ML20012B959
| ML20012B959 | |
| Person / Time | |
|---|---|
| Site: | Shoreham File:Long Island Lighting Company icon.png |
| Issue date: | 09/16/1987 |
| From: | Marsh R NRC OFFICE OF INVESTIGATIONS (OI) |
| To: | FEDERAL BUREAU OF INVESTIGATION |
| Shared Package | |
| ML20012B886 | List: |
| References | |
| FOIA-89-192 NUDOCS 9003190220 | |
| Download: ML20012B959 (3) | |
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NUCLEAR REGULATORY COMMISSION 1
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.1j September 16, 1987 1
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Federal Bureau of Investigation j
450 Golden Gate Avenue San Francisco, California 94102 qfDear This 1 citer.is a result of a conversation on September 6, 1987, between Special Agent Oakland FBI office, and Eugene J. Power, an rffInvestigator,o is of ce.
he matter concerns a vendor who possibly-violated federal regulations by not disclosing known or potential defects in their equipment supplied to a facility or activity that was subject to.HRC liennsing requirements.
As general background information, the criminal wrongdoing was allegedly e
perpetrated by Transamerica Delaval Incorporated (TDl), now known ~as Imo Delaval Incorporated, Oakland, California, which. designed, manufactured, and
. supplied' emergency diesel generators to the Shoreham Nuclear Plant, Docket Number 50-322, Suffolk County, New York, which is owned by the long Island Lighting Company (LILCO). L1LCO, a firm incorporated in the State-nf New York, possessed a. federal NRC license to construct the Shoreham Facility in accordance with Title 10, Code of Federal Regulations (CFR). One of the numerous. requirements is contained in Appendix A Criterion 17 of 10 CFR 50, which required LILCO to provide an on-site electric power system to permit the
. functioning of systems important to nucitar safety [See Enclosure No. I for an extract of 10 CFR 50, Appendix A).
To fulfill that federal receirement at their facility at Shoreham, LlLCO purchased three diesel cenerators at a cost
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of over $2,000,000 from TDI on a purchase order dated May 20, 1974. The diesels were delivered to the site and installation was completed by 1981.
The required preoperational testing of the three diesel generators was
.b conducted in 1983.
On August 12, 1983. LILC0 experienced a crankshaft failure of one of its three diesels which had been purchased from TDI. Because of that (atastrophic failure, coupled with numerous other problems with the diesel generators, LILCO experienced a delay in the licensing of Shoreham and e reported loss of several million dollars. As a result, LILCO initiated civil legal proceedings egainst TDI [ Civil Action No.'85 Civ 6892 (GLG), US District Court, Southern District of New Yorkl.
In their legal efforts, LILCO developed testinonies to support their position that the failure of the emergency diesel generators at Shorehan "resulted from numercus instances cf intentional wrongdoing, other torts and b;eaches of contract by TOI." Specifically, LILC0 clieged that prior to the shipment of the diesels to Shorchan that TDI wcs aware the
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y diesels did not meet contract requirements, code, and NRC requirements.
Further, it was cited that TDI was also aware of the possibility of casting defects which could and did cause the blocks on the diesel generators to crack,however,(TD1neveradvisedLILCOofsuchdeficienciesasrequiredby 10 CFR Part 21 Enclosure No. 2). LILCO further alleged that TDI concealed information about potential failure of the generators and provided deliberate misleading information.
In their Preliminary Statenent dated February 3,1986
[ Enclosure 3], in response to Motions to Dismiss and Stay Discovery, "LILCO has alleged TDI's fraud, violation of RICO, failure to warn, negligent provisions of contract services, negligence in design, manufacture, inspection,
and. testing, strict liability and numerous breaches of contract." It was also identified that TDI experienced related type problems on engines supplied to commercial cargo vessels [See Enclosures Nos. 3 & 4). The litigation between the two parties has continued over the years withent resolution, and the NRC's Office of General Counsel has continued to monitor these proceedings in the interests of the agency. This monitorino by the NRC Office of General Counsel has resulted in the receipt of copies of the depositions of witnesses and' other' documents in the legal proceedings (Enclosures 5, 6, 7, and 8).
