ML20028D794
| ML20028D794 | |
| Person / Time | |
|---|---|
| Issue date: | 04/20/1982 |
| From: | Gamble D, Mark Resner, Sinclair J NRC OFFICE OF INSPECTOR & AUDITOR (OIA) |
| To: | Jamarl Cummings NRC OFFICE OF INSPECTOR & AUDITOR (OIA) |
| Shared Package | |
| ML20027A771 | List: |
| References | |
| NUDOCS 8301190459 | |
| Download: ML20028D794 (10) | |
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Am-il 20, 1952
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!!El10RANDLt1 FOR:
James J. Cummings, Director Office of Inspector and Auditor David H. Gamble, Investigator FROM:
Mark E. Resner, Investigator 757g <j 7 4'
John R. Sinclaii, investigator f
Office of Inspector and Audi
SUBJECT:
INQUIRY INTO'NRC'S HANDLIN f THE HAYWARD TYLER PUMP COMPANY INSPECTION / INVESTIGATION Our investigation into the subject matter revealed tha't a number of NRC personnel made decisions which were clearly contrary to existing regulations Our report was forwarded to the Commission on and manual puidelines.
since that time there have been several. discussions March 24,1982; about the advisability of taking appropriate action against the NRC employees involved.
In particular, disciplinary action was discussed at the Commission meeting on March 25, 1982, and at the Congressional Based upon our subsequent discussions there hearing on April 6,1982.
seems to be a general lack of infonnation concerning what bases exist NRC to take some fom of disciplinary action. As you which require are aware OIA reports no longer contain the OIA investigators' analyses of statutory, regulatory and other provisions which may have been violated; therefore, in light of the confusion in this case, the following analysis is forwarded for your review.
While no recommendations of any specific disciplinary actions are provided, it is clear that the facts in this This memorandum analyzes the
. case do warrant some disciplinary action.and does not repeat the facts which case by event; more than sufficient detail in our fiarch 23, 1982, report.
Release of Draft Report to the Company Under Investication I.
A.
The February 12, 1982, Release s
On February 12, 1982, Region IV personnel met in Arlington, Texas, with reoresenta'.ives of the Hayward Tyler Pumo Company (HTM ) - the company At this meeting Region IV uMer investigation at the time by NRC.
released rultiple copies cf drafts of the NRC investigation and ir:spection reports, a transmittal letter, and the Notice of Nonconfomance which The decision listed the violations for which NRC intended to cite HTPC.
to release these reports was made jointly by Regional Administrator Although John Collins and Deputy Regional Adninistrator Karl Seyfrit.
8301190459 830104 PDR COMMS NRCC CORRESPONDENCE PDR
2 Region IV prof fered several explanations for this release, most of them acoear to be oost hoc rationalizations - the only partially credible explanation being that the r:elease was an attempt to expedite obtaining s
HTPC's concurrence that the reports contained no HTPC proprietary data.
Tnere are several difficulties with the manner in which Collins a Seyfrit attempted to obtain this proprietary reivew by releasing draft The following is an analysis of the NRC provisions which Collins and Seyfrit appeared to clearly ignore by releasing these draft material.
reports.
1.
The draft transmittal letter for the inspection report (s 19,1982, and investigation reports Which were both' dated February signed by Collins and Seyfrit respectively - see Exhibits 25 and 5), a indicate that Region IV was providing HTPC with 10 days to review the reports and that this review was being conducted in accordance with 10 Our review of this section revealed that it obviously contemplated that draft official records would not be released outside CFR 2.790.
This The clearest language on this point is subsection 2.790(a).
This subsection provides for the availability of " fina NRC.
documents"; to make the finality requirement crystal clear, a featnote to this sobsection states that "such records and documents do not It is therefore at least con-include handwritten notes and drafts."
tradictory and somewhat inexplicable as to how draft reports (verified through testimony) were released to the vendor despite the regulations clearly stating that only final records were to be. released, even for 7
I-proprietary review.
2.
