ML20138J355

Proposed Findings of Fact & Conclusions of Law in Form of Partial Initial Decision for Reopened Phase II Hearings. Certificate of Svc Encl

ML20138J355
Person / Time
Site:	South Texas
Issue date:	12/12/1985
From:	Sinkin L Citizens Concerned About Nuclear Power, INC., SINKIN, L.A.
To:
References
CON-#485-505 OL, NUDOCS 8512170499
Download: ML20138J355 (18)

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'85 DEC 16 All:34 UNITED STATE 5'bF, AMERICA 0FFILE OF SEcatie-00CKETING & SEWiU 4

BRANCH ,

,; NUCLEAR' REGULATORY COMMISSION ,

% 1 BEFORE THE ATOMIC SAFETY AND LICENSING BOARD t ,

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4 In'the Matter of ( ,'

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HOUSTON LIGHTING AND ( Docket Nos. 50-498 OL 4 POWER COMPANY, ET AL. ) 50-499 OL

-(South Texas Project, ( ,

Units 1 and 2) ,

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't t s CITIZENS CONCERNED ABOUT NUCLEAR POWER, INC. '%

PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW IN THE FORM OF A PARTIAL INITIAL DECISION /

FOR REOPENED PHASE II HEARINGS S

g Lanny Alan Sinkin Counsel for Intervenor, ,

Citizens Concerned About Nuclear Power, Inc.

1324 North Capitol Street- 3 Washington, D.C. 20002 '

3, (202) 797-8106 f

^t 1, December 12,'1985 , ,

8512170499 G51212 PDR ADOCK 05000498 .

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Ptyt a m 30 3  ;

1

. - . UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION BEFORE THE ATOMIC SAFETY AND LICENSING BOARD In the Matter of (

)

HOUSTON LIGHTING-AND ( Docket Nos. 50-498 OL POWER _ COMPANY, ET AL. -) 50-499 OL-(South Texas Project, -(

Units 1 and 2) )'

CITIZENS CONCERNED ABOUT NUCLEAR POWER, INC.

PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW

.IN THE FORM OF A PARTIAL INITIAL DECISION FOR REOPENED PHASE II HEARINGS

-I. BACKGROUND I.1. On October 16, 1985, Citizens Concerned About Nuclear Power, -Inc. (CCANP), filed its CCANP Motion to Reopen the Phase

' II Record: II (Motio'n II), which sought to reopen the Phase II record to admit certain documents. CCANP contended that the documents in question indicated that certain testimony by the Applicants was not wholly truthful. .Specifically, CCANP alleged that the documents undercut the position taken by Applicants that they did not regard the Quadrex Report as relevant and material

.to the Phase I-issues and hence they were not required to provide the Report ot this Board pursuant to the McGuire rule. See LBP-85-6, 21.NRC 4 47, 461-(1985) and cases cited therein. To CCANP, the documents demonstrated that "there was a direct link in the minds of HL&P senior management between the commissioning of the Quadrex Report, the Pha se I operating license hearings, and the

- ultimate licensability of the plant." Motion II at 5-6 (emphasis in_ original).

I.2. By response dated October 31, 1985, Applicants opposed.

1 m

. - Motion-II. Similarly by. response dated November 5, 1985, the Staff opposed reopening the record.

I.3. By Order dat'ed November 14, 1985, we reopened the Phase II. record to admit three of the documents presented in Motion II

- and. scheduled evidentiary hearings to take testimony regarding the import of the statements called out by Motion II. Memorandum'

. and. Order (CCANP Motions II and III to Reopen the Record) dated November 14, 1985. Our decision was based on the fact that these documents could "be' construed as seriously undercutting the

- position adopted by the Applicants, and hence adversely impacting

!: our evaluation of their character ...." Id. at 10.

I.4. On December 5 and 6, we held hearings pursuant to our

~

November 14 Order. Applicants presented Mr. Don Jordan; Mr.

