ML20023D033

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Requests Investigation of Region III Inadequate Investigative Oversight Re QA Breakdown & Possible Criminal Falsification at Zack Co,Hvac Contractor at Facilities.At Howard & s Marello Allegations Discussed
ML20023D033
Person / Time
Site: Clinton, Midland, LaSalle, 05000000
Issue date: 07/26/1982
From: Devine T, Garde B
GOVERNMENT ACCOUNTABILITY PROJECT
To: Palladino N
NRC COMMISSION (OCM)
Shared Package
ML20023A480 List:
References
FOIA-82-366 NUDOCS 8305190097
Download: ML20023D033 (11)
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GOVERNMENT ACCOUNTABILITY PROJECT <

Institute for Policy Studies 1901 Que Street, N.W., Washington. D.C. 20009 h^) (202)234-9382 July 26, 1982 The Honorable Nunzio J. Palladino Chairman -

U. S. Nuclear Regulatory Commission Washington, D. C. 20555

Dear Chairman Palladino:

On behalf of our clients, Mr. Albert T. Howard and Ms. Sharon Marello, the Government Accountability Project (" GAP") of the Institute for Policy Studies requests that the Nuclear Regulatory Commission ("NRC") conduct a full investigation of the enclosed evidence before permitting full power operation of the LaSalle Nuclear Power . Station _(Unit I) in LaSalle County, Illinois.

We requesn that the Comission's Office of Investigations ("OI") replace Region III ("RIII") in its ongoing investigation of LaSalle and the Zack Company, to which the enclosed evidencT pertains.

s We further request that the Commissioners direct the office of Inspector and Auditor ("OIA") to investigate the performance of RIII's Office of Inspection and Enforcement. More specifically, we believe that RIII's oversight of LaSalle was inadequate in three arcas--

(1) failure to act for three months on serious evidence of tr a Quality Assurance ("QA") breakdown and possible ' criminal falsification at LaSalle's Heating, Ventillating and Air Conditioning ("HVAC") contractor,'the Za'ck Company, on the ,,

eve'of ' full power operations at LaSalle despite urgent and then-independent requests from Mr. Howard and GAP; (2) failure to uncover the Zack QA breakdown during its ongoing regulatory program; and i (3) failure to honor commitments made last November to correct RIII investigative deficiencies confirmed by OIA l Report, Special Inquiry re Adequacy of IE Investigation 50-358/80-9 at the William H. Zimmer Nuclear Power Plant (August 7, 1981).

Our action is based on the investigation our organization has conducted cver the past five months, from March 1982 to date, as well as on evidence Mr. Howard, Ms. Marello and other witnesses have presented to us regarding the Region III LaSalle investigation. Enclosed as Attachment 1-8 is a packet containing Mr. Howard's affidavit and 44 exhibits Ms. Marello's t

affidavit; an affidavit from Mr. Charles Grant III; and six memoranda 8305190097 830311 PDR FOIA PRENDER82-366 PDR

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[ ~The Honorable Nunzio J. Palladino July 26, 1982 summarizing . verification interviews. conducted by our staff. The interviews.

confirm the personal integrity of Mr. Howard and Ms. Marello, as well as the substance of their allegations. All witnesses except for personal references are former or current Zack employees. Our evidence directly challenges the credibility of Region .III's July 19 recommendation for a full power license.

a GAP is a non-profit, non-partisan public interest organization that assists federal cnd corporate employees who report illegal, wasteful or improper activities by their agencies or organizations. GAP also monitors govern-mental reforms, offers its expertise about personnel issues to Executive Branch offices and agencies, responds to Congressional requests for analysis of issues related to accountable government and disseminates significant information about problems to appropriate places within the governnent.

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our review of the recently issued IaSalle Report (Inspection Report No.

50-373/82-35 (July 19,1982)) reveals more deference to utility timetables than Region III has demonstrated in the past, particularly at the Zimmer station in Moscow, Ohio. Although we have had only one week to review, analyze and study Region III's report, it clearly suffers from serious omissions. This type of investigation leaves the public less realistically ~

assured than if no investigation: had SFen conducted at all.

Specifically, . the report ignored the evidence on Zack presented by Mr. Howard nearly three months ago, on May 3,1982. . Second, Region III totally ignored significant issues _that dealt with the causes of the Quality Assu,rance deficiencies at LaSalle, such as retaliation and manipulation of the QA program through short-staffing, conflicts of interest, and advance warning l of QA inspections.

Our review of the allegations actually covered indicates that the LaSalle investigation relied far too heavily on the utility's paperwork, while ,

foregoing witness interviews and independent hardware tests. We discovered that Region III investigators failed to take sworn statements from key witnesses who had not already provided' affidavits to GAP or the Illinois State Attorney General's office. GAP had already worked closely with some of these witnesses. Our decision not to take affidavits from these

-- ' employees was a gesture of good faith toward Region III; unfortunately,

.it was not returned.

We also found a disturbing manipulation of the allegations by omitting key facts, thus making it easier to reject the charges. Issues presented by conscientious workers were consistently rejected on the basis of suspect utility paperwork or " independent" tests that were, in fact, controlled by the utility. Further, and most seriously; the NRC's Region III office has

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t once again failed to independently explore the full extent of the problems at a nuclear power plant before dismissing the examples as insufficient by themselves to pose a public health and safety threat.

1 The Nuclear Regulatory Commission has often promised to improve the dependability and quality of its investigations; however, the flaws of the i

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, The Honorable Nunzio J. Palladino ' July 26, 1982 e

LaSalle probe confirm. that NRC probes continue to rely bn the utility's good faith and paperwork. It is very clear that whenever there was a conflict between eyewitnesses and utility paperwork, the paperwork won.

Unfortunately_the affidavits and evidence.provided by.our clients reveal that the paperwork for the' LaSalle site cannot be trusted.

The LaSalle investigation represents a major setback in the NRC's outreach effort to nuclear plant employees. No longer in good conscience can we recommend to nuclear workers that they speak to the NRC without counsel present. Mr. Howard, who was speaking for the fired Zack employees, had irreversible. personal damage. Although as spokesman for the- group Mr. Howard went to the Regional NRC office on the first work day after the entire QA department was dismissed .and talked to eight investigators, notcone.

informed him that he and his colleagues had only 30 days to file an appeal-for relief under 48 U.S.C. 95851 to the Department of Labor. As a result, their legal rights to administrative relief were sacrificed. -

Region III also publicly misrepresented his disclosure in an attempt to justify its own initial inaction. This is intolerable.

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I. ZACK ALLEGATIONS .

. Background - - -

In the fall of 1981 the Zack Company, a Heating, Ventillating and Air Conditioning ("HVAC") contractor, hired Ms. Marello, Mr. Howard, and a number of other individuals to establish a Quality Assurance Documentation Control office. Their assignment was to insure that the Zack Company had a Docu-

. mentation Department that complied with 10 C.F.R. 50, Appendix B, the American National Standards Institute (" ANSI") codes, and the contract ,,

specifications of their various clients in nuclear business. Their specific assignment was .to control .the documentation -- purchase orders ("P.O. 's") ,

material certifications ("certs"), material traceability records ("M.T.R.")

and certificates of conformance ("C.C.") . This involved the monitoring of over 3000 purchase order " packages." ' Each package represented the proof of quality for up to thousands of items used to construct the Clinton, LaSalle or Midland nuclear power stations.

Mr. Howard was hired as the Documentation Control Room Supervisor. Ms. Marello was a clerk. They, and the three or four other Documentation Control Room employees were allowed -- in fact assigned -- to investigate documents con-tained in Zack's files. Their task was to verify the accuracy, or identify the -inaccuracies to the purchase order packages. This task gave them free access to the Zack files, and also placed them in a good position to observe the " paperwork trail" of Zack's nuclear documents.

In six and a half to seven months, Ms. Marello and Mr. Howard discovered and challenged a quality assurance breakdown that leaves reliability of HVAC systems, and the overall QA programs at three nuclear plant sites in serious N

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The Honorable Nunzio J. Palladino July 26, 1982

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question. Their experiences reflect a contractor operati'hg for years without regard for the Atomic Energy Act, and consequently the publ'iq health'and saf e ty. \

'Ihey discovered documentation that had altered specifications, some with

" white out," missing certifications, purchase ord'ers with 'no ASTM specifi-cations, purchase orders changed to reflect correct quality assurance .

approval, and adhesive stickers with questionable authenticity, used to modify documentation and reflect the correct standards. They also uncovered top-level Zack management attempts to convince vendors - with some success --

to provide inaccurate quality and traceability certifications after-the-fact.

Both Mr. Howard and Ms. Marello worked in the Document Control Room at the Zack headquarters. Although they received no formalized Quality Assurance training, they, and th'e rest of the QA department, did become familiar with the various codes, contract specifications, and regulations that allegedly governed their work.

Unfortunately they suffered a pattern of harassment and attempted intimidation.

The pressure increased as Zack strove unsuccessfully to meet unrealistic time demands imposed by Commonwealth Edition ("Com Ed"), which wanted the paperwork resolved to avoid licensing delays at i_t,s,LaSalle site. The_ tension became so severe that Ms. Marello was eventually hospitalized.

Last August Zack had notified the utilities of a potential nonconfoming condition under 10 C.F.R. 850.55(e), due to inadequate and inaccurate quality and identification records on vendor purchases. They also attached. a Cor-rective Action Report (" CAR") plan which outlined Zack's intention to identify, analyze and correct all the paperwork problems at the compaqy headquarters.

This CAR also outlined the steps Zack would take to insure that the proper individuals responsible for this were appropriately disciplined..

As pressure mounted to have the LaSalle nuclear plant load fuel, the QA ..

department at Zack fell under greater pressure to close out nonconfomance reports ("NCRs") that detailed the Zack QA documentation deficiencies at LaSalle. Mr. Howard refused to provide a final report to Com Ed. On March 1, Zack suumitted 99 remaining NCRs to Com Ed. Zack warned it was unlikely l that necessary documentation to correct deficiencies could be obtained.

This frank admission did not deter the utility and NRC rush to begin operations at LaSalle. Com Ed received permis,sion to load fuel.

On April 13 and 15, 1982 Mr. Howard, acting as a spokesman for the entire Zack Quality Assurance department, had contacted an individual in the Consumers Power Company's Midland Project Quality Assurance department.

l This individual had represented to Mr. Howard and other members of the department that they should feel free to bring any allegations or problems at Zack to Midland's internal grievance system. Ho also guaranteed them confidentiality and protection from losing their jobs.

On April 18, 19 and 20, an audit team from Consumers and the Bechtel Corpor-ation arrived in the Chicago office. The QA department anticipated a complete i

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9' The Honorable Nunzio J. Palladino 5- July 26, 1982 investigation and professional support for its effort. However, their anticipation was belied as naive. On April 30 the entire department was dismissed, allegedly due to an office reorganization.

On May 3, 1982, the first working day following the purge, Mr. Howard began a series of contacts with Region III. He provided specific allegations about LaSalle and to a lesser extent Midland and Clinton, evidence and his offer of full cooperation with an NRC investigation. However, nothing happened.

After 2 months, when Mr. Howard and the others realized the NRC was not going to respond to their allegations, which had cost them their jobs, they took their information to the press and then to GAP.

Specific Allegations The three affidavits, exhibits and supporting verification memoranda evidence specific allegations about Zack.'s QA documentation and utility oversight.

Certain issues pertain to the fundamental of Zack's QA program-

1) Absence of any formal Quality Assurance Documentation Program--

Until Ms. Marello, Mr. Howard and othm were hired in the fall of 1981 to honor corrective action commitments entrer was no QA formal program for documents.

As a result, they were in an uncoptrolled state, ,i_.e.,' a mess. Documents were piled on the floor. (Attachment 1 3, at 1-2; Att. 3, at 1; Att. 8, at 4-5) . ,

2) Inadequate qualifications of personnel performing significant roles-- Individuals without any previous nuclear experience were assigned to make decisions requiring engineering judgment, as well as detailed know-ledge of professional codes and legal requirments for QA documentation. They received these assignments despite protesting that they were, not qualified to make such significant decisions. The qualifications deficiencies extended to the Zack auditors. .( Att. 1, at 1-2, Att. 2, at 3-4; Att. 3, at 2-3; Att. 8, at 5, 11-19). .
3) Missing documentation and discrepancies in welder qualifications records- 'Ib illustrate, an October 23 Interim Report found 25 discrepancies in a partial review of welding qualifications records for the LaSalle site.