IE Manual Chapter 1025_
IE Manual Chapter 1025 entitled " Review of Inspection / Investigation Reports for Exempt Infomation - Processing of Claims" discusses in detail the procedure for having vendors (and licensees) review HRC The reports to detemine whether they contain any proprietary data.
manual is quite clear in its " policy statement" that NR "in their final fom."
IE Manual, Ch.1025 sec. 02.
procedure for effecting this proprietary review, the manual states that "a copy of the completed report will be sent to the licensee / vendor for sec. 031 (emphasis supplied). Throughout the review purposes."
10.,
manual the discussion of licensee / vendor review clearly contemplates l
The only that only final reports will be provided for their review.
provision for draft reports' being sent anywhere outside the regional office is in the section which discusses Headquarters review of " escala In this section the manual directs Id., sec. 04.
/
dors er.forcement action."
that these draf ts (" advance copies") "should not be sent to licensee ven for review in accordance with this chapter until_ the documents initiating in original).
the enforcement action have been signed and issued" (emphasis l
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- From this last provision two prc:ecures pertaining to release of documentation First, the only time draf t reports are pemitted are clearly defined.
to be sent outside the regional office is wtien they are sent to NRC Second, this provision demonstrates that the release of draf t reports to a vendor can adversely affect.the. ability Headquarters.
as in this case) in a case.
3.
The draft material that was released appears to have been material that is nomally exempt from disclosure'under NRC regulations:
"(a) The following types-of records are exempt from public disclosure under s9.4:
N5) Interagency or intraagency memorandums or letters which would not be available by law to a private party in litigation with the To the extent not so available by law, examples include, but NRC.
are not limited to:
~~'
"(v) Infomation scheduled for public release, but as to which premature release would be contrary to the public interest, such as documents awaiting patent review; but only to the extent that the production of such recor (i) interfere with enforcement proceedings.
10 CFR 9.5(a)(5)(v) and (7)(i).
This review and interpretation of the described regulations is also supported by recent HTPC Freedom of Infomation Act (FOIA) requests.
which have been denied - presumably under the authority of the same NRC regulations 4-ovide that " records of the kind specified in 59.5(a) shall not be produced or disclosed by NRC personnel...except regulations.
10 in accordance with this Part or ss2.744 and 2.790 of this ch disclosure of NRC records under the F0IA regulations (10 CFR Part 9) or CFR9.12(a).
the rules of procedures regulations (10 CFR 2.744 and 2.790), it is evident that Collins and Seyfrit released these records without following any of the procedures specified in these regulations.
With regard to the specific exemptions outlined above, which precluded release of this material, it is important to consider the effect of First of all it may be contended that Region IV's premature release.
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4 Collins, as kepional Administrator, was the custodian of these recordt and therefore had autnority under the FOIA regulations to unilaterally release this material.
This contention is at best superficial because, as Collins himself stated, as early as February 4 Collins knew that this matter was one which would be reviewed by the EDO before the enfo action was taken by Region IV.
his custodial role with respect to these documents; by prematurely releasing these documents on February 12, Collins pre-empted the possible exercise by the EDO of any exemption to withhold this material, e.g., to See, e.g.,10 CFR prevent interference with the enforcement action.
9.5(a)(7)(i).
Interference with a Possibie Criminal Case 4.
As Collins stated'during his interview with OIA, Region IV's investigation covered areas which ray also have constituted ' criminal v matter as a civil case, Collins' and Seyfrit's actions clearly have HTPC.
interfered with the handling of this case as a possible criminal matter.
See for example, Investigator Richard Herr's statements as to the difficulties There has been he encountered during his " supplemental" investigation.
considerable discussion and correspondence among the Department of Justice (DOJ), DIA, and IE/ Regional offices concerning the need to prevent potential criminal cases from being impaired by NRC's actions in Most of this discussion and handling t.he civil aspects of the cases.
correspondence has dealt on a general level, e.g., asking for increased cooperation and sharing of information, to wit, the undated Memorandum of Understanding among DOJ, DIA, and IE. times when the discus in the area of NRC's releasing reports and other evidence prior to the time when DOJ has had the opportunity to review the matter for possible Examples of this correspondence are the letters to NRC fran DOJ regarding Nuclear Pharmacy (Attachments 1 and 2), a March 17, criminality.
