ML20023C873
| ML20023C873 | |
| Person / Time | |
|---|---|
| Issue date: | 03/13/1980 |
| From: | Jamarl Cummings NRC OFFICE OF INSPECTOR & AUDITOR (OIA) |
| To: | Ahearne J NRC COMMISSION (OCM) |
| Shared Package | |
| ML20023A415 | List:
|
| References | |
| FOIA-82-515 NUDOCS 8305180178 | |
| Download: ML20023C873 (1) | |
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'2 i;ote to Chairman Ahearne The attached letters from the Department of Justice's (D0J) General Litigation Section, stem from their frustrations in trying to deal with the fiRC while D0J is considering the possible criminal aspects of the
!!uclear Phamacy, Inc. (l4PI) c'ase.
In my opinion letters similar to the ones attached - but milder - viere draf ted some months ago by D0J but were not sent based on my assu'r'ances that tiRC would keep D0J infomed of any future actions they plan t'o take relative to the fiPI case. The Office of Inspection and Enfor' cement (IE) neeting with liPI on January 21, 1980, was evidently the straw that broke the camel's back.
To be perfectly frank, I do no't disagree with the overall thrust of the D0J letters.
This office has r'epeatedly experienced the same frustrations in trying to deal with IE and ELD in the liPI case and other cases involving potential criminality.
Prompt notification, coordination and cooperation by IE with OIA with regard to ' potential criminal matters is for all practical purposes non-existent.
Over the past several months I have personally met with senior IE 's.taff officials on this subject - no substantial progress has been made. ThisJ,s,,no,tatrivialmatter.
Dick DeYoung and I will meet oh Friday P. arch 12 to discuss this matter
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further.
I am confident that we' can rcsolve this issue and I will keep you infomed of the status of 't.h'el discussions.
hricin?1 Signed by t
Jc e s J. Curzi'1SS.
- James J. Cur.mings, Direct.or Office of Inspector and Auditor
Attachment:
As stated.
Distribution dil A File 79-54 cc:
W. Dirchs, w/att Ol'A rdr V. Stello, w/att L. Bickwit, w/att H. Shapar, w/att 3
R. DeYoung, w/att Commission, w/att OIA 030518017e 83'0412 g
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1980 James 11. Sniczek, Director Fuel Facility oad
'a tarial f afe ty
. Inspection divisten Office of Inspection and Fnforcer. cut
.eucicar,.cculstory Conr., a sica Washin ton, D. C. 20553 tear
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onienek:
As you are cuare, we vera surprised to learn that you, Ir. St::llo std otners held a r.cetin vith ::r. '.anenc:, the Freciocat of hrI and his attorney, Tea Vai: cries at t a c !.k C on January 21, 1-300.
And, as an understatement, vc were c:<trenelv diaturbed to be advised b.r Mr. Vakcrics' icv.. cart-ner that. ir. Stello. hsd indica ted a t this =ccting that the Of fice of.In;pection and r:nferccrent ;:ad deternined that tac' bulk trans fers of Zenon 133 by :i?I to its coato.nero aid nct violate any liccase conditions or I:' 0 re: ulations, and further, that OIE cecided to drop Count 2 (.'.tcachment A).
As you kncu. the Xcnon which MPI accuired freu Union Carbide was then transferred by d?I to hospitals, either in bulk or ut.s brei:en do.T. by h?I into unit dosat.es,vhich were then trr.nsferred to the hospitals.
I Uith respect to unit dosares, one of it?I's defenses is that us a pharnacy, they h:ve authority to cc: pound substances which is n':at they cluin vas involved in breakin,. down bulk pechages into t..it eenes.
- o. w e r, this cercnse si ply.;ces i
not exist vita resn-:ct to bulk transfers and, indeed,.;?I's c,isrcvard or. tne icv in t.ne ecsc or cu l,.: trans t ers. sac-es sus-u stantial li.:ht on pretenses of ccod faith in ::dvancing a "cor.-
c o u n d i n.t.
- crense as to unit desarea.
4ae si..?niticance or-e therefore, becone apparent this sspec t of.GI'a concuct.suld, to those vao hsd b :co:.e fA:.iliar with the facts.
cc: P.ccords Greenspun
'Section Cen. Lit.
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a It has been related to ne that these statenents vere nade to :'r. Vakerics because of a curious opinion that "i?I vas not prohibited from transferring Union Carbide Xenca in i
,i bulk becauce:
10 C.F.R. [ 3').41(S) (5) and (C) are to be read to-gether; so that while 55(5) rcstricts a licensee to transfer-
'j ring by-procact.tsterial only to a person autnorized by an NRC license to receive ir, f(C) only requires the transferor j
to inspect his trans2 cree's license and verify that it authcr-ises receipt of the tv,a, ivru cud cunntity of the by-product naterial.
Thus, acct!ht;- to tais notion, if.CI in{pected 8
l their trcnnierse.s (.nospitais) licenses ns to type, Icra ane-q':antity, and did trans fer tne type, fons and quantity, there i
was no vidation by :2L in connection with the bulk trcnsfer j
i of Union Carbide Xcnon; cad further, if the hospitals were caly aut'norized co receive ?cA cpproved Xenon, that was the hospital's responsibility, r.ot ;;FI's To bee.in with, this entraordinary explanation is not based on anv 1cus that we are aware of which relate to this I
Section 30.41(A) provides that r.o liccasce cay transfer case.
Para-b a,roduct nacerial excer. t a.-~s authorized in tais section.
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grsph ('d)(3) provides that a licensee riay transf er by-product l
naterini to ca.v '. cr s on a.u__t_nor i z_e d. __t_o__ r e c e ive.s.u__c_h by-p r_o.duc t n_a__terial, unicss otaervise proviced in ais 11cance.
i Parec.raph (C) ir. poses an inspection require..cnt upon t.ne transreror and. does not purpcrt to repeal t.ne pr10r u.e.R.
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sections or cli_ irate any license conditions.
Thus, paragraph is (C) ir. poses f_urtac_r obligaticr.s on the trar.sterer and, it I
quite ouvicus taat tuera is no cociticstion, elicanation or I
qualifica tion of prior sections in the inspection recuireact.c.
two p. ra;;raphs to;ather Forthctnore, with respect to lunping the s
as on2, it is also readily apparent tust i(L)(3) and J(C) are is cvidenced by the single fact of two different sections as their lettering,, language and sequence.
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- orcover, a sure;estion by a public ancncy th.=.t a licensee can evoid his liccuse rec,uirc ents and t'.:os.e of his transferee nerely by loo'.:in at nia transferce's licenae, und then deal i
in bleek cathet radioactive caterials at his plessure, is hardly in the public interest, cenerously speatin.s.
- Indeed, if a licensee itad inspected his transferce's license and saw j
that they were only authcrized to receive FDA approved rat:io-
- t..ais is rurtner evic.ence o.r u1,ty xnou,ec;c.
t active r.:a terials,
In fact, the Office of Inspection and i:nforce enc cust have had thic in nind when Jim.'urray and you vere alcrantly and tuat.iPI repeatcJiy insis tin;, in our of fice on 2ccer.ber 14,
- s..a s. cm..r.- t t e n tha v:..olations in cuying cuc nel..lin:;
,m e ton c.a r nic.e Zenon, as r.c red in ':r. Cu:nin s ' ce.rlier referrcl report.
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_3 Jt is also apparcut t'as t ;;PI vas not as confused as sove at the.::tC as to uhat they could and could not las.-fully do.
Attached are several letters frc= 1:r. Sanche ad.mittin.3 i
cad, indeed, prouisina, to obtain and sell caly FDA approved I
Xenca (Attnchnents B-1
).
Marcover, the peculiar theory advanced i.nores the pr-actical cuestion of hov.i?I could t
Ic511y transfer nor.-approved Tenon vhcn they 1:cre not even-r.enitted to accuire it.
.'. s far a's tan explanation is con-the.ai: ova view vas consis tent with prior inter-corned, that.
I mreta ticr.s or tnis suo.i cc t aa t ter, please previce rue by I
nMarch 31, l'pD, uith copics of all uritten juriicial or ALJ o.otntons inter ret,.n.'
tnese Coc,e secticas in ents rasnion, l
all na es of cases or investiy:tions in caich the 37.C has previcualy uade this interpretation and, copics of tne docu-
- .cnts in vai*ch this interpretation is contained.
