ML20137A456
| ML20137A456 | |
| Person / Time | |
|---|---|
| Site: | Waterford  |
| Issue date: | 07/13/1984 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML20137A292 | List: |
| References | |
| FOIA-85-123 NUDOCS 8508210409 | |
| Download: ML20137A456 (46) | |
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., 1 ORIGINAL 2 UNITED STATES OF AMERICA
- k 3 NUCLEAR REGULATORY COMMISSION 4
5 6 In the Matter of:
- 7 NRC Staff and LPL Representatives 8
Discussion of July 13, 1984 Dealing with the LP&L Response of June 28, 1984 9 10 11 12
'13 14 15 16 17 18 19 '
20 Location: Bethesda, Maryland Pages: 1 aa 21 Date: July 13, 1984 , 22 23 24 Faf 8 % 5 .i BERNABE85-123 pyg ' 25 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 161-1901 . Batt. & Annep. 169-6136 <
1 l -{ 1 UNITED STATES OF AMERICA 2 NUCLEAR REGULATORY COPS.ISSION 3 l _________________ _x l 4 : In the matter of: : 5
- NRC Staff and LPL Representatives :
6 Discussion of July 13, 1984 : , Dealing with the LP&L : ' 7 Response of June 28, 1984 : g - - - - - - - - - - - - - - - - - - -X ' I 9 i 4350 East West Highway > to Bethesda, Maryland Friday, July 13,'1984 11 12 Hearing in the above-entitled matter convened at 13 2:00 p.m. (
$ \
15 APPEARANCES: i 16 On behalf of the NRC Staff: ' 17 Darrell Eisenhut Ben B. Hayes 18 , Richard Herr j Dennis Crutchfield 19 On behalf of Louisiana Power & Light Co. 20 J. M. Cain i 21 R. Leddick Gerald Charnoff, Attorney I 22 ' 23 24 BH 25 NRC-i T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 161-1902 e Belt. & Annep. 169-6136
. I 2 l
( l i PROCEEDINGS l 2 MR. EISENHUT: Why don't we go on the record. i 1 1 3 This a meeting on the Waterford project between the NRC l 1 4 staff and Louisiana Power and Light. For the record, my l 5 name is Darrell Eisenhut. I am the director of 6 licensing at the NRC. The people present here are Mr. 7 Hayes, who is the director of the of fice of g investigations, Mr. Herr, the director of the region 9 four of fice out of the Of fice of Investigations , and in Dennis Crutchfield , with the staf f. Mr. Crutchfield is it an assistant director in the division of licensing. He 12 is also the director of the Waterford review team. 13 We are meeting here today with Mr. James i4 Cain, who is the president in CEO for Louisiana Power 15 and Light. Mr. Leddick, senior vice president for the 16 company, and Gerald Charnoff, who is the counsel for 17 the company. - is This is a short notice meeting we developed ig after some discussion with the company yesterday. It is 20 not a public meeting, but rather, it is a meeting 21 between the NRC management and the utility management. 22 Therefore, it is not public and has not been publicly 23 announced. We are taking a transcript of the meeting, 24 however, at the Office of Investigation's request. The 25 Office of Investigation will be the determiner when BH ( NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 2611901 e Belt. & Annep. 269-6136
3 'k 3 that transcript is made public. 2 .By the way of background. On June 13th of 3 this year, I sent a letter to Mr. Cain. That letter 4 pointed out some areas of concern we had as a result of 5 an intensive review ef fort at the Waterford Feed sight, 6 some time ago. LP&L responded to a proposed program on 7 June 28 of this year. Earlier this week , on July 10th , 8 Mr. Crutchfield received from the company, a 9 preliminary list of individuals who would be assigned ! 10 t review certain of the questions in our June 13th 3, letter. The objective of today's meeting is somewhat 12 simple. It is to express the staf f's preliminary views 13 n the program plan for resolution of our June 13th ( 34 concern, and it is to present our preliminary views 35 from an approach standpoint. Mainly, those that focus 16 on the credibility, if you will, of the reply. As you 37 know, or may know, the office of investigations is is currently investigating matters in at least two general 39 areas. One of those relates to intimidation and 20 harrassment. The other one relates to false 21 documentaiton. I 22 The problem, therefor.e, before the staff is 23 simply the following. How does the program that you 24 have developed take into account what I will consider 25 the broad, almost philosophical allegations. For BH i NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 161-1901 e Belt. & Annep. 169-6136
4 ( i example, question number 23 of our June 13th letter, 2 Pointed out that LP&L should provide an assessment of 3 the overall QA program to determine the cause of the 4 breakdown, together and develop a direct access program S to prevent reoccurrence. 6 That was under number 23, which was the QA 7 program breakdown between Ebasco and Mercury. Now, our 8 concern, therefore, flows from how can we be assured 9 from your program plan, that what you will be giving is to an unbiased product. That is, how can we have high ii confidence in the product if, and recognizing that some 12 of he people who have been there before, obviously inv lved in the, what do you call it, breakdown, or ( 13 a whatever you call it, how can we be sure now that they 1 15 are capable and understand the program problem well 16 enough to ensure that this time around there is not u going to be a breakdown. The product, obviously, has to is be a high technical quality product. But, I think, much 19 more importantly, is we have to have confidence in teh 20 PeoP l e doing that job. 21 Now, part of the reason for the concern was 22 that when we saw the list, which we received on July 23 10, Mr. Crutchfield received , and which has been 24 amended, I believe, by copy dated July 13th, today, a 25 number of the people on that list are the same people BH ( NRC-T-1 FREE STATE REPORTING INC. Court Reporting
- Depositions D.C. Area 161-1901 e Belt. & Annep. 269 6136
5 ( 3 who were there when these problems developed. 2 Therefore, the question is obviously going to be, how 3 are you going to demonstrate to us that we should now, 4 this time around, so to speak, have. confidence in the 3 product? Very frankly speaking, the reason we are 6 having this little meeting is to bring that problem to y your senior management's attention. Because, I think g that it is clearly going to be something that we are g going to have to address. If we don't address it, we 10 are going to be down at the end of the line with a ii technical problem that is back here, and it is going to 12 say, we are not sure how we've got confidence in it. 33 Now, I don't know, Ben, do you want to make any ja comments on that? 15 MR. HAYES: Yes, I would. As Darrell i 16 indicated, we do have two broad areas that my office is 37 investigating. As a part of the investigative process, is my staf f keeps NRR well read in on the results on a day 19 to day basis. In doing so, it is obvious that the staff 20 has some concerns about some of the individuals, at 21 least, on the list that I received on July 10, 1984, , 22 your first list. I would like.to state, though, Mr. 23 Cain, that we are not at any stage of our investigation 74 to the point, where we can in a month or so draft a 25 report and make that available to the staf f. The views BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 261-1901 e Belt. & Annep. 169 6236
6 ( i that we have addressed to the staff are certainly 2 preliminary. We have a long way to go in many of these 3 areas. But, I felt it important to advise Darrell about 4 what we have to date, so that if he felt it necessary 5 to meet with you then we could have this meeting, and 6 obviously, you are here. 7 But, I want to tell all three of you that we a have not reached any conclusions or recommendations or 9 anything of that nature at this point. What I attempted io to do in discussing with Darrell is to hopefully head n off a potential problem that may surface down the road' 12 so that we, the commission and the applicant don' t find 13 ourself
- reassessing ourself 90 days down the road. That
( 34 was my concern. The reason that I asked for the 15 transcript was that my presence and my staff's presence 16 meeting with the staff an applicant is very, very, 17 unusual. This is the first time around, and I just is don't view that as an OI role, and in the normal sense 19 of our mission. So, I asked for the transcript, and 20 hope that we would make this transcript available to 21 the public at an opportune moment. 22 I am concerned about maintaining the 23 integrity of the investigative process and the 24 investigations without that, then our investigations 25 serve no useful purpose to the commission as well as to BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 1611901 e Bolt. & Annap, 169 6136
l l l 7 l ( i the public and the applicant. I will monitor the l l 2 discussions and hopefully, add what I can to assist in l 3 some resolution, bu t at the same time, if I see the 4 conversation on behalf of the staff going further than l 5 I feel comfortable with, I will interject myself and 6 ask that we withdraw from that area. So, at the l y conclusion, at least at the conclusion of this , 8 statement, I am in hopes that we can, the staf f can 9 give you at least a general view without hurting our 10 investigative product. That is really why I am here. l l 33 MR. CAIN: I'd like to comment that Louisiana ' ; 12 Power and Light is appreciative of the willingness of 33 the office of investigation to sit down and meet with s i4 its management, as well as others in attendance and 33 state that we will not do anything'that compromises the 16 integrity of the office of investigations. You have my 37 assurance of that. We are mindful of the precedent I is being set by this meeting and are hopeful that that ; 19 precedent is indicative of the need for all of us to l 20 set about accomplishing an objective which is the j 21 commercial licensign of the Waterford three. To that ; 22 extent, we are all pulling toge,ther for that purpose. 23 As a company, I would hope that this afternoon, one, we ; 24 could get some sort of confirmation of the approach 25 being followed is one that is acceptable, one that we BH NRC- ' T-1 FREE STATE REPORTING INC. Court Reporting e Depositlens D.C. Aree 141-1901 e Belt. & Annop. 169 4136
8 6 i don' t get down the road two, three, four weeks from now 2 in drafting replies and submitting them and then they 3 say if you would have done such and such it would have 4 been a lot better. We need some sort of confirmation 5 that the approach being developed is one that is, has 6 some recognition of approval. 7 As far as personnel concerned and their p a involvement or past involvement with various aspects of ; 9 the project, when I was given an executive to responsibility for Waterford 3, I found it necessary to 3, replace the vice president of nuclear operations and 32 the plant manager. So, my willingness to move on 33 personnel is not without example, however , it has been i4 done with compassion and understanding. I think all of : is us who have beca responsible folk at managing people ( 16 have to recognize that there are limits as to what you , 17 can and can' t do. There are ways of doing it in a 18 manner that does not destroy human dignity and I would 19 contend to continue to maintain a posture that is 20 mindful of human dignity. On the other hand, I have the 21 corporate responsibilities to carry forward an 22 investment that has exceeded two billion dollars, that 23 must be placed in a position of earning a return for l 74 corporate survival, to that extent that it is necessary 25 to take, temporary or short term action that involve BH i NRC-T-1 FREE STATE REPORTING INC. - Court Repetting e Depositions D.C. Aree 161 1901 e Belt & Annep. 149 6134
F 9 c i i personnel with dignity, I am here to committ that I am ! 2 here to do so. I would hope that I have enough 3 capability to do this in such a way that it does not 4 reflect on the. investigation that is underway or the 5 involvement of any NRC staff, so there is no 6 " backlash". I think I can do that, I'm confident that I 7 can do that, and those that work with me can do that, ; e once we know who we are involved with. ! 9 I think that has been a problem, or one of i to our concerns is that we have been getting certain i, general expressions of concern that we have been unable 37 to narrow down with the informationt that we have got. 1 33 We are quite willing to go the extra mile. You just 34 help us (o that, and we will do everything we can in a is professional way. 16 MR. EISENHUT Let me make a comment on that 37 if I could. Clearly, as Mr. Hayes said, we are not at is the point where we can go down the list and identify, l 19 or at least, our staff, I guess would say, does not f 20 have before it, the information of the results from the 21 office of investigations.to the degree we could go down 22 the list and identify those individuals that either we 23 have concluded that there are problems or there are not , 24 problems. The investigative work is just not there yet. 25 So, that in fact, puts us in this akward sort of what - BH l NRC-T-1 FREE STATE REPORTING INC. < court m.p.eting . Depositions D.C. Atee 161 1901 e Selt. & Annep. 149 4134
10 ( i do you do in the interim. I think that the key thing 2 that we are looking at is clearly, first, you folks 3 have to determine the cause of whatever levels where 4 breakdowns of problems developed in whatever places. If 5 they developed, you are going to try to assess the 6 cause of the problem. 7 Now, I think what led us to the concern was, e and let me try to be as generic about it as I can. If g we go to your list of people, for example, I wasn't to sure just exactly what the functional role was that you 33 had. The titles of individuals listed as primary 12 reponders or designated reviewers, your later list 33 dated today, July 13th, lists individuals as response 14 coordinators. Let me start with the previous list, 15 because I have looked at it, at least, somewhat harder. .. 16 For example, the first name on the list was the OA Q 17 manager for EB ASCO. Even with assuming no information is from the results of any investigative work, I would 19 have to read the staf f's 23 questions and answer the 20 hard question, how or what role, or what contribution 21 did that individual make.to this situation, good, bad, 22 or indifferent. I would have to make that assessment. 23 Similiarly, I don't remember, but I think l 24 there was an individual who either was or still is the 25 OA manager for T & B, Tompkins and Beckwith, Tompkins BH l NRC-T-1 FREE STATE REPORTING INC. Ceart Reporting e Depeeltiens D.C. Aree 141 1901 e Belt. & Annep. 169 4136
i i I 11 k and Beckwith, who is on the list. Again, I would have i 2 to ask the question, what role that individual may have 3 played in the previous development of the previous 4 setup. I give. you these as examples. I certainly am 5 not, and do not want this discussion to infer that I am 6 identifying two people, or any number of people on this y list that I would have questions about. I am saying 8 that that is the logic that I have to go through. 9 MR. CAIN: Darrell, let me interrupt you and jo ask, is that concern of yours just because of ji historical involvement different from Mr. Hayes over 12 here? Is the mere fact that the QA man from EBASCO and 33 Tompkin & Beckwith had been around five, ten, or 34 whatever it is years, is that factor alone giving you a 33 concern as to the credibility of the product that we is result in, or is it that plus something that Mr. Hayes a has that perhaps is indicting? is MR. EISENHUT: Let me speak first. My aspect 19 first, would be a generic question. My generic question 20 would be more in the mode of how do you know whether 21 the individual, again I don' t want to, I am not 22 identifying any too particular , areas. How do you know 23 that that person was a contributor to the problem or 24 not a contributor to the problem. You would have to 25 address it first generically. But, I think it is fair BH 4 NRC-T-1 l FREE STATE REPORTING INC.. Court Reporting Depeeltiens D.C. Aree 161 1901 e Belt. & Annep. 169 4134
12 ( ~ i to say that a number of individuals on the list, t~o 2 make it as generic as I can, there is at least a shadow 3 hanging over certain individuals on the list where I 4 would first have a generic concern, secondly, there 5 name would come-up as a clouded issue. 6 Let me give you an example. - 7 MR. CAIN: When you say a generic concern, f a generic is generic in the sense that they have been 9 around five years? io MR. EISENHUT: Yes. Generic if they had only si been around five years would only make it a question. 12 That alone, if that was all there were, I would be 13 asking you to a, reassure yourself, and then expect you g 14 to Come forth with a convincing argument that those 15 individuals are not a problem. 16 MR. CAIN: Well, I guess that I would react 17 that if we 'tund any suspicion on a generic basis that a ! le guy was part of the problem, we would have run him off, 19 and then would have cleaned that up considerably. We j 20 would have run him off a long time ago. Because, in a l 21 job of this sort, and a product of this sort, we have 22 got to have quality oriented people. But, I hear what 23 you say and we are willing to take a look at it. 24 MR. EISENHUT: I was going to say, I 25 appreciate the point that you are making, except, you BH NRC-T-1 FREE STATE REPORTING INC. ' Court fleporting e Depositions D.C. Area 1611901 e Belt. & Annep. 169 6136
13 i certainly would have run them off a long time ago. I 2 Except, much of this information in the June 13th ; 3 letter was new to you, and the full impact when you 4 develop it you. may find that there clearly is or has t been, at least in some limited areas a QA problem. So, i 5 6 you then will have to assess why there was a QA problem . 7 or to what degree there was a QA problem. It appears e that the person answering the question whether there is 9 a QA problem is the same person who was there , r to Previously. So, by generically I am saying, how can you n assure me that you are taking , legitimately taking a j i 12 hard look at a potential problem area when the person 13 deciding whether or not there is a problem in the first ( i4 instance is the person who was there before, who may 15 have been the problem. 16 That may sound like a double or triple talk j 17 sentence, but it certainly, I think that conveys the { s 18 feeling. I 19 MR. CHARNOFF: Darrell, let me ask you a l 20 question. I think I understand completely where you are j 21 coming from in terms of the generic question. At the : 22 same time, there was the integrity question asosciated 23 with the individual. It is fair to say that even if ! 24 they made errors, mistakes in judgement, whatever, they 25 are also in major part, the corporate historians of ! BH 1 i NRC-T-1 FREE STATE REPORTING INC. ; Court Reporting . Depositions ; D.C. Area 1611901 e Bolt. & Annep. 269 6236 -
14 S i what happened, so that they have to have some f' actual 2 input to their knowledge of what went on, assuming 3 integrity is very important even if they aren't the 4 principal reviewer. 5 MR. EISENHUT: Oh, absolutely. I agree with 6 you. 7 MR. CHARNOFF: On the other hand, if there is g an integrity question or as you say, maybe a cloud, 9 then we have a double problem. 10 MR. EISENHUT: I'm not sure that there is a 33 double ground though. If I had questions and if, for 12 example , let me make it, Jerry Charnoff's firm screwed 13 up in several cases when I asked for an evaluation by J 4 34 your firm to see what went wrong and why there was a i 15 Problem, and then I presented that problem to you, you l , 16 Probably would not go back and assign the very same 4 37 people in your firm to evaluate why they had apparently l 18 had a problem'. 39 MR. CHARNOFF: I understand that, all I am 20 saying is that I may use some of those people to find ! 21 'out what happened. l 22 MR. EISENHUT: Oh. Very good. That is why I go l 23 back to this piece of paper and I said, I'm not sure 24 what the designation of primary responder meant or 25 designated reviewer meant, but if those two people BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 161-1901 e Belt. & Annop. 169 6236
15 i identified on your, on your previous sheet, suppose 2 both of the-people in line are, there are three names 3 in line one. Suppose all three people in line one I had 4 questions about. Then, I would question whether or not 5 you were, had developed a program which programatically 6 could adequately respond to this problem. 7 Let me give you even a more specific example. g Here, I will need to get a confirmation from and O. I. 9 and a confirmation fromt the utility. There is at least jo one name on this list that I am told who in a previous 33 discussions identified that his name appeared on 12 certain cocuments. That gentlemen has now said that he 13 really didn' t sign those documents. Yet, his signature ( 34 appeared on those documents. i3 I think that is'a piece of information which
- the utility is aware of. I think that this is nothing 16 l i
new. You know of the individual in the list, because 17l' 18l that person has. ig MR. CHARN0FF: Could we go off the record for 20 just a moment? 21 MR. EISENHUT: .Certainly. 22 (Off the record discu.ssion.) 23 MR. EISENHUT: Let's go back on the record. 24 The basic question about which we were discussing 25 before the short pause was at least our information is BH NRC-T-1 FREE STATE REPORTING INC. Court Iteporting e Depositions D.C. Area 161-1901 e Belt. da Annep. 169-4236
16 ( i that one of the individuals whose name appears on the 7 July 10th document, and I believe on the July 13th 3 document, is the same individual who has already 4 stated, that his name appears on OA type documents, 5 QA/QC type documents, I use that in the broadest 6 context, construction documents I guess, his name 7 appears that he has signed the document. He has stated g that he did not sign the document. Now, with that as a 9 limited kind of background, it would appear that those to are the kinds of things you would have looked to on n each of those individuals to ensure that you do not 12 have yourself a real problem. 13 MR. CAIN: Can I at least take a hypothetical? 14 MR. EISENHUT: Tt.ke this hypothetical. 15 MR. CAIN: If, 'n fact, there is such a name, 16 such a person on this list, he at least in a prima 17 facia basis is not himself a wrong doer. He may be is contending that there was wrongdoing somewhere else. ig So, that, would not 20 MR. EISENHUT: He may or may not be. pi MR. CAIN: He may or may not be, but in this 22 hypothetical case, if his alleg.ation is false, then he 23 is a falsifier. But, at least what he is asserting, and 24 what you are looking to would suggest that he may not 25 be the wrong doer. Somebody else may have done BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositlens D.C. Aree 1411901 e Belt. & Annep. 169 4134
v 9 17 t i something. That shouldn't, by itself, disqualify him 2 from being on this list. Is that correct? 3 MR. EISENHUT: True. Not necessarily, however, 4 the circumstances on this hypothetical, which I do not 5 remember, and I will readily admit that I am speaking-6 as a hypothetical. It may well be that he authorized 7 someone to use his name. So, it may not be as simple to a turn off this example that you are giving. 9 MR. CHARNOFF: It was your example. 10 MR. EISENHUT: I'm sorry, it was my example. I 33 guess the real question comes back to LP & L that when 12 you finalize the list of individuals that are going to 13 be the front line primary reviewer responsible for ( 34 these 23 areas the question that I am going to put to 15 you is, and I fully well expect to explore it at a 16 regular meeting, applicant and NRC meeting. Is who are 37 they, what are there qualifications, how did you go la about insuring that those individuals in at least your 19 mind were not part of the problem in the first place. 20 Now, I don' t want to take the approach of presumed 23 guilty until proven innocence. However, I think that is 22 the question that I am going to. ask you and I think it 23 is encumbent upon the utility to make a strong 24 demonstration of the qualificatione and adequacy of the 75 people and the job. BH g NRC-T-1 FREE SYATE REPORTING INC. Ceart Reporting e Depositions D.C. Aree 141 1901 e Belt. & Annep. 169 4136
18 ( 1 I am going to start at the very top. If I 2 look at the first name on the list, as I mentioned 3 previously on the earlier draft, it was a Q. A. manager 4 of one of the engineering companies and he mentioned a s second Q. A. manager. I fully well expect you to come 6 in with those individuals and demonstrate to me, first 7 go back to the beginning to find why they are qualified 8 to be a manager, and if they have done an adequate job. 9 What were there background, their experience levels, 10 then why wouldn't we r why do you think they were not n involved or part of a QA/QC problem. Thirdly, why you 12 think they can be a curer or solver of the potential
- i3 QA/QC problem. I would expect that I would test you on 14 each individual assigned to your program, just as I is would in any other cases when you go through QA/QC.
16 I believe that as you go through that, if 17 there were a situation such as the hypothetical as you is have mentioned, and if the company developed its own 19 internal program for discussing this matter and the 20 qualifications of those individuals. Any such problems pi may well surface in the company, I would expect them to e 22 surface. . 23 MR. CAIN: But, it is cicarly understood that 24 if in the development of this process that you have 25 just described, to assure ourselves of these things BH ( NRC-T-1 FREE STATE REPORTING INC. Cevet Reporting Depeeltiens D.C. Aree 1411901 e Belt. & Annep. 149 4136 __ _ _
F 19 A that maybe we decided for whatever reason you did not i 2 want to use that person as the primary responder, but 3 that is not to say, picking up on Jerry at this point, 4 that we could not utilize this corporate memory in the 5 development of files , the whatever, we had to pull 6 together for whoever might end up being the primary
; responder. Such an involvement by that individual will e in now way discredit the response to that item.
9 MR. EISENHUT: I would agree with one 10 provisal. You couldn't just turn to the corporate i, memory and take every statement or every piece of 12 information as a gospel statement. You obviously, as 33 someone keeps reminding me, look behind the invoice. You have to look at the piece of paper and the
,$ information you are getting. Be sure that whoever you 16 have assigned to the problem is convinced that you have jy the total picture.
18 MR. LEDDICK: I have to point out that we is rarely are basing anything on opinions. We are basing 20 them on documents and facts as much as we can 21 determine. 22 MR. EISENHUT: I appreciate that. That's why 1 23 said look behind the invoices as opposed to look behind 24 the statements. 25 MR. CHARNOFF: Are you saying if the paper has BH NRC-T-1 FREE STATE REPORTING INC. > Covet Reporting e Depositions
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20 1 i been prepared by people who have been around over which 2 there has been a cloud? 3 MR. EISENHUT: Well,it is even more basic than 4 that. I can appreciate that, that is why I said look
~
5 behind the invoices as opposed to look at the 6 statement. 7 MR. CHARNOFF: Are you saying if the paper was a prepared by people who had been around over whom there 9 had been a cloud we have got to check the papers. 93 MR. EISENHUT No, it is more basic than that. ii I have just told you that the office of investigation 12 has confirmed that there are two general matters under
. 13 review, intimidation and harrassment and falsified 14 documents.
15 MR. CHARNOFFt Yes, I understand. 16 MR. EISENHUT: That's why I say make it clear 37 that you look behind the invoice. 18 MR. CHARNOFF: You know, what I hear you 19 saying is I think fair enough that I think we have a 20 burden to demonstrate to you that we understand the 21 problem and have a response to the problem. The 22 question that I have for you and Ben Hayes is having 23 said what you have told us and having a list of 23 or 24 however many names there are, we obviously are not 25 party to many or all of some of the allegations that BH NRC-T-1 FREE STATE REPORTING INC. Cowt Reportine e Depeeltions L D.C. Aree 2411901 e Selt. & Annep. 169 4134
21 ( i Ben Hayes and Dick Herr are looking at. So, in many 2 re:pects we are looking with one arm tied behind our 3 back in the sense that we are suppossed to go through 4 this detailed investigation without a guidepath. We 5 have some general ideas of areas and general ideas of 6 history of who's around. The question is whether you 7 are willing to help us, that is if we were to come in g and say we think we feel pretty good about these 23 9 guys because we have done this, this and that. Are you so prepared to help us and say, but even so, there is at is least one or two, or five guys there that there is a 12 cloud over, they may not be guilty at all, you can 33 continue your investigation. 34 We don' t have any problem with that, but are is you prepared to help us by identifying those five, not ic for us to take any punitive action to, because we won't I i7 until your investigation is done. But, so that we don't
- is find ourselves in a position where our investigators ig aren't as good as your investigators. Or, our 20 investigators don't have the benefit of allegations, or 21 maybe the benefit of not.having allegations. That cuts 22 three different ways. .
23 But, the real question is whether, you have 24 been at this now with your people for three months, 25 four months, whatever it is, and you do have some BH NRC-T-1 FREE STATE REPORTING INC. Cemet meeertine e Depeelt6 ens D.C. Aree 1411901 e Belt. 46 Annep.149 4134
22 ( i knowledge, not enough to say that somebody is good or 2 bad, and we understand that and you have to go through 3 normal processes until you reach a conclusion. But, I 4 am prepared to. in effect share with the chief executive 5 officer of this company, the people who at this time 6 you. are concerned about enough so that we should 7 hesitate before we used them, without conducting a e field investigation of character on our part. Or, do we 9 have to play, it is almost like a game otherwise, and I to am afraid of that. I don' t think that is even in the is public interest or even necessary to protect the 12 propriety of your investigation. Just as I think we 33 have said before, I think that somewhere in this 14 relationship between the regulator and the regulatee 35 the private company, you don't have the confidence that 16 the senior executives of that company are going to 17 respond with integrity to this concern at the same time is that they watch their corporate assets and deal with ig their people. 20 We don't really have to fold this up because 21 we are playing a game or we have to wait until we 22 finish our investigation, meanwhile, the project is 23 held hostage to it. That is not right or in the public 24 interest, or I think what Congrear intends. So, the 25 question is, how do we croar. the threshold of sharing Bil 0 NRC-T-1 FREE STATE REPORTING INC. Cemet seeertine e Depeele6 no D.C. Aree 1411901 e Belt. & Annep. 149 4134
23 4' i some investigation without protecting the integrity of 2 the investigation which we do not want to do. It is as 3 important to us as a licensee as it la to you as an 4 agency to have your investigation unsuly. 5 Yet, we have got to avoid the game par't of ' c it. What I was hoping we could do here, today, is y really cross that bridge with a committment. I mean, I e have talked to Jim Cain and Mike. They understand fully 9 as I do and you do, the importance of the twin 3o objectives here, getting on with it, and yet not 33 affecting your investigation. That is what we are 12 really begging you for, if you will with the ' 33 committment from the company that we are not about to 34 prejudice that investigation and we will do what we can 35 with your advise not to do so. But, we need to have the is benefit of your intelligence, which may not be, I 17 appreciate it is not without conditions and that you to don' t want to be on the spot of hurting anybody, but, I to think what Jim said about dignity really is the key and 20 that he will conduct himself that way. But, I think we 21 need the benefit of what you guys know. 22 Otherwise, we are still going to play a game. , 23 We are going to come in and I think we have the burden l 24 Darroll set, but I think we need some help. Because we ! 1 25 have not commissioned a separate investigational BH i
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24 3 effort. We don't own an O. 1. We don' t have the guys 2 with Dick Herr's qualifications. We have no need to do 3 that. That doesn' t make any sense either. So, the 4 question is where are We in that regard. Because, then 5 I think it would be very helpful. You may correct me4 if 6 I am wrong. MR. LEDDICK: I thing the second list was an 7 8 attempt to make an effort, somehow to identify those g people that might be under suspicion, remove their in names from the list. MR. CHARNOFF: But that's a guess by you. 12 MR. LEDDICK: But now I am disturbed to find that there are still people on this list that are under ( 13 suspicion. I just don't know how to go about that. i, 15 Also, I may very well have removed some very valuable 16 people from this list because I am still in the old 37 guesning game. I just don't know how to deal with it. is MR. CHARNOFF Then you really have a ig committment then where, really we will be guided by you in terms of not disclosing information in the ways we 20 21 will talk to you about how we will do it, so that we 77 don' t prejudice. We don't want, to do that. 23 MR. HAYES: I realize the dilema and the 74 problem is that we are proceeding approximately six to 75 eight weeks ahead of where my staff presently finds BH NRC-T-1 FREE STATE REPORTING INC. Cemet Reeertine e Depeele6 ens D.C. Atee 1411901
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25 ( i itself. I am somewhat torn between being candid with 2 you and your client, and at the same time, protecting 3 the credibility of the commissions office of a 4 investigations. It is a real dilema. I have rassive with it not only at Waterford, but certainly other - s power plants 'around the country. It goes on on a daily y basis. e This meeting this af ternoon was, it may be a 9 meager attempt. It was an attempt to relieve some of in the pressure of the situation and hopefully at the end gi of your review, have a product that will stand the test of the staf f's scrutiny. I don't have the answer to 37 33 that. I am, again six weeks away of committing i4 resources that might disclose in more certain terms
,3
! those individuals on this list that may be copable in g some manner, some procedural violation or what have 37 you. At this point we have allegations that on is individuals, contractor, individuals, as well as the io staff, I would assume. I can't give you a list of them here today if I had to. I don' t know what to tell you.
20 2, pp MR. CAIN: Is there anybody that we have an affiliation with that you would be willing to give it 23 74 to? p$ MR. IIAYES: It is something that I would not D!! ( NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositlens D.C. Aree 1411901 e Belt. & Annep. 169 6236
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3 feel comfortable in making the decision without 2 some consultation with the commission. It breaks with 3 the policy that we have been abiding by over the last 4 couple of years, but what many of the facilities 5 anxiously awaiting some type of licensing product, 6 whether it be fuel load or full power, it might be a 7 time to reassess our policy in this area. I feel 8 somewhat compelled to stand with the policy as it has 9 been, but at the same time I am certainly willing to ig sit down with the commission and discuss the matter. 11 I, as I.said, t.his is the first time that the 12 Office of Investigation has participated directly with 13 a CEO and VP Nuclear and council on this matter. Again, ('. u I feel very uncomfortable because the perceptions could 35 be negative, while at the same time 1 think that my 16 presence here is something that I view as realistic and 37 at least at this point , I don' t think that we have 18 compromised this of fice's integrity or the commission's ig integrity. There are very many views by different 20 people. Because of this meeting, that's why I wanted a 21 transcript and get it to , the public . 22 MR. CAIN: I understand your position. Let me 23 ask some more general questions and you determine 24 whether or not you can respond to deal with your 25 concerns. How many allegations are we faced with? Is BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 1611902 e Bolt. & Annop. 169 6236
27 i 1 this, have we got 100 allegations that are bugging you, 2 or do we have 50 that are bad, and I know that perhaps 3 by reviewing that gives us perhaps a clue to the complexity of your assignment. But, on the other hand , 5 it gives us some-insight as to the scope of your 6 investigation and what we have got out there dealing 7 with. Are you in a position to answer that? 8 MR. HAYES: Well, I think I can give you a 9 partial answer. With respect to the items of wrong 10 doing, wh~ich is our responsibility, numbers are 11 important. But, they are not the paramount deciding 12 factor as to whether or not this of fice will undertake 13 a full-scale investigation. I look at the basic 14 allegation itself as to how it affects public he 15 and safety. I guess it would be fair to af that we 16 have numerous allegations concerning intimidation and 17 harrassment on that plant site.
'8 MR. CAIN: More so than allegations of wrong 19 doing?
20 MR. HAYES: Well, we classify that as a wrong 21 doing matter. When I say numerous, more than three. We 22 have six investigations at this'particular point in 23 time. Six. There may be others that turn up, as they 24 always do, and we are ccD.'.inually evaluating the merits 25 of those allegations. Just because we receive an BH I NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 261-1902 e Bolt. & Annop. 169-6236
28 ( ' i allegation does not mean that'we instituted 2 investigation. We looked very closely at it. I have 3 taken the resources that we have available and tried to a investigate those areas that I feel would have a real 5 impact on public health and safety, that is, false 6 documentation. I have moved resources in to those 7- investiative areas and hopes to resolve them in a 8 timely fashion. At the expense, Mr. Cain, of setting 9 aside the allegations concerning harrassment and 10 intimidation, I do not have adequate resources to put 33 at your plant site to do a timely investigation. I 12 d n' t have adequate resources to do that in any plant i 13 today. We are, we just can' t do it. .\ 34 MR. CAIN: If I reimburse you? 15 MR. HAYES: The problem isn' t the money. The 16 Problem is that it takes six to twelve months to take 17 an investigator and school them in part 50's 18 appendixes, and what have you. That is the problem. ig MR. CAIN: In the area of false documentation, 20 you indicated you have six investigations underway in 21 intimidation and harrassment that fall under the 22 category and items of wrongdoing. In the other category 23 of false documentation, even though you have not had 24 the resources to devote to that, by comparison, do you 25 feel that we have got more than six in that area? Are BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 161-1901 e Bolt. & Annop. 169-6136
29 ( i you in a position to respond? 2 MR. HAYES: If we had an allegation concerning 3 falsified records, we may get numerous allegations 4 concerning falsified records. What we attempt to do is 5 to conduct one investigation to resolve that particular 6 area. We way end up with eight falsified documents but 7 one investigation. And, our investigation may encompass g 15 to 25 individuals as witnesses. We may get 9 allegations on that particular falsified document from jo six different sources. 33 MR. CAIN: I should have asked the question in 12 this manner. Is there one area i.e., piping, concrete, controls, electrical, mechanical, that you have perhaps ( 13 y an indication that' there is a concentration.of false 15 documentation? 16 MR. HAYES: I think if I should answer that, 17 it might be too revealing as to where my staff, as we 18 speak today may be. So, I would decline, at least at 19 this point, Mr. Cain to respond. 20 MR. CAIN: I appreciate your concern. 21 MR. EISENHUT: Let's see. Let me focus back on 22 my other. Mr. Cain asked the question a little while 23 ago, is there a dif ferent represenative that they might 24 have who might give some framework to work with or 25 discuss the concerns with. BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting Depositions D.C. Area 261-1902 e Bolt. & Annop. 269-6136
30 ( i MR. CHARNOFF: Let me add to that. As you 2 know, we have employed as an independent, three rather 3 distinguished people, some of whom we felt, well, Bob 4 Ferguson and Larry Emphries and Saul Davine who had no 5 contact with this plant before who are overseeing this 6 thing from an independent stand point reporting 7 directly to Jim Cain. 8 MR. LEDDICK: Who are, the staffs are involved 9 in details they are solving too. 10 MR. CHARNOFF: These three are individually ij reporting directly to Jim Cain on their work. Now, 12 wouldn' t it be helpful to their work, as distinguished
. 13 from our work, company work, if they understood where -(
14 these clouds are, and if they could have some sense of 15 that. Because then that focuses them, if you will, on 16 the areas that they really ought to button down in 17 terms of helping us get this work done right, l is effectively, and completely, so that Darrell and Denny, 19 When they get an answer from us, have some sense of l 20 confidence in it. 21 You know, if you take that case of the fellow 22 you said before that we know something about, I don't know whether we do or not, but it doesn' t matter. If 23 24 that was an allegation that you had received, that we l 25 didn't'know anything about, that didn' t come from the BH h NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 261-1901 e Bolt. & Annop. 269-6136
31. ( i company in some where, there would be no way that we 2 would know whether any of these fellows on this list 3 are there. 4 MR. EISENHUT: You're probably right. But, 5 much of this did not. come from someone walking in with 6 allegations. Much of it just came from a lot of foot 7 work by the investigators in the field. 8 MR. CHARNOFF: Oh, sure. And that means that 9 we have to do it. I mean, are you really going to ask io licencees in this situation to employ 10 Dick Herrs, 33 compete with Ben Hayes from OI to compete with the 12 commission. I don't think that that is what the ( 13 commission has asked for and I don't even think it ja necessarily helps you to do that. We are willing, if 15 you want us to do that, Jim Cain said we will do it. We 16 will hire them, too. I don't know that that is getting 37 anwhere. Here we have an investment that the public or 18 that we all have made in Ben Hayes program. He has got 19 some information, not conclusive, why can' t that be put 20 to constructive use on a timely basis. That is the 21 question. 'I understand that he may want to go back to 22- the commission on it, and if necessary we would appear 23- with the commission and talk. 24 MR. HAYES: This is certainly a matter that 25 the commission has wrestled with before. It continues BH ( NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 161-1901 e Belt. & Annop. 169-6136
32
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i to wrestle with this problem. From where I sit today, 2 if the decision is made to disclo'se this preliminary 3 information to the applicant, then I would feel 4 comfortable telling the CEO. I mean, I have no 5 problems. 6 MR. CHARNOFF: I'm really talking about 7 limited disclosures. That is what CEO's are all about. g That is what they get paid for. 9 MR. HAYES: So. 10 MR. LEDDICK: I'm already taking action based ii upon the fact that I have got to be suspicious of some 12 of the people out there. But, I'm not sure that I am 33 getting the right ones. I am already putting some ( i4 people under a cloud, so to speak. I am already doing 15 that, maybe the wrong ones. Just because, my only 16 criteria is, who has been around here a long time. One 17 of the problems that bothers me is that for example, is Stenson was the former QA manager. Quite clearly by his 19 position he was a guy that would be under a cloud. I 20 replaced him, we replace'd him with another EBASCO QA 21 manager that was with me at Sansa. Now, I have no way 22 of knowing whether that guy was under a cloud or not. 23 Frankly, I am making the assumption that he isn' t, but, 24 he is a very forceful guy and I would say that a very 25 likely guy that you might have somebody feel that they BH
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33 t. 1 were being intimidated by him. That is the problem that 2 I have got. I can't even be sure that the replacement 3 people are ok. 4 MR. HAYES: I know. I appreciate the dilema. 5 That is why, in my opening remarks that I don ' t 'have 6 the policy answered to give to you gentlemen. We are 7 all aware of the problem, and as Mr. Eisenhut stated we 8 are trying to finesse as best we can, and to give you 9 what we can without compromising the integrity of this 10 office, which certainly reflects upon the commiss' ion 11 without further consultation with the commission. 12 MR. CAIN: Absent the revealing of the 13 information that we are here to discuss this afternoon, 14 Mr. Eisenhut, would you take a sworn statement from an 15 employee saying that I have done nothing in my 16 judgement or to my knowledge that has intimidated or in 17 any way harrassed any employee on this project. I have 18 done nothing to falsify a record and this is a sworn 19 statement subject to criminal repercussions if it is 20 done falsely? 21 MR. EISENHUT: 'That is something, certainly, 22 that I would have to discuss with OI. But, I think you 23 at least in mine. 24 MR. CAIN: That goes back to your statement in 25 the development of a presentation as to why an BH NRC-T-1 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 161-1901 e Bolt. & Annop. 169-6136
34 ( 1 individual could be a solve: of the problem and why an 2 individual got to be manager of QA, etc., etc. 3 MR. EISENHUT: I think it is certainly heading 4 in the direction. I don' t know whether that is the 5 precise arrangement. I think _something along those 6 lines would probably go a long way. Because, you do-7 want to be sure that you have confidence and that we 8 have confidence that the person solving the problem,is 9 not, themself part of the problem. Mr. Hayes do you 10 have any comment? 11 MR. HAYES: From the investigative standpoint, 12 and purely from the Office of Investigation standpoint, 13 that is certainly something that we would take into 14 consideration in addressing allegations. If, in fact, 15 that individual is on record as saying whatever he may 16 wish, or she may wish to say in that affidavit. 17 Because, eventually the 18 MR. CAIN: The problem that we have now is who 19 do we give the affidavit to. 20 MR. CHARNOFF: I was going to say, harrassment 21 is in the eyes of the beholder. 22 MR. HAYES: That's rig'ht. The difficulty in an 23 individual defining that from their own personal 24 motives is that a given situation who has supervised 25 people for the last five years is very difficult. BE '( NRC-T-1 FREE STATE REPORTING INC. Court Reporting Depositions D.C. Area 261-1901 e Bolt. Et Annep. 269-6136
4 35 1 MR. EISENHUT: That's right. You see, we have 2 got this, one of the reasons, the reason that I thought 3 it was appropriate at least to discuss this matter was 4 It is clear because it was- clear we have this dilema. 5 that we send you, we sent you a list of the issues and <
'6 that we know that you have laid out a very ambitious 7 major program to respond to those questions. It is at 8 everyone's best interest that when we get the product, 9 we want to be sure that we have confidence in that to product. I think-that we are all wrestling with is what 11 kind of a vehicle can we develop, to ensure that that 12 product, when we get it is above and beyond any real 13 shadows cast on it by virtual individuals involved.
( l 14 MR. LEDDICK: To deal with that problem was to' 15 use the task force of people that are recognized as , 16 having integrity and have never been involved in this 17 sort of thing before. Their staf f , NUS staf f would be i' 18 like that too, to write Chuck and ask what is going on 19 and to ask embarrassing questions. We are using NUS 20 people on a number of roles to look at things from a 21 fresh viewpoint. That has been our attempt to use in a 22 limited sense, a third party ap'proach to this. 23 - MR . EISENHUT: Well, no, I appreciate that. 24 But, typically those kinds of approaches are more 25 technicaly oriented. I think , typically, they don' t go BB \ NPC-T-2 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 161-1902
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4 36 ( i back and look behind the individual and say, you know, 2 what really was your qualifications, what was your 3 app:,ach, how did you go about doing this, were you 4 intimidating people, how did you insure or monitor to 5 make sure that people weren't falsifing documents, etc. 6 Typically, they don' t do that kind of. thing. Maybe, if 7 you could build that into the program some way, it may a go a long way. 9 MR. CAIN: I guess the question that I have is go that if we do that, it all comes out beautiful. He has ij still got an investigation going on. Are you willing to 12 sign off and give me a license even while that 13 investigation is out, even though we have got a case ( 34 history that has been developed, my keyway credentials 15 are beautiful. I have done this, I have done that. I 16 have had this much experience. I followed Reg . no. such 17 and such that_if followed correctly, precludes the 18 Opportunity of any falsification of records. 19 We give you this development of our 20 satisfaction as to how we got to that answer. Will you , i 21 sign off and give us a low power license while he is 1 l l 22 completing'his investigation. I was on an impression that you have got hanging over your head a concern that ! 23 24 you will go ahead and sign off and then boom, he is 25 going to lower the boom on you. BH ( NRC-T-2 FREE STATE REPORTING INC. Court Reporting . Depositions D.C. Aree 161-1901 e Belt. & Annop. 169-6136
37 '\ 1 MR. EISENHUT: It is even a little bigger than 2 that. You are certainly right. But, it is even that the 3 concern is that because we are close enough couple on 4
.this matter in a somewhat of a unique arrangement in
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5 the review. I already know that I have clouds floating 6 over Eome of th'e very areas and ways that these things 7 are being resolved. That, of course, is going to 8 influence my judgement. You are absolutely right. That 9 is why I think we are wrestling with trying to come up 10 with a vehicle maybe that we can share some of that 11 information with you. 12 MR. CAIN: Can I make a suggestion. Can we ( 13 critique just a moment because I think that we are 14 reaching sort of a stalemate. I think the parties need 15 to regroup and say, you know, where are we. Can we go 16 in the other room and talk just a second and then we 17 Will Come back? 18 MR. EISENHUT: Certainly. You'd like to take a 19 short recess on this. Go off the record, and we will 20 reconvene a little later. 21 (Off the record discussion.) 22 MR. EISENBUT: This will go back on the 23 record. Mr. Cain , you asked for a short recess , maybe , 24 do you have any comments? 25 MR. CAIN: Well, I think that we are all BH NRC-
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i 38 ) ( I l hopeful that we can arrive at some solution to the l 2 dilema that we have been discussing and perhaps in the 3 course of next week we can reach that point. I have 4 another area of concern I want,to pursue before we 5 conclude this meeting though. At the' June 8th meeting, 6 a public meeting'with the commission, there were four 7 areas _of presentaiton by the NRC as to the, which 8 resulted in the development of the 23 items that we are 9 concerned with responding to. I am advised that the 10 methodology that we have preliminarily submitted to the 11 NRC has pretty well been signed off on or agreed as 12 being acceptable by three of those areas represenatives 13 and the fourth area, which I could say deals with the 14 qualifications of inspectors. You have agreed that it 15 would be appropriate that we speak to that area 16 chairman and perhaps working individually with him that 17 maybe we can satisfy any preliminary Concerns that he 18 might have so that we can go ahead and wrap the process
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19 up as to its scope, its, that type of thing so we don' t 20 come back, whereas.we have been talking about 21 individual involvement, the pros and cons, we are 22 talking about methodology. We d'on't come back two weeks 23 from now to determine rather than looking at 100 NCR's 24 you should have looked at 500 NCR's, and that type of I 25 thing. That is more mechanical. I guess what I am CH t NRC- l T-2 1 l FREE STATE REPORTING INC. Court Reporting e Depositions ! D.C. Area 161-1901 e Bolt. & Annop. 169-6136
39 ( 1 asking is for confirmation of the mechanical process 2 steps that we're going through in the judgement of you 3 all is ok. 4 MR. CRU TCHFIELD : Yes, we agree to that, and I 5 thi.7k Mr. Gagliardo is attempting to get in touc'h with 6 Mr. Barrison and will be in touch with Mike to make the 7 final arrangments for that get-together. I think it is 8 the the right approach for him. 9 MR. CAIN: Ok, and so we will not be haunted 10 with this thing you all have hanging over your head, it and are being haunted by certain things but, we're not 12 going to be haunted three weeks or a month that the 13 method we are using to approach this will come back. -( 14 MR. EISENHUT: No. If I could comment, you 15 know, it is certainly our committment to make that team 16 of People available to work out meetings, whatever, to 17 work out the program and then work down the line in 18 each of those areas. Mr. Crutchiola (Phonetic) and the l l 19 entire team have gotten clear guidance. We surely will l 20 spare no expense, I mean, those people are going to be ' 21 available to work with'you to resolve these matters. 22 MR. CAIN: I guess the- last thing that I would 23 _like to bring up is by way of defending myself. The 24 last time that we met Darrell, you sort of raked me 25 over the coals for having implemented an exit I BH NRC-T-2 l FREE STATE REPORTING INC. Court Reporting
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I 40 l l ( interview, or interview process in item 16 that in you i 2 all's judgement was less than satisfactory. In an 3 effort.to redeem myself, I would like to share with you 4 that we have hired Quality Technology Company, who is 5 the consultants that are on board at Wolf Creek, which 6 we understand have a very good record as far as you are 7 concerned. 8 I think Harold Denton had mentioned what they 9 were doing to me. I think'you have mentioned your 10 satisfaction to Mr. Leddick and these people are on i 33 board and up and running. We have reviewed what we had 12 in process, and I guess I would accept the criticism { 13 that what we had was working. The shortfall was that it was not audicable. We did not have a record trail to 14 15 demonstrate what corrective action that we had taken as 16 a result of the interview. We had taken some corrective 17 action, and we are now compiling that in such a way 18 that will show that that was not .ost ef fort. We are 19 also asking quality technology company to go back and 20 review all of this material to reverify again to my j 21 satisfaction that we had done everything that we should 22 have done w'ith that material as it was discussed in 23 those int'erviews. We are continuing and will continue 24 the exit interview process as we, the staff. In the 25 future, I would hope that you feel that we have engaged BH . NRC- l T-2 l l FREE STATE REPORTING INC. ; Court Reporting e Depositions D.C. Aree 261-1901 e Bolt. & Annop. 269-6136
41 1 in what has been committed to me as the best you can 2 hire in this area. I don't know, if you want that 3 material, I'm not promoting that operation, but if I 4 can redeem myself a little bit, we are trying to be 5 responsive. 6 MR. EISENHUT: I really appreciate that. I am 7 not familiar first hand with the organization nor the 8 situation. I have heard some good comments that they do 9 have an auditable record, we could actually go in and to actually pursue the files with helping to resolve. 11 I recall, also, in question in article 16 of 12 our letter, I think that we pointed out that it was , 13 inevident how they were followed up, or it wasn't clear 14 if the issues were resolved. It was sort of in the mode 15 whereas we were on a number of these as to whether 16 there is a real issue. -But, there was certainly a
.17 question.
18 MR. CAIN: Let me, more generically looking at 19 it, I am sure, we are ourselves not without questions, 20 criticisms, on this project and a number of other 21 projects. We have been accused of cutting corners. We 22 have been accused of compromisi'ng safety. We have been 23 accused of giving to pressure, we have been accused of 24 having splits on the technical staf f that we are 25 overrunning. BH ( NRC-T-2 FREE STATE REPORTING INC. Court Ileporting e Depositions D.C. Area 161-1901 e Balt. & Annop. 169-6136
42 ( 1 I appreciate, first hand, some of the dilemas 2 that you' folks face because, let me assure you on this, 3 while on one hand we are trying to look to see what we 4 can work out as the most exped,itious and effective way 5 to satisfy his problems. There is no way that thgis 6 staff is going to compromise any of the safety findings 7 that it came up with. There is just no way that anybody 8 here is going to override the technical folks who did 9 the detail technical work, both either from a technical 10 standpoint, .and certainly has been said the 11 investigation. It is not going to be compromised in any 12 way. 13 There will undoubtedly be those questions and L 14 comments, you could have done nothing about it. The 15 reason that I make that comment is that I know you 16 folks face the same situation. Some how, we have to go 17 sort out what really the issues are, but really, the 18 techical facts are, and you get away from, you know, 19 what does it-really mean? 20 MR. CAIN: I thint that both of us have to 21 reach the point. You others on the staff of the 22 commission, notwithstanding a t'echnical allegation of 23 one sort and not withstanding a diversity of view as to 24 the solution. I am responsible for the decision as to 25 whether or not that plant operates safely, and I will BH NRC-T-2 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 161-1901 e Bolt. & Annsp. 169-6136
43 1 accept the responsibility and I will go forward with a 2 decision. You are going to have to take that posture at 3 a point in time, and I am going to have to take that 4 posture in signing whatever application I have to sign
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5 to do it. I hope we both recognize our 6 responsibilities, but are not intimidated by the point, 7 by diversity of view among subordinates to the point 8 that we are decision cripples. I am not inferring 9 anything. 10 MR. EIS2NHUT: No. No. Believe me. I don't 11 feel intimidated by the pencess too easy. A lot of 12 these licenses bear my name on them and we are going 13 into heavy battle on which ever side it is appropriate. 14 We are certainly going to do that. Back on a more basic 15 note, I guess we kicked around the vehicle and 16 discussed some ideas and thoughts and processes of how 17 we might pursue this. I gather what came down generally 18 was we are going to ponder some approaches on our end 19 as to what we can do, vehicles we might be able to use 20 and how forward you are willing to go to try to make-21 this a more effective process. I think the same 22 frustration and people expansio'h you are going to look 23 really hard at your program, and to who you have 24 assigned, etc. We are going to have to continue to look 25 at what we could be doing. ,- BH ( NRC-T-2 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Aree 161-1901 e Bolt. & Annep. 169-6136
44 ( I MR. CHARNOFF: We are going to do that 2 Darrell. I would hope that over the next week, given 3 the conversataion we had before that quick break that 4 we took, that you folks will think hard internally as 5 to how you can help Jim Cain, in effect, with the 6 information that you_already have. 7 MR. EISENHUT: Yeah Jerry. I don't look at it 8 as much as helping Jim Cain, but as much as helping the 9 process. We are all, I want to make sure that we do a 10 thorough solid job in resolving all of these technical 11 questions in light of where we stand in investigation 12 related effort. I don ' t think that is necessarily 13 helping Jim Cain or' helping the NRC, I think it is 14 helping everybody do a better job to ensure the health 15 and safety of the public. 16 MR. CHARNOFF: That's what I'm saying. If you ! 17 have information, however unsolved as it is, it would !
'8 be a value to management to have access, and to the 19 extent that it is not available to us, it is at least a 20-questionable practice as to whether you are letting 21 i management make the best' decisions while it is being 22 l
held up. I appreciate the need' to preserve the 23 integrity of that investigational process. But, I think 24 that you have got a scratch of that and we have got to 25 BH try to come back with you in a week or so with any : NRC-T-2 FREE STATE REPORTING INC. Court Reporting Depositions i D.C. Area 161-1901 e Bolt. & h M '
45 1 thoughts that we have to do the same. I think we need
.2 to be on the phone again in about a week, so we can 3 talk about this thing.
4 MR. EISENHUT: Yes. I think we are going to 5 have to continue to see what we can do from both' sides. 6 Okay. MR. CHARNOFF: 7 MR. EISENHUT: Mr. Hayes. Do you care 8 MR. HAYES: I have no comments. 9 MR. EISENHUT: If not, I just want to tell you to I appreciate you both coming on on extremely short 11 notice, but I thought this was something that was 12 worthwhile sitting down and talking about around the 13 table, seeing what we can come up with. v 14 MR. CAIN: We would like.to offer our 15 congratulations to Mr. Crutchfield in his recently 16 announced promotion, and we wish him well. We would U hope, however, he would see us through our conclusion. 18 MR. CRU'ICHFIELD : I was told I will. 19 Believe me, he will see it to MR. EISENHUT: 20 the conclusion. Okay. Very good. Thank you very much. 21 (Whereupon, at'4:03 p.m. on Friday, July 13, 22 1984 the hearing was adjourned.') 23 24 25 BH ( NRC-T-2 FREE STATE REPORTING INC. Court Reporting e Depositions D.C. Area 161-1902 e Bolt. & Annep. 169-6236
- COVERNMENT ACCOUNTABILITY PROJECT
. 1555 Connecticut Avenue. N.W Suite 202 - Woshington, D.C. 20036 (202)232-8550 August 29, 1984 HAND DELIVERED Nunzio J. Palladino, Chairman U.S. Nuclear Regulatory Commission Washington DC 20555 Thomas M. Roberts, Commissioner U.S. Nuclear Regulatory Commission Washington, DC 20555 James K. Asselstine, Commissioner
~
U.S. Nuclear Regulatory Commission Washington, DC 20555 Frederick M. Bernthal, Commissioner U.S. Nuclear Regulatory Commission Washington, DC 20555 Lando W. Zech, Jr., Commissioner U.S. Nuclear Regulatory Commission Washington, DC 20555
Dear Commissioners:
~
I am writing on behalf of Citizens for Safe Energy, the Sierra Club, Delta Chapter, and the Government Accountability Project to request that you exercise your oversight authority over the Office of Investigations ("01") to preserve the integrity of the ongoing investigation into potential criminal activity at the Waterford Three nuclear plant. I understard that the Nuclear Regulatory Commission ("NRC" or " Commission") is currently considering, or perhaps has already granted, a request by the Louisiana Power & Light Company ("LP&L") that the names of the targets of the OI investigation be disclosed to top management of the company. We believe that any such disclosure would violate OI policy statements, which serve as the framework within which 01 conducts its investigations. Moreover we believe that given the current status of the investigation, any disclosure of the names of targets at this time will irreparably harm the investigation, especially any inquiry into potential management involvement . We request that the Commission immediately direct 01 not to disclose the names of any of the potential targets of its investigation to LP&L, or the sub-stance or nature of its investigation. If OI has already disclosed the names we request the Commission to remove those currently responsible for the inves-tigation and place in their stead investigators from outside the NRC to commence a r.eu investigation. Only in this way can the damage done by any such disclo-sure be stemmed by objective, outside investigators. It is critical that the Commission move expeditiously to prevent any fur-ther disclosure of information about the investigation or the targets. Both OI and (he Commission itself will be acting in clear derogation of NRC rules if they Wo not preserve the investigation's confidentiality. Unless the Commission gg d64 Feth-85
- WS W Y_-
August 29, 1984 Page 2 acts quickly, the public will lose faith in the objectivity and thoroughness of the Commission's investigations as well as its ability adequately to handle the ! increasing number of potential criminal cases 01 is ready to refer to the Depart- ' ment of Justice.
- 1. BACKGROUND 01 commenced an investigation last spring into a series of allegations about falsification of records and harassment of quality assurance / quality con-trol personnel at the Waterford site. The investigat ion was begun, as was the special investigative effort headed by NRR, as a result of the revelations brought forward in a series of articles appearing in the New Oricans newspaper Cambit.
We understand that up to this point OI has prepared more than four' cases for referral to the Department of Justice for potential criminal prosecution. Re- ' cently, in response to inquiries from Congressman Morris Udall's Committee on the Interior and Insular Affairs, the NRC has stated the 01 investigation is ex-pected to take several additional months to complete. On August 9. 1984 pursuant to a direction from Commissioner Asselstine a transcript of his conversation of July 16, 1986 with LP&L Chief Executive Officer James Cain'and LP&L counsel Gerald Charnoff was served on all the parties to the Waterford proceeding. The transcript of that discussion reveals the following: (1) Mr. Cain and Mr. Charnoff met with Darrell Eisenhut and Ben Hayes to request that they disclose to LP&L the names of the targets of the 01 investigation. Mr. Cain and -Mr. Charnof f 's stated reason for request-
-ing the names was so that LP&L management could remove these individuals from positions of responsibility in the reform program LP&L is currently proposing to resolve the 23 problem areas outlined by the NRC in .its letter of June 13, 1964 to LP&L.
(2) According to Mr. Charnoff, Mr. Hayes raised no objection to disclosing the names of the targets to LP&L management, if the Commissioners agreed to the disclosure. (3) Mr . Cain and Mr. Charnof f. argued that since Mr. Cain was in no way im-plicated in the OI investigation he should be given access to the names so that he might remove those individuals under a " cloud" from any po-sition of responsibility in the reform program. However, LP&L manage-ment still wished to keep such individuals available to provide the
" corporate memory" of the allegations if the need arose and to provide information needed to resolve the 23 problems.
(4) Mr Cain and Mr. Charnoff stated that they learned, apparently from Mr. Hayes, Mr. Eisenhut or Mr. Crutchfield that the OI investigation had focused on falsification of records and harassment of QA/QC per-sonnel. They also stated that they believed the investigation pos-sibly implicated individuals in key roles in LP&L's review program.
August 29, 1984 Page 3 (5) Mr. Cain and Mr. Charnoff. intended to meet,or perhaps already had met by July 16, with all the Commissioners to discuss disclosure of names of the targets of the 01 investigation. Mr. Hayes has consistently refused to disclose any information about the status of the ongoing 01 investigations to the intervenors, even to the extent of refusing to answer questions about potential referrals to the Department of Justice. II 01 POLICY STATEMENTS 01 Policy Statements appear to prohibit the disclosure of the names of tar-gets of the 01 investigation to LP&L. The relevent Policies are the following: Policy 18 With the exception of significant safety issues, infore.at ion regarding an ongoing 01 investigation will not be disclosed by any NRC employee outside NRC without the specific approval of the Director, OI, or his designee. Policy 19 Investigators and others assigned to an 01 investigation or inquiry will normally not discuss the substance of ongoing OI inquiries and investi-gations with licensees or other non-NRC personnel in entrance or exit interviews, except saf ety items requiring immediate corrective action. It is clear that these policy statements are intended to preserve the strict confidentiality of OI investigat ions except when a significant safety issue arises which could affect the public health and safety. Mr. Cain and Mr. Charnof f have not argued that any significant saf ety issue OI is currently investigating mandates the disclosure of the names of the targets. Secondly, the policy statements safeguarding the integrity of the OI invest-igations are intended precisely to inhibit the utility from learning of the di-rection and scope of the investigation. Armed with knowledge of the focus of the investigation the utility is able to limit the evidence which flows to inves-tigators. Policy Statements No. 23 and 24 also reflect a concern that the substance i cf OI investigations be daintained as confidential, so that the utility is not given the opportunity to influence the free flow of information to the investigators. ! The Report of the Advisory Committee for Review of Investigation Policy on i Rights of Licensee Employees Under Investigation, or the so-called "Silbert Com-oittee" Report recommends strongly that the substance of the details and direction , cf an 01 investigation not be disclosed to the utility. Mr. Charnof f, of course, l was pivotal in the institution of the Silbert Committee. He also advocated before ; the Committee that utility attorneys routinely be given notice of all interviews ; conducted by 01 so that they could be present, either as participants or observers. l See Report at 9. The Committee wisely rejected Mr. Charnoff's suggestion, stating ' that it was " unaware of any precedent for such a policy and disfavors its adoption t
August 29, 1984 Page 4 by the NRC." The Committee stated clearly that the presence of utility represen-tatives at interviews would alter their investigative character and ef f ectively hinder the use of investigative interviews as enforcement and oversight tools. y As this Commission well knows, Mr. Charnof f lost this bid to inject company management and attorneys into the NRC investigative process. At the time of formation of the Silbert Committee, even the idea of forming such a committee, composed largely of utility attorneys, was roundly criticized by Julian Greenspun, Deputy Chief for Litigation, General Litigation and Legal Advice Section, Criminal Division, Department of Justice. His perceptive analysis of the situation is as follows: As experience f rom many corporate investigations has shown and basic common sense dictates, because only the employees and management would know about . shortcutting of laws and regulations, those in charge when this has o-curred become preoccupied about what their operat ional em-ployees may report without management looking over their shoulder, about practices, procedures and orders given. As a matter of human nature and as numerous investigations and cases have shown. ..the greater the basis for concern by those in charge, the more aggressive the ef forts to inject themselver into positions to dampen disclosure of the truth by those over whom they have any economic power of influence. See Greenspun Letter, March 25, 1983, at 6. It is clear that the Connission cannot permit LP&L management to inject itself into the 01 investigation without destroying the integrity of the investiga-tion, including OI investigators' ability to develop additional leads, perhaps Gven cues which may lead to top LP&L canagement. At this point it is unknown whether or not OI has completed, or in f ac t even begun, any investigation into involvecent of upper LP&L and Ebasco management in potential criminal conduct. Given the critical stage of the investigation, and C1's estimate that it will not be completed for several months, any disclosure of names to LP6L at this point will undermine the investigation's look into involve-cent of upper management. k' hat assurances do we have that Mr. Cain and Mr. Leddick, LP6L Senior Vice President, Nuclear Operations, are not under investigation for oither wrongdoing or a subsequent cover up? 111. LP6L PROGRAM PLAN The asserted reason 1P6L is requesting disclosure of the names of the targets of the investigation is to remove all such individuals with a " cloud" over them from positions of responsibility in LP6L's reform program intended to address the NRC's 23 problem areas. The Committee also noted the concern of 01 investigators that company counsel, charged with the responsibility of reporting back to the company what was said during the interviews they attended, would reveal the direction and scope of the investigation and potentially prejudice the investigation by advising the company cs to how harmful information might be directed away from the investigators to the company's benefit. See Report at 12, n.l.
August 29, 1984 Page 5 We too are concerned that LP6L management who are potentially under investiga-tion for criminal conduct are heading up the reform program to ensure the saf e construction and future saf e operation of the Waterford 3 plant. This is why we requested that Mr. Eisenhut, who is heading the NRC's special investigative effort at Waterford, impose a third party to resolve the 23 problem areas of potential safety significance and to carry out a legit imate third-party review of the plant. See July 25, 1984 Letter, attached and incorporated herein as Exhibit 1. Apparently the NRC Staff seriously considered imposing such an independent third party on LP6L, but reconsidered in favor of allowing the utility itself to develop its own review plan. LP&L's seriatim responses to the NRC Staff's June 13, 1984 letter and its refusal, even as late as August 17, to commit itself to an independent review program, demonstrate that it does not intend to comply with the NRC Staff's directives. Mr. Charnof f indicated in his comments to Commissioner Asselstine that Mr. Eisenhut was concerned about the legitimacy of LP&L's reform program if individuals in key positions of responsibility were implicated in criminal conduct being investigated by 01. We share Mr. Eisenhut's concern. That is why we request t ha t he, or alternatively, the Commission itself, impose a truly independent third party on LP&L to resolve the problems laid out in the NRC's June 13 letter. IV. CONCLUSION In conclusion, we request the Commission act immediately, in its oversight of the Of fice of Investigations, to ensure that no further disclosure of information about the targets or substance of the 01 investigation be released to LP&L. If OI has already released the names, in violation of its rules and policies, we request that the Commission order a new investigation to be commenced, conducted by a group of investigators brought from outside the agency, with no prior interest in this case, in this manner, if the investigation has been compromised by dis-closure of the names, and concomitant disclosure of information about the investiga-tion, independent investigators may' attempt to salvage what can be salvaged of the probe. Your immediate attention to this matter is appreciated. Sincerely yours,
, W WA Lyn e Bernabei cc: Ben B. Hayes (hand-delivered copy)
Darrell Eisenhut (hand-delivered copy) Dennis Crutchfield (hand-delivered copy) Service List
GOVERNMENT ACCOUNTADlLITY PROJECT o institute for Pokey Studies 1901 Ove Street. N W.. Woshington D C. 20009 (202)234 9382 H AND-DELIVERE D July 25,1984 Mr. Darrell G. Eisenhut Director Division of Licensing Office of Nuclear Reactor Regulation U.S. Nuclear Regulatory Cornission Washington, D.C. 20555 Re: NRC Letter Dated June 13, 1984, Docket No. 50-382 Louisiana Power and Light Company Dated June 28, 1984 Waterford 3 Review
Dear Mr. Eisenhut:
On behalf of Citizens for Safe Energy, the Sierra Club (Delta Chapter), and the Government Accountability Project (" GAP"), we are writing to you to urge you to reject the proposed plan of the Louisiana Power and Light Company ("LP&L"), as set forth in its letter of June 28, 1984, to correct the problems found by the NRC Special Review Team at the Waterford 3 nuclear plant. LP&L has a history of putting its schedule for completion of Waterford ahead of concern for ensuring that construction of the plant is adequate to protect the public's health and safety. Its proposal demonstrates that history is repeating itself. We ask that the Nuclear Regulatory Commission ("NRC") Staff require nomination of an independent third party to conduct a thorough review of the problems laid out in your letter of June 13, 1984, and to develop a plan and methodology to res~olve those issues. Our demand is based in part on the fact that the NRC's investigation into construction and quality assurance deficiencies at Waterford has substantiated allegations of falsification of quality assurance records. It is our under-standing further that the NRC's Office of Investigations is preparing to refer a number of these cases to the Department of Justice for possible criminal prosecution. Given the substantiation of serious charges and the long history of LP&L's failures to correct the quality assurance breakdowns at Waterford, LP&L cannot be trusted now to carry out a thorough, honest and complete reform program to correct past mistakes and verify the adequacy of construction of Waterford,
,. LP&L's letter of June 28, 1984, proposing a reform plan, is fresh evidence of the company's complete disregard and disrespect for NRC regulations and the NRC Staff's directives.
Throughout its response, the utility disputes the NRC Staff's evaluation of the problems at Waterford and p' resents solutions so woefully inadequate that they barely deserve coment. The Review Team has clearly stated that the items it listed in its June 13, 1984, letter are concerns which need to be adequately addressed before issuance of an operating license for Waterford because they present potential safety problems. Yet LP&L presents in its response a plan by which many of the items will not be resolved prior to fuel load or low-power operation. The company's failure to read the clear words of your letter and the clear warnings you expressed to them in many meetings, both public and private, is irrefutable evidence, we believe, that LP&L does not have sufficient integrity to carry out an honest reform program at Waterford. We also request that the NRC provide greater opportunity for public input and coment on LP&L's resolution of the quality assurance breakdown at Waterford. The NRC Staff should hold public meetings in New Orleans with the intervenors and other interested members of the public to receive comments on any third party LP&L proposals, as well as any proposed plan and methodology to deal with the problems. The NRC Staff has instituted similar channels for public coment at both the Zimer and Midland plants where it found QA breakdowns of equivalent magnitude. In both cases we believe public comment led to improved third party reviews of the quality of construction and design of those plants. In both cases, allowing the public to scrutinize the utilities' resolution of the problems aided the NRC Staff in its monitoring of the utilities' performance. The public is growing increasingly skeptical about whether the NRC has the problems at Waterford under control. Therefore, if the NRC wishes to regain public confidence, it is imperative at this junction that it open its enforcement efforts and meetings with utility officials to public scrutiny. I. BACKGROUND The NRC Special Review Team discussed with LP&L on June 8,1984, the problems of safety significance it had uncovered at the Waterford plant. It emphasized, somewhat to LP&L's surprise,.that these problems were serious enough that they needed to be resolved prior to fuel load. On June 13, 1984, the Team set forth in a detailed letter, similar to an inspection report, these same problems and asked LP&L to propose a program to resolve them. Apparently the NRC Staff originally intended to demand that LP&L nominate an independent third party to propose and implement this reform. The NRC Staff removed this requirement for a third party in its final letter to LP&L. It appears to GAP that the Staff's initial instincts were right -- a third party program is needed at Waterford. As you know, third party reviews have I been ordered at the Diablo Canyon, Zimmer and Midland nuclear plants. In all these cases, the NRC Staff or the Comission ordered independent assessments of the quality of the design and construction of these plants after they lost faith in the utilities' trustworthiness and commitment to quality work.
~
r , The wisdom of requiring an independent third party review at Waterford is becoming increasingly apparent. On June 28, 1984 LP&L submitted a response suggesting that a Task Force of individuals well-known in the nuclear field, and a Special Review Corsnittee with a former NRC commisioner and chairman, could solve Waterford's problems. However, LP&L's " proposal" presents little hint of what its plan to resolve the problems will actually be. What is absolutely clear from the proposal is that LP&L is gearing its strategy to load fuel at the earliest fuel load. possible time and does not intend to resolve all the problems prior to , This letter demonstrates LP&L's arrogance and near defiance of NRC directives. According to Mr. James Gagliardo of the NRC Staff, to whom I have spoken over the last few weeks, the NRC Staff has told LP&L to propose a new approach to resolution of the problems laid out in the NRC's letter of June 13. Although Mr. Gagliardo informed me that LP&L's response was to be submitted last Friday, July 20, 1984, to our knowledge it has not yet been filed. In addition, I learned from him at that time that the NRC Staff was no longer discussing whether to require LP&L to nominate a third party to assess the significance of and develop solutions to the safety-significant problems the Staff has uncovered. Mr. Gagliardo also told me the NRC Staff had held several closed meetings with LP&L officials to inform them of the inadequacy of their response. Further, we have learned that the NRC's Office of Investigations has su_bstantiated some allegations of falsification of quality assurance records, and is preparing to refer several cases to the Department of Justice for potential criminal prosecution. The recent history of quality assurance failures at the Waterford plant provides ample evidence of LP&L's grossly negligent or apparently intentional disregard of documentation and quality assurance requirements. In December, 1982, the Nuclear Regulatory Commission fined LP&L $20,000 for its failure to adequately control the activities of its construction manager, Ebasco Services, Inc. ("Ebasco"). The most serious problems it found were with the work of the Mercury Company of Norwood, Inc. , the contractor which installed the instrumenta-tion and control systems at Waterford. These deficiencies included: the as-built configuration of the systems did not match the "as-built" drawings; reversed slope of tubing runs; incorrect seismic support designations; missing supports; improper bolting; and deformed tubing. These inspection findings mirrored similar reports by LP&L in July of 1982 concerning the work of subcontractor Tompkins-Beckwith ("T&B"). In Inspecting 20 hangers in the low pressure safety injection system, LP&L found 16 of the 20 hangers had quality problems needing engineering evaluation, which led to a requirement that T&B do 100 percent reinspection of all installed hangers to be followed by a 100 percent reinspection by Ebasco of the same work. A special document review team at Waterford found in the Spring of 1983 missing or faulty documentation for 30 percent of the work of American Bridge. An inspection of the hardware installed by American Bridge found that 30 percent had deficiencies, primarily that the as-built condition did not match the approved design. The document review team found similar problems with the J. A. Jones documenta-tion for the foundation and cadwelding work. Documentation was missing concerning the certification of QC inspectors responsible for safety-related work. Because
no extensive reinspection of J.A. Jones work has yet been done, one can only assume that h;rdoarv ceficiencies similar to those found for T&B, Mercury and American Bridge work would be discovered if an intensive . inspection were done. In June, 1983, the NRC formed a Special Inquiry Team to investigate the increasing number of allegations by former workers of missing, faulty or falsified QA documents, a cracking foundation mat, and a lack of QA coverage for Combustion Engineering equipment supplied to Waterford. Many of these allegations first surfaced in news reports in the local newspaper Gambit. In September, the Special Inquiry Team asked LP&L to find answers for the same sort of QA deficiencies the NRC had documented the year .before. In February,1984, the NRC Staff did an intensive CAT inspection of Waterford, reviewing hardware in seven major areas. The Staff at that time found the following: (a) Eighty instances in which FSAR commitments were not met for installa-tion of electrical raceway; (b) Seventeen out of 20 safety-related cable tray supports not shown on design drawings; (c) Loads on cable trays which were 50 percent over the permitted load; (d) Three out of 20 pipe hangers and/or restraints had problems of safety significance; (e) Documentation problems with concrete pours .cadwelding, backfilling, and masonry walls;
~ (f) Welds in the HVAC system which did not meet requirements and a significant deficiency in the main steam line penetration; (g) Twenty-one out of 37 fasteners included the wrong bolting material and lack of markings which indicated material traceability problems; (h) Failure to incorporate design and field changes in approved design drawings and documents; and (i) Deficiency notices which were not upgrtut610 nconformance reports.
', Of greater significance was the CAT Team's conclusion that LP&L had failed to carry out prior commitments to the NRC to take corrective action. Further, LP&L still, the NRC stated, was unable to look beyond the specific deficiencies to the programatic problems at Waterford and the causes of those problems.
The results of the NRC's current Review Team, begun in April,1984, offer a bleak assessment of LP&L's ability to take control of the situation at Wate rford. In following up on its 1982 inspection, the Team found LP&L, Ebasco and Mercury had failed to carry out LP&L's promises of reform, including an audit of its entire QA program; correction of problems uncovered in the audits and management reviews which were conducted; and identification and analysis of i
of the root cause of the QA breakdown at the plant. Similarly, LP&L failed to fulfill its commitment to interview current and
- past QA employees to draw out their potentially serious concerns about the quality of Waterford's construction. Although it conducted 407 interviews in January,1984, the NRC found that LP&L had not followed up on incomplete interviews or responses, and never did any meaningful evaluation of the inter-views and data collected. Again in June, the NRC directed LP&L to develop a program to assess the problems raised ~in those interviews.
What has become increasingly clear over the last two years is that LP&L is institutionally incapable or unwilling to determine the root cause of the QA breakdown at Waterford and make decisive and programatic changes to correct these problems. That is why we urge the NRC Staff to require a third party, chosen and approved according to the so-called Palladino criteria, to develop and implement the corrective action program for Waterford.1/ 1/ Chairman Palladino, in a letter of February 1,1982, to Congressmen Dingell and Ottinger set out the criteria by whic;h an' independent auditor would be chosen to conduct an independent seismic design review of Diablo Canyon. Since that time these criteria have been used for nomination and approval of a third party to conduct a management audit at the Zimmer plant, the third parties who reviewed the ongoing soils and construction work at the Midland plant, and the third party conducting a design review of Midland. The three criteria are: (1)- Competence: Competence must be based on knowledge of and experience with the matters under review. (2) Independence: " Independence means that the individuals or companies selected must be able to provide an objective, dispassionate technical judgment provided solely on the basis of technical merit. Independence also means that the design verification program must be conducted by companies or individuals not previously involved with the activities . . . they will now be reviewing." (3) Integrity: "Their integrity must be such that they are regarded as respectable companies or individuals." The Commission considered five factors in evaluating the most important requirement, independence: (1) Whether the individuals or companies involved had been previously hired by PG&E to do similar seismic design work; (2) Whether any individual involved had been previously employed by PG&E, and the nature of any such employment; (3) Whether the individual owns or controls significant amounts of PG&E stock; (4) Whether members of the present household of individuals involved are employed by PG&E; and (5) Whether any relatives are employed by PG&E in a management capacity. (continued) l
. II. MANAGEMENT STRUCTURE FOR LP&L PROGRAM LP&L proposes essentially three overlapping organizations to manage its proposed program.
First, the LP&L Project Manager for nuclear projects is responsible for the overall management of the plan, including: ! (1) determining how to resolve the 23 issues of potential safety significance; (2) determining the " collective significance" of the outlined problems; and (3) recommending programatic changes to prevent recurrence of the types of problems outlined. Second, a " Safety Review Committee" has been established, composed of top management personnel reporting directly to Mr. Leddick, Senior Vice-President in charge of Waterford. A subcomittee of the SRC is composed of three Waterford licensing, construction and quality assurance managers and two outside consultants. One consultant LP&L has hired is Joseph M. Hendrie, former member of the NRC's Advisory Committee on Reactor Safeguards and former chairman of the Nuclear Regulatory Comission. The subcommittee reports to the management committee, which in turn reports through Mr. Leddick to Mr. Cain, LP&L President and Chief Executive Officer. The subcomittee reviews the company's resolution of the NRC's 23 stated concerns. Third, LP&L has established a Task Force staffed by officers and employees of UNC Nuclear Industries, Inc., and the NUS Corporation. The Task Force will report directly to Mr. Cain. It is responsible for developing a program and implementation of a schedule for dealing with NRC concerns, as well as reviewing SRC's recomended solution to the 23 items. LP&L's recommended management structure cannot do an honest and thorough job of evaluating the root cause of the.NRC's concerns or resolving these problems for a number of reasons. (A) Conflict-of-Interest C The SRC subcomitte'e is composed of individuals who are essentially responsi-ble for a portion of the QA problems at Waterford. Certainly Mr. Gerrets, Corporate QA Manager, cannot be expected to make an objective assessment of his and his staff's past failings. (continued) In addition, the Comission allowed the Joint Intervenors and Governor Brown 15 days to comment on the proposed independent third party auditor and the proposed verification program, and to present their views at public meetings before the Comission and NRC senior management. The intervenors, together with the ~NRC Staff, received all status reports for the independent verification program, as well as transcripts of all meetings held between the third party, PG&E, NRC Staff and the public. Additionally, the Comission ordered that PG&E was to have no editorial control over the third party's final report.
Moreover, the SRC itself is composed largely of construction managers who are responsible for the pressure to cut corners in the QA program throughout Waterford's construction history. Certainly they are unlikely to target them-selves or their organizations as the root cause of the QA breakdown. Task Force member Hendrie as former NRC Chairman and Commissioner was ultimately responsible for adequate NRC oversight of Waterford's construction. He has a conflict of interest in that he has a stake in demonstrating that the NRC provided adequate oversight and regulation of the Waterford project through-out its construction, and that problems now being discovered are not of a nature that the NRC should have discovered and documented them years ago. It is becoming more evident daily that Region IV has defaulted in its responsibil-ity to maintain adequate oversight over Waterford. The NRC's December,1982, inspection report and the civil penalty imposed upon LP&L only scratched the s.urface of the QA problems at the site, it appears that the NRC in its report and in imposition of a civil penalty attempted to downplay to some extent the severity of the QA problems at Waterford. Certainly, Mr. Hendrie will not feel secure in making a judgment that LP&L's problems are serious enough that the NRC should have uncovered them long before completion of the plant, when he would have to take personal responsibility for that failure as Chairman of the Commission during Waterford's construction. B. Lack of Independence Neither the SRC subcommittee nor the Task Force has independence of LP&L management. It is clear that the SRC, which reports through Mr. Leddick and Mr. Cain to the NRC, and the Task Force, which reports through Mr. Cain, are both ultimately bound by LP&L management. LP&L's managers, their attitude toward the NRC and the safety concerns outlined by the NRC Staff, and their eagerness to rush Waterford to completion, may easily prejudice whatever findings the SRC subcommittee and the lask Force make. It appears that Mr. Cain has ultimate editorial and substantive control over the Task Force's conclusions so that it can hardly be labeled independent. Similarly, the subcommittee's findings must make their way up through at least three manage-ment levels of review before reaching the NRC. C. Rejection of the Most Basic of Quality Assurance Principles -- Independence from Construction LP&L has established two teams to assess the problems at Waterford. Both are composed of construction and QA personnel This violates the primary ) principle of quality assurance that QA should serve as an independent check -- free from nuclear theconstruction. plant time and financial pressures of construction -- of the quality of The NRC has already found that construction and engineering's attempts to rush completion of Waterford led to serious quality problems, including premature turnover and testing of systems. The inherent strains between quality assurance and construction at Waterford, between rapid completion of the plant and verification that the plant is constructed in a safe manner, have been replicated in the two teams. The NRC l cannot by any stretch of the QA criteria approve a re-review of documentation and reinspection of safety-related work at Waterford necessitated by a QA breakdown to be controlled by teams primarily composed of LP&L construction and licensing officials. l l
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. l D. Inadequate Staff !
LP&L has not provided the number or qualifications of individuals who will be resolving the 23 concerns laid out in the NRC's June 13 letter. LP&L has , not provided any information on their educational background, prior work experience, or experience at any other nuclear plants, including Waterford. Further, to allow any meaningful evaluation of these individuals, one would need to review their work at other nuclear plants to determine whether they were in any way responsible for or involved in similar QA breakdowns. III. LP&L PROGRAM AND METHODOLOGY LP&L, in its bare-bones proposal, has failed to outline its methodology for evaluating the problems at Waterford. 2/ , i The approach it suggests is aimed toward loading fuel at Waterford at the earliest possible date, not to resolving the construction and QA deficiencies which place the quality of Waterford's construction in doubt. The NRC Staff stated in clear terms at the June 8 public meeting in Bethesda and in its June 13 letter that LP&L had to resolve 23 problems before the NRC would issue a license for the plant. In spite of this clear direction, LP&L presented to the NRC only two weeks later a matrix which suggested that a large number of these problems were not of safety significance and could be resolved after fuel load and low-power operatior. Yesterday, LP&L issued a press release indicating it believed it could place Waterford in commercial operation by early 1985 As will be described in greater detail below, LP&L has taken an argumenta-tive tone in its response and refuses to acknowledge that many of the problems outlined by the NRC are in fact of potential safety significance, or, in some cases, are problems at all. The history of QA breakdowns at Waterford; LP&L's inability or unwilling-ness to take corrective. action, even when the NRC orders it to do so, and its I current recalcitrance, show an uppermanagement which cannot be~ trusted to verify l Waterford complies with NRC requirements and protects the public health and sa fety. l
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LP&L proposes no methodology to review the problems at Waterford, determine their root cause, or determine their generic implications. At a minimum, any program must include the following: 2/ LP&L promised by July 6,1984, to provide target dates for developing assessments and recommended changes for the 23 problem areas. It appears that LP&L has not met that schedule. LP&L's continuing establishment of unrealistic schedules indicates.its inability to recognize the serious nature of the QA problems it must resolve.
(1) Definition of a sample size of the documents to be reviewed and the hardware to be inspected and justification for that sample size; (2) Definition of the criteria for the selection of the sample; (3) Hold points for NRC review in inspection and document review plans; (4) A realistic schedule to allow appropriate NRC review and public review and comment on both the overall plan and on the particular methodologies contained within the plan; (5) A system of regular reports,made simultaneously to the NRC and the public, of the reviewers' findings and recommended corrective actions; (6) A system to ensure the independence of the review. A minimum require-ment is that LP&L maintain no editorial or other control over the reviewer's findings and conclusions; (7) Financial independence of the reviewer from LP&L. The reviewer must be permitted to complete its review and be able to expand the scope of its assessment if necessary. This means LP&L cannot terminate the reviewer at will but only after approval from or consultation with the NRC. Further, any contract between LP&L and the reviewer must be carefully scrutinized to ensure it does not allow LP&L to exert subtle control over the reviewer's activities or conclusions. (8) Public scrutiny. The reviewer's activities must be ~open to public scrutiny. As at Zimmer and Midland, the NRC should mandate regular public meetings to ensure public oversight of the reviewer's activities and findings, and LP&L's adherence to the approved program. (9) Consultation with knowledgable NRC officials, and current and former workers alleging QA and construction deficiencies. The reviewer should speak to the former and current construction and QA workers and document reviewers who have brought to the NRC's attention many of the deficiencies LP&L is not forced to resolve. These workers could provide valuable information about the programatic problems at Waterford and the root cause of the problems. (10) Incorporating as a main objective of the program determination of the root cause of the problems. Although the words " root cause" and " generic concern" are mentioned a,t various points throughout the LP&L proposal, nowhere does the company outline a method to determine the " root causes" of the problems. i Any serious inquiry into the causes of the QA breakdown requires research into the history of NRC inspections at Waterford; a review of LP&L audits; and a review of LP&L's corrective action to answer the concerns raised in those audits. It should also make an independent audit of current management, focusing on their attitude toward QA principles and NRC regulation. IV. LP&L'S APPROACH TO RESOLVING THE TWENTY-THREE PROBLEM AREAS LP&L's approach to resolving the problems outlined in the NRC's letter of June 8 barely deserves comment. It is heartening that the NRC Staff has rejected l
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i l the approach and asked for a broader and deeper scope for assessment of the problems. However, review of LP&L's initial proposal does demonstrate its attitude toward the NRC and its directives. The response is argumentative, misleading and presents no clear plan for ensuring that Waterford has been built to i protect the public safety. Analysis of a few portions of that response will aptly demonstrate this point. Item 1. Inspection Personnel Issues. The.NRC found the certification and qualifications of 30 to 40 percent ! of QC inspectors for Mercury and Tompkins-Beckwith in question. It required LP&L to verify the credentials of 100 percent of QA/QC personnel and to do 100 percent reinspection of the work of those inspectors found unqualified. LP&L refuses to carry out the NRC's directive and.has agreed to verify the certification of only 20 percent of QC inspectors. It states its preliminary i evaluation of its inspectors indicated they were qualified to perform their assigned work function. l l l The' lack of an adequate number of adequately trained and qualified QC personnel has been a major cause of the QA breakdown at the Waterford site. As the NRC found in July,1982, a document review team found in the Spring, . 1983, and the Review Team found only last month, a large percentage of QC 1 inspectors working for contractors who did safety-related work at the plant were not qualified. Inspections of the work of the unqualified inspectors has uncovered significant problems. It is therefore hbrd to understand how LP&L can at this late date justify anything less than verification of the certifica- ' tion of 100 percent of the QC inspectors and 100 percent inspection of unqualified inspectors' work. In addition, it appears that LP&L will not verify the certification of i QC inspectors to ANSI N45.2.6-1977, but only to contractors' lower standards. ' Part of the problem with Tompkins-Beckwith QC inspectors, however, was that although they met the T&B qualification requirements they did not meet ANSI ! requirements and were not in fact performing their inspections properly. Therefore, LP&L must verify certification of all QC inspectors to the ANSI ) standards or reinspect their work. ; l Item 2. Missing N1 -Instrument Line Documentation. LP&L did not provide QA coverage for installations of this instrumentation ) on the basis that the equipment was not ASME Class I, II or III. However, the NRC found that in fact QA coverage should have been provided for instrumentation for local mounted instruments and demanded documentation of such coverage. { It is clear from LP&L's response that it cannot meet this requirement since it ' has not represented that it can assure full compliance for any of the 90 locally mounted instruments in question. Instead, LP&L indicates it has reclassified the installations for which it cannot produce QA documentation or. claims an exemption from the requirement on some other basis. Item 4 Failure to Upgrade Lower-Tier Documents. The NRC found that up to 70 percent of " lower-tier" corrective action reports
examined, including Field Change Requests ("FCR's"), Design Change Notices ("DCN's"), Engineering Discrepancy Notices ("EDN's") and Discrepancy Notices ("DN's") were not properly upgraded to nonconformance reports and thereby reported to LP&L and dispositioned in accordance with the strict requirements of NRC's. Improper use of lower-tier documentation systems can lead to design control problems and improper dispositioning of serious nonconforming conditions. LP&L refuses in .its response to do any review of the actual lower-tier documentation beyond the review the NRC has already carried out. Instead, it proposes to look merely at the lower-tier document reporting " paper program" to see if it is properly structured. LP&L refuses even to recognize the problem pointed out by the NRC. The problem is not the paper program but the implementation and abuse of the lower-tier reporting system. A paper review of the structure of the system will do little to allay NRC concerns. Item 5. Vendor Documentation -- Conditional Releases. The NRC found deficiencies in the handling of conditional certification of equipment supplied by Combustion Engineering. The underlying problem in this instance is not only the lack of receipt inspection documentation, but in addition, lack of adequate manufacturing documentation. LP&L addresses only the first portion of the problem and fails to address the latter. The manufacturing documentation should be available and checked to ensure the vendor order meets all applicable codes, standards, and project specifications, and that all manufacturer QA program procedures were followed. Item 8. Visual Examination of Shop Welds During Hydrostatic Testing. LP&L refuses to acknowledge the problem documented by the NRC. Instead of providing documentation that the shop welds were properly inspected during hydrotests, LP&L states that inspections performed by Authorized Nuclear j Inspectors ("ANI's") fulfill the NRC requirement. However, ANI's only review ! the welds for code compliance and do not review whether proper documentation has been completed. LP&L also states that the ASME N-5 Code data reports confirm that the welds were properly inspected. However, this report in fact confirms only that the , system of which the shop welds form a part was inspected. ' Finally, LP&L has artfully promised the NRC to verify inspection by
" qualified", not certified inspectors. As noted above, the inspectors may very well meet the qualification requirements of their employers but not nuclear industry standards.
Item 14. Improper Use of J.A. Jones Speed Letters and EIR's. The NRC concern was in part that design changes were being made through informal lower-tier reporting documents. This can cause, and has in fact caused, a breakdown in design or configuration control at Waterford. LP&L has refused to acknowledge any problem in their use of Speed Letters and EIR's to make design changes, and further failed to examine the programatic failure of their design control program.
In this case, the NRC has already documented numerous instances of significant differences between the as-built condition of the plant and the approved as-built drawings. It is also unclear from the review LP&L has conducted what the period of time for the sample review was. The earlier period from 1974 to 1982 should be the relevant sampling period. Item 21. Failure to Properly Disposition Construction Deficiencies During Transfer / Turnover of Systems to LP&L. The NRC concern expressed ~ first in July,1982, is that construction deficien-cies have not been properly dispositioned after transfer and turnover of systems to LP&L because of pressure to turnover systems for testing. LP&L completely misinterprets the NRC's concern and states that the NRC need not worry about lack of proper QA documentation because it will not impact on testing. Presumably, LP&L is referring to the testing schedule. The NRC's concern, however, is not LP&L's testing schedule but the failure of LP&L to resolve significant problems identified prior to or during turnover because of missing or faulty documentation. If significant nonconforming conditions are not corrected on important safc+y systems they could potentially impair the proper. functioning of those systems. VI. CONCLUSION Many factors point toward the need to appoint an independent third party to resolve the problems at Waterford:
- The abysmal history of QA failures at Waterford;
- The inability and unwillingness of LP&L to resolve the problems even at this late hour;
- The NRC investigations' substantiation that records have been falsified at Waterford and the current consideration of referring these cases to the Department of Justice for criminal prosecution; and
- The utility's recent defiance of NRC directions to develop a sound program to ensure the quality of Waterford's construction.
We urge you to require an independent third party to review and present a plan to verify the quality of Waterford's construction and address the 23 concerns outlined by the NRC Staff in its letter of June 13. We urge you also to incorporate public participation and scrutiny into the process through public meetings, public comment, and public consultation. Already we have lost faith in LP&L's ability to put aside construction and schedule pressures to construct Waterford safely. The public is now judging the NRC's seriousness in ensuring the adequacy of the plant's construction. Sincerely yours,
' . -a h t .-.,1w---
Ly<nneBernabei General Counsel -
UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION f BEFORE THE ATOMIC SAFETY AND LICENSING APPEAL BOARD , In the Matt,er of ll . LOUISI ANA POWER AND LIGHT COMPANY
),
h Docket No. 50-382
-(Waterford Steam Electric Station. )
Unit 3) , j Service List 2 Dr. Harry Foreman, Director i Christine N. Kohl Chairman Atomic Safety and, Licensing Appeal Administrative Judge Board University of Minnesota ; U.S. Nuclear Regulatory Comission Box 395, Mayo i Washington, DC 20555* Minneapolis, MN. 55455 l Dr. W. Reed Johnson E. Blake, Esq. Atomic Safety and Licensing Appeal B. Churchill, Esq. l Board Shaw, Pittman, Potts & Trowbridge > U.S. Nuclear Regulatory Comission 1800 M Street, N.W. Washington, DC 20555* Washington, DC 20036 Howard A. Wilber Luke B. Fontana, Esq. ' Atomic Safety and Licensing Appeal 824 Esplanade Avenue Board New Orleans, LA 70116 j U.S. Nuclear Regulatory Comission ' Washington, DC 20555* Malcolm Stevenson, Esq. Monroe & Lemann Sheldon J. Wolfe, Esq., Chairman 1424 Whitney Building Administrative Judge New Orleans, LA 70130 Atomic Safety and Licensing Board . U.S. Nuclear Regulatory Comission Mr. Gary L. Groesch j Washington, DC 20555* 2257 Bayou Road
, New Orleans, LA 70119 -
1 Dr. Walter H. Jordan 0 Administrative Judge Ian Douglas Liridsey, Esq. 881 West Outer Drive 7434 Perkins Road i Dak Ridge, TN 37830 . Suite C Baton Rouge, LA 70808 Atomic Safety and Licensing - Brian P. Cassidy ,
- Appeal Board Panel I Regional Counsel U.S. Nuclear Regulatory Comission f FEMA Washington, DC 20555*
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