1981, letter from DOJ (Attachment 3), and an exchange of correspondence During the between Seyfrit and IE Headquarters (Attachments 4 and 5).
i DIA interview of Collins he stated that he was fully aware of the concern Collins to not prematurely release matters in a potential criminal case.
further stated that he considered the allegations in this case to be This is potentially criminal ever since they were first received.furth 01A in which he stated that "Following my review of these reports, I became concerned that some of the findings raised questions regarding criminality, particularly with respect to possible falsifica Tyler Pump Company."
(OIA report, Exhibit 2.)
This concern for possible cc: promise of the criminal case by Collins and Seyfrit is even more heightened by the fact that, even when Collins referred the matter to OIA, he failed to infona OIA that the documentsTh had already been released to HTPC.
with the US Attorney's office shortly thereaf ter, you were not even 4- - -,
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5 aware - and thus obviously you were not.in a position to infor= the US Attorney - that this draft material had already been released to the subject of the investigation.
5.
Region IV Actions After the February 12,1982. Release In addition to the above four violations of NRC provisions by Collins and/or Seyfrit, it appears that Collins and Seyfrit compounded their actions by their conduct after the February 12 release of the draft There are three principal actions which fall into documents to HTPC.First, when Collins met with the EDO et al. on February 18, statement to the contrary notwithstanding) this category.
it appears that Collins (Collins?
did not tell the EDO or the other senior NRC officials present that he had. released this draft material to the company under investigation.
Collins' failure to so inform them was ever! more serious in view instructions he received from the EDO at that meeting (1) to conduct supplemental investigation and (2) to not release to Collins' silence in the face of these two orders is was completed.
Second, when Collins referred the HTPC case to OIA on i
February 23, he made no mention of the February 12 release, nspite his of great concern.
knowledge of the adverse impact such a release could have on a poten Third, on February 24 Region IV released criminal case (see 4., above).another copy of some of the docum further in B., below.
B.
The February 24 Release _
On February 24, Region IV personnel traveled to the Washington, D.C.,
At this meeting Seyfrit offices of the law fim representing HTPC.provided HTPC w letter for the inspection report, and the Notice of Nonconfomance.
There is conflicting testimony on whether these documents (particularly the inspection report) were signed or whether the signatures an dates had first been " whited out."can be had by directing Collins law finn has since returned to Collins.)
Regardless of whether these documents were signed or not, they constitute arother release of documen Seyfrit that were not yet authorized for disclosure outside NRC.
released these documents despite the unequivocal direction by the ECO o February 18 that Region IV was not to release either the inspection or investigation reports until the supplemental investigation was comple All parties at the February 18 meeting recall this order being given, Collins recalled infoming Seyfrit of tie order, and Seyfrit recall receiving the order from Collins.After Collins learned of Seyfrit's February 24 f
release of additional documents, it was incumbent upon Collins to in om release this report.
senior HRC management (e.g., the EDO) of the release.
6 In addition to the above potential violation, the February 24 release' may also constitute violations of the first four provisions described in 4
The comments made concerning the possible violations in A.,
A., above.
above, are generally applicable to the February 24 release; however.
some of these violations were even more aggravated in the case of the For example, the violation of 10 CFR 9.12(a) for February 24 releasel the February 12 release is premised upon the theory of pre-empting crosoective actions by the ED0; however, with the February 24 release, Seyfrit was directly subverting an express decision of the EDO, pursuant to the lawful exemptions provided for in 10 CFR 9.5, to withhold thisA infomation from HTPC at this time.
release was more serious is in the, area of interference with a possible At the time of the February 12 release Collins and other criminal case.
NRC officials believed there may be criminal violations by HTPC, but However, on these feelings.apparently had not yet been articulated.
February 23 Region IV referred the HTPC case to OIA for consideration *of 1ts criminal potential; the Director, DIA, immediately began coordinating It was on the very next day that Seyfrit the case with the US Attorney.
made this additional release of material to HTPL, despite Region IV's outstanding request for DIA action on the criminal potential.
NRC Headouarters' Knowledae of the Recion IV Releases C.