TDI was a major supplier of diesel generators to the US commercial nuclear-
.-industry, and by 1984 had supplied generators to 13 different utilities for installation and ultimate operation at 15 different nuclear plants. Because of the crankshaft it.ilure at Shoreham and numerous other problems which were identified with the TDI diesel generators, the nuc kar industry initially met in October 1983 end subsequently established the TDI Emergency Diesel Generator Owner's Group of 11 facilitics to review the significance of the diesel problems within the industry and to deveicp recommendations to resolve the issues [See Enclosure No. 9]. The efforts of the owner's group was closely coordinated with and monitored by the NRC to insure the resolution of the safety and health aspects of the technicel problems associated with the TDI generators. The NRC ultimately concluded in a Safety Evaluation Report on the operability and reliability of the TDI emergency diesel generators that a technical resolution of the issues was available. The NRC Safety Evaluation Report to include the recore.endations of the owner's group is contained in NUREG 1216 which was ultimately published in 1986 [ Enclosure No. 10).
An investigation by the Office of Investigations (01) Field Office, Region V, NRC, into this matter was predicated upon the telephonic receipt of allegations in January 1983 from a former TDI employee who requested confidentiality. The i<
individual made general allegations regarding TDI that (1) there was an=
l; apparent lack of docunent control in.the manufacturing process and (2) there was an inability of Quality Control to trece materials used in the manufacture of emergency diesel generators ured in the nuclear industry.. For example, the alleger advised that he suspected alteration of heat numbers or steel and also suspected the use of Cardinal fasteners which did not meet specificetions.
The alleger, however, did not provide specific details to support his corcerns.
.the initial 01 investigative efforts were conteir.ed in Report of Inquiry QS-83-005 [ Enclosure 11] by this office.
As a result of the initial allegations, 01 Region II, Atlarta, reinterviewed the alleger on February 9, 1983, and interviewed four additional individuals in liarch 1983 who had been or were TDI employees [See Enclosures No.12,13, 14, 15, and 16). Three of the edditional individuals related that they believed that the naterial control progran at TDI n s adequate. One individual C $,,, Q. ! { -
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expressed support for the initial allegations, but he provided no specific l ',
basis for his suspicions. With these four interviews, additional concerns were developed which indicated.(1) lack of control of welding practices, (2): inadequate time trials in testing emergency diesel generators (3) possible false ~ certifications by the TDI Quality Assurance Manager that certain
. employees had received auditor training, and (4) that an internal TDI audit was falsely documented.
In view of the health and safety aspects of the allegations, the Yendor Program Branch.-which was a staff office of Region IV. NRC, Dallas.- Tey.as, subsequently conducted two technical inspections of the TDI facilities at Oakland, California. The Vendor Program Branch conducted one inspection, Report No. 99900334/83-02,- inSeptember1983[Enclnsure17),andafollow-up inspection. Report No. 99900334/83-03 [ Enclosure 10). As a result of the two inspections, several nonconformances were identified.
In view of the gencric problems associated with diesel generators, the tlP.C issued 1&E Bulletin 83-58.
The last technical inspection was conducted on June 3-7,1965[ Enclosure No.19).
In January 1984, the Vendor Progrt.m Branch prepared an inspection history of TDI to assist the NRC staff in evaluating the required licensee actions for.
the TDI emergency diesels generators. The inspection summary reveale:i there were 9 NRC inspections from 1979 through 1983 which cited TDI for 59 nonconformances and 3 violations in the areas of: itanufacturing process controls; control of special processes; procurement control; naterial identity and control; nonconformances and corrective action; equipment calibration; internal audits; 10 CFR Part 21 practices; Quality Assurance records: and miscellaneous (SeeEnclosureflo.20).
Because of other regulatory investigations, there have been no active NRC 01 investigative efforts expended in this matter since 1903, and none it.
anticipated in the near future. As an item of infornation, there are only 23 01 field investigators within the United States, thus, our investigative i
assets are limited, in view of the potential criminal activities of TDI, the enclosed information is forwarded for your review and any further action deened appropriate.
. Sincerely, Robert G.11arsh, Director Office of Investigations Field Off. ice, Region V
Enclosures:
As stated I)H B' T -
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