15 A
No, I don't remember.
16 Q
Do you have the time frame?
1 17 A
It was in that time frame that you talk about, I
i t
18 !
I think.
I 19 l C
Eas that letter been eroduced in this croceedinc?
i 20 il A
I don't know, l
21 l Q
Could I ask your lawyers, Mr. Nute, do you know 22 :
whether thar letter has been produced in this proceeding?
i 23 j MR. NUTE:
I am not sure what you are talking i
i 24 I about.
a4 si Reporters, Inc. I i
25 THE WITNESS:
He is not ny lawyer, i
j t
)
} [a s
i j
62 1
BY MR. CHARNOFF:
n 2
Q Was it a letter from Dow to Mr. Cherry or Mr.
3 Cherry to Dow?
4, A
I remember seeing one from Mr. Cherry to Dow or to I
I 5
Mr. Wessel.
I'm not sure who.
6 MR. CHARNOFF:
Do you know whether that letter i
7 has been produced, Mr. Nute?
8 MR. NUTE:
I don't know what letter you are talking 9
about.
10 MR. CEARNOFF.
The letter Mr. Temple referred to.
11 MR. POTTER:
Off the record a second.
I 12
' Discussion off the record. )
(
(
13 BY MR. CEARNOFF:
14 Q
Back on the record.
15 Mr. Temple, the letter that you recall, do you 16 recall what it dealt with?
17 A
I guess the only thing really that I can recall 18 was that he wanted to see me on that witness stand.
I 19 Q
Now, was there a reply from Dow to Mr. Cherry?
i i
20 ;
A I really don't know.
l 21 '
Q You also said there were sc=e telephone calls, f
22 Do you recall to whom they were made and by whom?
Were they l
23 '
made to Mr. Cherry or by Mr. Cherry?
.l i
24 l A
It is my recollection *. hat Wessel and Cherry talked '
.a-
. M Runen, Inc. !
25 ;l on the telephone.
I don't know whether it was once or more l
l 365 062 a-
63 1
than once.
2 Q
And you are referring to some Wessel/ Cherry phone 3
calls rather tnan Cherry to anybody else in Dow?
4 A
Yes.
5!
Q And you don' t know the nature of those phone 6
calls, do you?
7 A
No, I don't know the nature of those phone calls.
8l Q
There has been discussion in the record here of a 9
Dow Michigan position.
I take it that that reference is to 10 the position that was developed and reflected in your September 11 8 letter to Mr. Oreffice; is that correct?
12 !
A That's correct.
k-s 13 Q
Is that the only formal statement of a Dow 14 Michigan position?
15 A
To the best of my recollection, it is.
I 16 Q
Could you tell me how that Dow Michigan pc.. ion l
17 l was developed?
i l
i i
18 j A
I can try.
The period when Dow under my direction i
19 ;
started really diggine into all of the aspects of what the t
20 contract meant, what Dow's rights were, what we needed to do, i
21 what we felt the cros:ects were for Consumers building the 22 t plant at a certain budge number and ccming on line, started t
i 23 back in 1974.
So really, the evolution of all cf the basic 24 information that went into the knowledge that all of us as
- e4 al Reporters, Inc.
I 25 !
members of that negotiating team had with regard to the i
i 5 b' J
64 1
relationship and all the things we tried to accomplish was 2
the data base from which the conclusion stemmed.
3 As I indicated earlier, we had spent the early 4l part of 1976 trying to come to a renegotiated document which I
5 more reflected what we felt we could live with in the year 6
1976 instead of 1967 when the July 21 decision came.
Not 7
only didn't we feel we were getting very far towards a reso-8 lution of an agreed-upon new contract, but we were certainly 9
aware that we were going to be faced with the need to develop 10 a position for Dow which could be articulated by a Dow witness 11 who would undoubtedly be called to participate in these 12 hearings.
(
(
13 At least in Dow, and I would think anywhere else, 14 it would be expected by top management for the unit responsiblel 15 for the action to develop their position before top management 16 would attempt to develop theirs,
17 We were also aware, following and probably even i
l 18,
prior to the July 21 decision, that the cost estimate --
i i
l 19,
that there would be a new cost estimate for the Midland plants,!
20 !
but we weren't aware of what une specific nummers were or 1
21 at least Consumers hadn't come with one number.
r i
2' I don' t remember whether we had been told it could 7
i i
23 l be as high as 52 billion by the Censumers people and that 1
24 ;
that was 3echtel's estinate at the time or not.
i a..
at Reporters, Inc.
25 :I With the court decision on the 21st, it made to l
1 i
l 365 064l
65 1
us a considerable addition to the number of unknowns that 2
surrounded the entire project.
So as a team, we f aced the 3
need to determine what the tern's and, therefore, the Division's f
a posture would be when we were asked the question about the 5
changed circumstances between Dow and Consumers.
6 Certainly, the costs and the economics entered 7
into that decision.
By that time, we had gotten Black and 8
Veatch to give us the latest data on the conventional coal-9 fired power houses with extraction steam capabilities so that 10 we could assess the alternative.
11 We all had various experiences with Consumers 12 which generally each and in their own way, I think, gave them m
13 a fairly strong feeling that a future fu l of that many 14 unknowns would be very difficult for Consumers to cope with 15 based on the track record of the Midland project to date, t
16 experiences at Palisades, the cost overruns at Marysville 17 and various other things that Consumers had attempted to come i
I 18 [
to grips with and had not been terribly successful, not the i
19 least of which was our own tinancial condition and the fact i
1 20 '
that as scme of the financial nagazines rated the electric 21 '
utilities.
i i
22 l I can recall Consumers Power was between 115 i
23 0 and 120 cn a lisr of 120 electric utilities.
This is cenerallv 24 during the ' 74 ' 75 period when they ran out of money and 3-*
al R morun, Inc. '
r 25 couldn't continue the project.
Chb l
36f3 1.i
66 I
1 When the whole question of the handling of nuclear 2
waste came up, we couldn't help but feel that when that very 3
difficult and real issue was resolved th'at it would result in 4
some. increased cost in nuclear energy and steam which was 5
a factor we couldn't control.
I think each member of the 6
team interacted, did their homework, and we talked.
7 I reached the conclusion that although everybody 8
could have their own ideas, that it was only me as the 9
Chairman of the Team and the General Manager of the Division 10 who could sort them out and say, "Okay, from what all of you II have said, from what I believe, from what our c::perience l
i 12 '
is, from the way we see things now and in the future, this is n
k 13 what I think the Division's position should be."
14 And then we all interacted with regard to that.
15 It is my recollection that I really didn't 16 finalize this until after I came back from vacation and 17 had thought more on the subject.
Although I'm not sure that l
l 18 I hadn't pretty much in my own mind concluded what our i
i 19 l l
cosition was coing to be.
After I got back from vacation which:
l i
i 20 t was around Labor Day, I think, I crobably drafted that letter l
i 21 to Oreffice, had some further dis tssion with the negotiating 22 l team, probably 'draf ted she letter, circulated it to the 1
23 '
members of the Negotiating Team.
i 24 l We probably got toge ther, and evervbocv sort or
. Recon.n. inc. !
25 agreed that it is tough to come to that kind of a conclusion, 066 i
36c3 i
67 I
but that is ;; obably what it ought to be.
2 Q
Let's talk about some of these factors that were 3
present as you have indicated as early as 1974, particularly, I
r a
for example, the financial duress that Consumers Power Com-5!
pany was in during that 1974-1975 time frame.
And that wa.,
6 associated, too, wasn't it, with the two-year delay of the 7
plant at that point?
8 A
Yeah, they ran out of money and had to stop the 9
job.
10 Q
At that point, though, you didn't develop a Dow 11 Michigan position that suggested that the project was no 12 longer in the interests of the Dow Corporation or the Dow m(-
13 Michigan operations, did you?
(
14 A
That the cost was $940 million, and the advantage 15 in nuclear steam over the alternative was significant.
16 Q
But it was still apparent at that point --
17 A
I don' t th. i -- I may not be right on this, but I l
I 18 l don't think -- the cost astimate for the plant nad changed I
l i
19 !
from early 1973 when we signed that document until 1974 I
I I
20 when all this financia?. problem happened.
21 Towards the end of
'74, then, I think they began 22 to be able to give us some of the specifics which said l
i 23 initially it is going to be a one-year delay and this much 24 money.
And then I think they said later like in early
,c, ad
. al R eorwe s, Is l
i 25 that, no, it is going to be worse than that and longer than i
I I
i l
c
$6s
63 i
that, then it is going to be somewhere up at the 51.450 2
billion level.
3 So all that all evolved, I think, over '74
'75.
f 4
.O Is it fair to say that the principal fact that 5
galvanized the development of the position was then the July, 6
1976, Court of Appeals decision?
7 A
Well, it was one of the major factors.
But at the 8
same time, the ecst had gone up, the economic advantage had 9
gotten much less.
10 Q
Excuse me.
I am not talking about --
11 MR. POTTER:
I think he ought to be allowed to finish 12 the question, Jerry.
(G 1
13 BY MR. CEARNOFF:
14 Q
But I am not talking about the nature of the 15 decision.
I am talki.c about that which crystalli=ed the 16 decision or caused the decision to be made rather than the l
17 substance of it.
i 18 Do you understand what I am saying?
What brought 19,
you to develop a Dow Michigan position?
Was in the sudden l
20 l ccming together of all of these factors or was it as you I
I i
21 l indicated Dow thoughtas the remand order was understood by i
22 !
you, you would have to have a Dow position?
I I
23 i think that was a ma3or : actor.
n 24 Q
Okay.
And then, all these other concerns came a-k at Rworun, In 25 together and led to the nature of the recommendation or the
$65 Ob8
69 1
conclusion you arrived at in September; is that right?
That 2
is, your concerns were schedule, your concerns were costs, 3
that kind of thing.
4
.A Everything in my entire experience from 1973 5
on and the experiences of the ot.her members of the team came 6
into play to the best of our ability in reaching the con-7 clusion we reached.
8 Q
What I would like to focus on is the period follow-9 ing the date of the Court of Appeals decision in July.
10 Between that date and the September 13 meeting with Consumers, 11 I take it there were no meetings between your people and 12 Consumers.
(
13 How about between you and Consumers people?
s 14 A
I had no meeting, although two telephone convers-15 ations that I recall.
But I would add the ball was in their 16 court because we had made a proposal on June 30 and eleven 17 weeks later on September 13, we had never had any specific 18 response.
l t
I 19 ;
Q I understand.
I am not looking for fault here.
I 20 4 am just trying to understand the nature of the communications I
l i
i.
21 i that existed if at all during that period of time.
l 1
22 I During that period of time, then, between the Court !
23 l of Appeals decision and September 8, you went away en vacation; 24 l is that correct?
i as
.t Reorms. Inc. I l
l 25 A
Yes.
I 363 OD I
I
70 1
Q For what period of time was that?
Do you remember?
2 A
I would guess two weeks.
3 Q
I won't ask you where you went.
4
.A I remember that.
5 Q
Mr. Nute was away on vacation during a period of 6
that time, too, wasn't he?
Do you recall?
7 A
I don't recall.
8 Q
Again, then, focusing on the period following the 9
remand decision by the Court of Appeals and the draf ting of 10 your letter of September 8, you were gone for about two weeks.
11 Were there any other meetings of your negc ;iating group?
12 A
With their negotiating group?
q
\\
13
.Q No, just internal to Dow.
Did your group get 14 together?
15 A
Yes, lots of times prior to when I went on 16 vacation.
17
(
And you said you probably, when you drafted the 18 letter, drafted it and you probably circulated it to the 1
19 negotiating committee.
Do you recall whether you did?
t 20 A
I'm sure I did.
At least Mr. Nute saw the letter.
l
.r 21 And I would guess everybody saw the letter, i
t 22 MR. POTTER:
Excuse me.
Is this all before he went,
I 23 on vacation?
t I
1 24 !
MR. CEARNCFF:
No.
In between.
The letter wasn't j
a-+
.ral R eorun. IN.
i 25 ;
written until he came back from vacation.
I i
1
\\
l I
h l
i
71 1
MR. POTTER:
That is what I want to understand.
2 BY MR. CHARNOFF:
3 Q
So Mr. tIute saw the letter in draft before it 4
went.to Mr. Oreffice?
5 A
Yes.
To the best of my recollection.
6 Q
I understand the time problem that you have in 7
remembering those kinds of things.
8 Do you recall whether any other particular member 9
of the negotiating team saw it?
10 A
I can't recall.
11 Q
Do you recall whether you draf ted the first draf t --
12 A
Yes.
(
13 0
-- of the letter to oreffice?
14 A
I'm sure I did.
15 Q
Mr. Nute did not?
16 A
Mr. Nute did not.
17 O
What is the normal way in which the Dow Michigan 18 Division reached Dow Michigan positions on any major subject?
19 l What is the organizational way?
Is there a Dow Michigan Soard i
20 ;
like a Dow USA Board?
l 21 j A
No.
I had a staff of 14 or so people.
But I i
22 l would guess most -- for instance, in labcr negotiations, we i
23 '
had a negotiating comnittee.
That cc=mittee woulc formalize 24 l most of the decisions with my playing a role as advisor.
2-6 al Reorwn, lm I
l 25 Q
Are there any circumstances that you can recall, l
oI\\
l, 3bcJ l
72 Il 1
Mr. Temple, where the Dow Michigan position on any matter was 2
not also the Joe Temple position during your period as 3
General Manager?
4
.A Well, I am the boss, and I don't think a Michigan 5
Division position can be a Michigan Division position unless 6
I agree with it.
7 Q
So that clearly the Dow Michigan position of 8
September 8 was a Joe Temple personal position as well?
9 A
It was a position that I helped to form and that I 10 agreed with in its entirety.
11 Q
In the evolution of that position between July 12 and September 8, were there any studies conducted or papers 13 presented to you by members of the negotiating team that you 14 requested or that they volunteered to help cry ~stallize the 15 evolution of this position?
16 A
Well, I think I said that back from 1974 on, 17 work was being done to make sure we thoroughly understood 18 all aspects of everything that was going on.
And through 19 that period of time, there were I am sure a number of studies j
l 20 !
particularly on alternatives which were made.
And there was 21 an updated study on a Dow alterrative made, I would guess, 22 and completed scmetime during the period of first of June 1
23 until the middle of August, 24 I can't remember when it was completed.
It was co-.
al Recorters, Inc.
25 to use the Black and Veatch data.
bb.
')
73 j
Q You got a new cost estimate, I think you said, in 2
the course of a telephone call with Mr. Youngdahl on August 3
5 as I recall.
A That is correct.
4 5
Q Did your group at that point then review the 6
situation with regard to the economis --
A Yes.
7 f the plant?
Q 8
9 A
Yes.
10 Q
How was that review done?
11 A
That was done under the direction of Mr. Burroughs 12 who is a member of the committee who had been in this area b
with regards to the nuclear project for an extended period
[
13 ja of time.
He had historically done this.
15 Q
So you told him Mr. Youngdahl said, "Here is the 16 new number," and then he went off and did another study?
17 A
I would assume, although I don't know from first-18 hand knowledge, that he got more of the particulars from his 19,
counterpart who was Gil Keeley, and they exchanged infor-t 20 ma tion.
And Jim got all of the data that Consumers was willing 21 to give us.
22 And I think they were willing to give us all of 23 the data so we could make the comparison.
So it was not 24 just the single raw number of $1.67 billion.
- .4
.i n.mmn. inc.
25 Q
So they gave you all of the data leading up to
$r63 y '/
74 I
that number?
2 A
I didn' t say they gave us all the data on how they 3
derived it, but all the information we' needed with regard to 4
that number to determine the economics and our cost of steam 5
from the plant as they now saw it.
6 Q
Working from that number or the data that resulted 7
in that number of $1.6 billion?
8 A
I don't really know.
I think Jim had all he felt 9
he needed to reliably determine what our steam cost would be 10 from the plant coming on line in 1982 that would cost Sl.67 11 billion.
12 Q
Did he review with you between the August 5 com-13 munication of the new number and the development of your 14 letter of September 8 results of his studies?
15 A
I'm sure he did.