It was not until March 4,1982, when Roger Fortuna (then Chief, Investigation Branch, IE Headquarters) infomed the Director, DIA, of the prior release Shortly thereafter, in consultation of documents by Region IV to HTPC.
with the Commission, you directed the investigation which culminated in However, until that March 4 call from Fortuna, OIA's March 23 report.
no one in NRC. who was aware of the Region IV releases was taking any action to bring the releases to the attention of responsible senior NRC During the course of OIA's investigation, we learned that a number of people outside Region IV were aware of the Region IV release -
management.
yet none of them, with the exception of Fortuna, saw fit to pass thisS infomation on to senior NRC management.
Attorney) and James Liebennan (Director of Enforcement, IE Headquarte stated that they became aware of the February 12 and/or 24 releases on In addition during their February 25 l
or shortly after February 24.
meeting with Marcus Rowden et al., William Dircks, Guy Cunningham, and James Sniezek were all confronted with infomation which unquestionably established that Rowden (Attorney for HTPC) had received copies of draft Region IV documents related to the HTPC inspection / investigation.
During this meeting Rowden placed a copy of the tra specific sentences in that letter htlich he felt'were not supported by
{
Although Dircks and others who were l
NRC's inspection and investigation. interviewed placed little significan I
Readen was only trying to assure consistency between the reports and their transmittal letter, the parties at that meeting - when shown a i
copy of the transmittal letter by OIA were able to identify specific l
Therefore it is clear sentences with which Rowden had difficulties.
that Dircks, Cunningham, and Sniezek clearly knew that HTPC h draft transmittal letter.also had the reports, (1) Dircks said he was unaware l
0 about it. (2) Cunningham inferred that HTPC had some knowledge of the reports, and (3) Sniezek was most clear that HTPC obviously either had tne reports or at least had access to the information contained therein. ^
Despite these statements by these three senior officials that they were aware that information and/or reports had been released to the company under investigation, they failed to recognize that there were' violations of either NRC regulations or procedures.
Meetino Between NRC and Former NRC Officials II.
During the course of this investigation there were a number of meetings held between NR; managers and representatives of HTPC; these meetings were in addition to the expected-cdntacts in the field between NRC The significance investigators / inspectors. and HTPC personnel on site.
of these meetings is heightened by the fact that HTPC retained as its attorney fomer NRC,Chaiman Rowden; Rowden, in turn, retained as a technical consultant former IE Director Ernst Volgenau; Volgenau, in turn, retained as his consultant former IE Director of Enforcement Investigations, Dudley Thompson.
the fact that these fomer senior NRC officials were serving as HTPC representatives at these meetings.
There were four principal meetings between NRC management and fomer NR The first was on January 26 - one day officials representing HTPC.
after the NRC investigators and inspectors began their field work at the It was only two days after this meeting that Deputy HTPC f acility.
Regional Administrator Karl-Seyfrit traveled to Burlington, Yemont, to As we also know personally conduct the exit briefing the following day.from ou premature tennination of NRC's investigation over the ' objections of t principal NRC investigator on site.by various senior NRC officials the HTPC representation was headed by Rowden personally.
The next significant meeting occurred at Region IV on February 12.
Although Rowden had planned to attend this meeting, one of his associates It should be noted that lead the HTPC representation in his absence.Frcra the NRC the senior officials Volgenau also attended this meeting.This, of course, was the meeting where Region were Collins and Seyfrit.
released draf t material to HTPC.
The next meeting was on February 24 when NRC officials, including Seyfrit It met with Rowden and others in Rowden's Washington, D.C., law office.
i was at this meeting when Seyfrit released another copy of the inspect on It was also at this meeting when report and its transmittal letter.
Rowden and his associates initiated their requests for changes in the At this language of the transmittal letter to the inspection report.
meeting Rowden infomed Seyfrit of his intention to meet the following day with the E00.
8 The final significant meeting during the course of the investigation w d
on February 25 when Rowden and others met with Dircks, Cunningha At this meeting Rowden again made his appeal for changes to NRC's proposed transmittal letter, which. changes were later e Sniezek.
Region.IV.