Charles Thrash; Mr. Jerome Goldberg; Mr. George Oprea, Jr.; Mr.

- David Barker; and Dr. . James Sumpter. Applicants also agreed to -

supply an affidavit from Loren Stanley regarding one particular document. Tr. 15709 - 10; App. Exh. 86.

II. FINDINGS AND OPINIONS I

II.1. The issue raised by. CCANP's Motion II is essentially .

an issue of Applicants' credibility. The basic measure of that credibility is the construction to be given to the documents presented by Motion II which led to our decision to reopen the Phase II record.

I I . 2. All three documents - Applicants' Exhibits 79 are notes taken by Mr. Charles Thrash during meetings of the STP 1

Management Committee. Our evaluation of these documents depends in good part on our opinion regarding the' qualifications of Mr.

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. -Thrash and his methodology _of taking notes.

11.3. Mr. Thrash is retired from being a partner in the law firm of Baker and-Botts. Tr.1543 8, L.1-2. He has practiced law

.for more than thirty years, and it is commonplace for Mr. Thrash to r'ely on his notes as an accurate reflection.of the events he records. Tr.15457, L.14'- 15458, L.2. Mr. Thrash testified that the items in his' notes at issue in the reopened hearings were his best recording of the actual statements made at the Management Committee meetings in question. Tr. 15499, L.2-22.

11.4. Mr. Thrash currently serves as secretary to the Management Committee, a position he has held since 1972. Tr.

15438, L.3-8. He attended all the meeting of the Management Committee during the period from October 1980 through February 1981. Tr. 15450, L.2.

11.5. Mr. Thrash-did not take verbatim notes of the meetings. Tr. 15442, L.14 - 2 0. His notes were, however, his attempt to capture the essence of what was said. Tr.15443, L.8-

15. He estimated that in general his notes captured ten to twenty percent o'f the words spoken. Tr. 15444, L.1-7. Mr. Thrash did rely on his notes to write up the formal minutes of the meetings.

Tr. 15443, L.8-15.

11.6. The first document from Motion II admitted to the reopened record is Mr. Thrash's notes of the December 4, 1980 meeting of. the Management Committee. In his notes, beginning at 3:10 p.m., Mr. Thrash recorded Mr. Goldberg as stating that construction errors would raise engineering questions; that there was a need for an overview of B&R engineering by more experienced engineers; that this overview would enable Applicants to provide 3

strong testimony at'the' Operating License-hearings; and that outside engineers were being identified at that time. App. Exh.

79 at 2052. Based on the times recorded in the margin by Mr.

Thrash, these statements by Mr. Goldberg took place over a period of less than five minutes. M.

II.7. Mr. Thrash could not explain Mr. Goldberg's statement that construction errors would raise engineering questions. App.

Exh. 84 at 1162, L.2-8.

11.8. When previously asked in a deposition for his sense of his notes beginning at 3:10 p.m. on December 4,1980, Mr. Thrash testified that he read the notes to say that the purpose of the third party engineering overview . (eve n tu'a l ly performed by Quadrex)was to provide testimony at the Operating License hearings. App. Exh. 84 at 1162, L.19 - 1163, L.5; Tr.15447, L.13

- 15448, L.16; 15488, L.6-2 0. Mr. Thrash testified that such a reading of his notes followed the obvious juxtaposition of ~ the study and the reference to the licensing hearings. Tr.15452, L.21 - 15453, L.6. In f act, the statements linking the study and the licensing hearings.are set off from other statements by parentheses and the reference to an overview by more experienced i engineers is followed by a dash and the words "then can provide i strong test at OL hearings." App. Exh. 79 at 2052 (emphasis added).

11.9. While Mr. Thrash's general recollection is that the primary concern of the owners was whether the engineering defects surfacing at almost every Management Committee meeting in late 1980 would prevent full scale restart of work on the Project; Tr.