16 Q
Do you recall what he told you?
I'7 A
Well, I recall that the advantage for nuclear 18 steam under a certain set of conditions which he outlined 19 versus a Dow alternative of a conventional power was approxi-20 mately 4.3, I think it was, million dollars per year favorable 21 to the nuclear alternative.
22 Q
Over a 20-year period?
2a A
No, S4 million per year.
24 Q
S4 million per year over a 20-year period?
Is
=4 w neww m =.
25 that the approach or for how many years?
,I\\
t.
- u.!
)b3
75
~
1 A
I think we were using what they call a levelized 2
steam cost.
You get me into an area which I am not an expert 3
at.
/
4
.Q Did he at any time tell you that he challenged 5
the S1.6 billion estimate, plant cost estimate?
6 A
I don't remember.
7 Q
Did anyone else on the Dow negotiating team 8
challenge that number?
9 A
Not that I can remember.
10 Q
Now, when you wrote the letter to Mr. Oreffice, you 11 had apparently discussed the letter with him the previous 12 evening before putting the letter on Mr. Oreffice's desk.
(m' 13 A
I think that is correct.
(
s 14 Q
Do you recall any other discussions with Mr. Oref-15 fice between the July Court of Appeals decision and the tele-16 phone call or discussion, the oral discussion, on, say, the 17 evening of September 7 with regard to your Dow Michigan la position?
19 A
I don't recall.
20 Q
Did you seek in the letter of September 8 to 21 Mr. Oreffice to give him a letter which you could then use 22 to discuss with the Dow Chemical Board?
23 A
I suggested that he probably would want to let 24 the Scard of Directors know the way this things was going and 24 W Re m w g im.
25 the Division had reached a conclusion and that this letter
%b3
76 1
would outline that conclusion.
Q Did you seek to place in the letter all of the 2
reaspons that you had for developing the Dow Michigan Division 3
I recommendation?
A No, I don't think so.
Mr. Oreffice likes one-page 5
letters.
I had already abused that rule.
Q He told us he likes two pages, and I noticed 7
yours Was three.
A I still got promoted twice so he has got scme other 9
rules.
10 Q
Was it important for Mr. Oreffice and the Board
))
12 in y ur judgment in acting on your recommendation to know your j t
reasons for it or is it only important for them to know what
(
k 13 your recommendation is?
ja I
MR. POTTER:
Let me just object with the obvious l
15 reason you are calling for the state of mind of Mr. Oreffice 16 or somebody else, but he can answer the question.
j7 MR. CEARNOFF:
No, I wasn't.
I was asking his 18 state of mind.
Is it i=portant in his mind for them to know 39 i
I his reasons or just the bottom line?
20 i
THE WITNESS:
I think it is important that Mr.
,,1 4
l Oreffice understand at least as much as what I put in that
,2 letter whiCh I think was adequate for the reasCns Why I had 24 '
reached the conclusion that I reached, particular bearing in Aeoorters. Inc. !
co-at 25 '
mind that what I was really suggesting was that we were going i
}
l 365 076
77 i
l 1
to take at least two steps prior to considering where that j
2 was a Dow decision.
3 One was to hear Consumers again.
And the other i
i 4
was to have this corporate review.
I 5
The real recommendation was that he proceed to 6j communicate with the Directors of the company tne fact that i
7 we were approaching this kind of a decision in the Division 8
and for scme -- and giving him enough background so he could 9
give some of the reasons and to find out whether anybody on the 10 Board of Directors felt obligated to take exception to any-l 11 thing that we were doing at that point in time subject to a 12 corporate review.
n I
(
13 BY MR. CHARNOFF:
14 Q
So clearly, at that point when you wrote the letter l
15 and made the recommendation, you recognized you were not l
l 16 taking a Dow Chemical corporate position.
17 A
That's true, and I communicated that at the j
l 18 :
September 13 meeting to Consumers.
i i
19 l Q
And in fact, if you have a copy of your letter of i
I 20,
September 8 before you, I might ask you to look at the i
21,
next to the last paragraph on the third page which presumably i
22 i Mr. Creffice skimmed after he read the first two.
l 23 !
A No, he read it, I think.
24 The next to the last paragraph?
< ce -o cal Reporters, irc. i 25 f Q
Yes.
Q-l]
36ra l
78 1
A I have read it.
2 Q
That paragraph does reflect what we were just 3
talking about -- namely, your recognition that what you i
4 were recommending was not yet a Dow Chemical position?
5 A
Correct.
6 Q
And would it be fair to say your letter of 7
September 8 insofar as it reflects a Dow Michigan recommendation 8
is simply input into the development of the Dow Chemical 9
corporate position?
10 A
Yes; I think it is a significant input, but it is 11 an input.
12 Q
But nevertheless, just an input and not the Dow D.
t 1
13 position?
14 A
Not the Dow position.
15 Q
While you have that letter in front of you, may 16 I ask you to turn back to page 2 and please feel free to review:
l 17 l the whole lette*'
i
!d As I read the letter, the first page or so relfects l l
19 in addition to your statament of concern the kinds of contract l
20 changes you were looking for.
The second page refers to the i
21,
July 21, 1976, Cort of Appeals Remand Order and the kinds of i
22,
questions that may have to be examined following that order.
i i
23 l And then in the last full paragraph of that page, i
24 l there is in effect a short statement of reasons, if you will, m4 al Aeoorters, Inc.
25 '
for the Dow Michigan position, perhaps not a comprehensive i
s 56s 0 <> 8 t
79 1
list, but the key reasons.
2 T.s that a fair statement of that last, next to the 3
last, paragraph?
l 4
MR. POTTER:
Let me understand the question you l
5 are asking.
I don't want to characterize it, but the basic 6
reasons, you are saying, for the decision are contained in 7
the last full paragraph appearing on page 27 8
MR. CHARNOFF:
Yes.
I 9
MR. POTTER:
Okay.
l 10 THE WITNESS:
Well, there are some specifics which 11 are reasons in that paragraph.
12 BY MR. CHARNOFF:
g 4
13 Q
And then on the top of page 3, you talk about the 14 unknowns.
15 A
Right.
16 Q
And that is another reason, I take it, for your i
i 17 j j
decision?
l l
A The elements of today's situation plus the track 18 l 19 :
record of Consumers in handling difficult situations.
I t
4 20 j Q
And insofar as you presented any reasons to Mr.
l 4
21,
Oreffice. they really appear in that bottom of page 2 and 22 the top of page 3; is that correct?
i 23 i A
In this letter?
i l
f 24 I Q
In this letter.
i
.ce.
cal Rmorurs. im.
i 25 !
A If I may just read --
36c 0l9
~
80 1
Q Surely.
2 A
You asked me whether I had specific conversations 3
with Oreffice other than the one that took place the night 4
before?
5 0
Yes.
6, A
Which I think I recall I had.
7 Over the period of time from 1974 until September 8
8, 1976, I had lots of conversations with Mr. Oreffice.
9 Well, lots, quite a few.
I don't know how many.
And I think 10 he was quite aware of a number of the things that concerned 11 me.
And indeed, when Consumers wanted us to buy some of their i
12 -
preference stock or invest in their plant, Mr. Oreffice, I
( \\
13 think, was financial Vice President at the time, and became
\\
~
14 very much involved in those discussions.
15 So he himself has some background in direct dis-t 16 cussions with Consumers as well as conversations he had with i
17 me and others over about a 2-year period.
l l.
18 Q
Would it be a fair reading of this letter and given '
19 i your testimony to say while there was a long history of perhaps:
i i
20 l sometimes dif ficult negotiations and uncertainties that the
~
21 uncertainties were, if you will, compounded by the Court of 22 i Appeals decision?
i l
23 :
A Yes.
i 1
24 j Q
And that that was a critical facecr among othero sc.
_ eas ne m r m s,inc..
l' 25 j cerhaos, but a critical factor, in increasing your gcncern ~
s i
36(J i
81 1
as to whether the plant was advantageous to Dow?
2i A
Yes.
It sort of was almost like perhaps that is 3
the straw that will break the camel's back kind of thing.
4
'O Now, you then wrote the letter to Mr. Oreffice on 5
September 8, and Mr. Oreffice then, as I recall it, took the 6
matter up with the Dow Chemical Board, is that correct, on 7
the 8th or the 9th?
8 A
Whenever the Board met.
I think it was that same 9
week sometime.
I'm not a member of the Board of Directors, 10 and was not there.
11 Q
I understand.
12 And you got a report that the Dow 3oard agreed 13 with the recommendation here for a corporate review to be 14 undertaken?
15 A
Yes.
16 Q
And Eben did Mr. Oreffice ask you how this review 17 should be undertaken?
i 18 A
I think I had already said in here that I had some 1
19 ideas, and I was, speaking for both myself and the negotiating I
t i
20 j committee as to some of the questions that ought to be on the I
21 '
corporate review and that I would like to put them together i
22 i and give him that recommendation and see whether he has any i
23 !
difference or other ideas and then proceed from there, j
24 l Q
Then, you wrote your letter of September 15 to i
.c. *~.r.i..oon n. inc. i i
25,
Mr. Oreffice outlining the areas that should be looked into l
l 365 CBIl'
82 1
as far as you are concerned?
-~
2 A
Right.
Q And even the people who might best take up those 3
l f
4 matters?
5 A
Right.
6 Q
Nov, in your conversation with Mr. Oreffice on the 7
evening of September 7, did you just briefly describe to Mr.
8 Oreffice your recommendation?
5 Well, scratch that.
10 Had yott written this letter, this draft form, 11 at that point!
12 A
I'm sure I had.
l
[
\\
13 Q
And at that point, you had even cleared.it with 14 Mr. Nute?
That may be the wrong form.
15 A
I assume so.
l i
16 Q
You talked to Mr. Nute about it?
l 17 A
I accepted or rejected his advice by that time.
l 18 Q
Did you outline to Mr. Oreffice what the nature of 19 the letter contained?
20 A
I would guess so.
And I may have even read him 21 the draft.
i 22 l Q
What was his r: taction?
l l
23 i A
I can't -eally recall.
i 24 Q
Did he say, " Send me the letter'?
Recomn. ine. l ic..
r.:
25 l A
Well, I told him I was going to send him the i
365 082
83 1
letter and the purpose of it, and he didn't say, " Don't sent it 2
to me" or " Send it to me" or anything else to the best of my 3
ability to remember what went on then.
4
.Q Did he indicate an agreement with you that such 5
a review should be undertaken?
6 A
He was comfortable with what I had recommended.
7 Q
Did he indicate --
8 A
As near as I can tell hcw he felt, looking into 9
his mind.
10 Q
Did he indicate to you any view that he concurred 11 in your underlying thought that the project may not continue 12 to be advantageous for Dow Michigan?
,rm, s
13 A
I don't remember that I even asked him to' comment 14 on whether he agreed or disagreed with the Division's 15 conclusion.
16 Q
So the gist of the conversation was more directed j
at "look, I am sending you this letter with our recommendation 17 l I
I 18 j for corporate review, and you are going to get it tomorrow"?
19 !
A And I think in my view, yea may want to discuss it i
X with the Board of Directors.
l 21 Q
Okay.
So there was no discussion on the merits, l
t 22 if vou will, of the Dow Michigan position with Mr. Cref.? ice?
I 23 ;
A I don't rect.21 that much of the phone conversation i
24 or the discussion, c.-,
.rw a.oon.rs, inc.
25 [
C Then, che next day, Mr. Creffice received your 085 l
36ca i
84
,-s 1
'.etter and tcok it to the Board, and you were not at the Dow 2
Chemical Board meeting?
3 A
That's correct.
4
.Q Who reported back to you on the results of that 5
meeting?
6!
A I really can't remember.
I assume he told me "go 7
ahead."
I may have even said, "If I don't hear from you, we 8
are just going to mush on."
That's the way we do things in 9
Dow.
10 Q
Mush on?
11 A
In the absence of having to have a lot of extrane-12 ous communications, we try to proceed v.ith what we have e,
i
~
13 decided we w^re going to do subject to somebody concluding 14 we shouldn' t do that.
15 I really don't remember.
I 16 Q
Did you have any direct discussions with Mr. Oref-l 17 fi'c about the study bewteen the meeting of the Board on i
I i
la !
September 8 and 9 and your submittal to him of your letter i
I t
19 l of September 15?
i 20 A
I really don't remember.
I think before we final-21,
iced the letter, I probably either went over to see him or i
22 l had a phone ceraersation with whether he was comfortable with 23
- that was on it, whether he was comfcitabl ' with the people 24 l we had indicated ought to perform these various assignments ses. eat Recorters, Inc.
25 l and that sort of thing.
I C
004 3 6.)
85 1
MR. POTTER:
Excuse me.
I know it is clear for
~
2 us, but so the transcript is clear, you are referring now to 3
the letter of September 15, 1976, in your last answer?
4 THE WITNESS:
Yes.
5 BY MR. CHAMOFF :
6 Q
How was that letter developed?
Did you write it 7
yourself?
3 A
I wrote it myself.
I 9l O
Did you consult with Mr. Nute about that letter?
I 10 A
Yes, I'm sure I did.
I 11 l Q
Did you consult with the negotiating team about 12 that letter?
i
\\
13 A
I think we brainstormed as a team what items should 14 be in the corporate review.
15 Q
So you had a group meeting?
16 A
We may have had several.
17 Q
During whe period between September 8 and September i
18 15?
l A
19 l Or maybe even before September 8.
i 20 I Q
To what extent was Mr. Wessel involved in the l
21 development of the letter of September 15?
t I
A I can't really recall.
He may have been one of the ;
22 l i
23 l individuals that was carticicating in one of those.
Part l
24 of it may even have been his thought.
It is hard for me to c~
.r.i a.comrs. ine.
i 25 sort out who had whar thoughts as I look back three years.
I' I
0oC 0 3 C
36a
86 i
1 Q
You don't recall any meetings directly that you had ;
i 2
with Mr. Wessel alone or singly or with one or two other people i
3 in discussing that matter?
4
.A For that specific matter, I may have, but I can't 5
recall.
6 Q
To what extent was Mr. Wessel involved in the l
I 7
development of the September 8 letter?
8 A
I can't remember.
9, O
To what extent was he involved in the general l
1 10 !
desire to develop a corporate position that led up to the I
i 11 l September 8 letter?
I 12 ;
A Well, would you repeat the question?
s 13 0
To what extent was he involved in the decision to t
14 try to obtain a corporate position?
I 15 A
I just say he probably was involved.
I don't l
t 16,
remember the specifics.
l I
17 Q
War Mr. Friedman involved at these times?
i 18 A
Not that I know of.
19 Q
Incidentally, what law firm is he connected with?
20 Do you know?
t 21 i MR. POTTER:
Don' t answer the cuestion.
t 22 l We invoke the attorney / client privilege on that.
23 i MR. CHARNOFF:
He is a lawyer, isn ' t he?
24 MR. POTTER:
He is a lawyer.
i
,ce->
<ai a memn. inc. '
25 MR. CHARNOFF:
And your objection goes to the name i
GB6 k
36c3
87 1
cf the fira?
2j MR. POTTER:
Identifying it.
If nothing else, I 3
like consistency.
I i
I I
4 MR. CHARNOFF:
That is a virtue of some sort.
5!
What is Mr. Friedman's first name?
6!
THE WITNESS:
I think it is Jack, but I'm not even l
7' sure of that.
8 BY MR. CEARNOFF:
i I
9 0
I was just wondering whether privilege would be 10,
invoked on that ene.
I 11 Okay, now, we have explored the period between I
i 12 September 8 and September 15, and you said you might have I
13 had a discussion with Mr. Oreffice. about the outlines, 14 particularly about the people that you were suggesting for the 15 various tasks.
Is that correct?
16 A
That's correct.
t 17 O
Do you recall whether the assignments that you 18 were suggesting changed after your discussion, if any, with j
i 19 Mr. Oreffice?
i 20 :
MR. POTTER:
May I have that last question back?
21 ;
(The pending question was read by the reporter. )
i 22 l THE WITNESS:
I don't believe so.
23 !
