ML19264B856
| ML19264B856 | |
| Person / Time | |
|---|---|
| Issue date: | 10/03/1981 |
| From: | Dircks W NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| To: | |
| Shared Package | |
| ML19264B857 | List: |
| References | |
| FOIA-81-470, TASK-PINV, TASK-SE SECY-81-588, NUDOCS 8110270542 | |
| Download: ML19264B856 (6) | |
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- g. Eh,5#8 k ',Q October 3,1981 POLICY ISSUE d
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(Notation Vote)
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For:
The Commissioners
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From:
Executive Director for Operations
Subject:
INVESTIGATIVE JURISDICTION OF THE OFFICE OF INSPECTION AND ENFORCEMENT
Purpose:
To clarify the authority of the Office of Inspection and Enforcement to conduct external investigations within the jurisdiction of the hTC.
Discussion:
Two NRC offices have been delegated the authority to conduct investigations:
the Office of Inspection and Enforcement (IE) and the Office of Inspector and Auditor (OIA). There has been a continuing lack of clarity regarding the investigative jurisdiction of IE as compared to that of OIA.
This nas resulted in problems affecting the effective functioning of both offices.
The purpose of this paper is to (1) advise the Commission of this problem because of its impact on both IE and OIA operatio':s and (2) to seek Commission clarification of its desires in this area.
It is my view that the distinction between the investigative responsibilities and authority of the two offices should be determined by whether the matter to be investigated is internal or external, rather than on the basis of whether pctential criminality is involved.
By internal I mean that the focus of the investigation involves the hPC and its employees or contractors; by external I mean that the focus of the investigation involves the licensed nuclear industry or 2 matter of NRO regulatory interest.
I believe that IE has and should have exclusive authority and responsibility for the conduct of all external investi-gations and that OIA has and should have similar exclusive authority for the conduct of internal investigations.
In this regard the official Delegations of Authority embodied in the h7C Manual Chapters as well as Chapter 1 of 10 CFR pertaining to the two offices are instructive.
Manual Chapter 0113 (as well as 10 CFR 1.30) pertains to OIA.
CONTACT:
W. Ward, IE 49-27246 8110270542 811008 CF SUBJ CF
The Commissioners This Chapter and 10 CFR 1.30 establish OIA as an internal investigative and auditing organization.
In contrast, Manual Chapter 0127 (as well as 10 CFR 1.64),
gives IE a broad external investigative mandate. Among other things, it confers on IE the responsibility to investigate licensees, their contractors or suppliers, applicants, individuals, and any organization subject to NRC jurisdiction. MC 0127 describes the purpose of these investigations as being "to ascertain the status of com-pliance with NRC requirements" and to " identify condi-tions...that may adversely affect the public health and safety, the common defense and security, the environment, or the safeguarding of nuclear materials and facilities."
In addition, MC 0127 specifically charges IE to "investi-gate incidents, accidents, allegations, and other unusual circumstances involving matters in the nuclear industry which may be subject to NRC jurisdiction..." Neither the Manual Chapter nor the regulstion limit IE's investigative role in matters that may involve potential criminality.
The issue of authority as specified in the NRC Manual and Regulations notwithstanding, there are several other compelling reasons that lead me to conclude that IE requires a clear external investigative mandate. For instance, it appears to me that it is inconsistent to have OIA perform external investigaticas, thus involving a Commission staff office in an operational activity.
Commission policy has been to place operational activities under the cognizance of the Executive Director for Opera-tions. Assigning external investigative authority to OIA represents a departure from this practice.
Even more important, however, is the impact of 01A involve-ment in external investigations on the inspection and enforcement program in general and on enforcement coordin-ation in particular.
Indeed, the problems already encoun-tered in such investigations as South Texas, Nuclear
The Commissioners Pharmacy Incorporated, Stepan Chemical, Zimmer, and the various TMI investigations have demonstrated the need to have this conflict corrected.
In these cases, all of which involved potential criminality as well as major health and safety issues, it is not clear that all developed information has been provided to 1E or the Department of Justice, enforce-ment actions have been delayed, and licensees have been confused by having to deal with two sets of NRC investigators. The Department of Justice has been brought into some of these matters with only limited IE consultation regarding the program implication of such an action. The latter has caused elevated enforcement actions to be held in abeyance pending D0J resolution of relatively minor criminality.
nere have also been occasions where DOJ has declined prosecution in cases where IE believed prosecution to be vstranted for reasons of program impact.
Relateily, there have been instances where IE Enforcement meetings with licensees have led to NRC/ Licensee Agreements which were later challenged by DOJ. The Niagara Mohawk, Stepan Chemical, & Nuclear Pharmacy cases are examples where this has occurred.
These examples point out the need for IE's authority to deal directly with D0J regarding these external matters that 1E investigates.
This would afford IE an oppor-tunity to ensure that all relevant information is made available to D0J in a manner sufficient for D0J to understand the relationship of the data to the public health and safety.
Such direct contact would also enhance mutual understanding of the respective roles of DOJ and NRC, and could be expected to shorten the length of time that it now requires to obtain a prose-cutive determination.
I believe these factors demon-strate that the present procedures that require IE to deal with DOJ via a third party are not satisfactory, and provide no discernable benefit to the NRC.
In the above-cited investigations, OIA involvement was predicated on evidence of apparent criminality.1 It is my view that investigations of actual or potential cri-minality are only a subset of each of the larger cate-gories of internal versus external investigations.