~

15 4 51, L.5-11; .15 4 91, L.11 - 15493, L.16; he also testified that 4

> . he recalled' discussion that the third party assessment would be l useful if engineering questions came up in the licensing L

j' hearings. Tr. 15452, L.21 - 15 4 5 3, L.23. At the same time, Mr.

i Thrash used as a metaphor for the concerns of the owners "getting an inspection sticker on a car if it won't run," which sounds t

very much like a metaphor for. licensing. Tr. 15453, L.13 -19.

i 11.10. In his general recollection of the purpose of the l

third party audit, Mr. Thrash clearly tied the study to quality

. concerns. He referred to engineering defects, Tr. 15451, L.5-11, .

although he later said " problems" would be a better term. Tr.

l 15459, L.20-21. These problems were growing in number, Tr.15451, L.5-11, and older problems were not being resolved promptly, Tr.

15459, L.13 -2 3. He related the third party review to these i

i problems as a study to go beyond the efforts of HL&P and B&R and to get outside help in identifying and correcting additional problems. Tr.154 51, L.19 - 154 5 2, L.10; 15 4 6 0, L.12-21; see also I Tr. 15 4 71, L.17-2 0 ; 15 4 7 8, L.4-13.

II.11. Mr. Thrash assumed that any reasons for conducting the study would have been recorded in his notes of discussion

concerning the purpose of the study. Tr. 15478, L.21 - 15480, L.5 11.12. Mr. Thrash testified that there were discussions at l

the Management Committee meetings which linked the Quadrex study l

l to the L1timate licensability of the Project. Tr. 15483, L.3-12.

l l I! .13. The discussion on December 4, 1980 about the third l

l party assessment was not formally an agenda item but rather came up during discussion of other items. Tr. 15455, L.18 - 15 4 5 6, L.16.

11.14. Mr. Goldberg linked the third party assessment to his 4 5 t

c:

, own possible testimony before the ASLB in discussion with Dr.

Sumpter in December 1980. Tr. 15698, L.15 - 15699, L.3.

II.15. Regarding' Applicants' Exhibit 79, we conclude that:

a. Mr. Thrash was a highly experienced lawyer in late 1980~whose notes of a meeting in which he served as secretary represent a reliable record of what was said at- such a meeting.

Findings 11.3-4. Given the general inability of witnesses to recollect the discussions recorded in Mr. Thrash's notes, these notes represent the best evidence available of what was actually said. In this Partial Initial Decision, we have decided that these notes should be read in a common sense fashion, basically as saying what they appear to say.

b. Mr. Thrash did not take verbatim notes of the Management Committee meetings and in general . recorded only ten to twenty percent of the actual words spoken, but Mr. Thrash did record the essence of what was said and relied on his notes to write up the formal minutes of the meetings. Finding II.5.

c. Since the statements in the December 4,1980 meeting linking the third party assessment to the Operating License hearings represent five or six distinct expressions within five minutes, we conclude that Mr. Thrash recorded the essence of Mr.

Goldberg's explanation regarding the purpose of such an assessment. Finding II.6.

d. Given both the recorded words and Mr. Thrash's la te r testimony regarding the meaning of the recorded words, we conclude that Mr. Goldberg told the STP Management Committee on December 4, 1980 that a third party assessment of B & R's engineering was necessary so that credible testimony on said 6

. engineering could be provided to this Board in the Phase I hearings. Since this purpose was the only purpose given by Mr.

Goldberg, we conclude that preparation for the Phase I hearings was a primary purpose of the Quadrex study. Finding 11.8.

e. While Mr. Thrash had no recollection of the meaning of the statement attributed to Mr. Goldberg regarding construction errors raising engineering questions, Finding II.7, the context of the discussion recorded in the notes was the current status of engineering, the discussion took place af ter the November 19, 1980 prehearing conference in which the Phase I issues were set forth and af ter the issuance of our December 2, 1980 Order setting out the same issues, and Mr. Goldberg's decision to look into engineering apparently was linked to his review of the materials prepared for the Phase I hearings (See CCANP Exh. 87). We conclude that Mr. Goldberg told the Management Committee that the construction errors so prominent in the Phase I issues would raise engineering questions and that the purpose of the Quadrex audit was to put Applicants in a position to provide credible independent testimony on the quality of B&R engineering.

f. We do not find Mr. Thrash's general recollection of the purpose of the third party assessment inconsistent with our conclusions regarding the import of the notes. He tied the study to the concerns regarding current engineering quality; remembered the discussions of the study as linked to the licensing hearings l

and licensability; and assumed that, if a purpose for the study other than the licensing hearings had been expressed, his notes l

wculd have included the additional reasons. Findings II.9-12.

l 7

. g. Furthermore, the explanation by Mr. Goldberg

~

I- recorded in the December 4 notes came in response to an informal l

l question, as opposed to being a form'al presentation by Mr.

Goldberg. We would expect in such a situation that the explanation - would reflect the purpose uppermost in Mr. Goldberg's i

mind just prior' to the actual hiring of the Quadrex Corporation.

Finding II.13.

h. Nor is Dr. Sumpter's recollection of Mr. Goldberg's linking of the study to the hearings inconsistent with our conclusions. While Applicants sought to deemphasize such connections, that Mr. Goldberg would make the same connection for both the Management Committee and Dr. Sumpter just prior to hiring Quadrex reinforces the importance of this purpose in Mr.

Goldberg's mind. Findings II.14.

i. We find all testimony by Applicants contrary to these conclusions to be part of the continuing effort on the part of the Applicants to mislead the Board regarding the Quadrex study / Report and the Applicants' obligations regarding the McGuire rule.

' II.16. The second document is Mr. Thrash's notes of the February 19, 1981 Management Committee meeting. In his notes, Mr.

Thrash recorded Mr. Goldberg as responding to a question f

regarding the effect of an adverse audit by Quadrex on the licensing hearings. Mr. Goldberg is recorded as responding that

the Applicants could only disclose such findings and explain how l

they would be corrected. App. Exh. 80 at 81037. ,

f 11.17. Mr. Thrash recorded Mr. Goldberg as stating that in l

hearings, the Licensing Board would not believe the contractor or 8

L ..

the utility but would believe the Quadrex reviewers. Id. Mr.

Goldberg had precisely such an experience in a previous licensing proceeding. Tr. 15516, L.16 - 15517, L.13.

11.18. When Mr. Thrash was asked whether the notes meant that Quadrex personnel would appear as witnesses in the Operating License hearings, Mr. Thrash testified that the primary inference he drew from the notes was that the Quadrex Report would be given to the Board but that, if testimony was desired, such testimony by Quadrex personnel would also be provided. Tr.15495, L.4-13.

Of course, Applicants provided neither the Report nor testimony by Quadrex personnel to this Board in Phase I. In fact, the existence of the Report was not mentioned.

II.19. We also note at this point Applicants Exhibit 86.

This document contains Mr. Stanley's notes of a conversation with Dr. Sumpter, apparently on January 1, 1981, in which Dr. Sumpter first explained the third party review to a Quadrex representative. Tr.15695, L.17 - 15696, L.25. In this document, Mr. Stanley wrote " Fairly heavy people" followed by "May 81 hearing- NRC." App. Exh. 86.

11.20. While he had no recall of mentioning the Phase I hearings to Mr. Stanley in that conversation, Dr. Sumpter speculated that there were two possible explanations for the notations by Mr. Stanley. The first possibility was that the was bringing Mr. Stanley up to date on the history of the Project over the previous two years, a history that Dr. Sumpter testified would include the status of construction, the show cause order, and the construction shut down that followed that order. None of these items appear in Mr. Stanley's notes. The second possibility 9

. was that he had told Mr. Stanley that Applicants needed the study completed quickly before licensing hearings began. Tr. 15697, L.5-2 3 ; App. Exh. 8 6.

II.21. Regarding Applicants' Exhibit 80, we conclude that:

a. Our conclusions in Findings II.15a and b apply equally to Applicant's Exhibit 80.

b. The extent of Mr. Thrash's notes in the fifteen minute period from 3:10 to 3:25 represent the essence of what was said by the Management Committee participants in the February 19, 1981 meeting. See App. Exh. 80.

c. Mr. Goldberg assumed in February 1981 that adverse findings by Quadrex would be disclosed to the ASLB and that Quadrex personnel would testify during the hearings as the most credible witnesses on the subject of B&R's engineering. Findings II.16-19.

d. The two possibilities raised by Dr. Sumpter to explain Mr. Stanley's notations make less sense than the conclusion that Dr. Sumpter told Mr. Stanley in January 1981 that Quadrex would have to provide highly qualified personnel for the study who would, in turn, make credible witnesses in the Phase I hearings. Given Mr. Goldberg's prior experience regarding the greater credibility of a consultant and his discussion with Dr.

Sumpter in December linking the licensing hearings and the study, we find this conclusion to be the most likely explanation for the notations.

e. We find all testimony by Applicants contrary to these conclusions to be part of the continuing effort on the part 10

. of the Applicants-to mislead the Board regarding the Quadrex study / Report and the Applicants' obligations regarding .the McGuire rule.

11.22. The third document admitted from Motion II is Mr.

Thrash's notes of the February 20 Management Committee meeting.

In his notes, Mr. Thrash. records Mr. Barker as telling the Management Committee that the Quadrex study was needed to provide information to meet licensing hearing questions. App. Exh. 81.

11.23. Mr. Barker testified that his statement on February 20 was perhaps based on Mr. Goldberg's statement to the -

Management Committee on February 19; Tr. 15648, L.2 2 - 15 6 4 9, L.6; 15679, L.10 - 15680, L.3; or on Mr. Goldberg's statements at the December 4 meeting. Tr. 15680, L.20-24.

11.24. Regarding Applicants' Exhibit 81, we conclude thatt

a. Our conclusions in Findings II.15a and b are equally applicable to Applicants' Exhibit 81.

b. Mr. Thrash's notes on Item 46 at 2091 would appear to cover only a two or three minute period of time and, therefore, represent the essence of Mr. Barker's formal presentation.

c. Since the licensing hearings are the only'apecific purpose recorded for the Quadrex study and since, even though present, Mr. Goldberg did not qualify that purpose in any way, this purpose was at least one of the primary purposes for commissioning the study.

d. We-find all testimony by Applicants contrary to these conclusions to be part of the continuing effort on the part of the Applicants to mislead the. Board regarding the Quadrex 11

study / Report and the Applicants' obligations regarding the McGuire rule.  ;

11.25. Applicants did introduce notes by Mr. Barker from the early November 1980 period, apparently to demonstrate that an engineering review was being discussed prior to the November 19 prehearing conference wherein the Phase I issues were delineated.

See App. Exh. 85. We note, however, that almost every reference in these notes to an engineering review referred either to a B&R internal review or an HL&P review, not a third party review, which !!r . Barker testified was not decided upon until late November. See Tr.15 6 53, L.19 - 156 5 5, L.20; 15 6 5 6, L.20 - 15 6 57, L.5; 15 6 5 9, L.7-21; 15 6 6 0, L.13-2 3; 15 6 61, L.14 - 15 6 6 2, L.15. As such these references are irrelevant to the issue of the purpose of the Quadrex review, except perhaps to reinforce the conclusion Mr. Goldberg decided to seek a third party review because he believed we would find such a review more credible than an internal review, much as Applicants were presenting numerous third party reviews to answer concerns about construction l

defects. See Finding II.21.c. ,

11.26. Overall, the three major documents brought to our attention by CCANP - Applicants' Exhibits 79, 80, 'and 81 -

demonstrate to us that Applicants' senior management decided to perform the Quadrex review in order to prepare for the Phase I hearings. When the review resulted in a highly critical report, l

which among other things suggested Applicants had abdicated their I

responsibility to oversee B&R's engineering, Applicants decided l not to provide the report to this Board and made a determined l

1 i

12 i

l

o attempt not to mention the Report in their Phase I testimony. Mr.

Goldberg, particulatly would have an incentive not to mention the Report because his prior experience indicated to him that we would tend to believe the criticisms of Quadrex rather than any defenses to those criticisms by the utility or the contractor.

11.27. Following the pattern established in the initial portion of Phase II, Applicants have again provided false and misleading testimony in their refusal to admit the Quadrex study was intended to provide credible testimony in Phase I regarding B&R's engineering.

11.28. Applicants failure to include in any of their testimony before this Board the fact that preparation for the Phase I hearings was a purpose for commissioning the Quadrex Corporation study represents a lack of honesty and candor. Given the extensive evidence already developed on this lack of honesty and candor, we cannot help but find a disqualifying lack of character on the part of Applicants' senior management.

13

r:

III. CONCLUSIONS OF LAW III.1 This Board already addressed the issue of honesty and candor in our Partial Initial Decision in Phase 1 of this proceeding. Ugyntgn_ Lighting _ged_Egwet_ggs, (South Texas Project, Units 1 and 2), 19 NRC 659,- 677-678 (l'ack of truthfulnese and candor may demonstrate so serious a defect in a corporation's character as to disqualify it from holding a license despite later corrective action). See algg Ugggten_Lightlog_ gad _Egwet ggs, (South Texas Project, Units 1 and 2), CLI-80-32, 12 NRC 281, 291, notes 4 and 5 (1980): EGG _Yt_W9E01_ Inst, 329 U.S. 223 (1946); Lgflgtg_Etggdgggting_Cgt_xt_ EGG, 636 F2d 454 (D.C. Cir.

1980); MitglnLg_g[ggtt{g_Egggt Qgt_yt_NRG, 571 F2d 1289 (4th Cir.

1978).

Furthermore, material false statements and omissions are specifically made punishable under sections 186 and 234 of the Atomic Energy Act. 42 U.S.C. Sections 2236 and 2282.

The truthfulness of an applicants' statements includes the

" completeness or comprehensiveness of information provided."

dQutk90_bigbklG9_eQd_E95tC_G9t, EMECB, 19 NRC at 674.

This necessity for honesty is a well recognized regulatory principle. Sgg stat Egoingsketg_yt_Stetg_Det, 353 U.S. 252, 263 (1957) (dishonesty historically considered manifestation of bad character); EGG _yt_WQBQ4_ingt, 329 U.S. 223, 225 (1946)

(deliberate concealment of information); BBQ_QRORCela_10Gr_Ys EGG, 670 F2d 215 (D.C.Cir 1981) (deliberate concealment and misrepresentations); Ugello_Iggting_behgtetgting3_1cgt, 2 AEC 423 (1964) (f also and deceptive statements); 42 U.S.C. Section 2236 (an NRC license can be revoked for "any material false statement 14

\ .

l l

in the application").

Lack of candor is similar to dishonesty and frequently treated as such. Sgg gtgz Sga_1gl end _Ecgad gesti ng_Ggtet_yt_ Egg ,

! 627 F2d 240, 241 (D.C.Cir 1980); Nigh_qt_gbaggnag, 28 F.C.C.2d

! 231 (1971), 486 F2d 123 (D.C.Cir. 1973); W8DFG93_10gt_yz_ EGG, 628 l F2d 122 (D.C.Cir 1900); Egimgtig_Dtggdgggtigg_ggz, 33 F.C.C.2d

. 250 (1962).

l

}, A misrepresentation of even an immaterial fact can serve as a bacis for nonrenewal of a license. Egg _yz_WQEg, SWEB8 329 u.s.