3Y MR. CEARNOFF:
24 Q
Did you review with Mr. Oreffice the results of neouws. w. I
- 2. _,.i 25 the meeting of September 13 with Consumers Pcwer Cc=pany af ter i
l k
365 087
88 I
that meeting and before you gave him the letter of September 2
157 l
l 3
A I am sure that we had some kind of a conversation i
4 where I reviewed the lighlights of it.
Certainly, I told them l Sj we didn't learn anything new to cause us to change our I
6; position so we are going to the next step.
i I
I 7!
How much of what took place in that meeting I l
I 8!
communicated to him, I honestly can't remember.
9 Q
Then, you wrote this outline to Mr. Oreffice.
How I
l r
10 was the outline implemented?
Did he issue an oral or written 11 statement to you to get this thing going or to Mr. -- let's
( _
12 !
see, Klemparens, I guess was designated for the project
\\
13 leader for the review.
I 14 A
That's correct.
l I
15 Q
The team leader.
l 16 A
Right.
l i
17 l Q
That was your suggestion, as I see it on this l
l 18 piece of paper.
19 '
A Yes, but Oreffice also suggested that.
20 Q
Did he then call Mr. Klcmparens into a meeting and 21 discuss this study or did he ask ycu to talk to Mr. Klcmparens 22 or how was it communicated to Mr. Klcmoarens?
23 A
I'm gcing to have to do the best I can on this.
24 '
With regard to Klcmparens ' ability to spend the time to chair
. drat Reporters, Inc. l ce-.
25,
this thing, I had specifically talked to Mr. Morand who was h
89 I
i 1
his boss to let him know what I was contemplating and to see 2
if the needs of the U.
S. Marketing Department could accom-I, 3i modate our need to ask Al to do this job which might last a 4
month.
5!
When I discussed the outline with Paul, the recom-6 mendation was that he personally call everybody's boss and 7
tell them that he would like them to serve on this committee.
8 And I know he made seme calls.
I don't know whether he called 9
everybody.
10 And the recommendation.was to gather them up for 11 him to charge the group or for me and I think Mr. Nute to be f
12 l there to answer any questions, and then for us to disappear r^
l
(
13 '
and let the individuals pursue their tasks.
14 0
That is the area I want to get into.
Was there a 15 i meeting of this group where you and Mr
.ute briefed the group 16 on what the issues were and what he ought to be looking at 17 or was this appearance prior to a disappearance by you?
f 18 A
My recollection is there was a meeting where 19 Oref fice was there, and these individuals and Lee and I were i,
20 there.
Oreffice charged the grcup, and we probably gave them i
21 some of the background, told them what the Michigan Division 22 ;
conclusion was and answered questions.
i t
23 !
And that is about all I remember about our role.
24 ;
it may have been me, it may not even have been him, although sce-
.ral Reporters. Inc.
25 I think Mr. Nute was there.
Ob t
C 3 ba i
90 i
l li Q
Do you recall when that meeting took place, did 2
it take place promptly around the 15th of September?
l 3
A I would guess it took place very promptly.
4 0
I recognize it is three years since the meeting 5
took place, but I would like to know a little bit more about i
6 the nature of the briefing that you gave to this conmittee, 7;
the project review.
Could you tell me, did you make any a
written, any chart, presentations to them?
1 9
A I don ' t remember doing that.
10 Q
You said Mr. Nute may or may not have.
Was there 11 anybody else from your negotiating group there?
12 A
To the best of my knowledge, it was just Lee and
(,
13 I.
l 14 Q
It was a rather brief presentation, as you recall 15 it?
l l
16 A
What is brief?
Five minutes?
No, it was longer l
l 1
17 than that.
An hour?
I would guess it was less than that.
j r
la,
Q Did you go into the reasons for your concern that i
19 the project was no longer perhaps in :ne best interests of i
20 Dow Michigan?
21 '
A I can't remember.
22.
Q Do you remember whether the thrust of the review l
23 was simply to cutline the seven tasks rather than to go into 24 your reasons for the concern?
Ace-,
ea: Reoorters. Inc.,
25 A
I just would be guessing, but certainly that had I
91 I
to be and care of so that the people who got the task under-2 stood what was intended by the words in the letter.
3 Q
After that meeting, did you have any discussions l
4 with the members of the corporate review team prior to the 5!
meeting on September 27 when the corporate review team met 6
with the Dow USA Board?
i 7
A If I did, they were casual and/or to answer 8
questions.
9 0
Is it fair to say then that during that ten-day or 10 two-week period that you were not fully knowledgeable as to 11 how the corporate review group was proceeding?
12 A
My objective was to stay as far out of that as
,m
(
t 13 possible.
I think I generally achieved that.
14 Q
And as a result, you would be less knowledgeable i
i 15 about what that corporate review group was about than maybe l
16 members of the corporate review group would be; is that right? '
17 A
Yes, I think so.
i l
I 18 Q
And in particular, Mr. Klomparens who would be the 19 team leader; is that correct?
20 j A
Yes, I would say that is correct.
l 21 Q
So at that point, he would be more knowledgeable l
22 !
of the corporate review activity of where they were going than,
i 23 l you?
24 A
Yes.
.res Reporters, Inc. l
,ce, 25 l Q
Incidentally, why war Mr. Klomparens suggested as t
hi Il 36r]
- 091,
92 1
team leader?
.~
2 A
Well, in his background, he had been both in the 3!
business and the economic evaluation and the pricing side of
(
4 Dow's business.
And that probably is as much of a finite 1
5 reason that I can recall fer his selection.
And I can't even 6'
tell you who else was considered.
7 Q
Okay.
Now, just by the way, did you have con-a versations with any other member of the Dow Chemical Board 9
about your September 8 recommendation other than Mr. Oreffice 10 either before or after it?
11 MR. POTTER:
Could I just characterize it again?
12 You are talking about the USA Board?
A L
13 MR. CEARNOFF:
No, Dow Chemical Board.
I was 14 being very strict in my words.
15 THE WITNESS:
During what period?
16 BY MR. CEARNOFF:
i 17 Q
Lec's take it first in terms of pricr tr your l
l I
18 ;
development of or yo'2r submitting of the September 8 letter.
i i
1 i
19 l You had the conversation with Mr. Oreffice tne night before.
i i
20 Had you had any conversation with other members of the Dow l
21 Chemical Board?
r 22 ^
A Well, Mr. Whiting was a member of our negotiating 23 team and is also a member of the Board.
I 24 j Q
What was his role in tra company apart from being ree.
w nwomn. w.
i i
25 '
on the Board?
Did he have an executive role in the company?
i l
1 365 092;
93 I
j 1
A Well, Mac was, I think, General Manager of the 2
Division when we started all this.
And his responsibilities 3
were generally in the area of energy, but I don't really 4
know.
He has since retired from the Board.
l 5
MR. POTTER:
When you say "when we started all this,i" 6l does that refer to the initial signing of the contract for the 7
nuclear power?
8 THE WITNESS:
Way back in the mid sixties.
9 BY MR. CHARNOFF:
10 I O
What do you mean it is before your time?
l 11 l A
It didn't happen on my shift.
12 Q
Was Mr. Whiting involved as a member of the negot-s I
i 13 iating team in the discussions, well, in th,e review of your 14 ueptember 8 letter to Mr. Oreffice?
15 !
A Yes, but to a much lesser extent than any of the 16 other members of the team who were much more active at the llli time.
l l
18 l Q
Why was that' i
l t
l i
19 '
A Just because Mac was not a member of the Di vision, 20 we had not made him an active carticicant in all of the studies 21 that we had done, and we didn ' t need him that much.
22 Q
Would it be fair to say, then, that when you say i
23 l!
"the September 8 letter and Oow Michigan position resulted l
t e
24 from your discussions with and in effect was almost concurred rol Reporters, Inc. d CS-25 l in by the negotiating team," did that necessarily mean that i
z65 093
94 1
Mr. Whiting concurred or took any position with regard to your 2
September 8 letter or did he not participate really in that?
i 3'
A To the best of my knowledge, he knew the position that.we had reached in early September, and I think was I
4 t
5i generally in agreement with it as a Michigan Civision con-6 clusion.
7 Q
But not necessarily as a Dcw Chemical?
8 A
We never asked that question.
You know, I don't 9
know..
10 0
He didn't express anything?
Do you recall whether 11 i he orally articulated any agreement or concern with your I
12 letter or the development of the letter?
n t
i 13 A
None that I can recall other than that which I 14 would expect from Mac who was involved in the birth of this 15 thing and who was a very strong advocate, I think, of the I
16 concept of industrial use of by-product steam from utility 1
17 plants.
He was really a firm believer in that and I'm sure i
18 was very personally disappointed with the way things appeared I
19 to be evolving.
I 20 !
Q Even in September, 1976, he remained a firm believer 21 in that concept and hoped the project would continue?
22 '
A No, I said was disappointed in the f act that it was i
22 i coming en hard times in our view.
I believe in the concept; i
24 it is the implementation that bo thers me.
I think everybody
.fst Reporters, Inc. !
a-e 25 in Dow believes in the concept because Ocw has b
.n generating' t.
h'.1'1 1(
i e
30)
95 1
steam on that principle since the year 1900 or before.
2 O
You don' t know whether in September,
'76, Mr.
3l Whiting hoped the project would continue?
I 4
.A He may have.
I can't look into his mind and tell I
I I
5 what he thinks.
I tried to describe the circumstances as 6
best I can.
1 7
Q Any other Board member other than Mr. Whiting and g
Mr. Oreffice contacted by you in connection with the develop-9 ment of your Michigan recommendation?
10 A
Let me consult.
11 (The witness consulted with his attorney.)
12 May I have the question?
rx
(
13 (The pending question was read by the reporter.)
l t
i 14 Yes.
15 BY MR. CEARNOFF-i 16 Q
Who else?
I i
17 !
A Mr. Carl Gerstacker.
i la Q
When did you talk with him?
19 !
A Scmetime, I believe, in August prior to my going en vacation.
20,
i 21 '
Q At that point, you hadn't written your letter of i
22 September 8?
23 !
A I had nct written the letter, but I had a multitude 24 ;
of notes which were a collection of my various thoughts.
- s t
.at Reocrters, Inc.
25 Q
And the nature of your conversation with Mr.
365 095
96 t
l 1
Gerstacker was you were inclined to have a Dow Michigan 2l conclusion that it was not in the best interests for Dow l
i 3l Michigan to continue, and you were going to recommend a l
l 4
corporate review?
5 i A
No.
Haven' t gotten to the corporate review stage.
I i
6i My purposa in calling Mr. Gerstacker was because I respect 7
his mind and because in the very early stages, he had also l
been involved in the contract between Consumers and Dow.
And 8li l
9' I wanted somebody with his experience, brain power, keen way 10 of asking difficult questions, to hear me talk about my thought 11 processes, what I was thinking about, where I thought I was 12 ;
heading, and to have him either tell me where I was going I
(~
(
13 astray or tell me what he felt was right or wrong or very 14 right or partly wrong or what basic I 'nay have used that he i
15 didn't think made sense.
16 It was an effort to use the best one of the I
i i
17 best brains in the company to make sure that as we approached l
IJ j this thing, we did it in a responsible way.
i 19 Q
So did you talk to him about the way in which I
20 to approach it or did you talk to him about, for example, the 21 concerns that had been expressed at the bottom cf pr.ge 2 22 '
and top of page 3 of your letter to Mr. Oreffice of September 23 1 8 or both?
24 lN l
A We spent about as I recall, three hours together.
Acs-na: R eporten,1N. I 25 And I talked extensively about my concerns.
l!l I
O 365 096
97 1
Q Is that the concerns that were --
-s 2
A Muni beyond the concerns that are listed there.
3 Our concerns about the reliability of Cc:.3umers, which I 4
think I have talked about a lot, the Court of Appeals decision, 5
the knew higher costs, the feeling that we had that even l
6; af ter the plant was on line, we had a contract which required 7
us to buy quantities of steam at a price which was subject a
to the judgment of the Public Service Ccmmission.
9 I talked about everything that I could think of 10 that was in pages of terribly disorganized notes, but the 11 substance of ay trying to bring together all of the inputs 12 of all of the members of the committee and everybody else I
13 who had what I felt was a valid input that I should consider 14 as I approached leading the Division to some ;ind of a con-15 ;
clusion which at that time I thought g to be the girt l
16 !
of what ended up in the Oreffice lette2 l
I l
17 Q
Did Mr. Gerstacker bless the direction in which I
i 18 you were going or did he just raise some questions for you to l
19 '
consider or what did he say?
20 :
A He raised a great number of questions, but at the 21 end concluded that he would conclude as I have concluded, 22 given the same set of f acts and the same ki ="ory and the 23 !
same concerns that Dow has historically had about doing business 24 with public utilities, with other.<inds of f actors which he Acs-,
eral Reporters, Inc.
25 [
felt were incertant to croce me on.
a u
36(a 1
98 1
Q Incidentally, you briefly menticned a reference i
2 to the buying steam at rates that would be subject to the I
i i
3!
Public Service Commission.
What did you have in rind were i
4 your concerns?
5 A
Well, Public Service Commissions in Michigan, at 6
least are political appointees.
Major multinationals are not j l
7 tne favorite people in the world for political appointees to 8
do any f avors for.
Poor people generally are because they 9
vote.
10 And we felt that we just had an agreement which was 11 subject to continuous review by -- it happened to be at that 12 time three people who were politically appointed by one 13 Governor af ter another.
Therefore, we really didn't have a j
l 14 contract which gave us a great deal of peace of mind with l
15 regard to what we were really going to end up paying for 16 steam.
i 17 And that was a haunting on the part of our negot-18 l iating team, I would guess, from Mid-1974 on.
i I
19 I Q
Is it fair to say, Mr. Temple -- you described l
20,
yourself as the ' oss --
21 A
Of the Division.
22 ;
Q
-- of the Dow Michigan Division.
Would you 23 characrerize yourself as a pretty powerful sort of person in 24 your relationships with the people of whom you are the boss?
.cs.
,ral Reporters, Inc.
25 A
I think I am a very good boss for people who 365 09&
99 1
perform responsibly in thear Jobs.
And I think people find 2
it easy to interact with me.
I think I have outstanding i
3 personnel and people skills.
l 4
Q In the course of interacting with people, do you 5
find that your views are more of ten accepted than not by t
6 your subordinates' l
l 7
A Well, if they are the wrong views and are getti:.g 8
acceptance, I got the wrong subordinates.
l l
9l Q
Well, I appreciate that.
I think that is probably 10 a wise obrarvation.
But I am r.urious about whether as a 11 practical matter, in your day to-day relationships with 12 '
subordinates, good subordinates, do you find your views n
13 generally carry the day?
14 A
I wouldn't draw that conclusion.
i l
15 Q
Is the opposite conclusion one that you would draw, l 16 that your views generally do not carry the day?
I 17 A
No.
I think there is reasonable balance.
l i
18 !
O In the discussions that you had with the negotiating:
i 19 l team in the period of August and early September, was there i
20 any significant opposition or dissent or even significant 21 question raised by any member of the negotiating team towards 22 the direction you were going?
i 23 A
Don't forget, we got here ever a long period of i
24 l time.
c.,
.r.: nemners, inc. :
1 25 ;
O I understand.
I nOQ' l
36D! U//
100 1
A And if I intended something in the legal area to s
2 mean one thing and Mr. Nute concluded it didn ' t mean that, I i
3 would guess there was no case where he didn't express his 4i views as clearly and succinctly, positively, as he could.
l 5I In the technical area and economic area, with Mr.
1, 6l Burroughs, he frequently told me I was all wet and that I l
7+
didn't understand and that I needed to make sure that I l
I 8
walked through slowly.
i I
9l Q
In yar aggregating of all these separate specialist i
i i
10 views into a conclusion, did anybody express any concern or j
i I
11 regard whether they just enthusiastically embraced the idea 12 I of the Dow Michigan position, concluding that this was not in 13 the Dow Michigan interest to continue with the project?
14 A
Well, I think everybody felt the serious burden of I
15 responsibility in making that kind of a decision.