- Hence, it is instructive to examine the topic of criminality in light of our experience to date.
' Pursuant to section 221(b) of the Atomic Energy Act, the FBI is required to investigste all alleged or suspected criminal violations of the Atomic Energy Act.
The Commissioners As it pertains to the NRC, actual or potential criminality can be considered as falling into two categories. The first category is encountered during inspections or investi-gations (or is brought to the attention of the kdC in some other fashion) and is only peripheral to NRC's principal interest or responsibilities.
Examples of this type of criminal activity range from theft of private property or embezzlement of licensee funds to violations of specific federal laws, such as smuggling, counterfeiting, or evading payment of income tax.
In such cases, we make the infor.-
ation available to the Federal, State, or local law enforce-ment agency having jurisdiction over the matter.
NRC has neither the authority nor the desire to investigate such matters except to the extent that they may bear upon NRC statutory rerpcasibilities.
In the second category are those instances of potential criminality that are clearly related to matters within the jurisdiction of the NRC. The vast majority of these involve potential violations of the Atomic Energy Act or the General Fraud Against the Government Statutas (such as 18 USC 1001 or 18 USC 371).
Soue examples of these are willful violations of NRC regulations made criminal by statute, records falsification, lying.to an inspector'or investigator, unlicensed possession of nuclear materiel, or attempts to deceive the NRC in order to obtain a license.
It is important to note that the vast sujarity of investi-gations conducted by IE involve, at least at the outset of the investigation, the possibility,cf criminality.
IE is dealing with, or has dealt with recently, dezens of instances where the initial information icc m ted either possible falsification of records relied upov by the NRC or the knowing and willful violation of SRC regulations.
In each of these examples, the elements of potential criminality and NRC's reguletory interests are inextricably intertwined. No decisions can be made regarding either health and safety actions or criminal prosecution until there is an adequate amount of information available on which to base auch a decision.
It is my belief that the appropriate way to acquire this information is to initiate or continue an investigatien concerning the matter at issue. By following this course of action IE would be,.ible' to ensure that it promptly possesses information of suf-ficient quantity and quality on which to make its decisions involving the health and safety of the public.
At the same time, such an approach would not foreclose a futare denisien to pursue criminal prosecution.
In that regard. it should be noted that most instances of potential criminality encountered by IE are not of the " smoking gun" type.
Tae 9
The Commissioners existing NRC-Department of Justice agreement covering criminal referrals provides guidelines for making such referrals and for the conduct of necessary health and safety investigations and the taking of necessary enforce-ment actions, even after such referrals.
In those rare cases in which prompt field response by the FBI might be warranted, such as theft of Special Nuclear Material (SNM) or sabotage, IE investigators could either assist the FBI or conduct a parallel investigation in coordination with the FBI as was done in the recent Beaver Valley investigation and three other cases in the past year. Provisions for such actions are currently contained in the NRC/D0J agreement.
Whether or not criminality is involved, IE investigators need to collect sufficient information to support suc-cessful NRC enforcement actions. To this end, they need to identify and collect copies of pertinent records, and identify and interview persons who can provide substantive information. When warranted by the nature of the case, 3
3 statement; must be obtained.
It should be noted that statements, or admissions, or other evidence obtained by IE investigators could be used for prosecutive as well as civil enforcement purpoces.
Thus, these IE investigations would enhance rather than hinder any subsequent criminal investigation or prosecution in summation, IE and GIA have both had difficulty regarding the respective investigative jurisdictions ot the two offices.
Thus I feel that this matter needs to be clarified by the Commission.
I've'lt.e that the following points support the 1E posi; ion-(1)
The appropriatt YRC Manual Chapters and Regulations presently give (E rather than 01A broad autharity to 1
conduct external irvestigations. This external authority is not further conditioned by whether the matter also involves potentiai criminality.
(2)- /. thorough IE investigation could provide the basis for NRC heslth and safety as well as referral deci-sions.
(3)
External inve~'igat ons, as a: operational activity, belong under the ccgaizanen of an EDO line office.
(4)
IE has the capability to eu tduct such investigations.
e I
The Commissioners
-f-(5) The current situation is having an adverse impact on the inspection and enforcement program and is causing confusion among licensees.
(6)
It is reasonable for IE to present the issues of a case directly to D0J rather than through an intermediary.
Such direct communication would facilitat2 mutual under-standing and promote the ultimate objective of advancing the safety of nuclear activities.
(7) The July 9, 1981 GA0 report on OIA notes the need for OIA to concentrate on its legitimate internal audit role.
Recommendation:
I recommend that the CoEnission clarify the Delcgations of Authority in MC 0113 and 0127, designating IE as the NRf.
agent for all investigations external to the agency and 01A as the NRC agent for all internal investigations.
Further, both offices should have coordination and referral-responsibilities with D03 for matters falling within their respective jurisdiction;.
Coordination:
The Offices of NRR, NMSS, RES, ADM and OEI.D concur in this recommendation. We have provided a copy of this paper to OIA for their information. OT.A has indicated its desire to withhold written comraent until such time at this paper is forcarded to the Commission.
/7./b t,
William J. Dircks Executive Director for Operations Commissioners' comments should be provided directly co the Office of the Secretary by c.o.b. Monday, October 26, 1981.
Commission staff office comments, if any, should be submitted to the Commissioners NLT October 19, 1981, with an information copy to the Office of the Secretary.
If the paper is of such a nature that it requires additional time for analytical review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.
Distribution: