ML20136E239

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Marked-up Transcript of 830512 Interview of Schnebelen Re T Applegate Allegations.Pp 1-27
ML20136E239
Person / Time
Issue date: 05/12/1983
From:
Atomic Safety and Licensing Board Panel
To:
Shared Package
ML20136D878 List:
References
FOIA-84-415 NUDOCS 8511210449
Download: ML20136E239 (28)


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SCHNEBELEN Tape il S/12/83 t e.f H0YT: - , AfC Mr. Schnebelen I'd like to introduce myself here on this record for you and .tell you that my name is Helen Hoyt and I am an Administrative Law Judge assigned to the Atomic Safety & Licensing Board Panel here in Bethesda.

And I$ colleage here is artfMr. Sebastian Aloot ah'from

- the General Counsel's office of the Nuclear Regulatory.

Consnission.and The third person here in this room with us today is Ruthanne Miller who is a law clerk with the Safety Board. Mr. Aloot and I have been assigned by Chairman Palladino on May 6, 1983 to undertake an investigation into the allegations detailed in the November 16, 1982 Memorandum to Chainnan Palladino from Martig G. Malsch, Deputy General Counsel en title 9 " Interview with Thomas Applegate" and copy of that is ri

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,Ah $ght there on, accordance yes with oursir right on your assignment, right,ofyes the focus oursir. .

7 investigation will be whether or not the Director of OIA gh/ and that office made a good faith effort to carry out their responsibilities in an OIA investigation of s l'

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Applegate's allegations investigated by Region III in the esrly months of 1980. And to anticipate any questions

[) h you may have concerning an attorney, we would like to assure you that you may have one if you wish. We have elected to use a small dictaphone cassette recorder in lieu of making copious notes. It is intended for our use only and will remain in our files and will be used to transcribe the events of this interview that we will have with you today. We ask that you not discuss this interview with anyone in this Coninission's office or any other office. This request is made of you to ensure what we discuss with you Mif it could influence any others would remain here and you would not talk with anyone, about that discussion that you've had with us. Do y6u have any questions, sir?

SCHNEBELEN: No E. not yet.

H0YT: dMenwehavecompletedtheinvestigation,wewill

/report our findings and our reconsnendations to the M

Coninission. p Mr. Alcot is going to ask # the bulk of questions of this interview and at this time I'll turn it over to him.

ALOOT: Would you like to take a couple of minutes and...

SCHNEBELEN: I would yes.

H0YT: ight sir.

ALOOT: I would like to identify the tape, side 1 tape 1 of Schnebelen interview May 12, 1983.

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I 0511210449 851106 PDR FOIA BAUSER B4-415 ppg

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I Bntak in tape time until Schnebelen is ready. l ALOOT: Could you state your full name for the record?

SCHNEBELEN: Arthur A. Schnebelen.

ALOOT: pf, Mr. Schnebelen pff could you describe the periods of

/ employment with the NRC and the responsibilities you held while you were with the NRC?

SCHN N: -(Cicara his chroat) I started working in September 1975. ~/'

I believe my position was, I think, Senior Auditor.

Later, I became Branch Chief for the Administrative and Program Audits and then approximately 1979 or '80 I became Special Assistant to the Director and then in March of 1981, I became Acting Director #of Investigations.

ALOOT: This is all Office of Investigations...

SCHNEBELEN: All was within the Office of Inspection and Audit. I believe my last day of work, I think was'May 5, 1982.

ALOOT: JA,-(c'ee-ed thn:t}-Mr. Schnebelen when was the first time you learned of allegations relating to Zimer or the Region III investigation of Zimmer or Mr. Applegate?

SCHNEBELEN: I would have to say, it would be in January of 1980.

ALOOT: at was the basis -(;;; .d u..va6) for your

[ knowledge?

SCHNEBELEN: First, you are going to have to bear with me, that was a long time ago and I'm t sure about some of this. It's been a long time. I believe, Mr. Cumings, the Director (cic:=d + -M of OIA either called me at his office or he came to mine or somewhereMnd asked me or advised me that I was going to be assigned to Mr. Fortuna's Division who at that time was, I think.

Director of Investigations to help them with a potential investigation that they had at Region III. I believe at that time he showed me the letter from the Chairman, ALOOT: Ahearne l SCHNEBELEN: Yes yes Chairman Ahearney -(c'^:=d t' = t) w m ...c . _

/equ,esting OIA to perform a review or an investigation C of Region III as to thegadequacy or inadequac of their investigation of the Thomas Applegate allegatio h

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_. 2-I ALOOT: Are you,or could it have been January of 19817 Rather -

than 19807 SCHNE8ELEN: It could have been, whatever the M.Chaiman's letter was dated, it was then that following January.

ALOOT: Okay, I think that was January 1981.

SCHNEBELEN: Well, okay change that machine ^=y #nrt~ correct that l

previoustestimonytoreadthad.

ALOCT: ight. JJur; let me direct your attention to the time period of 9 to 10 months earlier, approximately February of 1980. IF, diLound that time period, did Mr. Cumings or anyone 41se in the Office of Investigation and Audit tell you that they had received a telephone call from Mr. Applegate?

SCHNEBELEN: This was about ten months before the Chaiman'sf ALOOT: Yes.

s SCHNEBELEN: No; no, no.

ALOOT: So January was the first time you ever heard about Applegate?

SCHNEBELEN: That's correct. That's correct.

ALOOT:- s there any reason, do you know why you were

[ ass,igned to the Applegate inquiry?

1 SCHNEBELEN: No. I could ask Mr. Cumings that, I presume. I would >

like to think because of my background, experience 1'was available, probably. AJV, I think they wanted a kind of senior grade individua"1 with them because of the nature or'the potential problem that could arise between one agency within NRC investigating the other one. So I would hope that it was because of the various backgrnund problems, background traits.

ALOOT: Do you have a background in investigation?

SCHNEBELEN: During the air force days wepser within the air force...during the latter part of my air force career, I was with the Controller's Office, Auditor General. Such, I headed up various offices from three to twenty we men had;the on audit side. We did a lot of fraud work and as a result of that we worked very closely with the Office U

of Inspection anflitigation (OSI Air Force). We would work jointly Arand then during our career time, I would

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take various courses in some of the techniques just to keep abreast of it. I was not a career investigator, though.

H0YT: Did you ever conduct any Article 32 investigations, Mr.

Schnebelen? Article 32 investigatio37

. SCHNEBELEN: Which article?

H0YT: Criminal investigations for offenses...

SCHNEBELEN: Yes M . Yes M . About...

H0YT: How many of them did you do?

SCHNEBELEN: - That would be hard to say because they were small.

Anywhere from a bowling alley fraud that somebody was stealing nickels and dimes up to the Commissary of Bowling. We had a six months investigation of bowling on misappropriation of funds included. So, numbers-wise, I... l H0YT: That's not important.

SCHNEBELEN: Yeah no we were yeah ,

H0YT: But you were familiar with the techniques of investigations under Article 32?

SCHNEBELEN: Yesab$i.

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_4 AL00T: Could you describe how the investigation was scoped. That's the word we've been told how the office detemined what the purpose--

the scope of the investigation M d. b ould you describe how this particular investigation was scoped in January 19817 SCHNEBELEN: I'm going to have to guess on some of this. I would think that Mr. Cummings and Mr. Fortuna initially must have gotten together even before my entrance onto the team to discuss the various aspect of it. I don't know for a fact. ....a.  :. .

ALOOT:- When was the first time that you got involved in this process?

SCHNEBELEN: I could only say that it was sometime in January. Well, I called in like I previously said and then that's when Mr.

Fortuna--I guess i a joint meeting and Cummings and I think it was Gamble and John Sinclair were going to be on the team and that's when we said we would have to go out i

and stock up. First of all, I said that we were only going i to_be concerned with the adequacy of the Region III investi-l gation of the Applegate allegations. We were not going to determine whether there was construction deficiencies or things of that nature. h Chainnan letter we received was very clear --that Region III was going to be responsible for that side. We were going to look at the Region 9%III) treatment of the Applegate allegations. So consequently, Mr. Fortuna, Mr. Cuaunings directed the three of us--meaning b

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myself, Gamble and Sinclair that we were to go ou*. in Region III and interview everyone regardless of where they sat on the Staff position to detennine their adequacy of the investigation and to go anywhere and do almost anything we need dho do to come up with a responsive report to the Chairman.Cobas w /d on those ground rules, initially, we started j I think John and I went to Gap to receive some more data they had supposedly attained from some people. We reviewed that. Now I guess John and Dave and I went out to Regic.. III. I don't know exactly when, but I'd say January or February time--probably Jcnuary.

ALOOT: Do you recall that during these January scoping meetings whether there was any discussion regarding not making this investigation an employee misconduct type investigation?

SCHNEBELEN: You know--I'll be honest with you. Ce Ms Mo a 4 4

~H0YT: I want to have --just reflect on this tape. We had turned it off for a moment when Mr Schnebelen asked us to and we did sototrytohayanyfearsthatMr.Schnebelenhad--whatour mission was and that we felt that if he needed any time during the questioning to refresh his recollection from any documents--

anything he may have available--please just advise us to stop at that point and we have these notes that we're making for

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X-ourselves on this tape to reflect that in it. And I thir$ that Mr. Schnebelen wanted that last question and line of questioning that Mr. Aloot was headed towards to be begun again and again Mr. Schnebelen)and on this tape,I want to be sure to tell you that you may take all the time you need to respond. It is not necessary that you respond instantaneously. Oo s+ a+ q cy I<. sec, Q e ,

ALOOT: Mr. Schnebelen, in January 1981 during the scoping meetings, was there any discussion as to whether this particular inquiry was going to be conducted as # employee misconduct investigation or as a investigation into the adequacy of the Region III investi-gative program?

SCHNEBELEN: To the best of my recollection, I can only say that during the initial stages of my participation into thip. Ye whole scope was geared toward the adequacy of the investigation that Region III conducted of the Applegate allegations.

ALOOT: That is to be distinguished from what the-focus on SCHNEBELEN: Individuals ALOOT: i h M \W individually.

SCHNEBELEN: That's correct.

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SCHNEBELEN: I could say_one more thing.

ALOOT: Go ahead.

SCHNEBELEN: During our initial entrance visit with the Region III senior staff, after we indicated -- I say we--it was John Dahd myself j in-dicated to the Region III people while we were there during some ch4 = of it, I believe Mr. Keher or one of the other gentlemkn spoke up and said--I don't know the words but in I

t.Q4stk sumation, something to the feet that it sounds like your investigating Jerry Phillips. Does he need an attorney? And, Ok 'S I believe, our response was that if Mr. Phillips was an attorney-.he'f sure welcome to have one, but that we, OIA,

. was not there to investigate. Jerry Phillips or anyone else, individually. We were there only at the direction of the Chairman to see how Region III, Region III handled the allegations.

ALOOT: During these January meetings, was it discussed among your-self', Mr. Gamble Mr. Sinclair and Mr. Cumings,pf how to handle the problem of the Gap allegation that Mr. Cumings had prior knowledge of these problems and did nothing about them.P SCHNEBELEN: I'm sorry I don't understand this.

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ALOOT: h 'Was there a discussion among yourself and the other members of OIA who were assigned to this investigation about Gap's or Mr. Applegate's first allegation that Mr. Cummings had prior knowledge of the problems at Zimmer and failed to comunicate them to Region III or an other office SCHNEBELEN: This was prior to January of '81?

ALOOT: Yes. Youdon'trecallanyconversation?.

d)0 SCHNEBELEN: I didn't even know we had one. h didn't know--as a matter of fact I wasn't even aware of anyone in the office knew about anything prior to '80. Maybe they did. See, I wasn't in ALOOT: You were in N d b M SCHNEBELEN: I was in the other side of the house then. I don't know if they were aware of anything before January of '81. I really can't answer that.

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ALOOT: on the purpose of the investigation, did your meeting with Gap confirm your interpretation of their petition that it wasn't aimed at Mr. Philli

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ALOOT: Yes. Did you tell them, the Gap, that that was your reading of their petition and did they agree with your k' G/

SCHNEBELEN: I doubt if we said we discussed their petition, hardly but I don't think we went into whether we were going to satisfy their particular petition or not. We advised them what we were chaired to do and that we wanted to get as much in-formation from them that they said they had that would help us.and that we went down to obtain the documenpfrom them and advise them that we were going to start this but ALOOT: But there was no mention at that point by Gap that OIA was unduly restricting the investigation.

SCHNEBELEN: No, no or no they weren't --they didn't know what we were going to do really because we were just -- we hadn't even started ourselves when we saw Gap. We hadn't even been out to Region III yet.

ALOOT:

D Now.)nt mentioned that the charter you received from the Chairman and through Mr. Cummings was go out to Region III--

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talk to whoever we have to talk to -- look at whatever you have to look at to resolve this matter. Prior to going out

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l to Region III the first time, did you identify the people you wanted to interview.

SCHNEBELEN: I believe we did. Yes.

ALOOT: Did you have a list SCHNEBELEN: Yes. I think we made a big list up. We sat in the office and

  • d prima w it was those people obviously involved with the in-

-vestigation and then we wanted to see those people I believe .

that Applegate had indicated names somewhere in some of his data and then also we wanted to see, if possible, any of the names that were given to us by Gap. They gave us some names, some allegations and so forth.

ALOOT: Now, let me see if I can clarify this. By we, you mean, whof?f SCHNEBELEN: It would be John, myself and Dave that was really down to the ni6grithpartbutthe art was Roger and partly Mr.

Cummings. I just can't sit back now and think back two years ago as to who was 8 -

because we were back and forth of each others office so,but g I'm sure Mr. Cummings was involved in V

quite a bit---I know Mr. Fortuna was --and thenjsourse Dave and I and John were the work hee 5 .'

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t ALOOT: Ana you say you identified or you intended to interview people that were identified by Gap Were all these people that were identified, all this infonnation particularly the infonnation from Gap d all that relate to this particular investigation

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l or was it related to some other investigation?

SCHNEBELEN: It would relate really. The data that Gap gave us was--I think

Cywas a lot of material that Applegate came up with during his b o'n the site when he was a private detective or something and I think he was at that time when he came across some of these names he was talking with the people. He would meet them, I guess, at the local bar or tavern and then, I think, he gave a lot of these names to the Gap and then they in turn--I guess ht@m ' "of a listing fann and furnished some type 04 e.c% i Q ~' %

us the names. After ccie Mthat wasg to see if Region III ( acl f

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Did they have this available? We our-selves at that point were not planning on interviewing those people unless it was to show whether Region III people were negligent in the performance of their duty---did they go far enough that theyM ;)Asok forth and so on.

ALOOT: I see. Who wrote the interview suninaries?

SCHNEBELEN: Of the people we interviewed?

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ALOOT: Uh hu.

SCHNEBELEN: Generally, John or Dave. Depending on who I designated. John would write some--Dave would write some. We all took notes.

Whoever wrote it --the other people would look at it to see to see I <nd CN3 W9Pdf C) E ALOOT: Who. Were you assigned to this? And did you attend these appeal interviews as a supervisor?

SCHNEBELEN: When I went out during January, February, I guess, the first week in March. It was a team--we were kind of equal but--

since I was the GS-15 I -fliey were 13-type--you know)you more Cedok \

or less are saying3 hey;you head the team up eventhough the two gentlemen had far more day-to-day experience in in-vestigations then I did. So, when you say supervisor, I don't think we're really at the point that I was that much ofasupervisogbutIthinkbecauseofthegradestructure N' O et N b l some of the shots and jif we have to; l go talk to some of the supervisorsj ut b nothing came out l g otJo was

& ^ the supervisor and the other two saying that people were---the three of us worked together. I ALOOT: As a team?

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SC'INEBELEN: That's right.

4 ALOOT: Did you assign who would write the interview sumaries---?

SCHNEBELEN: . No'. We kind of osmosis N on that. Right U'

ALOOT: The lottery ----

SCHNEBELEN: Who had the most work. The Phillip's, for example, was a big interview we had and then the other was smaller so we kind of .

M t out together.

,cv p c.( h w d ALOOT: I see. Was people interviewed in order?

SCHNEBELEN: Yeh, I think we did Jerry first. We either did Jerry or the radiographer . I can't remember his name now.

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SCHNEBELEN: (avinWard,yes.

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SCHNEBELEN: b, I think Jerry first. If I saw that report I.could tell you about something important.

ALOOT:

[ st recol e tion, did subsequent interviews of other people flow from the Phillip interview or did you already have in mind [

SCHNEBELEN: Some did flowg but we already had in mind j but if you wanted to see-- what we really tried to find out was -- did the Region really have an interest in the Applegate allegations or were they just gushing off,and we figured by talking to the various e m p ver; 1 supervisors in the branches as to what Ste est was placed on the allegations. Did they do out and check the webs out so on and so forth. That's why we wanted to check--I think all the people we interviewed were connected somehow within the Branch or had supervisory responsibility of the Zimer site.

SIDE 2 - SCHNEBREN INTERVIEW - May 12, 1983 ALOOT: Mr. Schnebelen: did you review the interview summaries as they

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were written.

SCHNEBELEN: Yes.

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SCHNEBELEN: Yes.

ALOOT: What was the process for your review of those individua1# in@ l / #Lvj

%emt sumarie say they were written a week later.?

SCHNEBELEN: I think I indicated before. Generally, when John wrote the interview YengenerallyDaveandIwouldreviewthemas to-did the interview--the written interview basically reflect what the M clwere i back and forth. That's what our primary concern wa -to make sure that the written interview actually reflec[what was said.

ALOOT: Did you review each and every sumary as they were prepared?

SCHNEBELEN: You mean--each interview?.

ALOOT: AA , h interview as the summary was prepared.

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SCHNEBELEN: I'd have to say yes. I mean I can't be sure about having to say yes. -

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ALOOT: g Bestpoufeerrecollect)p) When were the first round of inter-views completed? Il P & t f $ A.

SCHNEBELEN: I'dhavetosaythat)I'mguessing.g 2Y A ;,l.b'~' h g That would tell you,.Mr .

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f lookontheinterview.J.fyoureallywantedtogetaccurateit f would tell you right -

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SCHNEBELEN: Yes, yeh each intervied dated. I tried to tell you-when it's complete (hY'5 W 4s '

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qt r ' the first round in the sense that there were any subsequent interviews that were & I people identified interviews 6 after you j .

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  • SCHNEBELEN: We had to go back on M y because they were out of.the office, " ,

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either on field trips o, - 2 :%~ #', ' I just don't recall . " '. *

  • ALOOT: Was there a time when you returned to the Bethesda office after i

your first round of interviews and it was determined that you needed to interview more people or reinterview other people?

tJ SCHNEBELEN: I know pe went back out several times.

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ALOOT: Let me direct your attentionD SCHNEBELEN: It could have been-----I don't recall , without seeing the

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. itinerary by trips. John and Dave went to the site and talked to one of the resident inspector I know.

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ALOOT: Was that to request welt records?: There came a point when you  !

Ocided to rehter-view Hr. Phillip ar]d Mr. Ward? 'I 9s \,, ' s cc,

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SCHNEBELEN: g 5I believe so. I think that will show h* ,

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ALOOT: Mr. Cumings, yourself, Mr. Sinclair, Mr. Gat],,,T1 conducted reinterviews. First, why was Mr. Ward and Mr. Phillip re-(nterviewe_d?,_.Whatwas ' ',.the purpose. of,,the reinterviews?

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m ,,.d 4, SCHNEBELEN: - think we~fo ,una some deficiencies in some records and we' now if ther spotId' them g.g

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. ip ALOOT: Could you freshen your recollection by reading this copy of

, the inspection report). N < N crm fC PW 4

SCHNEBELEN: Yeh I remember now. It's vague.7 .c we fAf.ter & came

% back in January ,

I believe I called out to the resident inspector at the site andaskedthemforsomeweldpackages. Would they send us copiesofweQpackages. I thidk, for example, I remember the name a a A CY606tidi42 and K11. I believe now without going &c :I .W' believe these were either one or all ywere yes v< 3

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mentionedjby applicant and we found some problems during our reviewofthewel4packagesgandwewantedtogobackandsee whetherWardandPhillipshadconsideredthemdhing ( .e - ,

and that's what I believe a lot of N.- reinvestigation in February was addressed towards those wel s and the word e a e

I think, on some of the sign offs that the inspectors had done, I believe we wanted to ask them 8,.i ' 6Maccept

. ,ser St fas ,Wis or so forth.

ALOOT: ' These are questions that weren't asked at the first interview?

SCHNEBELEN: That's correct. We didn't have the O h e&

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qu h ALOOT: ame. question on that reinterview yas) What was the purpose OV. w AS of roh Cununings(to play in participating in the interview?

SCHNEBELEN: Well, other than him being the bossman and wanting to know what was going on, I would sayg to satisfy himself that he was the Director. He would have to sign a report and he was reallytheoreticallycondgetingtheinvestigation. I would w covet

  • presume that he wotrid go out. Especially in view of the fact of what we found between the first and second timeframe. In other words, the first timeframe we really had nothing other thantheallegationsandthenwefoundthesewetl 7 package discrepancies and that's when he really got interested and that's why, I think he wanted to go out there to see what N -( DJ1 N o-their answers would be.

ALOOT: During this period when all four of you were out there, apparently.

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Mr. Sinclair and Mr. Gamble went to St. Louis to interview c

Hr. Bandell.

SCHNEBELEN: That's correct. Mr. Bande11.

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ALOOT: Bande11. During that day they were away,(you and/or Mr.

Cumir.gs interview anyone else or review any records?

SCHNEBELEN: I think we were -- if I'm mistaken I think we were working down in the document control room pulling packages to seeja6 I know I wasj to see what inspection reports (what old inspection reports,to see wi. ether there were any items in old inspection reports that we could trace into the cu arent discrepancies Applegate was trying to bring abert. ch0M o l

ALOOT: I see.

SCHNEBELEN: That's31 also know Mr. Cumings was out, I can't regli it, but I Know he went out too I think with work withjthree different cases at one time.hle was doing something for the Comission or the Chairman .ah

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c SCHNEBELEN: On 'different matter s completely unrelated to our trip out D Q R ,.A>&Movering about three different things,I know that, t A A Q- Al -Q ALOOT: Sogwetl Mr. Gamble and Mr. Sinclair naway,you were reviewing relevant documents SCHNEBELEN: That's right;yes ALOOT: Files SCHNEBELEN: Yes ALOOT: Did you find any relevant documents SCHNEBELEN: Ah ALOOT: Were you able to trace old inspection reports especially w ',

SCHNEBELEN: We had some butshad all been brought out before, in other wordsiin the local document room we found where some of site the inspectors had brought items that forth had previously gone outoftofac1; and I thinksmatter the.'h'ad' '

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ALOOT: So there is no new information SCHNEBELEN: Not new,no. But there again this was justijnother investigative technique. .You cannot lookesomething and

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  1. 4 maybe you aren't goinagto find out did3 something come out two years ago or three years ago tnat Region III

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.gu ALOOT: Who decided to interview Mr. Harkster SCHNEBELEN: I really don't know, I'm' guessing I'm just having to go '

back on memory. I think someone mentioned it to us. I think from I&E staff somewhere. I'm not sure. Gilmore or his fonner boss I can't remember his name anymore, But someone on D e I&E sjaff did mentioned I think - C Mr. Cunnings orfDave opfUohn hey maybe you might want to talk to Terry s1nce he had been I think he had been the resident inspector out there or had been on the inspection staff at Region III and he had some data so that'sg! think M oloc: c# d --O

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we a ALOOT: Mr.Vanddwas,whodecidedtointerviewMr.Vandtlf.

\W SCHNEBELEN: That was just a joint thing sincegwas the resident inspector

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ALOOT: During the relevant period ,

SCHNEBELEN: During the current one I think ALOOT: I see pnd Mr.

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r., ater was the resident SCHNEBELEN: Oh way back somewhere I don't know exactly when, this might tell us in here. Quite aways back plus I think he was also on the staff o.c/ n sp3/R .I # . m.- j ALOOT: Do you recall about what time all the interviews were completed and the report, the first draf of the report was completed and sent to you for review SCHNEBELEN: I think April sticks in my mind for some reason. .

ALOOT: Now when this first draft came to you, you previously stated that you reviewed the interview sunnaries as they were writteniso when it came to you in say April was that the secorid time you had seen those interview summariesf SCHNEBELEN: Ah, well that's hard to say.I really can't do that I don'tsokay. The interview summariesjwhen we because.ThlTtial started't feview of the draft we probably didn't have the sunna/f5 attached to the draft.

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ALOOT: I see.

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SCHNEBELEN: There weWe just a narrjatiygs o f the draft and t,h at ~',

I don't believe the k..m v wadat that point M e A . m -q d.W g could have I don't know, I just don't recall ALOOT: What would~ be the draft then ythe sumary SCHNEBELEN: Well the sunnary. The interviews themselves for all practical purposes were finished probably well before the draft was even started. It had to be. So then the draft was done. Now the draft of the _rsport consisted of

'I think a bunch of initially I believe attachments. But thenof awe sumary"$we rqvise change /it around a little bit, because we want*to br'ing in the well package we thought that was the critical point to prove our point that Reg Sn III did not do a good job. So that's when we starte ving upt But on the initial draft I just don't know t!.e complete neat typewritten draft W L.-

e. b -.i % or ed n It could have been. .

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t ALOOT: When you got the first draft in April, did Mr. Cumings also get -thr~ copy of that first draft?

A-SCHNEBELEN: Norma'ssy, he would not becauset okay keep in mind when the draft started up I had switched from the team member and now all of a sudden I was supervisor? March or something I was appointed acting director so now I became officially their boss. So before in al ,;fairnpsp ta me. .

before anything went to Mr. Cumin,gs I w]oeM-have,-h'ad 'a' '

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shot at it. So my guess would be,how I do know I can't say whether it was a first draft or later draftsj but due to trying to get the report out they knew t, at there was a lot of intergst in ait and the pressure od lot of timer when we'hork'tamething in order to save t me we s types it up in probably four 2.opies, one for John, one for Dave, one for me and one for Cumings, so we could all a

t:?rk try to onget it together the report and try to compresj;ocnd save - - -/ time to -

QM}c$nai'5% gut o$kW,cS'^,E. s that I knownDo you recall at ALOOT: was pressure to get this report out? I I SCHNEBELEN: Within the office? Oh yeah, oh definitely. We had a mandate # rom the Chaiman to get the investigation going we wantd t out. .

ALOOT: Give me a time frame or given that pressure to get it out ,

is there any . . . what would explain deadline the four hsomewhere/me month t period between ir.itial draft in

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April and final release in August. Number 1 was that A common length of time for review?

SCHNEBELEN: Ah, I don't know what common would be so I really can't answer that. Ah, I do know that y had to do even after,Mytn after the firjt draftJgoing by memory, I believetWOsomeofthisfreflectonmeassupervisor, but even when we gave Mr. Cummings a,what we felt was a pretty final draft and he started going over it and jp-called me in to ask me questions about it I saw,where he pointed out some problems. I don't recall now What they we butIknowwe~havesomeshorff4sm'an'd I believe we ha o go'bac) and do/Aome more work on it. Ah, I know he that was at" point med time that he wanted to rearrgnge , -

thereportfromastandpointofshowingthatshowingIwelf packages as sumariestor as attachments rather,Jhan what we sent into them M Which I don't . er t#et. Ah, I do recall that, but I can't recall the specifics of it so I do know that g got g back and I think John was off on' another Texas aa....ig and Dave and I sat down and prepared some of these weld packa currently attached Po * 'W *gesand or what it tookthey .are Dave and I some time to do that I know that. But this was after April time frame I am almost positive. I can't say when I don't know how long it took us. Ah, but I do know we had that. Keep in mind I don't know when F'.9Pwas also another criminal investigation,can't we setremember up for the Zimertnot with Region III put f them aside. We established and opened a case on Zimmer itself and during that time frame I don't know again but I know John and Dave or John and I think Al RAf.o went out to the site at Zimer to conduct some invest... some interviews rather. Not to do with this report but due to another i one. Ah ...

ALOOT:

Is thisaseparate 81-39 file number. ingstigation\or

. was that identified as SCHNEBELEN: Yes.

ALOOT: 81-18 SCHNEBELEN: Okaydhegyou're,right yes. One was the Region IIIfthe firste R'ijiBii e IIIJthe latter number should have been the investigation of Zimer. Yes.

~~

ALOOT: By latter you mean 81-39.

SCHNEBELEN: 39 correct.

ALOOT: p, dring this four month period do you recall any other

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than adding r.dditional investigator material twere there any discussions between yoursglf and Mr. Cununings regarding substantive changes. Changes in substance of the report.

SCHNEBELEN: Yes. gg ALOOT: What was the nature of those discussions?

SCHNEBELEN: I believe 6 one of them was to do with training or I think it was investigator's Region III investigative training manual or something to do with the training I can't recall what. And I think we initially had #

attachmentsto the report with that. Now I believe we also had some connentsin the report about it. Ah, and then subsequently after Mr. Cununings received it and then I don't know whether John and David was with me at the time or that's ininaterial but we did discuss as to whether this was appropriate to be put into the report at j

this time and with that I went back and raread the report

ir the draft and went back to Cummings and said I after

\ looking at this I think that we should take this out of the report and schedule this for a inspectio investigation of all of I&C to see whether horty fall throughout the agency or was it a short4 ll d feltsttofor this one isolate instance. It would**fafr,I give the Chairman a report which contained ah negative statements about his training or investigative program unless we had support for it. Would one case suffice for that support? As an auditor I said no. That generally if you go out to do a report on audit and you find one thing wrong you don't stop and prepare a report chastizing someone for one document missing or one signature is wrong. You would go out in larger sample to see if this W a prevalent problem throughout and then if it is you should come back and advise the management of that. This case we only had one, one investigation out of a 1,00% that is done in the agency in the course of a year thatr46dtt! have been a problem GM So we felt' this should be a matter of a special OIA investigation

'N/ and I believe it is in the report. I could be wrong on that. I think we even might oh maybe it wasn't. I thought we put it in the report that we were going to make this a matter of a special investigation and as a result of this report of our report it was then decided after meetings and meetings and meetings with the Chainnan and his people that they would then bust up the so called Region concept investigation and make it one IE NRC Office. With that we never scheduled our inspection to see whether the investigative program in IE was good because they had to give a ground ah new marching orders w--=- - -n ,.- .-r, -:-_,.,,...m ,_ ---.--,-_r, , ,, -.,___--.-__,_,,.y .-- --, m_%,,. - -

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  • I I by tre Chairman to come up with a new training manual and l new program so that more or less said hey OIA hold off a i

while. .%d then along with that I believe we had marching orders to review or I believe they had orders to say whatever they come up with pend copies to 0IA first to make sure they comply with ALOOT: So you made the decision to ...

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SCHNEBELEN: Itrupstating ah it was joint betw'en I think Jim and I.

Yes. Yes.

ALOOT: Are any otherdhanges in the substance of the report during the four-month period [

SCHNEBELEN: That one sticks in my mind, I can remember that one ah.

I'm sure fonnat was a big one ah A, LOOT:

What about the.Har q\e3 . A W/, M.

g :t:g?

SCHNEBELEN: Okay yes that was okay that was attached initially to the report you're right. Ah Mr. Cumings was the one I believe that made the decision to take that out. Ah he felt that the McMpdC interview at that time and after listening to him I couldn't argue with the man was more appropriate to be part of the 39 file because of the type of information in the MpM/ interview rather in the Region III file. The Region III file was really geared toward not really geared toward it was geared only toward Region III's investigation of 4. u r ' t . ~ ' .:.

'- allegations. Harpster covered kind of a waterfront and we felt it was more appropriate to be included in 39. Which was excuse mejaoongoing investigation.

ALOOT: Was there discussion about the possibility of creating a third separate file?P fcr W K W (#f * '-C( . ?*

l SCHNEBELEN: It could have been ah yes it could have beenl fine ah I don't recall.

ALOOT: Do you recall any conversations about just putting a cover memo on the Harpster interview and sending it somewhere?

SCHNEBELEN:

Yes to the Chainnan f guess ALOOT: i.augh SCHNEBELEN: I'm sure yes because what'are we going to do gwe are going to have to do something with it'7 1

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ALOOT: All of these options were discussed SCHNEBELEN: Yeah I'm sure that John and Dave was thinking at the time was going on it too and that could have been one of the concluding options yes let's sendiWg it to somebody but I think it was thendircided to put them into ah 39 that was going to be our fi@.a. bc ALOOT: Do you recall any ah any changes to this draft report that would take out a discussion of I believe about a meeting in Chicago with the FBI and with the PM subcontractors, radioggraphers for the Zimmer , contractg SCHNEBELEN: Meeting in Chicago.$ ' thought that was part brLJ7 of O'C &

our interviews,O.) SN Manything ' t d0'- ( W e.- '4 - -

ALOOT: infonnation but there was some We haven't,a&

discussion received toa 4 thg*some te point ah about a ouva tracking doWn the meetings with the FBI in Chicago ah 7

SCHNEBELEN: That we went to or Applegate went to ALOOT: That apparently that Applegate went to and maybe some ,.9

. Region III people went to also some information H .cr.t N

forget the magnum 3 eabody Magnum Report P

tawthe,M--

SCHNEBELEN: Ah okay well Applegate I guess someone from Region III went to the either the assistant or the attorney in Chicago. A M went;we ajso went back to talk with the U.S. attorney to see W what his reactions M ere to some of Applegate's allegations primarily toward the area you are speaking of rather than the criminal side. Applegate kept pressing or trying to pressure us and to look at all the things. We kept saying we don't have the authority to look at ah gambling or to guns or to prostitution.

. ALOOT: By we you mean Region III SCHNEBELEN: OIA ALOOT: Oh OIA SCHNEBELEN: He wanted us to do it and we're saying hey that's not our bag that's why you have the local police for,you have the U.S. Attorney foq you have the FBI for. They have that basic jurisdiction. We are concerned yes but he kept wanting us to go investigate this thing. The belt buckles the ALOOT: You had conversations with Mr. Applegate during the course of your investigation or the office did

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. .. .__ .. 2 . .. _ . . _ _ .

e SCHNEBELEN: I did gi know for one time for eight hours at a meeting with him with Region III a;nd Applegate .

ALOOT: During the investigation phase or after the issue of this report or afterwards7 l e issued t+ , 1 #' ""

SCHNEBELEN: g.ijherhadtobetowaN A aft y g r A @ I'know Re n g g en tr , o,Applegate kept cal 11ng Region II 3 is u l)* $ '~ llet's sit down with the man face to facertffey brought Applegate..JrF Toe Devine from Gap in and said let's go through these 1, 2, 3 so we know what exactly you're speaking about and we can trace each one down. And we spent eight hours in Region III office going through with Applegate cWecoO %I don't when this timeframe was ALOOT: -#m gs a question to mind. Wass it obviously Mr. Applegate was not formally interviewed. Who made the decision not to interview him or as it just the absence of the decision to interview him .

SCHNEBELEN: I think the latter prob... I don't think we really. No I think it was probably the latter.

ALOOT: Were there any other changes in the draft report' that you can recall ah between SCHNEBELEN: Now that I have seen all the drafts you know I know there were alot of changes made from the initial oh yes a whole '

bunch of fonnat, words ah like we've talked about things l' #

Cununings had some strong opinions on somphings since he signed the report ALOOT: Do you recall what those things were SCHNEBELEN: M C h U' 5; oqf jtraining part another ALOOT: Why would the decision to exclude or delete the Applegate interview was irrelevant f $c. . .

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SCHNEBELEN: I think we were -- if I'm mistaken I think we were working down in the document control room pulling packages to see ah I know I was to see what inspection reports what old inspection reports to see whether there were any items in old inspection reports that we could trace into the current discrepancies Applegate was trying to bring abort.

ALOOT: I see.

SCHNEBELEN: That's I also know Mr. Cummings was out I can't recall it but I know he went out too I think with work with three different cases at one time he was doing something for the Consnission or the Chainnan ah ALOOT: On different matter.

SCHNEBELEN: On different matter completely unrelated to our trip out to covering about three different things I know that.

ALOOT: So well -Mr. Gamble and Mr. Sinclair away you were reviewing relevant documents SCHNEBELEN: That's right yes ALOOT: Files

~

SCHNEBELEN: Yes ALOOT: Did you find any relevant documents SCHNEBELEN: Ah ALOOT: Were you able to trace old inspection reports especially SCHNEBELEN: We had some but had all been brought out before, in other words in the local document room we found where some of the inspectors that had previously gone out to the site had brought items forth and I think matter of fact had some but they had some special hearings on them and I think these had been brought out beforehand.

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