And with l
16 that given, and the fact that they all had, I think, plenty l
i 17 !
of opportunity to either support or not support the decision, I
i 18 l I don't think thera was any member of that team who was I
19 uncomfortable with that being the right decision for the i
20 Division at tnat time.
21 -
Q Could you tell me specifically who was on that d
22 ;
team at that time?
23 +
A Nute, Surroughs, I think Gaska, myself --
24 C
Who is Mr. Gaska?
How do you spell that?
ta-,
.,.i s ecorms. inc.
25 !
A G-a-s-k-a.
He had taken Parke Brown's place as O
1
- rQ 0
i 365
101 l
1, Manager of Basic Operations and probably had not had that 2
job and, therefore, had not been a member of the committee 3
for much more than a few months.
4 Q
So it is Nute, Burroughs, Gaska and yourself?
5l A
Right.
i 6
Q And Whiting?
7 A
And Whiting was on that committee, too.
8 Q
But I take it he wasn't involved as intimately 9
as the others were during this period of time?
I I
6 10 l A
That's correct.
11 Q
Incidentally, do you still have in your possession I
i 12 i the notes you used when you talked to Mr. Gerstacker?
(
t 13 A.
I don't have anything.
14 Q
Does Dow Chemical?
l t
15 A
I doubt if they were saved.
I doubt if anybody i
16 could have read them.
i 17 Q
Okay.
Give me Just a minute.
(
i r
18 l I just took a break to determine whether your 19 answer was comclete or do vou want to add something to that l
l 20 '
last set of answers as to whether the documents were available?'
21 A
No, it didn' t have anything to do with the docu-22 ments.
23 l MR. CEARNOFF:
Okay, can we :ake a break?
24 (Whereupon, a recess was taken.)
.runemrrersinc.;
25 4
\\,0 \\
9, e9 l
102 i
1 SY MR. CHARNOFF:
2 Q
Mr. Temple, during the period af ter the time that 3i you briefed the Dow USA review group and until September 27, 4
when.the review group reported to the Dow USA Board, you did 5
not know what their conclusions were; is that correct?
6 A
I think that's true.
7 Q
They didn't discuss their conclusions with you 8
before presenting it to the Dow USA Board, did they' I
i 9
A I don't believe so.
I i
10 i Excuse me.
Let me add.I was present at the meeting l
11 on September 24 when the Consumers people came up to talk about 12 the impact of the Dow Division decision if it became a Dow m
b 13 decision on Consumers Power.
14 Q
Right.
And Mr. Oreffice was there, and I take it i
15 some members of the Dow USA review group were there, too.
16 Mr. Klomparens, I believe, was there and Mr. Hanes.
I i
17 A
He was there.
I could refresh my memory.
i 18,
Mr. Nute was there; I was there.
I 19 l 4
Q But neither you or Mr. Nute were on the review 3
20 group?
21 A
True.
i 22 l Q
When did you first learn that you were to be a i
t 23 ;
witness in the proceeding?
I i
24,
A I had always assumed I was going to be the witness.
a.
are neconm, Inc..,
25 0 Regardless of if Dow was going to provide one, I had always
. g,'
\\
q 365
103 I
assumed I was going to be that witness.
So when everybody i
i 2
else agreed to that conclusion, I guess -- I really don't i
i 3
recall.
l 4
.Q Do you have Mr. Burroughs' notes of the September l
l 5!
13 meeting?
l 1
l 6l A
If he has them, I can get them.
I i
7 Q
Could I ask you to turn to page 3 of those notes 8
please?
9, A
I am there.
l l
l 10 I Q
And this is Mr. Burroughs ' notes of the Dow-f 11 Consumers nuclear project meeting of September 13 held in i
i 12 l Midland, Michigan, and you were present?
\\'
13 A
True.
14 Q
I guess the people present for Dow were the Dow 15 negotiating team, Surroughs, Gaska, Nute, Temple, and Whit-i 16 ing; is that correct?
17 A
True.
Is Q
If I could ask you to look at the third paragraph 1
19 i from the bottom of page 3 --
20 A
Yes, I see it, t
i 21 '
Q
-- of those netts, in that paragraph, there is a 22,
statement that Howell, Keeley and Sacon will carry the ball i
22 for Consumers in the hearings.
However, they expect Youngdahl!
24 l and Temple will have to answer the questions concerning a,
.am Recomn, Inc.,
25 i contract negotiations.
Consumers stressed that Temple would 7
3 f
\\bJ b b "3
104 l
1 an active participant in the hearings; that he would be on the ;
i 2
stand quite a bit, and that all correspondence relating to j
i 3l the contract negotiations would be subject to scrutinv.
l 4
I take it this was the first discussion between I
5l you and Consumers on the forthcoming hearings; is that correct?
i I
i 6
There weren't any prior to September 13, were there?
t I
i 7:
A I don't recall any.
l i
I 8
Q None that you participated in anyway; is that 4
l 9,
right?
i I
I 10 !
A In that period of time, certainly in between the 21 1
I 11 i Court decision and these things.
l 1
I 12 l Q
The July 21 Court decision?
('
13 I A
July 21 Court decision.
l I
14 Q
At this meeting, Mr. Burroughs noted it was Con-15 sumers who stressed Temple would be an active participant i
l 16 in the hearings so there was really no difference of view 17 j between what you said was your personal view that you assumed 13 :
you would be carticipant in the hearing and Consumers.
i 19 That is --
20 l A
These individuals.
21 gl Q
Did you have any misgivings on the 13th about being i
22 '
a witness?
23 '
A I hate to testify, but other than that, no.
24 l C
Why do you hate to testify?
.. srni newmri. inc.
25 '
A Because it takes a lot of time, a lot of preparation
$bJ
't 0' 4 r
105 I
1 for those hearings.
i 2!
Q Eut it was clear then these individuals for Con-1 I
I 3i sumers felt that you were going to be an active participant I
4 in the hearing?
I I
5i A
Yes, but they also felt Youngdahl was.
i 6
Q Now, as I understand the next paragraph, after 7
noting that everything Dow and Consumers have been discussing 8
will be aired in the hearings, there is an expression that it i
I 9'
was Consumers' opinion that Dow would be very much involved 10 in the hearings.
And then Dow commented they agreed and feel i
11 that Dow will have to clearly define its position with regard I
12 !
to the nuclear project.
%s that correct?
\\
D The second paragraph frem the bottom.
I 14 A
That's what that says.
l I
15 Q
Do you recall that discussion?
i 16 l A
I recall the point coming up several times during 17 l this meeting that we were going to have to furnish a witness l
18 who would have to testify to Dow's position.
19 !
Q And that Dow position had not yet been formulated?
20 '
A The Dow position had not yet been formulated.
21 Q
So there was no mistaking in your minds as of il 22 ll September 13 that the Dow Michigan position was somehow or 22' other the Ccw corporate position?
24,
A It was clear in my mind.
I drn't know what was in m.,
a.iamonen. w.,
i 25 everybody else's mind.
^05 G
\\
J
$6; i
106 l
I I
1 Q
It was clear in your mind?
l i
l 2
A That it was not.
l l
\\
3l 0
And did anyone at that =eeting disagree with that 4
proposition given the fact that Dow was stating it would have i
5 to develop a position?
6 A
I can't remember.
7 Q
Now, you said that you were long of the view that 3
you would have to be -- if drze were to be a Dow witness,-
l 9
it would have to be you at the hearings.
f i
10 A
If Dow was to have to provide Consumers with a j
11 l witness, then it would be me.
e i
12 Q
Likely you, perhaps others, but certainly you; is
\\
(
13 that correct?
14 A
That's correct.
i 15 Q
How did you arrive at that understanding?
i t
16 A
I didn't see how anybody else could possibly have l
i 17 the scope of understanding of our relationship with Con-18 sumers and the " changed circumstances" kind of an issue that i
19 '
I had.
20 i o
And yet, you weren' t involved direct.' y in the develop-t I
21 '
ment of the corporate position?
t 22 '
A That's true.
i 23 l C
Did you discuss that matter with either Consumers 24 lawyers or Dow lawyers?
,c.-
.rm A ooners inc.
i 25 A
Which matrer?
a f
r) 100 i
36
107 I
I l'
Q That you weren't involved directly in the develop-l 2l ment of the corporate position and perhaps someone else, too, i
3i should be a witness.
4!
.A Well, I can remember stating that if we got into 5
some technical areas or some special arear like the economics i
6!
or like safet" or any of these other aspects, that I felt we i
1 7l would need w!
1sses other than myself to testify to the 8!
specifics of any issue like that.
9 Q
That would be in detailed, specific aress?
10 You shook your head yes.
I 11 l A
Yes.
i 12 i Q
But again, those people would not be any more l
1
(
I
{
I 13 knowledgeable than you as to the development of the corporate j
l 14,
position?
15 A
That's correct.
i 16 Q
Did you discuss with anyone, Mr. Wessel, Mr. Nute, l
i 17 l Mr. Rosso, Mr. Renfrow, or any fellow officer or Dow, your I
18 view that there ought to be somebody to testify to the Dow i
19 corporate positicn other than you since you are not involved j
20 in --
21 '
A I recall no such conversation.
i 22 j Q
Now, what did you understand was to be the purpose 23 :
of your testimony?
You said you would be the, obviously the, 24,
Dow spokesman, but what did you understand the purpose of your CE *
.fal AfDOFTWrs, IrlC.
25 i testimony would be?
What did you expect it to address?
i 365 10,/
1
109 l
l 1
A Are we talking about the direct testimony or the i
2 cross examination aspect of testimony or everything?
3 0
Well, let's take it first in terms of direct and
/
4 then separatelv in terms of cross.
A Okay.
As I think we all know, the subject of what 5j 1
1 went in the direct testimony, what form it took, and all of 6
7 that, was decided between the attorneys with a minor involve-a ment on my part, short of making sure that what was said 9
in the final direct testimony was indeed true and complete i
answers to the questions which were asked.
f 10 I
l l
l' Now, going back, early on, I really didn't think j
I 11,
about the difference between what should be in a direct
(
i
(
13 1 testimony and what kinds of questions a Dow witness should be 14 prepared to answer.
i I
I 15 From the standpoint of what could, might be likely I
I 16 to, or wot ?.d take place on cross examination, it was my i
I I
17 l judgment there wasn't anybody else in Dow who would be as well l
18 preapred and as knowledgeable as I was to respond to questions l
19,
which might be asked.
20 l 0
When did you first become involved in the direct 21 j testimony?
i 22 l A
Well, I attended one pcrtion of one meeting between l
l 23 I the attorneys.
24 !
Q Do you recall which one that was?
cm.
.rst Reporwrs. Inc.
25 A
I nhink it was the September 29 meeting.
h i
O 365 108' 1
1
109 l
1 Q
I think you had testified to Mr. olmstead you weren't 2
at that meeting, the September 29 meeting.
f i
3 A
Then there was a misunderstanding of the question l
4 if I testified.
I think that is the date of the neeting.
I 5
was at one meeting with the attorneys.
Renfrow was there
{
i I
6 and Dow attorneys.
I think I said I was there.
I i
7 Q
Well, I think you said both this morning, and i
l 8
that's why I was curious as to whether that was the right date.i i
I 9:
A I apologize if I answered the question wrong.
I i
10 Q
No, that may be correct.
I think you said earlier j
11 in answer to a question of Mr. Olmstead -- I think he was 1
1 12 addressing the interrogatories that had your signature on
("T i.
13 them.
You said, well, if you signed it, then you had reviewed 14 it before you signed them.
And you would review it to make l
l 15 sure that is is accurate and complete.
j i
l 16 A
To the best of my knowledge.
i
- 7 l Q
To the best of your knowledge.
I 18 i That same statement of policy and approach would I
i 19 apply to testimony as well as to a signed set of interrogatories 20,
or signed letter or anything else, I take it; is that right?
21 '
A I would never sign anything that I didn't think was 1
22 !
truthful and honest and a complete answer to the questicn
!l 23 '
which was asked.
i 24 l Q
And that applies to your written testimony as well
. rat Reporters, Inc. ]
sce-25 j even though there was no signature on it by you; is that 365 109
110 I
right?
2 A
fes.
3 Q
Now, did you understand that your testimony was to 4
be in writing or did you understcnd it was to be oral at any 5
time in terms of direct testimony?
6 A
I guess it was my understanding during this period 7
of time when the lawyers were naving all their meetings that a
there was going to be a written testimony frem me.
9 Q
That was from the meetings beginning September 29; I
i 10 is that right?. Did you have any sense before that as to whether 11 you might be called upon to give some oral direct testimony?
12 A
I just assumed I would be on the witness chair.
p
\\
i 13 Q
You don't know whether it was for direct or cross; 14 is that right?
15 A
That 's the lawyers ' business how we do it.
I 1
16 assumed I was going to be the guy.
j i
17 Q
What did you understand was to be,.in addition la i to just giving truthful and accurate and complete answers to I,
19 j the questions, the purpose of your direct testimony?
t 20 >
A I am not sure I understand what you mean by "the 21 j purpose."
22 !
Q Well, you emphasized that you took special care 23 '
to make sure that your answers to r2:e questions were truthful 24 and complete to the questions asked; is that right?
Ace-
.ral Reoorters, Inc.1 25 A
Yes.
I do that on everything I sign.
l 365 i,'
i 111 1
Q Did you have any sense that the questions as answered 2
by you did not completely disclose the Dow corporata position?
3 A
No.
4;
.Q Did you have any sense that the questions as answered I
i 5
truthfully and completely by you omitted anything of signi-i l
6i ficance to someone trying to understand the cost / benefit of i
7l proceeding with the Midland plant?
I 3l A
No.
I don't believe so.
Because what was to be 9
done was to be done following the Dow corporate decision.
l 10,
O Did you discuss the completeness of the questions I
11 asked of you with either the Consumers attorneys or the 12 Dow Chemical attorneys?
l 13 A
I guess I would answer that in this way:
I was t
i 14 aware that conditions were very. delicate between both companies; 15 that although I was an employee of Dow, I was going to be a i
l 16 witness for Consumers.
I knew that it took a multitude of f
I i
17 !
meetings for the lawyers to determine what was the right l
l 18 form and content of the testimony.
19,
The lawyers who represented my interests were i
20 people I had a great deal of confidence and faith in, both in 21 their legal capabilities and in their moreals and ethics.
I 22 -
And when I saw the final product, I had no trouble concluding l
i 23.
that' it represented the important aspects of the Dow relation-i I
24 ship with the Consumers Power Ccmpany.
,ce-erai aeoorters, irie.
I 25 1 Q
And there was nothing.that occurred to you that was l
\\
ll 36J lI
112 I
1; left out that should have been placed in?
i I
l 2l A
Ch, during the course of it, I asked questions as i
l I
3 to why the Michigan Division's conclusion was or wasn't 4
relevant.
t 5l Q
And what were you told?
6i A
I was told that basically, the thing that is impor-I l
7-tant and the thing that will guide everything that Dow does 8
is the Dow corporate decision.
9 Q
Do you remember + No told you that?
Were these i
10 l your lawyers?
11 A
Among others, yes.
The Consumers outside law 12 l firm, I think, stressed the f act that the corporate decision f's 13 was the decision that was important.
l i
14 Q
And your lawyerr. agreed with that, too?
i 15 A
Yes.
It is my understanding that they agreed j
i 16 with that-i 17 O
Incidentally, did you see prior drafts of your i
i l
18 l testimony or you only saw the testimony ir.
s question and i
i 19 ;
answer form?
20,
A I saw other draf ts.
21 i Q
3efore the question and answer form was given to 22 l1 you for review?
23 A
Yeah.
24 l Q
So did you have any hand in reviewing those drafts
.ce-era 6 Reporters. Inc.
25,
or their development?
I
113
~
1 A
Well, I am a little confused with the process 2
which I was not playing a role in, but invol* red in.
I know l
3 I saw a draf t which was srbmitted by Mr. Bacon and I think it 4
was a proposal by him sometime in the course of these meetings 5
which had some things I didn't like.
6 Q
Like what?
7 A
Well, it called upon me to be familiar with Mr.
8 Howell's testimony, and I was noc interested in spending time 9
either reading or understanding his testimony.
10 It stipulated that one of the alternatives that II the division was looking at which was coal gasification had 12 been discarded which was not true.
(
13 It stipulated this coal gasification was not 14 energy efficient which I didn' t think was true.
15 It also ctipulated that Dow had gone through this 16 review process and now had concluded that the nuclear alter-l 17 native was the best alternative.
And in my view, it should 18 stiuplate that on the basis of the economic judgment, it 19 was the best alternative, but not necessarily on all bases.
i I
I 20 i G
Eecause of your concerns with reliability schedul-I 21 '
ing?
.l i
22 li A
Right.
And it also stipulated that in the review 1
I 23 l1 i!
process, I think we had conc _uded we could rely on Consumers l
24 !
Power Company to supply steam and energy.
And that really i
2-e amomn. inc ;
1 25 l blew my cocl because there is no way I would sign anything I
i 1\\b h
3bb-j i
114 1
I that said I felt I could rely on the Consumers Power Company 2
at that point in time.
3 Q
So it said too much or too many things you couldn't 4
agree with?
5 A
I don't know whether it was too long or it said 6
some things I didn't agree with than I would not sign.
7 Q
Were there any criticisms you had of the Bacon 8
testimony insof ar as -- the Bacon draf t -- it did not include 9
any material that you thought should be --
10 A
No, although it didn' t have anything in there with 11 regard to the Michigan Division's conclusion which again I 12 had become comfortable with the fact that the important thing p
(
13 was what the Dow Chemical Company had concluded it was going 14 to do, or I was becoming comfortable with that.
15 Q
Did you see the draf t of the testimony prepared 16 by Mr. Nute and Mr. Wessel which had your testimony set out 17 in the third person?
l i
I 18,
A I believe I saw one that Mr. Nute prepared.
I i
i l
MR. POTTER:
For the record, I referred the witness t
19 I
20 to Exhibit GG, which is a bound volume which purports to be 21 l the various drafts of the testimony that were prepared.
i 22 3Y MR. CEARNOFF:
i 23 i Q
My question was :
had you seen rhat draft either I
i I
24 !
da
" e course of its preparation or prior to the review of zu n.conen, ine. l a,
25 '
the question and answer form of the testimony?
l l
t' 1
365 114 !
115 l
1 A
I believe I had.
2 Q
Was there a reasonably complete statement of the Dow-3 Consumers relationship?
4 A
As far as I know, it must have been.
It must have 5
satisfied me or I would have put some suggested changes or 6
alterations or additions in it.
I can't remember.
7 Q
You don't remember suggesting to Mr. Nute or Mr.
3 Wessel that it be supplemented in any direction?
9 A
I don' t remember.
My whole attitude is when you 10 lawyers make up your mind where you are at, then come show 11 me what you determine.
And if I am comfortable with that in i
l 12 signing it, fine.
But in the meantime, I have got a Division
(
13 which has "i,500 employees, and I would like to spend a few 14 minutes a day running that Division.
l 15 Q
I think you are entitled to a few minutes a day 16 to run that kind of Division.
17 Incidentally, has Dow either here or at any of its 18 other plants installed any coal gasification units?
i i
19.
A We don't have a plant i: Coral Gables.
20 Q
I'm sorry, okay.
At anyplace in the United States.
21 '
A I believe we have installed some in Louisiana.
i i
22 ;
Certainly, we have installed prototype units, and I believe i
23 we have insta11ec or are in uhe process of installing one 24 or more ccmmercial units.
r.i meoorwes.ine.;
l 25 Q
Are those processes that have been daveloped by f
I i
3bJ
I 116 I
l 1
Il Dow?
i s
2 A
I don't know.
j 3
Q Could you determine at our next break whether those 1
4 units are prototypes or are actually in what you might call I!o 5"
ccmmercial operation or commercial units?
6l A
Well, I can probably call somebody.
o 7
Q Can I ask you to do that during our next break?
8 A
Yes.
9l Q
If in fact the question and answer form of testi-i i
10 'l mony that you delivered is substantively the same as the 11 third person form of testimony that Mr. Nute prepared --
12 Scratch that, o
13 I would like you to give him a copy of the testi-74, many available on the hearings in February.
MR. POTTER:
What page?
15 16l BY MR. CEARNOFF:
37:
O Page 2303.
At the bottom of that page, Mr. Temple, h,,
18 jj y u were asked certain questions about the Black and Veatch ali 79y data.
Could you tell me what that Black and Veatch report o
4 concerned itself with?
20'V d,
h A
I think it was a study which we referred to earlier 21:i i
which we asked them to do--to make sure we had the latest 22l1
,, [
technology for development the economics of the Dow alternative
.. q n
to nuclear rower.
24 h
- D E _fCi $8DCrte% inc. ',l t
Q and tn,at is what Mr. Burrouchs censidered when he 25,i 1
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c
$ 6c]
\\\\6 to
~
117 1
concluded that on a levelized basis, the nuclear unit would 2
still show a gain of about, cr an advantage of about, S4 3
million a year; is that correct?
4 A
I believe that is correct.
5 Q
Okay.
Now, Mr. Cherry asked whether that infor-6 mation -- that is, the Black and Veatch data -- found its way 7
into your testimony.
And you said you don't believe so.
Did 8
you consider in reviewing your testimony early in November 9
when it was being finalized with you that the Black and Veatch 10 data should have been included in your testimony?
11 A
No.
I don't know whether I even asked myself that 12 question.
-(s 13 Q
Is it true that the Black and 'Veatch study, since 14 it was an input into the Burroughs economic analyses and so 15 on, was in that sense considered in the development of the 16 Dow corporate position?
17 A
Yes, it certainly was.
18 Q
And lots o' ather data, presumably, w '
nsidered 19l in developing the Dow corporate position; isn't that correct?
20' A
I hope so.
21 Q
Other than the Black and Veatch data?
i 22 A
I hope so.
I believe so.
i 23 Q
And you didn't feel it necessary to put in all 24:
the details of that data in your testimony either?
,e cmo.nv j m
25 !
A No.
I 365 117
118 1
Q And even though the Black and Veatch data was not 2
identified or referenced in your testimony, nevertheless, 3
your testimony, your direct testimony, did set out completely 4
the Dow corporate position on the project, didn't it?
5 A
I believe that it did.
6 Q
And you believe that it did in November, too, 7
when you reviewed the draf t of the testimony with Mr. Nute 8
and Mr. Rosso or Mr. Renfrow?
9 A
I don't think I reviewed it with any of the Con-10 semers attorneys prior to the time that it had been finalized.
11 Q
When you reviewed it with Mr. Nute and Mr. Wessel, 12 you were of the view that was complete testimony insofar as
(
13 it was setting out the Dow corporate position?
14 A
That is correct.
15 Q
Now, did you in any sense feel that you were 16 restricted or restrained in developing your testimony?
17 A
In?
l 18j Q
In terms of what it should cover or should not i
19l cover.
20!
A You have got to consider the circumstances between 21l the two companies anc the amount of discussion that took place 1
22i with all the attorneys,
the fact that I had confidence in l
l 23!
the Dow attorneys w. o were involved in that process.
And out l
I 24' of all that came a tes timony.
'on soortmg Ceoany 25 Now, if somebody had said to me on the 15th of I
l 1
l
~~
,; 6 cJ
\\\\S
7...
~
119 1
September, go draft a written testimony for this hearing, 2
it probably would have had different things in it than what 3
had been --- than what appeared in the Dow or in my direct
/
4 testimony.
5 Q
If somebody had said that to you in September, 6
would you have turned around and said, "Tell me what you think 7
the purpose of my testimony is so I will know what I am 8
supposed to be considering and what I am not supposed to be 9
considering"?
10 A
I don't know.
I just sheerly speculated that if 11 lef t to my own druthers, it probably wouldn't have taken that 12 form because I am not a lawyer.
It wasn't an usual set of 13 circumstances between the two companies that existed.
14 Q
But even so, given.the processes between the two 15 companies or the sensitivity of the relationships between the 16 two companies, when you reviewed the document given to you 17 by Mr. Nure and Mr. Wessel to finalize it, did you have any 18 sense that you weren ' t free to prepare or to include in the 19l testimony anything that you thought was necessary to include 20l in it?
2 'l A
I did not have the feeling that I was precluded y
22!I from doing that.
I 23 Q
Okay, let me ask you to turn to eranscript page 24j 2305, the hcttom of that page, where Mr. Cherry asks you on om Oomoany 25 on line 11" "Had you been free in preparing your testimony 1
66;
'\\\\N-l C
i I
120 1
in order to place forward sufficient facts to understand in 2
detail the various options, et cetera, would your testimony 3'
have been different than the one that Consumers submitted on 4
your behalf?"
5 Do you see that pa. garph in the middle of the 6
page?
7 A
Yes.
8 Q
And then, after, apparently what happened rather 9
normally in that hearing, certain objections, you do answer 10 the question at the bottom of the page.
And you describe Il yourself as being open and candid.
And you say, "Yes, I 12 would say yes.
I think there probably would have been that
(-
13 kind of information included in the testimony. "
14 Do you see that?
15 A
Yes.
16 Q
Now, was that said in the context in which you 17 just told me before that had you been told in September to go 18 !
write a draf t of the testi.nony, you would have written some-l 19l thing that was different than what ultimately appeared or was l
20!
it said in the context of scme sense of restraint that you I
21 !
had that perhaps would be lifted under a different sense of i
22l direction, restraint, either given to you by Mr. Nute, Mr.
23 Wessel, Mr. Renfrow, anybody?
24 A
I guess it was more said in the sense that if 7 k W W OOOV 25 were to do it aithout instruction, I would have done it i
I 365 120 i
i
121 1
different.
Not with the idea that I was restrained from put-2 ting things in that final draft that I felt needed to be in 3
there to describe Dow's corporate position.
4 Q
Did it occur to you in the course of your review Sj of the Nute-Wessel draft of your testimony that relevant 6
information was not being included?
7 A
No.
8 Q
Again, then, looking at your statement at the 9
bottom of 2305 and recognizing that, of course, had you written 10 it, rather than the word " freedom," under the direction to 11 write your own testimony, you might have said things dif-12 ferently, is there any sense that you would have put in k
13 information that was relevant that was not included in the 14 testimony?
15 A
Under the actual conditions that prevailed, you 16 are talking about?
17 Q
Yes.
18 A
I was comfortable in what the testimony included 19; and the f act that it did not require to fulfill what I felt t
20l was telling the Dow corporate story more than what was in 21 there.
22-0 I think I heard that, but could I have that answer 23 l read back?
i 241 (The last answer was read by the reporter.)
.oone, cmw.v l e r.
25l If you recall being on the witness stand in 36a i
l l
122 1
- February,
'77, what, if anything, did you have in mind when 2
you said at the bottom of 2305 that there probably would have 3
been that kind of'information included in the testimony?
4 What does that kind of information refer to?
5 A
Well, given my nature of being open and candid, 6
I might have put more information in there which I don't know 7
whether would have been relevant or not relevant, but if 8
lef t to my druthers, I might have put some other things in 9
there just based on the nature of the individual that I am.
10 Q
So you didn't have any specific matter in mind at 11 that point that you were saying should have been in there or 12 would have been in there had you drafted it?
(
13 A
No.
l i
14 MR. POTTER:
I want to go on the record that in 15 the earlier session this morning, there was some reference 16 to disclosure of documents contained in a notebook.
And 17 since other counsel are sitting here listening while these 18 questions are going on, it probably would be worthwhile to l
191 go ahead and give them copies.
20f I want the record to show at this point in time, 21l we are turning over two documents that ware previously 1
22 I requested.
Specifically, a draft of the Ccmplaint prepared I
i 23 by Milton Wessel, a 13-page document which purports to be the i
24 l recording of Mr. Temple's side of a telephone conversarion
.-a wo.ev l e
25!
with Mr. Youngdahl, March 1, 1976, and then five documents
'I / l
") b' rJ
123 1
coming from a notebook containing seven documents, We are 2
turning over five at this time.
We are retaining the other 3
two because of problems I earlier described which relate to 4
material which is in my judgment irrelevant and immaterial to 5
this particular proceeding and which we may want to have the 6
Board rule on with the idea of expunging it before turning 7
over the other copies.
8 As I noted earlier, there is a question as to 9
whether we can get it out sufficiently so we can disclose 10 the document itself.
11 So we wish to reserve the other documents back.
12 Otherwise, we are turning over these.
(~ r i'
13 MR. OLMSTEAD:
Would you define the two you are 14 not turnin or?
15 MR. POTTER:
The first of the two documents which 16 are not being disclosed at this time is a letter dated 17 August 5, 1976, to Mr. Temple from Mr. Nute.
And the second 18!
document is a memorandum crecared -- it is dated August 27, i
19l 1976, to Mr. Temple from Mr. Nute.
i 201 And that, I think, is sufficient description at l
21 this point.
i i
22l MR. CEARNOFF:
Is this one set for me and one set l
23!
for Bill?
i l
24 MR. POTTER:
Let me see how many I have got here.
m ceo.nv l e~
25l I think there are plenty for everybody.
7 c
j
$bJ
\\
124 1
MR. OLMSTEAD:
If you don't mind, I would like to 2
ask a question about these documents.
3 My understand previously was that none of these 4
documents had been previously requested in this proceeding.
5 I thought somebody said this morning that the Board had rules i
6 on these.
7 MR. POTTER:
My understanding -- and I was not 8
involved in this case at that stage -- is that there were a 9
series of documents presented to the Board by the Dow Chemical 10 Company, and the Board was asked to rule on what the status 11 of those documents was.
12 I don't know whether it covers all seven documents n
13 in that notebook, but at the very least, the document which is 14 turned over to you, which is the August 19,
'76, cover letter 15 from Mr. Nute to Mr. Temple, attaching a memorandum of tele-16 phone conversation between Myron Cherry and R. W. Barker, a 17 counsel for the Dow Chemical Company, that specific docu-18 ment was certainly declared at that time to be privileged I
f 19l by the Board.
20i Now, which of the others of these were or were 21 not, I don't know.
I 22!
BY MR. CEARNCFF:
i 23 Q
You described yourself as a person whose nature 24 is one of being open and candid and attempting to tell all er
.oo.es s_o.nv 25f the information that you think might be relevant.
When you i9/t'l
,brJ l
125 1
reviewed your testimony with Mr. Nute and Mr. Wessel -- that 2
is the draf t question and answer form of testimony that became 3,
your direct testimony --
4 MR. POTTER:
The copy as filed with the Board.
5 BY MR. CHARNOFF:
6 Q
-- and the copy as filed with the Board, did you 7
feel that that testimony was consistent with your nature of 8
being open and candid and a person who attempts to tell all 9
the informacion that you think might be relevant?
10 A
Yes.
Il Q
Now, I appreciate the difficulties of being on a 12l witness stand, but I would like you to refer now to page 2,307 p
(
(.
13 Mr. Cherry asked you a rather long question on that page, 14 the gist cf which is, I think, that if you wanted to tell the 15 whole story, you don't want to limit it to certain questions,
16 given the surrounding circumstances as to what Dow knew and 171 what were important issues of the day, would you agree he 15; asked you, that the presentation of your testimony if the I
19l goal was to tell in cot.alete detail, reasonably complete detai_.,
20 everything that was going on at that point, without identi-21 fying what he meant by "everything that was going on," that i
22j your testimony as judged by that criterian was not open, not l
23 nones anc not consisting of all the relevant information?
I 24 And you answered in the af firmative.
on
.ww wo.~
25 Now, how could you answer that question in the 3'6Jr 2'b
~
l
126 t
1 affirmative in light of the f act that your direct testimony 2
which Mr. Nute and Mr. Wessel went over with you and which 3
was filed with the Board was consistent with your nature of 4
being open, candid and attempting to tell all the information 5
that Js relevant?
6 Was this just such a long, involved question or was 7
something else going on in your mind?
8 A
Well, it is partly that plus --
9 Q
Partly what, sir?
10 A
Obviously, it was a long, involved, complicated 11 question, one of many of which Mr. Cherry asked.
But he says 12 if the intention was to tell the whole story in complete
(
13 detail or almost. complete detail everything that was going on 14 at that point, if that was the objective, then was the testi-15 many open, honest and not consisting of all the relevant 16 information.