Flist, an issue we have The significance of these meetings is two-fold.
discussed at some length, is the actual influen i
IV may tnat were made to the transmittal letter and actions which Reg on have taken in response to real or perceived pressures from the form Chairman of the NRC (e.g., release,of the draft reports and trave Second is the area of the appearance to the This is an area which seemed to Washington for meetings).
public of impropriety in NRC's actions.be highlighted at the Some NRC provisions appears _
which prohibit NRC employees from engaging in conduct which even to be improper are outlined below:
..Not give or appear to give favored treatment or competitive advantage to any member of t
" Employees shall:
(1) 10 CFR behalf or on behalf of any nongovernmental interest."
0.735-3(a)(6),
shall not...directly or indirectly use, or allow th (2) his official information obtained through or in connection with Government employment which has not been made available to
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10 CFR 0.735-41 (Note that this section addresses "a private interest" and does not r general public...."
t)
"An employee shall avoid any action, whether or not specific prohibited by this Part 0, which might result in, or create the (3)
(b) Giving preferential treatment to any person; pendence or impartiality; (e) Making a Go appearance of:
ide f the l
official channels; or (f) Affecting adversely the confidence o 10 CFR 0.735-49a public in the integrity of the Government."
legal "Any person in Government service should:.. 2. Uphold the...
i Regulations of the United States... and never be a party to
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i f
evasion... 5. Never discriminate unfairly by the dispens ng o i
special f avors or privileges to anyone, whether for remune reorinted_
Pub.L.96-303, July 3,1980, 94 Stat. 855, 856, 5 USCA 7301,10 CFR Part 0, Annex A not...."
.in Annot.
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9 III. Aooearance of Contradiction in Collins' Statements _
01A's Interview of Collins on March 9,1982 A.
When Collins was interviewed by OIA on March 9 there were several statements he made, or attenpted to make, which were either not correct The first misstatement was Collins' denial that the investigative report or its transmittal letter had ever been signed (OIA or misleading.
Collins withdrew from this position when the signed report at page 10).
ccpy of this report and transmittal letter were placed before him during Collins' second misstatement was his denial that the Similarly, the interview.
inspection report had been signed (OIA report at page 11).
Collins withdmw from this position when a copy of the signed inspection report was displayed to him during the. interview.
Collins' Collins' third misstatement however was more significant.
rationalization for saying that the inspection report had not been He signed was that he meant the report was not yet in final fom.
explained this by stating that all reports are signed by his subordinates before they come to his office; he considered a report to be in final Collins f ann only when he signed the transmittal letter for the report.
was then asked whether he had ever signed the transmittal the transmittal letter that had not been signed (OIA report, Exhibit 10) inspection report.
and stated emphatically that he had never signed the transmittal letter It was only later that day, upon reviewing a letter which Collins had signed on February 18 (OI to the inspection report.
The fourth problem with Collins' interview was his omission of a fairly significant fact, to wit, the February 25 meeting 'betwee Given the extent Rowden.
unaware that the Dircks/Rowden meeting had occurred.
of our questioning of Collins and our purposes (which were clearly stated to Collins) of documenting all contact between NRC management HTPC representatives, it appears to be a rather significant omission for Collins to have not made any mention of the Dircks/Rowden meeting.
As you know,18 USC 10'01 provides criminal penalties for willful and knowing false statements and omissions of material facts.
Collins' Statement Recardino Criminality B.
During OIA's interviews of Collins, Collins indicated that he felt the allegations in the HTPC case represented potentiall Although it to OIA asking for CIA review of potential criminality.
of his testimony at the April 6 Congressional hearin
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10 was somewhat r. ore equivocal as to his views of potentia) cr,mnai.t This is an area that should be reviewed upon the availability of tne transcript of the Congressional hearing.
Attachments:
- 1. Ltr Greenspun to Dircks dtd 3/7/80
- 2. Ltr Greenspun to Sniezek dtd 3/7/80
- 3. Ltr Greenspun to Cumings dtd 3/17/81
- 4. Memo Seyfrit to Thompson dtd 9/3/80
- 5. Memo Thompson to Seyfrit dtd 9/26/80 A. ScEv2xe.len, w/o atts cc:
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