(Att. 2, at 7; Att. 8, at 13) .

I l 4) Inadequate training for QA personnel-- Despite repeated requests l for comprehensive training, Zack only offered informal guidance and self-study materials. To illustrate the quality of the training, Zack President Christine DeZutel and her husband were trained "in accordance with the Zack Company Quality Assurance Training Program" on the basis of one hour's instruction from a Zack executive in NRC regulations and professional QA standards. The company finally proposed a formal training program shortly

! . 2/"Att." All references to Attachment 8 incorporate the relevant '

accompanying exhibits.

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The Honorable Nunzio J. Palladino July 26, 1982

\ before -it dismissed the entire QA documentation . staff. (Att. 21, at 2:

Att.~2, at 2-3; Att. 3, at 2-3; Att. 4, at 1;-and Att. 8, at 5, 18-19, 24).

N A second category of allegations concern incomplete. Zack QA documentation--

-5) Missing records due to inadequate document control-- Both unauthorized management personnel, and even the owner's dog, had access to Zack' QA records and Pu'rchase Orders. As a result, records were lost or' chewed up. (Att. 1, at . 3 ; Att. 2, at 5; and Att. 3, at 1) .

6) Absence of required quality verification on documents that could be retrieved-- This ranged from missing signatures to missing required test data, specifications, and certifications to professional codes. (Att. 1, at.

2-3; Att. 3, at 2; Att. 8, at 4-5, 18) .

7)- Lack of proper identification titrough compliance with material traceability requirements-- This led to problems such as lack of required traceability for some 114,000 hexheads, bolts, nuts and similar items.

Similarly, certain steel beams could not be traced with certainty, although indications are that they come from Argentina. (Att. 8, at 17-18, 21-22) .

A third category of allegation concerns widespread falsification and improper modifications of Zack QA documents during the corrective action program for

  • deficient records--
8) Improper alteration of QA records through stickers containing. ,

signatures of questionable authenticity (Att. 2, at 3; Att. 3, at 2; Att. 8,_

at~14-15).

9) Improper alteration of QA records through whiting-out previous information in order to create the appearance of compliance with legal "

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requirements (Att.- 1, at 2; Att. ,

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10) Improper requests by Zack management for vendors to supply uriavail-able information or to inaccurately upgrade quality documentation-- Some .

vendors, such as U.S. Steel, refused to participate in the improprieties.

l other vendors cooperated to the letter of the request, even retyping the spelling errors in model certification letters supplied by Zack. Another

, vendor returned a blank form for Zack to fill in as needed. (Att. 2, at 7; l- Att. 3, at 2: Att. 8, at 16, 25-6).

A fourth category of allegations involves deficiencies in Zack's program for purchases ' rom its Approved Vendors List-l l 11) Failure to distinguish between commercial and nuclear purchases on Purchase Orders-- Since items purchased for nuclear use have much stricter quality verification requirements than those purchased for commercial use, this omission led to the improper upgrading program described above. (Att. 2, at 2; Att. 8, at 18).

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, The lionorable Nunzio J. Palladino July 26, 1982

12) Unqualified vendors on the AVL-- This occurred due to-the absence of necessary surveillance of vendor QA programs. (Att. 3, at 2-3; Att. 8,.at-15-16). -
13) Failure to remove unqualified vendors from the AVL-- Even if Zack determined a vendor were unqualified, tha: did not guarantee the vendor's removal from the AVL. For example, Zack received approximately 38 Purchase Orders from the Delta Screw Company during the period it'was " removed" from the AVL. (Att. 8, uat 18) . ,

A fifth area of allegations concerns the attitude of Zack management. It was incompatible with the Quality Assurance criteria of 10 C.F.R. Part 50, Appendix B-- -

14) Management awareness of QA breakdown-- Zack management was painfully aware of the problem. As the company conceded, "There has been a breakdown of the

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qualityassuranceprogramasrelatedtocriterions/ sic]VI-Documents Control, and VII - Control of purchased material, equipment and services...."

(Att. 8, at 6). The company promised reform and training to the QA staff.

But the commitments were not honored. Instead, Zack management scapegoated the staff for problems created by its own neglect. (Att. 2, at 6-7; Att. 3, at 3; Att. 8, at 10, 21-5) .

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15) Harassment, attempted intimidation and retaliation against QA staff--

All current and former Zack employees wM tere contacted confirmed this allegation. . The , tactics , included dismissal threats, severe personal abuse, accusations of petty misconduct, and eventually dismissal of the entire QA documentation staff through a pretextual_ reorganization. (See Att. 1-8, generally). .

16) Bad faith progress reports to the utilities--

Zack disguised its misconduct through false reassurances' to its utility customers. To illustrate, the company reported to Midland on a

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partial review of some 2,900 purchase orders'. Although the review was less "

than half complete, the Zack President characterized it as a " total document l , audit." (Att. 1, at 2; Att. 2, at 3; Att. 3, at 2, Att. 8, at 6, 10, and I

Exhibit 43S) . .

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17) Failure to adequately discipline those responsible for records falsifica tio n-- The company promised its utility clients to identify and take apppropriate action against the guilty parties. Although the responsible

! executive was identified, the " appropriate disciplinary action" consisted of a paperwork demotion and additional training. (Att. 8, at 4, 6-7).

18) Surrender to unrealistic utility deadlines-- Zack was under intense pressure f rom its utility clients, in particular Com Ed, to rush the quality verification of its purchases. Rather than defend the integrity of its QA reform program, Zack succumbed and attempted to produce a " rush job." That is why the company pressured employees to work overtime and perform tasks l' for which, they weren't qualified. There wasn't time to do the job properly.

(When the QA staff refused to sign off on unacceptable records, management personnel did it themselves.) (Att. 1, at 3; Att. 2, at 4 ; Att. 3, at 1; Att. 4, at 2; Att. 8, at 7-6, 22).

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g The Honorable Nunzio 'J. Palladino July 26, 1932 N

A final category of allegations involves the utilities themselves. Zack could not have persisted for' years in its misconduct without utility complicity--

  • had) Utility knowledge of the QA breakdown- There can bgno question '

- that the utilities have been aware of the Zack breakdown.M company was the subject of previous requests to stop shipping nonconforming material, as well' as previous severe enforcement action 'at Midland, whose owner Consumers Power.even loaned a contract employee to help straighten out Zack's QA records deficiencies. (See Att. 2 and 8, generally). At LaSalle, ' Zack ' informed -

Commonwealth Edison that it could not supply adequate information to properly correct 69 of 99 QA nonconformances. (Att. 8, Exhibit 43S)..

- f4g) Utility complicity kith the ongoing breakdown-- When formally.

notified of Zack's miseries, the QA management for the utilities and, their contractors failed to face up' to their responsibilities. Instead, Com Ed--

pressured for a rush job in the corrective action program. At Midland, the contractor Bechtel was satisfied if it were " highly probable" that Zack ,

ordered - the correct mat.::ial. The Midland QA program responded to Zack's QA effort with an effort to rewrite the'QA rules. Even before the effort was completed, the Midland QA management decided that "in virtually all cases, .

- material is acceptable or will be deamed acceptable." (Att. 8, Exhibit 29, at 3). .That philosophy cannot coexist _with the Atomic Energy Act. (Att. 1,

, at 4 ; Att. 2, at 4-5; Att. 3, at 2-3; Att. '8, at 9-12,; 14, 20) .

I A pf) ' Utility complicity with retaliation- In desperation, Mr. Howard

[and another Zack QA employee, Mr. Ronald Perry,' disclosed the QA deficiencies to of ficials at LaSalle and Midland.- In each case the discussions.were sup--

posed to be confidential. In each case,' the Zack employees were soon subjected -

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to recrimination and harassment, suggesting that the confidences were not honored. In Mr. Howard's case, the entire QA staff was dismissed within two

3. weeks of his disclosure -to the Midland QA Manager.

i 3DS) Inaccurate public denials by utilities of the Zack deficiences-- -

To illustrate, a Commonwealth Edison spokesman stated in a Chicago television [t -

interview that the Zack records were reviewed thoroughly by its Architect /.

Engineer Sargent and Lundy. In fact, an internal January 1982 Surveillance Report at LaSalle revealed Sargent and Lundy had-

... deleted the requirements for submitting on site contractor documentation (such as Zack's) to S & L for review. This review is now the responsibility of the Zack Company....

Based on this change, S s 'L's letter accepting Zack's docu-mentation is no longer required.

(Att. 8, at 11).

Contrary to the conclusions of the implicated organizations, the deficiencies summarized above are too serious to ignore or even to glance at superficially. ,

As a Zack report conclu,ded, only 94 of 374 material packages sent to LaSalle '

were correct and accept <rble._ Mine were judged "No Good for LaSalle." (Em-phasis in original.) (Att. 8, at 7) . In some cases, it is too late for the I

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/ The Honorable Nunzio J. Palladino " July 26, 1982:

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,17 vendors to supply verification information.on purchases,"made in 1978 or

earlier.- The records simply aren't retained that long. (Att. 1,'at 2).

. -Nor can the NRC . accept Zack's work "as is" and permit any plant to operate with quality in an in' etermina'te s' tate.' ' As RIII Administrator James Keppler

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i. stated with respect t6 the Zimmer station, the utility would have to " rip out" i and replace critical components that lack adequate quality records.' ("On-Time -

Start-Up for Zimmer Plant Still Doubted by NRC Official," The Cincinnati Enquirer, p. D-5 (June 30, 1982). To_ illustrate the impact at LaSalle, it '

would magnify the danger and expense to rip out already installed items after the plant begins operations.

II. INADEQUATE NRC-INVESTIGATIVE OVERSIGHT

Background

l On December 8,1980, on behalf of Mr. Thomas Applegate, GAP charged that a RIII-E investigation violated. basic investigative standards through failure to speak with relevant witnesses; failure to take affidavits from key witnesses; exces-( sive reliance on utility paperwork to c.esolve allegations instead of conducting

'; necessary independent laboratory tests on the hardware; failure to investigate s

sufficiently to determine the causes of confirmed inadequacies; inaccurately summarizing employee allegations, with the effect of shrinking the allegations into insignificance;. and on-balance exonerations despite confirmation of specific problems, before learning tha full scope of the' deficiencies.

) Last -November-18, OIA released its August 7 report, which backed GAP's l charges.

l-In an October. 8,1981 memorandum to Chairman Palladino, Office of Inspector.

+and Auditor'(OIA) Director James Cummings observed that the probe Applegate -

and GAP challenged "did not satisfy...~ generally. accepted investigative standards of other Government agencies.. .. Fundamentals basic to all in-vestigations were simply not observed in this' instance." Cummings cited inadequate documentation highlighted by the total absence of interview reports, as well as the failure to pursue obvious leads. He surmised that serious-

, quality assurance welding problems the NRC uncovered last summer might have-i been exposed years ago if IE probes had been "sufficiently comprehensive ~to

. identify this issue 'in a timely manner."

i L In a November 16, 1981 letter to Congressman Morris K. Udall (D.-Ariz.),

l Chairman of the House Energy and Environment Subcommittee, you backed the L OIA criticisms. You concluded that the shortcomings in the Zimmer investi-gation " reveal a generic problem" with IE oversight. You pledged to consider

' the,"necessary internal reforms" for NRC probes to reach a level " consistent l' with fundamental standards that govern investigations by any agency."

In November Congressional testimony, NRC Executive Director for Operations William Dircks reaffirmed the commitment and pledged to deemphasize reliance l

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The, Honorable Nunzio J'. Palladino July 26, 1982' on utility pape tQ.le increasing' reliance on witnesses and even a new NRC mobile laboratory testing unit. '-'

With respect to the LaSalle and Zack ailegations, RIII failed to honor this

, ' Mpledge.