If that was the objective of the testimony, 17 then I would agree that my answer is correct.
18 I didn't think that was the objective of the 19 testimony because there was so much going on, it would be 20 impossible to put the whole complete story with all the detail 21; on everything that was going on at the time.
i 22 C
Before we get to what was the purpose of the 23 l testimony, is it really your view that even given Mr. Cherry's 24 criteria, is it your view that your testimony was not honest?
.-s como..,v 25 A
No.
And I think there was a previous line of
,2D
)bg I
s i
127 1
questioning where I stated that I answered the questions 2
completely and honestly, and he agreed with that.
3 Q
That's right.
4 A
It is the testimony somewhere.
5 Q
Then, he tried to move you in this question into 6
the area if you weren't limitaci to certain questions, was your 7
testimony not honest.
And you said, "Yes."
And is that really I8' your view?
9 A
Well, if the objective was to tell the whole story, 10 14 volumes worth, and it required doing all of that to make 11 a complete and honest story, then I stand by my answer.
And 12 tnat is my interpretation of what he was asking me.
13 Q
What, then, was your understanding of the purpose 14 of your testimony if it wasn't to tell the whole story in 15 all of its detail, whatever the word " story" means?
16 A
Well, to me, the whole story goes back at least, 17 for me, "our years from that point in time.
That wasn't the 18, purpose as I viewed it of my written testimony.
It was to l'
19f appear, to be crossed on whatever they wanted to cross examine 20; me on.
It seemed to me the purpose of my testimony --
21 Q
The direct testimony?
i 22 A
The direct testimony
-- was to have it cover all l
23i those things which are relevant to Dow's corporate position i
24!
with regard tc Consumers Power.
Dei s m Careceev 25j Q
And insofar as that objective is concerned, your i
i I
,e 5
l M$b; i
128 I
testimony was open, was honest, and did consist of all the 2
relevant information?
3 A
I believe that.
4 Q
Okay.
Incidentally, you said that you reviewed the 5
final draf t of your testimony with Mr. Nute and Mr. Wessel 6
and not with the Consumers attorneys as I recall.
Is that 7
correct?
8 A
I think what I said was I don't believe I reviewed 9j it with any Consumers attorneys.
I 10 Q
Under those circumstances, is it clear in your mind 11 that you had the final say as to what that testimony was 12 going to say or do you feel that you were obliged to let
(
r 13 someone else, perhaps from Consumers, have the final say on t
14 your testimony?
15 A
I think I said that anything that I sign or 16 represent as my testimony, 7 am going to have the final 17 say on.
18 Q
How about in terms of the scope of the testimony?
1 19l Was it your view that you were limited by the scope of the 20' questions asked perhaps only by Consumers attorneys?
Did you 21l feel limited in that?
Was there any constraint on you to be 22 sure there was an appropriate questien asked if necessary to i
23i be sure it was a candid, honest discussion of the Dow I
24 corporate position vis-a-vis the project?
x.
, - g c e o.nv 25 I have said a lot of words.
Let me phrase it 3 6a
\\ 28 r
i l
129 I
again.
Insofar as the scope of the direct testimony was concerned, did you feel that you were constrained by Consumers or Consumers lawyers having any final say over the questions that were asked of you?
A Well, I didn't know what went on in the meetings with all the attorneys.
I assume that since I was going to be Consumers witness that they would have a major say in what the cuestions were.
9 I
I also felt that my lawyers would make sure that
)) 1 they felt that the questions were both appropriate and were complete in covering the Dow corporate position.
And based p
on my understanding of all of that, I felt that I had not been
\\
consurained in putting something that I had a great urge to incorporate in my testimony before it went out.
O In other words, your lawyers worked with Consumers lawyers in assuring that the scope was complete enough to E
~"
^
18 oroject?
191 A
I don't know what they did in those rooms all that g
time, but they were all there.
Q Well, judging by the end product.
,2
- ^7
' " ^
23 !
Q Let ne ask you to turn to transcript page 2379 g
- se cmnq Crceev where the :..1rst question anc answer seems to suggest an g
log i
%S
130 1
understanding by you, perhaps not direct knowledge, but under-2 standing by you, that perhaps Consumers had some final say 3
as to the scope. of the testimony and ask whether --
4' I will let you read it.
5 A
Please.
The first half of that page?
6 Q
You might want to read the whole page, sir, and 7
even the answer on the next page.
8 A
Down to where Wessel comes in?
l 9
Q I think that would probably be enough.
10l Now, addressing yourself to that page or page and I
i 11 a half, Mr. Cherry asked you whether you recall your earlier 12 testimony which he characterizes as your belief that the p
13 scope of the testimony was to narrow in order to tell openly,
\\
14 candidly and honestly all of the relevant facts.
15 Do you see that question of his?
16 A
Yes.
17 Q
And you say, "Yes, sir, I do."
18 !
Ncw, are we to understand that characterizations 1
19 being accurate only if it is qualified as you just told me 20 1 before -- namely, that you had understood this question in 21 terms of if the standard had been or the objective had been 22l to tell all od the details of the negotiating history and i
23 1 relationship ce ween the two cc=panies -- obviously, your l
l 24 l testimony was not complete?
en
- c:ron 25 A
I think that is the part of the testimony he is
~.a 4
3bJ
131 I
referring back to.
2 O
The material we were just looking at at 2307, as 3
I recall?
4 A
Yes, correct.
5 Q
And it is in that sense that you recall it was 6
only not open, candid and honest, in that sense, in the sense 7
of it not being complete if the objective were to tell the 8
whole history rather than to present the relauive facts of the 9
Dow corporate relationship to the Consumers Midland project?
10, Is that right?
11 A
Yes.
12 0
okay.
m
(
13 And then, Mr. Cherry in this series of questions 14 on this page says, "Well, in that sense, was the scope defined 15 by Consumers having the final say as to what the scope should 16 be?"
17 And you said, "Yes, that is my understanding."
18l And yet, I think you also testified to me it is i
i 19l your view your lawyers worked with their lawyers to achieve 1
20l a reasonably complete set of questions and answers that did i
21f fully tell the Dow corporate position; isn't that true?
I 22l A
Yes, that's right.
But I think as I understcod l
23l i_, the thrust of the Dow attorneys was that I was a witness 24l being provided by Dow, but I was Consumers witness, and they
.- wo.% i,
=
25' were presenting me.
So from a layman's point of view, if
,\\
~
,c
\\3r 3bJ 1
I I
i
I 132 1
they were presenting me and I was their witness, they would 2
have the major role in structuring the testimony.
3 But at the same time, I didn't think my attorneys 4
would settle for som^ thing which was less than what was 5
appropriate in light of the objective of the testimony which 6
was to tell the relevant facts about the Dow corporate 7
position.
8 Q
So what you had in mind in your answer which is 9
set out on line 13 of page 2379 is the format in which you -
10 were going to appear -- namely, as a Consumers witness, 11 presented by Consumers, answering Consumers attorneys' 12 cuestions -- and you dia not have in mind that you and your
(
13 people were going to be limited in any way in telling the 14 full Dow corporate position in the Midland project?
15 A
That's correct.
16 Q
Incidentally, even on reflection, and you did 17 prepare yourself for this deposition by rereading some of 18 these transcripts, did you?
19 A
Yes, I did.
I 20 Q
Even on reflection now, is it still your view i
21 that your direct testimony fully told the Dow corporate j
2 22l cosition vis-a-vis the Midlanc nuclear croject?
23{
A Yes.
And 2y cross examination certainly elaborated i
1 24!
upon it.
ieocreng Comcenv !
be 25 Q
No, but I am talking about in terms of had we
-n l
I 363
133 1
just reviewed your direct written testimony, that did actually 2
accurately, honestly, disclose the Dow corporate position?
3 A
True.
4 1 Q
Now, in the middle of transcript page 2382, there 5
is a question and answer beginning on line 9 through line 15 l
6 1 that I would appreciate if you would look at.
7 A
Shall I stop before you get into the elec tricity 8
part?
9 Q
Yes.
I am most concerned with lines 9-15.
10 And the re, as I understand the question, you were 11 asked whether prior to your coming on the stand you were 12 l told thit Dow reprecentative has made it clear to consumers 13 thi.t the scope of the testimony as set out by Consumers did
(
l 14" not reflect all of the underlying f acts concerning the Dow 15 corporate position.
16 And you answered, "I think that is true. "
17, What specific communication did you have in mind i
18l there?
i 191 A
I can't recall, I,
20j Q
Do you know whether Dow-lawyers or you wanted l
21j more facts concerning the Dow corporate position disclosed 22 than was contained in your direct testimony?
i 23 MR. PCTTER:
May I ask something just a minute?
24, Let's take a mirute.
I would like to have the witness read One A Ccmoeny j 25 page 2381-82 to see if that assists him in answering the
's ) )
C i
H 3b3 a
134 1
question in any way.
2 THE WITNESS:
As I read this now, it appears that 3
I wasn't terribly certain about this area of questioning 4
three years ago.
I am certainly no more clear on it now.
5 The reference to getting to the question and 6
answer form, I recall being something our people felt we 7
wanted to go to to make it abundantly clear that while telling S
what we felt were the relevant facts, we were not tr' ring to 9
tell everything that might be viewed as being required if we 10 were going to go back and tell the whole story in complete or 11 almost complete detail of what was going on during the period 12 of time that we were involved.,
13 BY MR. CHARNOFF:
14 Q
But there was no area of information that you 15 thought needed telling in order to be complete and honest 16 that was not included in your testimony, was there?
17 MR. POTTER:
Of the Dow corporate position?
18 BY MR. CHARNCFF:
i l
19l Q
Of the Dow corporate position.
I 20l A
That is still true.
21 !
Q And you don't recall any specific area or item i
22 of information or history or anything else that you or your 23 lawvers wanted included that any Consumers lawyers arged be l
24j excluded?
oor96q Ocmoanv i me l
25; MR. PCTTER:
Cn the Dow cor orate cosition?
b i3t L
I
])b J
135 1
BY MR. CHARNOFF:
2 Q
On the Dow corporate position.
3 A
I know of none.
4 Q
You left Dow Michigan to your new position, I 5
take it -- Marketing was it?
6 A
Yes.
7 0
-- in December,
'76, officially; is that correct?
8 A
The announcement was made on the day, the first 9
day of the hearings in November 30 or whenever we started.
10 Q
Eow long did you retain your position as General 11 Manager of Dow Michigan?
12 A
I moved out early January, but I retained all
(
13 responsibility for the Consumers Power-Dow relationship up 14 through the hearings in February.
15 Q
Do you know whether Dow and Consumers have sub-16 sequently completed their negotiations on their contract and 17l now Dow continues to be interested in obtaining steam and I
i 18 i electricity from the plant?
19 A
I understand that there is a new contract which 20 has been negotiated between the parties.
21 i Q
So that the new contract as it ultimately developed I
22 was consistent with the Dow corporate position taken in i
23; September, 1976, and it continued to be interested in the i
24' project and wanted steam output for Dow purposes?
I kne rm Comoany j 25!
A Well, I am totally uninvolved from a totally i
l i
136 1
uninvolved point of view.
I would agree with that repre-2 sentation of what that means.
3 Q
Does totally uninvolved mean you don' t know the 4
details of the new contract?
5 A
I only know there is one.
6 O
Okay, we are at a breaking place in terms of my 7
questioning.
And my own belief is I probably have no more 8
than another hour at most, but we could break for lunch.
9 (Whereupon, at 1:10 p.m.,
the deposition was 10 recessed for lunch, to reconvene immediately after lunch.)
11 12 13 14 15 16 17 18i 19l l
l 20i l
21 22l t
23:
1 24j
,mmm a--,i m
25' l
1 365 136
137 1
AFTERNOON SESSION 2
1:35 p.m.
3 Whereupon, 4
JOSEPH G.
TEMPLE 5
was recalled as a witness and, having been previously sworn, i
6 was examined and testified further as follows:
7 CROSS EXAMINATION (Continued.)
8 BY MR. CEARNOFF:
9 Q
We are back on the record.
I 10 Mr. Temple, when you reviewed Mr. Bacon's draft 11 testimony which you said had a number of things in it which 12 you didn't care to state and you also wondered why the draft 13 testimony had not included any discussion of the Dow Michigan 14 Division position, which you subsequently resolved talking 15 with your lawyers and the Consumers lawyers, do you remember 16 seeing attached to Mr. Bacon's draft of testimony an outline 17 of about six or seven paragraphs to which Mr Bacon attached 18 as an addendum to draft testimony which did discuss the 19!
Dow Michigan Division position, although he said that was not i
i 20!
currently planned as part of direct testimony?
21 A
I don't recall seeing that.
And really, in part 22 '
of restoring my recollection was to look at that testimony I
i 23-again as par of the documents I reviewed.
And what I looked 24 at, I don't think had that on.
on
. m s c.ev 25 So mest of my recollection is a refreshed recolleccSon l
138 I
having looked at it.
2 Q
Let me just show it to you and see if it now looks 3
familiar to you.
4 I will first show you the outline of testimony as 5
submitted.
This is Exhibit EE which was shown to you, I think, 6,
before by your counsel as the draf t of testimony, and then an 7
outline of detail of last review conducted -- namely, the 8
Michigan position, although not currently planned as part of 9
direct testimony.
10l Do you remember seeing that along with the Bacon 11 draft of testimony?
1.2 A
I may have seen that, but what I did was try to
('
{
13 go -- I can't recall what I saw when I reacted initially to 14 it.
And this is what I went through, this stuff here.
15 Q
Okay.
I think, referring to the September 24 16 meeting, you said Mr. Aymond made it clear that he wanted 17 Dow to tell the truth about its position; is that correct?
18 A
That's correct.
19l Q
At a meeting, Mr. Aymond did refer to the possibil.:.y 20l of a lawsuit between Consumers or initiated by Consumers i
I 21 against Dow; isn't that correct?
I 22:
A That's correct.
I 23j Q
But did he threaten the lawsuit in any way to ask l
24; Dcw to lie or to adopt a false position?
o,,
wo., ;
25 MR. POTTER:
Before you answer, let me object.
)b(
/
i 139 1
There is no way Mr. Temple could say what the state of mind 2
was of Mr. Aymond at the time he made the statement.
Subject 3
to that objection, go ahead and answer.
4 BY MR. CHARNOFF:
5 Q
Let me ask it another way.
Did you understand the 6
threat of a lawsuit to be a threat?
7 A
A threat of a lawsuit?
Yes.
8 Q
And did you understand the threat to be that Dow 9
ought to lie tc avoid a lawsuit?
10 A
No.
11 Q
Did ycu understand the threat to be that Dow ought 12 to adopt a f alse position at the hearing in order to avoid 13 a lawsuit?
14 A
I didn't think so.
We wouldn't have done it any-15 way.
16 Q
I understand that.
17l l
Did anyone at that September 24 meeting for Con-18 sumers ask Dow to either lie or to adopt a false position?
19l A
No, not to my recollection.
I 20 Q
Did you get such a request at any other time in 21 any encounter with Consemers?
l 22' MR. PCTTER:
You are talking about Mr. Temple
~
i 23l personally now?
24 l, MR. CHARNCFF:
Yes.
scorwgOcmcan<l cre 25!
-ur WITNESS:
No, I did not.
,-1 b b(]
I I
140 I
3Y MR. CHAPliOFF:
2 O
When you were told of the statement as reported 3
in Mr. Nute's notes that Mr. Falahee said something about Dow 4
and Consumers having a heck oi a lawsuit or heck of a legal 5
problem at the September 21 meeting which you were not at, 6
did anyone in telling you about that tell you that the amounted i
7 to a threat to compel Dow to either lie or adopt a false 8
position?
9l A
I don't recall anybody telling me that.
I 10 Q
The Dow Michigan position was not accepted by the 11 Dow as a result of the Dow corporate review; isn't that
~
12 true?