In any event, it is cac thing, to say that Count 2 is cuperncia,i,my c, erective cecause 1r r. properly cc.n,a,ncs a non-g violatica,
- 4. (:,) (5) para; rapa >.;. l(t:), ut ta a viola tion or_ n.
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f-(which trty 1.e suuj ect to a:2endnent); it is quite ar.ornar to su ;r. cst that oul3.: trans:ers c.r any ra.:g oactive c.:terials, blac.e..
narhet or otnervisc, are ler.sl cerely by lenking at a license a p r o%... t s t...u s ; i n :., e e u, suen :,c ;uilin,; reas ontng uculc, waic.
.a t then also apply to unit doses, as lon. as can violators looked at the license ubich did not authorica such tranafers.
Sulfice it to say that the sequcnce of events in this j
case, bag. inning at least uith the concent decree, can ;,ratui-tously unaur.aine en otacruise potentially vinble prosecution.
3 It certainly cer-;ot eccasion respect for the i!:1C nnd co.pliance I
wita the,Aau cy t...ose.:ao uould oc..wrvise oc ruoj ect to rer.u-Fr. Vckerics ' censpicuous ecscrip-latien.
In.' ecd, considcrinr,J
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one can casily inacine hev tion of the TOC (.'sttachnent he descri.bes it to his cun client nud, in turn, ho.i nis own client describes the 111:C's capabilities to others in their j
business coluninity.
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!*oreover fratuitcus vzcillations of positions, r,rstuitous and cpclo. cic canc:-5sicrs ca.: n;.missier.s, and,raruitous dis-l closures or. ev2cence ana tauc,rtes prior to the cenpletion or I.
an inveati.istion, could desarvedly or undeservedly suu.est i
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basic co uusion as to - c.o t.ne recpective c_icats are.
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clients, of course, are tac public--t!ic r.illions of persons l
who cennot af ford to retain laufurs cad lav firr.s to represcut thers before the S. C and who hsve no other parsons to protect their interests.
Furtnernore, if any hene fit:; of doubt cre to ba nece, the/ shou lu,, a :. dc on t.ue c1.m or putlic salety
-nd the ;;C uouln cr.rtcinly c.ta no prematara aad : c:tuitous cpolo;.y, cc:.ce ss ica or a f.: i s s i on to anyone for doing so.
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-4 In this re;;ard, the recent corr ent to us that the January 21 : eetin;,3:as held with defense counsel and "r. Sanchez because it.could hava 1eca unf air. : ot to co no suc escs _ additicaal confusion.
.i.s everyone well knew, the g
civil case was sesyed because there was a pendin; crit!inal briasti acion.
Fur ther-ore, tae author of t:.is-notion about fairness has not and c nnot refer to any authority requirinr,,
in feirness, taat a det -ndant be afforded such cor.ca.ssions, e
I ai2issions or disclosures of evidence and theorics.: urin;; ca
-i investi.,etion.
t Indee:i, as anycne could inat ne, the Oovernacnt'is under i
no ob,zi<se.,.cn or suc.a cisclostre to a subject o:. c u :.n v _ s t i :a -
4 tica unicaa 2nd until chsr,.es are brought and, in that evant.
there are rules nud cases ceclaring '; hat sanll Tue eiselesed in fairness to the defenZant and the public.
To be s.:re, hau-CVer, f ratu1Cous ':15c, Osurc3 ahd CC0c.:531onS. * *hi ch
.'ay U.3dcr-nina a poter.tially successful prosecut,on or one vio cas c..csen
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to violate the privile,;e affordec to hin, is indeed unfair.
On tiae cther hand, an effective enforce-. cat proc,re.c not only c or.:Fini 3 r c 3 p C C t for the a;jency Gnd it.s personnel, but sienificcati.v' nronotes cenplinnce with its 1ces-by chcsc who a
I have observed that non-coupliance offers severe consequences.
I Wile there are several evenues open to the Departner.t of Justice to ccccr.plish this result, we'vould lock fervard i
to assis ting. the ;U.C in developir. ; such an enforcenent - prorran, as.:e have dono eith other a ;encies, and in teetin;, with your office to cor.nence this cutual effort.
Sincerely, l
LV.aE: ICE LIFPE, Chief I
Ceneral Litication and j
Legal.'.dvice Eectiou I
Cri.inal Division l
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i JULI.Mi GiiEENSPU!!
Ij Deputy Chief for Litigation 9
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LL:JG:pb A'AR 7 1930 I
I Mr. Uilliam Dirks Acting E7.ecutive Director for Operations Nuclear Regulatory Co;i2ission Uashington, D. C.
20555
Dear Mr. Dirks:
As you doubtless recognize, effective enforcement of laws and regulations designed to protect the health, and indeed the i
lives, of the people of this country is a natter of incen'se inportance to our nation.
Among the caost critical of ti cse lava are, of course, the ones adainis tered by the :iuclear negu-the nishandlin; of radioactive materials latory Coraission, as can have enorrously tragic consequences.
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hil e the range of civil rcr.cdies availcble to regulatory caeucics r.ay be sufficient to respond to the bulk of violations i
related to public or employee health and safety, aisconduct evidencing an intentional disregard of these laus frequently neri ts the inposition of crin.inal sanctions.
Sir.cc violators
..re r,cnerally business officials, civil fines often have little i
they are passed on to the consumer and siuply iccor.e i
effcct as i
a cost of Coing business.
In contrast, cricinal prosecution, with its threat of resultin; incarceratien, ir r.ot only a r_eans 3
of punishing pas t wrongs, but also a very effective neans of 8
deterring future niaconduct by other businest.cs.
l In recognition of the vitc1 inportance of federal health l
nnd safety statutes, the Justice Department's Cricinal Divisica has recently designated this arca as one of its five enforcesent priorities.
As a result, crinical violaticas such as chose par-taining to nuclear esterials, tonic veste, nine safety, and occupational safety are now being. accorded the sace type of emphasis as that f.iven to public corruption, chite collar crir.e, organized criac, and ncrcotics.
The Crininal Division's General l
Litigation and Legal Advice Sacticn is responsible for criminal m
'cc:, Records Section Gen. Lit.
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- e enforcc ent of all nuclear re;ulatory' violations encept those threatening national security,which are' handled by the Division's Internal Security Section.
i As ve have begun to focus close attentica on nuclear rc3u-i latory violations we have encountered a problen with URC's i
Office of ' Inspection anc inforcenent.- t:hile the problen nay sten froa that office's 1cch of far.iliarity uith the enforceacnt pro-cess, we feel that it is of sufficient it.por tanc e tnat it should be brou-ht'to your attentica so that st5ps can be taken to ensure that the situation occa not recar.
On October 12, 1979, NRC referred to the Departnent of Justice - for possible criniaal prosecution a catter involving the Huclear Pharnacy, Inc.'(;;PI).
In substance, ::PI is alleged to have acted ' contrary to its ' license and ;e.C regulations by f
j purchasing bulk Xenon 133, which did not have FDA apprcval, and then t.arketin;, it for pharnace 2tical use.
A few weeks later ne vere cdvised by an enployee of your Office of Inspector and Auditor that U2C had serious proble.ms with the case due to purported scientific.findinc.s indicatins
.that there was very little diffurence between the :'enon obtained by :iFI and Xenon which uns nade by acnufacturers thac had received FDA approval.
Ue responded by indicating that such. test'results should not be considered de.termin' rive of whether or not a prose.
a cutien should be instituted.
Of,creater significance vas the Point that a regulatory systeu cannot survive if licensces are allowed to choose uhich of their license conditions they will follow.. Your exployees e:: pressed agreenent with these considera-tions.
Ud subscaucacly learned that, despite these considerations, and the fact t:ia t tac case had been referred to the Denart:ent -
of Justice with a recommendation for crininal prosecution,
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Office of Inspection and Enforce.,ent had sent a draft consent decree to i:TI's attorneys.
~'he docuc.ent containes adnissions l
rhich could be construed a ainst the Governnent in a later judicici proceedin.
It t:citly aesolved.. I of cuy scrious wrongcoing and l
agreed that no penalties could be it. posed.
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After learning of this, we spoke vith 5?.C caployees and verc 3,iven nscurances that no further actica uculd be taken en the civil penalty case until the cricinal case was declined or procccuted.
- e reco;nize that in sone instances civil chatenent action nust precced in advance of the resolution of the crL:inal case.
Eccever, such considerations are not present here, as d?1 terc.inated its violative concuct arter its practice care to light.
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Subsequently, on Decenber 12, 1979, ue sou-ht clarification frca URC _ on certain points related to the is?I natter and, to that g
cud, a ucatin,< uas scheduled for December 19, 1,79.
At the request of the Of fice of Inspection and Enforcement, the cactin; uns re-8 scheduled to December-14, 1979.
Je uere advised that tae ain
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recson for advancing the aceting was that tnat office r.cw vanced to cet fines to proceed forthwita uith a civil action in an effort for license violation.
This cosition was in shcrn contrast'to
'I' the earlier Graft ccusent decr'ee uhereby the Office of Ir.spection and Enforcauent had agreed that no penalty should be i=pesel.
I At the Decerber 14, 1979 eeeting, ruo officials of the Offica of Inspection and Enforce ent firrly expressed the viev that UPI had willfully violred the lau and should be prosecuted i
by Justice.
It uns ar,ain agreed that no further action uculd be taken in the civil case until resolution of the crt inal :.atter.
Uc have recently learned, heuever, that noteithster. din,7 this ar,raan.ent, on January 25, 19S0, at least tuo represent..cives of the Of fice of _ Inspection and Enforce =cne not uith the Fresi-
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dent of NPI and tria corporation's attorney to discuss the viola-tiens uhich ve are also considering for ' cricinc.1 prosecution.
l During the ucating, tne NRC officials disclosed Govern: cut t.icories and evidence. 'These disclosures have the potential of naterin11y ir.ipniring our ability to obtain untailored yr:nd jury testbtony or interview stater,ents.
before the necting concludad, tuo.:.iG officials of.this' office apparently conceded the:t.;PI's bulk transfers of.5cnon to its customers did not violate any licensa conditions or imC regulations.
The feet that such a necting was h$1d uhi'.c the matter was being reviewed for possible criuinal presecution is a r.atter of fundar ental concern.
Further, our chegrin over this neecin; is L
heiz.htened by the existence of prior agrec=ents that civil tapects of the natter uculd be held in sheyance pending a_prosteutive deteruination by the l'ep:irtzent of Justice.
The dm a..e done by
,I this aceting is reflected by the fact that.UPI's attorncys were quick to present to us the concessica r'2de by the URC of ficials.
It is to ' e e:.pacted th:.c *. :.C ucula ci:.:ilarly sea. co una it in
.any judicini proceeding unich nie,ht occur.
'coreover, our subsc-quent cor unications with the Office of Inspection and Enforcement has failed to reveal any sensible support for the concession.
Indeed, it is contrary to prior writtan ad:iissions by SPI.
Considering the importance of enforcc=ent of the Inus relat--
ing to nuclear naterials, and increasing public e.uarens os chareof,
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it is evident to us iron the fore;,cin::. t.i a t a sir,nificant eficrt rust be nade to develop an ef fective enforccrant pro;,ran.
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.6 Ineffective, vacillating or apolo etic enforce:ent efforts can, of course, invite derision and a'danr,erous disrespect for i
a regulatory aiency by those who would e.v.ploit any real or
,1 inagine,d tinidity.
See attachment, page 2.
j Accordine.ly, 3na vill be seeking the cooperation of the NRC in vigorously escertaining and developing cases involving potential criainal violations of its laws, and would uelcone any assistance or succostions you have in that rc3srd.
In the nenntire, the prospect of a viable criminal prosecu-tion of :*?I has been unnecessarily jeopardized.
We are, however, continuing to consider the natter and vill advise you of our final i
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prosecutive determination.
I Sincerely, LAWRE'JCE LIPPE, Chief l
General Litiration arad Legal Advice Section l
Criminal Livision 1
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JULIA:1 GREE!!SPU.4 Deputy Chief-for Litigation Enclosure ti i
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