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To illustrate, the NRC response to the Zack allegations at LaSalle was.

reluctant, at best. On June 2,1982 GAP passed along ' the allegation of a vindicated Zack whistleblower from Midland that a Zack supervisor had confirmed the same abuses at LaSalle. The whistleblower, Mr. Dean Dartey, complained that RIII had refuped to investigate his allegations due to lack of specificity. Had RIII fol' lowed its normal practice of checking d5ficient purchase orders at one site that had also been sent to other utilities (see, e,.g., IE Rep. No. 50-358/81-13), the NRC would have learned that illegalities in Zack-supplied Midland purchases were repeated at LaSalle. (Att. 5).

Similarly, GAP made three attempts to convince RIII to pu'rsue evidence of mis-

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conduct by Zack at'LaSalle. Mr. Howard made another half dozen attempts to convince RIII to investigate his May 3,1982 disclosure, and evidence, all without success.

In a July 19, 1982 letter to com Ed, Ad_ministrator James Keppler rationalized the omission by stating the Howard allegations applied primarily to LaSalle and had been deemed too general by the staff. As Mr.'Howard rebutted:

'Ihe NRC description in its LaSalle report ol our d meeting is absolutely false. I. spoke -in great detail and said my findings -

applied to all three sites. I emphasized problems at LaSalle more than Midland. I left my records with the staff that day,-

and more the next day.

- Similarly, the July 19, 1982 RIII investigative report on LaSalle (IE Report

,No. 50-373/82-35) bears striking similarities to the Zimmer effort rejected

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! last year at OIA.] The only major difference is that this year RIII is talking

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l to more witnesses before it relies on utility paperwork to reject their

( charges out of hand. That is particularly. inappropriate when the same investigative report found falsification of paperwork on-site, a finding further confirmed by massive amounts of falsified Zack records relied on at j LaSalle.

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Specifically, GAP charged that RIII-

    • failed to take sworn statements from witnesses who had not already provided affidavits to GAP .
    • totally ignored issues that dealt with the causes of QA deficiencies at LaSalle, such as retaliation, fear of which prevented almost half of witnesses contacted from speaking to the NRC; and manipulation of the QA program through short-staffing, conflicts of interest, and advance warnings of QA inspections;

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A The Honorable Nunzio'J.' Palladino July 26, 1982.

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.N **reaefined the issues it did cover by omitting key facts, such as the location of. alleged deficiencies, making it easier to reject the charges;

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    • rejected witnesses' . allegations on' the basis of " independent" 4

tests in fact controlled by the utility, as well as suspect -

paperwork;

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    • manipulated the evidence by failing to include key facts in. the report - such as its finding that approximately half of reinforce-ment bars were damaged - while concluding the plant is safe;
    • looked at woefully inadequate test. samples on site, such as --

reinforcement bars on 9 drawings out of over 7000 relevant documents, or three mortar cores when literally tens of thousands of mortar blocks were suspect; and

    • failed to independently learn the full extent of problems that j

were confirmed, before it dismissed those examples as insufficient

by themselves to pose a public safety threat.

The differences between old and new NRC' investigations are cosmetic, at best.

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In short, the RIII investigative report on LaSalle was.a final opportunity to clear up serious-safety questions before' the plant began operation. .The

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report . failed to answer the questions adequately at a critical' moment. .We are not contending that the LaSalle plant is unsafe. .On'the basis of this 4

-report, however,- the Comission cannot reasonably . assure the public that it is.. As a' result, Region III's Office of Inspection and Enforcement should be i

replaced .in the ongoing investigative effort on LaSalle and Zack.. OIA should investigate RIII's . actions in permitting the situation to develop this far.

Most significantly, the rush to begin operations. at LaSalle should be halted

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until all the safety issues can be investigated thoroughly and resolved with "

realistic confidence.

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Our request for this drastic action is not intended as an attack on individual RIII L investigators, or Regional Administrator James Keppler. Mr. Keppler has-i attempted to upgrade investigative techniques. He.also has taken the ' lead in tough public statements to improve utility QA efforts. Unfortunately, the l performance has not matched the promises or the rhetoric. The Commission-

. must take strong action to uphold -its ' regulatory mandate and to honor its l public commitments.

I-Sincerely,

AO R __

THOMAS DEVINE BILLE GARDE **

. Legal Director Director, Citizens Clinic for '

Accountable Government Enclosures TD/BG/my i

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