(
13 A
Well, a position did not become the Dow Chemical i
14 Company's position.
15 Q
The Dow Chemical position as it was articulated 16 to you did not say that it agreed with all the facts that you 17 presented and the conclusions you drew were that because of 18 the lawsuit, Dow Chemical is not agreeing with the Dow 19l Michigan position?
t 20i A
That was not articulated te. me.
i 21 C
Sy anyone in the Dow USA Board group?
22l A
That's true.
To the best of mv knowledc.e.
23.
Q And after you got that message fr:m en high, you 24!
didn't co back and ask hcw come, fellows?
.m emo.nv j x.
25l A
No, I didn't want to know.
4 1' 3
{ fiiV p-l
.)
J t
141 1
Q So that there is no way of your telling us the 2
Dow corporate position was in any way in substance the same 3I as the Dow Michigan position, but for the lawsuit?
4 MR. POTTER:
Of his own personal knowledge.
5 MR. CHARNOFF:
Mr. Temple's own personal knowledge.
6 THE WITNESS:
Ask the question again please.
7 BY MR. CHARNOFF:
8, Q
Based on your personal knowledge, you have no way I
9 of testifying whether or not the Dow corporate position was 10 in substance the same as the Dow Michigan Division position, 11 but for the lawsuit?
12 A
I think that's correct.
(
13 Q
What is correct is that you couldn't mak2 that 14 statement, is that what you meant by that statement?
15 MR. POTTER:
Of his own personal knowledge.
16 THE WITNESS:
Of my own personal knowledge, that is 17 correct.
18 BY MR. CHARNOFF:
191 Q
I ask your attorney to provide you with a copy of l
20l Midland Intervenors Exhibit 24 which is a letter from you et 1
21!
Mr. Leathers, dated June 30, 1976.
t 22l Do you have a copy of that?
l 23' MR. POTTER:
I think you better show him yours, i
j i
24' Jerry.
I don't see mine.
n
,ma wo.,
25 THE WITNESS:
I have read it.
1 I
4 4
i l
I < R.
i li 1 so
142 1
BY MR. CHAPSOFF:
2 Q
With reference to that exhibit, Mr. Temple, there 3!
is a statement in there that something is attached which you 4!
say is a critical step in our negotiation strategy.
Do you 5
know what it was that was attached?
6 A
Yes.
It is my June 30 letter to Mr. Youngdahl.
7 Q
That was the letter, then, that was discussed with 8
Mr. Olmstead this morning?
9 A
Yes.
10 Q
And that was the letter which I understand set 11 forth a new set of conditions or proposals by Dow and certain 12 requests that had been withdrawn by Dow as I recall?
b 13 A
That's correct.
14 0
You said in here, in your note to Mr. Leathers, 15 copies, I take it, basically to the negotiating team plus 16 Mr. Oreffice, that --
17 A
Plus Mr. Hanes.
18 l Q
Plus Mr. Hanes, too.
I'm sorry.
-- that their I
19 reaction.-- namely, Consumers reaction -- to it, the June 20 30 letter to Mr. Youngdahl, was unpredictable, and you 21 unders= red unpredictable.
22 Why did you underscore unpredictable?
23l A
I underscore lots of things in lots of letters.
I 24l To me, their response to many of the things that en-toorms Mcany 'j 25l we had.crocosed was unc.redictable.
I i
i e
\\
143 1
Q Did you have the impression you were asking for or 2
presenting a rather strong bargaining position in the letter 3
and, therefore, you would anticipate that perhaps Consumers 4
would not accept it?
Is that what that means?
5 A
No, I don't think so.
There was nothing in that 6
letter in any of those items as I recall them that we hadn't 7
discussed at length with Consumers in the past.
8.
However, as I recall, this was the first attempt I
9l to get the negotiations back on track af ter a diastrous 10 negotiating session that we had earlier on which I referred 11 to this morning when we talked about my telephone conversation 12 with Russ Youngdahl and the views I expressed of Mr. Bacon's
(
role in the negotiating team and so forth.
13 14 Q
You said in learning a lot about dealing with these 15 guys -- your language -- maybe it is just Consumers Power 16 Company, but maybe a lot of it is common to public utilities.
17 What did you have in mind by that?
I 18:
A Well, the whole history of constant changes and l
19l nonreliability and unpredictability.
i 20 k Q
Did this reflect your general preference for Cow 21l controlling its own sources of supply, not being subject to i
22 Public Utility Commissions and various other forces to which i
23:
utilities mav be subject that a corporation such as Cow may 1
24, not be subject to?
Is that what you had in mind there?
I 2n.
i m C e cany i
2.j A
That may have been a part of it, but it was the 365 1 ",' 3
l 144 I
whole, in my view, sore history we had had of unfulfilled 2
promise and missed dates and cost escalations.
3!
O Why would you translate that into perhaps it is 4
applicable to all public utilities?
Would it be that there 5
was something in the character of regulated public utilities 6
that might have compelled other utilities to be in the same 7
position that Consumers found itself in during this sore 8
period as you call it?
9 A
Well, at the time, there was consideration by the 10 Texas Division to a project which would be point with Houston 11 Power and Light.
12 Q
And ybu were concerned that another public utility
(.
13 might have the same sort of difficulties with carrying out 14 its projects -- for example, financing equally dependent by 15 a utility upon actions by Public Utility Commissions tho, 16 as you indicated, are political appointees and have certain 17 affirmaties in that regard?
18 A
Not particularly limited.
Totally unlimited, but 19 only the fact that the Michigan Division since the mid-sixties i
l 20 jl was now going into the late seventies, had been involved in i
21l what essentially was a partnership realtionship, not legally, l
22:
but from the standpoint of both being involved in the same i
23i thing.
24!
It seemed to me that as a stockholder and as a i
n 25; responsible manager of a major division, other locations 365 14 4
143 1
who would contemplate getting into very close relationships 2
on very big projects with an electric utility should at least l
3 hear what our experiences had been and how we viewed them
/
4 prior to signing on the dotted line and proceeding.
5, O
Was this your first experience in entering into 6
a commercial arrangement with a regulated public utility, 7
you personally?
8 A
I think so.
9 Q
This memorandum that you sent to the negotiating 10 committee and to Mr. Oreffice and Mr. Hanes and the attachment 11 to it, did you also send it to Mr. Wessel?
It is not listed 12 here as such.
I was wondering.
(
13 A
I don't remember.
14 0
Do you know whether it was sent to Mr. Friedman?
15 A
I do ub t it, but I don't remember.
16 Q
You said that at the September 24 meeting that 17 Mr. Aymond's statement with regard to the possibility of a 18 lawsuit that Mr. Aymond came on awfully strong, was your l
19l language.
Was he very heated and excited when he said that i
20l or in talking about S600 million lawsuit, that is an awfully I
21l strong proposition in and of itself?
i 22!
A I don't think he was heated and excited.
To me, i
i 23!
it was part of the scenario of the General Counsel, and then i
24 i the Chairman of the Board coming up,.and he was obviously w
,. m c r e.,
25 well prepared to go through all these various cases and made i
14' (J t
$bJ
146 1
it very clear that if he felt that we were at all at fault 2'
in any way, shape or form, if they lost the license, that 3
they would take whatever avenues they could find in order 4
to 2 cover full damages or whatever they could from the Dow
'emical Company.
i 6 I Q
When you said he came on awfully strong, you 7
simply understood when that kind of statement is made by the 8i Chairman of the Board of the company, he wasn't kidding; I
9 is that what you are saying?
You take this seriously?
10 A
I take it seriously, 11 Q
At some point this morning, in answering a question 12 from Mr. Olmstead, you talked about Mr. Wessel's position.
I 13 And you said his position was to keep the contract in effect, 14 but to keep options open.
Do you remember saying that?
15 A
His position with regard to the Consumers-Dow 16 relationship?
17 Q
Yes.
18 !
A Yes.
19, Q
When Mr. Wessel's position was to keep options 20l open, what did that mean to you?
21 A
Well, with a history of things changing w
- k
= ' air d
22 degree of regularity, that day, we had concluded that 23,!
conditions had not changed sufficiently to alter our position l
24l frcm being one of continuing to regard the contract as in cro.ev l m.
25; effect, but tomorrow if something happened or the next day i
.1 d b
,3. 6ra
' o i
147 1
if something happened, we would relook at the entire matter, 2
something of some consequence.
3 Q
Switching just briefly to two more matters with 4
regard to the coal costs, you said that Consumers thirty or 5
more days af ter the prior meeting suggested to you that 6
escalation rates that ought to be used ought to be higher than 7
what you had talked about with them a month or so earlier in 8l 1976.
Is that right?
l I
9>
A What they had provided, I think, in writing to I
10' Burroughs within about a thirty-day period of that time.
11 Q
Now, you were surprised that Ley came back with 12 that figure or those figures so soon af ter that other meeting; b
13 is that right?
14 A
Nothing surprised me, but, yes, it seemed strange 15 is a better way to put it.
16 Q
I guess you are unflapable at this point, 17 Just turning for a moment to page transcript 2293, 18 l if you have that 19!
A What day is that?
The second?
i 20l Q
February 1, 1977.
I 2ii A
2390?
22:
Q 2293.
23; And I am referring to the answer that appears on
(
24; lines 15 through the bottem of the page, and particularly e
,wnma conum 25 l the first paragraph, 13-19.
i 365 147 1
148 1
A May I read it?
I 2
Q Surely.
3 A
Okay.
4 Q
Now, it is our understanding the paragraph I 5
referred you to on 2293, you did say in the hearing in Feb-6 ruary, 1977, that when Consumers and your people had agreed 7
tentatively or otherwise on some of the data to be used, 8
Consumers did confirm that your values were appropriate, but 9
also added that they were relooking into the coal situation; 10 is that right?
11 A
That's what that says there.
12 Q
And those are your words?
13 A
Those are my words.
14 Q
So the fact that they came back within a month 15 or so thereaf ter is almost a natural consequence of the fact 16 they were looking at something and told you they were 17 looking at it and what they came back with were the results 18j of their relcok; is that right?
i i
19!
A That's what they came back with.
20l MR. POTTER:
I don't see how he can testifv I
21 about --
l 22j MR. CHARNCFF:
Well, we are dealing with the 23 witness' surprise that they came back.
24l MR. PCTTER:
Let's get this straight, though.
m wo.~ j
- ~
25j You are asking him to say what it is that Censumers came back A
E i
36b*
t4o
149 1
.:Ath.
He has testified to the fact they came back, out wnat 2
their motivation was and what they came back with, he can't 3
testify.
4 BY MR. CHARNOFF:
i l
5l Q
Let's deal with this.
You were on notice they 1
6 were looking into the coal price studies.
They did and 7
talked with you and agreed with you as to the reasonableness 8
of their numbers.
9 A
That's what that says.
And I assume that I was 10 more aware of it then than I am now.
And I wouldn't dispute 11 that.
12 Q
Now, do you recall or have any personal knowledge,
(
13 Mr. Temple, as to what v.c kappening with escalation rates 14 for various fuels -- coal, oil, gas, uranium -- during the 15 period
'75,
'76,
'77?
16 A
I am sure that they were going up.
17 Q
At more rapid rates than historically had been the 18l case?
l 19i A
I can't comment on that.
I 20!
Q Do you recall any concern with regard to coal 21, prices in 1976 as to whether coal producers and maybe coal 22l bayers were concerned with new stripmine legislation that the 23 Congress was then censidering?
I i
24l A
I am sure that is a fact.
Whether I considered
'oemnq 0.omosev j n.
25l those things at the time, I can't recall.
i 365 149 I
150 li Q
Do you remember any concern at that time with 2
regard to the potential for a large coal strike earily in 3
1977?
i 1
4 A
No t particularly.
5, Q
Would you agree that there necessarily is a great I
6!
deal of uncertainty with regard to projecting escalation rates 7
for fuel n the period of
'75,
'76,'77?
8 A
I would agree thrt geculating on the future is 9;
always full of uncertainties.
10 Q
And possibly reasonable people at that very time 11 could disagree as to what future escalation rates would be?
12 A
I would agree with that as well.
A 13 Q
After Consumers people advised you of the higher 14 escalation rates that they urged that you use and your people 15 reviewed it and determined to maintain the escalation rates 16 that you were using at the time, was there any discussion as to 17 the basis upon which Consumers arrived at these higher esca-18 lation rates?
i 19l A
I have no knowledge of that.
What I recall taking 20:
place is that the people from Dcw who were also buying coal
}
21, who I think were buying coal in the ground as well as coal 22!
for us, were told that there was a difference.
And I think 23; at the meetings, at least as I recall, we said we would set 24l up a meeting so that the Consumers experts and the Dew experts
-S
.o-c.~ j 25i could get together and exchange the rationale and the reasons 36cJ l0 v
t l
151 i
1 and whatever they needed to know about one another's projection 2-to be knowledgeable about the basis.
3 Q
Did such a meeting take place?
4 A
I think it did.
5 Q
You were not there?
6' A
I was not there.
7 Q
Do you know whether Mr. Burroughs was there or 8l would he have been one of the principal Dow representatives 9
or was there some other Dow person knowledgeable?
i 10 A
He is not the coal expert.
He may have been there; 11 I have no recollection.
12 0
Who is the Dow expert on coal pricing?
I 13 A
I don't remember who it was at the time.
14 Q
Are you f amiliar with that memorandum, a memorandum 15 transmitted to you from Mr. Nute, dated August 19, 1976, 16 attaching a memorandum of a telephone call that a Mr. R.
W.
17 Barker of the Dow Legal Staff had with a gentlemaned named 18l Myron Cherry?
19 MR. PCTTER:
Let me correct the characterization.
20!
It was a telephone call Mr. Cherry had with Mr. Barker.
I 21i So we don't leave the impression Mr. Barker called Mr.
4 22!
Cherry, it is the other way around.
i 23:
MR. CHARNCFF:
I accept that.
24 MR. PCTTER:
But I don't want it to lock on the w&
25l record the telephone call originated at Dow.
It did not.
It j
r3 3 6 b-
'J i
152 I
came into Dow from Mr. Cherry.
2 SY MR. CHARNOFF:
3!
Q Do you recall seeing this memrandum from Mr. Nute?
l 4l A
If it was addressed to me, I probably saw it.
l 5
Q Do you recall having any concern with regard to 6
what might be characterized as threats against Dow by Mr.
7 Cherry?
8 A
Without refreshing my memory, none whatsoever.
9 Q
Would you like to take a moment just to skim 10 through that memorandum and see if it does refresh your 11 recollection?
12 A
You mean do the whole thing here?
m
(
13 Q
As much as you need to refresh your recollection?
14 Are you finished?
15 ;
A Yes, I have read it.
1 16 Q
Does th&t opportunity to read the memorandum of 17 Mr. Barker of this telephone call with Mr. Cherry which was 18 initiated by Mr. Cherry on August 19 refresh your recollection i
l 19l of having seen that memorundum at the time?
i 20:
A I don't really remember whether I saw it or not.
21, Q
Do you ra= amber any discussion of the threats 22:
against Dow that were contained in this memorandum?
23:
A No.
I remember that there was a conversation l
24 between Barker and Cherry.
That's about the extent to ors accr*mg OOmoany 25 ;
which I recall short of reading this again 'as an event that 1 R 2-l 36rJ is i
153 1
took place sometime in that time period.
2 Q
I don't have arv further questions.
And I thank 3
you.
l 4
BY MR. POTTER:
5 O
Mr. Temple, at any time prior to the remand 6
decision or decision to remad the case from the U.
S.
Court 7
of Appeals for the District of Columbia in July of 1976, at 81 any time prior to that while you were General Manager of the 9
Michigan Division, did you at any time yourself communicate 10 any threat to the Consumers Power Company to the ef fect that 11 the Dow Chemical Company either was, a, planning to sue, b, 12 was going to sue, or was contemplating suing Consumers Power b
13 Company?
14 A
I don't recall that.
15 Q
Do you recall ever your alf making such a statement 16 to anybefy from Consumers Power Company in the period af ter 17 the remand decision in July, 1976?
i 18i MR. OLMSTEAD:
Cculd I have that question read 1
I 196 back please?
I I
20!
(The pending question was read by the reporter.)
l I
2il MR. CHARNOFF:
Wasn't that asked and answered?
i 22l MR. PCTTER:
No.
The first was in the period
~
l 23!
during the remand.
The second part of the question is I
i 24l afterward did he ever ccmmunicate such.
rens cro.nv l x.
25i IHE WITNESS:
Did I personally?
7
. [j )
3b']
154 l
1 3Y MR. POTTER:
2 0
Yes, sir.
I guess I can't recall it.
3'
.s.
4 Q
Let me ask you to take a look at the letter which 5
I believe may have been referred to during the examination 6
by Mr. Olmstead, but may not.
It is a letter dated November 7
11, 1974, to Mr. Russell Youngdahl of Consumers Power Company.
8 Could you identify that?
9 A
Yes, it is a letter of November 11, 1974, and I 10 don't think this was a part of this morning's discussion.
11 Q
Now, did you sign that letter?
12 A
Yes, I did.
(
13 Q
Can you tell tee what was your intention in sending 14 that letter to Mr. Youngdahl?
15 MR. OLMSTEAD:
Can I correct the record here?
16, That letter is referred to in another letter.
We didn't 17 discuss it this mo.:ning.
18 MR. POTTER:
Okay.
19l THE WITTESS:
This was the letter, the first of a
20 a series of Russ and Joe letters, which attempts to get 21 Consumers Power to provide us assurances that they would meet 22, their obligations to deliver steam to us in 1980 consis. tent I
23l with the dates wh_ch were in the Dow-Consumers agreement.
24l BY MR. POTTER:
1 on
.>- wo.nv :
25 l Q
Now, at the time that this letter was written, I
F l
\\3\\
%c3
155 4
ji was there ongoing construction on the site to your knowledge?
1 2
A Construction -- it was either shut down or it was 1
at a very, very low level.
3;.
4 Q
What specifically were you trying to get from S
Consumers as a result of sending that letter?
6 A
Well, what we were trying to do is to get them to 7
provide assurances that they were going to meet the dates.
8 We felt they were obligated to deliver steam in 1980.
And 9;
based on our interpretation of that contract, we felt we 10 were justified in demanding assurances that would satisfy us 11 that they were indeed going to be capable of doing that and 12 exerting their best effcrts to achieve that end result.
('
13 Q
I show you a letter dated November 25, 1974, which 14 is addressed to you from Mr. Russell Youngdahl and ask if 15 you can identify that letter.
16 A
This is in response to my letter of November 11 --
1-This is in response to my letter of November 11 l
18 i wherein we requested assurances.
Russ said a lot of things, i
I 19l but as far as we were concerned, upon receipt of the letter, 20!
didn't think much of the assurances that we were given.
I 21l Q
That was your judgment of the letter you received a
22 from Consumers Power Company dated November 25, 1974?
23)
A And I believe I respended to that letter later on.
i 24!
Q I new show you a letter dated December 19, 1974, co-o., l v
om 25 l!
to Mr. Russell C. Youngdahl of Consumers Power Company and l
1 ;'5 36ca
156 1
ask you if you can identify that.
2 A
Yes.
3' O
That is your response to the letter of Consumers 4
Power Company that you received on November 25, 1974?
5 A
That's correct.
6 0
I ask you to read if you would the last two 7
paragraphs of that letter aloud.
8 A
It says:
"Quite frankly, we have not yet decided 9
how to proceed.
We are reluctant to do or write anything whict 10 would unnecessarily 'exerbate' your present difficulties.
11 At the very least, Dow does not want the situation as 12 presently forecast to further deteriorate.
At the same time, (m
\\.'
13 we do not consider it yet commercially necessary to take any 14 action which might prove irreversible.
15 "Accordingly, we will continue to monitor the 16 matter while considering our options.
I also urge you to 17 review your conclusions and advise me if you are modified l
18 or if you are able to give us the assurances we need."
19t Q
Was there any further response to this letter, do i
1 20j you know?
That is, the Dow letter to Consumers Power dated i
21 December 19, 1974.
22f A
I think Youngdahl wrote me another letter af ter the i
23:
first of the year.
i l
24l Q
Would you take a look at a letter dated January em Comoany l c
an 25; 3,
1975, to yourself from Mr. Youngdahl and tell me whetheyJ 363 I
i
157 j
that relates to this exchange of correspondence in any way?
2 A
It starts off by saying it acknowledges receipt of 3
my letter of December 19 where in essence he says he is glad 4
it is not yet commercially necessary for us to take any action 5
which might prove to be irreversible.
6 Q
Now, was the project still shut down at that point 7
to your knowledge?
8 A
Yes.
9 Q
Does this complete the exchange of correspondence 10 that you referred to as the Russ and Joe correspondence?
11 A
No, there was another, at least one or two more 12 letters, at the and of -- near the end of 1975 or the begin-13 ning of
'76.
14 Q
I invite your attention to a letter dated December 15 11, 1975 to Mr.
R. C. Youngdahl and signed by yourself and 16 ask if you can identify that.
17 MR. CHARNOFF:
This is now on --
18 MR. POTTER:
This is December 11, 1975, letter.
19:
"'HE WITNESS:
Yes, I wrote this letter.
I 20 BY MR. POTTER:
l 21:
Q Is that the next in the series of correspondence I
22 as you recall it between yourself and Mr. Ycungdahl?
i 23!
A As I recall it, yes.
24l Q
What was your intent in sending nhat letter to
>c.-
l 3 c,5 157 m
25 !
Mr. Youngdahl?
I t
i
159 I
1:
A Well, the intent of sending the letter -- and I i
2 think by this time, the job had been restarted -- was to bring 3
the parties together with the idea of beginning negotiations 4
to alter the contract as may be necessary to make it be a 5
usable document and be good for both companies, recognizing 6
the situation which existed in 1976 and -- well,
'76.
And 7
to commence negotiations.
I think it suggests we get together 8,
January 9.
9 Q
I hand you a letter dated January 2, 1976, addressed l
10l to Mr. Joe Temple, Jr., and signed by Russ, apparently 11 Russ Youngdahl, and bearing the letterhead of Consumers 12 Power Company, and ask if you can identify that.
bl 13 Q
Now, this one says " Joe."
The " dear" has been 14 dropped.
15 Yes, I recognize this.
16 Q
Is this to your understanding the response to your 17; letter of December 11, 1975?
i i
a That is what it says in the first line.
18l I
19 Q
Subsequent to the receipt of that letter from Mr.
Youngdahl, did negotiations again resume betueen Consumers 20 l' 1
21' and Dow Chemical Ccmcanv?
22 A
Yes, they did.
23 Q
Does this to the best of your knowledge complete 241 the correspondence of the Russ and Joe letters?
i em Comcany l
- n 25 I A
Well, I wrote again on June 30.
I l
\\
c l
3b3
159 1,
Q June 30, 19767 1
2 A
1976.
I den't recal' other ones.
3; O
So you regarded the June 30, 1976, letter as being i
i 4l the last letter in this continuing exchange beginning November i
5 11, 1974?
6l A
Yes.
7 Q
Okay.
I 8l MR. OLMSTEAD:
Just as a matter of clarification, 9
the last letter that you wrote --
1 10 THE WITNESS:
To Youngdahl?
11 MR. OLMSTEAD:
-- was your answer that was the last 12 letter between the two of you or the last letter that you 13 wrote?
14 MR. ? OTTER:
Whatever his answer is, I want him 15 to understand what the questicr was from me at that point.
16 And that is, he characterized the Russ and Joe letters, and I 17 wanted to make sure are the Russ and Joe letters the ones that l
18 l begin in November of 1974 and end in Consumers response in I
19l January of
'76, or does it end in your judgment with the i
20i June 30 letter, 19767 l
21' THE WI" NESS:
I think that series really ends, 22; the January letter from Russ to me.
i 23l SY MR. PCTTER:
i 24; Q
Now, in addition to the different drafts of
.- :-c..,v l or 25 l testi=cny that were prepared between the pericd of September i b.9 36p
'~
3
160 I
29, 1976, and the draft that was finally filed with the Board 2
before you testified on November 30, 1976, do you recall 3
signing an affidavit that was prepared at the request of 4
Consumers Power Company to be filed with a brief or something 5
of that nature with the Board?
6 A
I think I did.
7 Q
What did you understand the purpose of the affidavit 8,
to be or do you know?
I 9
A I don't know or I don't recall.
10 Q
Did you understand at the time that the affidavit 11 you were signing was separate and distinct from the testimony 12 that was to be prepared and filed witn the Board?
(^'
13 A
I think so.
14 Q
Now, the answer to one of the questions that was 15 posed to you -- and I think it was from Mr. Charnof f -- the J
16 question was at the time that you received the telephone 17 call from Mr. Youngdahl on August 5, 1976, advising you that 18-the cost of the project had increased to $1,67 billion --
i 19l and I think the question was:
do you recall, you, Mr. Temple, 20l if anyone challenged that figure?
I 21l I believe your answer was no.
Is that correct?
i 22l A
I don't recall that anyone challeneged that figure.
23 Q
Did you have any confidence that would be the 24 ultimate figure for the cost of the project when it was given
'on eoernng Croe*w i 25i to you at that time?
a c
\\ O..
I hbd
161 1
A No.
I didn't have any confidence that it was any 2
better or any worse a number than other numbers they had 3
given us at various points in time plus at that time, at least 4
I was aware that there was a figure of S2 billion which I thint l
5 was a Bechtel figure.
6 Q
Who in fact made the decision Mr. Klomparens 7
should b(. the head of this corporate review team?
Was it you 8
or Mr. Oreffice, if you can recall?
9 A
I can't really recall, but, well, Oreffice may 10 have suggested it.
I can't recall.
11 Q
I invite your attention to pages 2381 and 2382 12 of the transcript of your testimony of the earlier proceeding (l
13 before the Nuclear Regulatory Commission.
Would you take 14 a moment and look at that again?
15 A
Okay, I read it.
16 Q
I invite your attention specifically to the 17 question and answer on page 2382.
The question reads as 181 follows-- I believe this is by =r.
Cherry:
So the answer to 19, my question is yes.
You were informed by a Dow representa-20; tive that one or more cow representatives made it clear to I
i 21l Consumers and in that peried prior to your coming on the 22i stand that the scope of the testimony as set up by Censumers t
i 23; did not reflect all of the underlying facts concerning the i
24'
" Cow corporate position"?
v
,oe,m croa, 25!
And your answer is, I think:
that is true.
Is i
l l
'\\ b C
s-3bJ
l 162 I
I that correcc~.'
2 A
Yes.
3 Q
That's what that testimony states there?
4 A
That's what it says.
5 Q
I believe when Mr. Churnof f asked you that question i
6 you were unclear as to what specifically that related to.
And 7
I am going to ask you did it relate to the Consumers Power 8
Company draf t cf testimony that was prepared around October 9
22, 1976, in which you earlier testified to that you had some 10 problems with?
11 A
That Mr. Bacon prepared?
12 Q
Yes, the Bacon draft as it was referred to.
('
13 A
I believe it did.
14, O
So your reference then on that page, reference to l
15 -
that particular draft of the testimony, that was prepared by 16 Mr. Bacon; is that correct?
17 A
To the best of my ability to recall, that is correct.
18 Q
Now, during Mr. Charnoff's examination of you, he I
19j showed you a copy of that particular draft of testimony that 20-was sent.
And he asked you whether you had seen an addendum i
i I
211 which appeared on the back of that testimony.
)
22!
Let me see if I can "ind it.
i I
23l He asked you to look at this addendum on the back i
i 24l which is 4-1/4 pages draft and entitled "Curline of 2etail of i
w
'.- wo.~ i 25 !
Last Review Conducted #ct Currently Planned as Part of Dir,e, t h
E v
b)
I N
163 1
Te s timony). "
2 i Do you agree that is what that says?
3 A
That's what it says.
4 0
and I believe your testimony was you don't recall 5
whether you ever saw that particular addendum when you saw 6 1 this particular draf t of the testimony when it came in; is 7
that correct?
8 A
That's correct.
I 9
Q My question to you is this:
when your testimony 10 was finally prepared between the attorneys for Dow and 11 Consumers Power Company, do you recall Consumers Power Com-12 pany attorneys at any time requesting that your direct k'
13 testimony include any of the material that is set out in this 14 addendum?
15 Take a minute and read that if you need to.
16 MR. REYNOLDS:
As a matter of clarification, you 17 mean a request made to Mr. Temple as opposed to questions 18 !
that might have been made to one of the Dow attorneys that i
i 191 were working with the Consumers attorneys?
i l
20!
MR. POTTER:
Either way.
Certainly he can answer 21; if it was a request made to him directly or if he knows a 22l request made to the Cow actorneys, i
23; THE WITNESS :
Ask me the question again.
i 24l
- V MR. POTTER:
on
.cor,ng cc.mo.nv !
25 l Q
Co you recall if any of the sess. ions that you had I
i
~
\\>
t.
t
}
d
164 I
with the Dow attorneys and the Consumers attorneys in the 2
actual preparing of you to testify in this proceeding had 3
any request -- in this proceeding, I refer to the earlier 4
suscension hearing -- any request coming from the Consumers 5
Power attorneys either to you directly or to the Dow attorneys 6
in your presence that the information contained in that 7
addendum that you have just read, that it be included in your 81 testimony, the direct testimony?
I 9
A I don't have any recollection at this time.
10 Q
Mr. Charnoff asked you a question as to whether il according to your own personal knowledge, you had any knowledge 12 of what effect, if any, the threat of litigation or however hl 13 one might want to interpret whatever was said by the Consumers 14 Power people on the 21st and 24th of November, 1976, what 15 effect that had on the Dow USA Board decision.
And I think 16 you stated you had no personal knowledge as to what effect 17 that might have had on them; is that correct?
18l A
That's correct.
They went off in a separate rocm i
191 and discussed whatever they discussed.
1 i
20 Q
Do you have an opinion as to what significant, if 21; any, that threat had on the decision?
l 22!
MR. CHARNCFF:
I am going to object.
I don't know I
23!
the basis of an opinion when a man has no personal k.cwledge.
l 24l M2. PCTTIR:
The record is reolete in this lo:
c-c.m l m
25j of depositions in the last two weeks, so we will take the I
6t j'
r
\\d' Tb3
i 165 l
1 answer.
r, 2
Go ahead.
3 THE WITNESS :
Well, I have a personal opinion that 4
that made a significant difference.
5 BY MR. POTTER:
6 Q
That is your personal opinion that it did make a y
significant difference?
8 A
Yes.
9, Further, nobody e'.er specifically came to me and I
10 said they disagreed with anything that we had said in the 11 Division.
12~
MR. REYNOLDS:
Is that tne basis of your opinion
()
13 that nobody came to you?
14 THE WITNESS:
The complete answer is the basis of 15 my opinion.
16 MR. POTTER:
I cbn' t have any further questions.
17 MR. CEARNOFF:
To clarify that one point, all 18,
together in the record, nobody came to you and said they i
i 19; agree with the specifics of your reccmmendation either: is to that right?
21 THE WITNESS:
That is also true.
22l MR. OIS. STEAD :
No further questions 23,
- 'R. POTTER:
On the record so we can clarify this, 24 on behalf of the Dow Chemical Company, we will waive sig-
=
cro.-v :
25i nature of Mr. Temple.
i f
(Whereupon, at 2:3c p.m.,
the taking of the,4 ro-sition was concluded.)
C
\\D 3
l
166 r
CERTIFICATE OF 30TARY PUBLIC AND REPORTER I, Elisabeth R. Craft, the officer before whom the foregoing deposition was taken, do hereby certify that the deponent whose testimony appears in the foregoing deposition was duly sworn by me; that the testimony of said acponent was taken in shorthand and thereaf ter reduced to typewriting by me or under my direction; that said deposition is a true record of the testimony given by said deponent; that I am neither counsel for, related to, nor employed by any of the parties to the action in which this deposi-
,'{)
tion was taken; and, further, that I am not a relative or employee of any. attorney or counsel employed by the parties hereto, nor financially or otherwise interested in the outcome of the action.
,) _ ~.. -.
j a.
ELISA3ETH R.
CRAFT Notary Pu'oli c in and for the District of Columbia My commission expires 1 December 1980, f
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