AT 226 - 2278 IDdE990dfut_DC9fdGEEllD9_Yz_ EGG, 193 F2d 900, 902 (D.C.Cir 1951), GECiz dRDigd, 344 U.S. 837 (1952); Gtgwdgt_yz i

l EGG, 399 F2d 569, 571 (D.C. Cir.), G!tt dEDigd, 393 U.S. 962 (1960).

For nuclear licensees, the fact of concealment may well be j more important than the information concealed because the 1

NRC regulatory process is heavily dependent on the licensee being l

forthcoming.

The NRC has stated l

l In order to fulfill its regulatory obligations, NRC is dependent upon all of its licensees for accurate and timely

( information. Since licensees are directly in control of i

plant design, construction, operation, and maintenance, they l are the first line of defense to ensure the safety of the l public.

l As the Commission has stated in the past Our inspection system is not designed to and cannot assume such taskw tto provide full inspection of construction activities 3. Rather, we require that licensees themselves develop and implement reliable >

quality assurance programs which can assume the major burden of inspection. ggggumECD_EQWet_G9t (Midland

! Plant, Units 1 and 2), CLI-74-3, 7 AEC 7, 11 (1974).

We require instead a regime in which applicants and licensees have every incentive to scrutinire their internal

- procedures to be as sure as they possibly can be that all 15 L

-. - -_ _ - -. _=_ . . . . _ - _ . - . . _ . . ~. . . - _ _ ..

submissions to this Commission are accurate. Pgtitilgg_igt EmeC9e0gy_aed_Bemedial_8stigo, CLI-76-22, 4 NRC 400, 418 (1978).

i Misstatements which fall far short of deliberate false statements can demonstrate a lack of character. Mitgi Dif_EI REttiE_f0d_Pgwet i

Ggt (North Anna Power Station, Units 1 and 2), CLI-76-22, 4 NRC 400 (1976), afi'd, 571 F2d 1289 (4th Cir. 1978). Withholding information from the Commission is considered to imperil the regulatory scheme so seriously that the NRC has determined that a 1

License can be denied even when a plan to withhold information

! fails. GgggymECH_E9WEC.G9t (Midlcnd Plant, Units 1 and 2), CLI-l

! 03-2, 17 NRC 69 - 70 (1983). Ggg 3 1 3g Ggc3yggtg_Egwat_ Ggt 1

(Midland Plant, Units 1 and 2), ALAB-691, 16 NRC 897 (1982); X-BBY_ED91DEECl09_G91, 1 AEC 466, 475, 481 (1960).

The extensive evidence in this proceeding regarding Applicants' lack of honesty and candor as supplemented by Applicants testimony in the reopened Phase II hearings represents an insuperable barrier to the licensing of this Project pending a radical change in the control of Applicants' corporations. The i Applicants have given us no choice but to deny the operating licenses for the South Texas Project pending such radical change ,

in the control of these corporations.

i 4

16

7 a UNITED STATES OF AMERICA NUCLEAR REGULATORY COMMISSION LEFORE THE ATOMIC SAFETY AND LICENSING DOARD M avi'g ii.

In the Matter of (

)

HOUSTON LIGHTING AND ( Docket Nos.

POWER COMPANY, ET AL. ) 50-498 50-499 OL OL 15 08: 16 All :34 (South Texas Project, (

Units 1 and 2) (

h.h]. -

BRANCH CEBI1EIC61E DE SGBV1GG I hereby certify that copies of CITIZENS CONCERNED ADOUT NUCLEAR POWER, INC. PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW IN THE FORM OF A PARTIAL INITIAL DECISION FOR REOPENED PHASE II HEARINGS were served by deposit in the U.S. Mail, first class postage paid to the following individuals and entities on the 12th day of December 1985.

Charles Dochhoefer, Esquire Brian Derwick, Esquire Chairman Asst. Atty. Gen.

Atomic Safety and Licensing Board State of Texas U.S. Nuclear Regulatory Commission Environmtl. Protection Washington, D.C. 20555 P. O. Box 12540, Capitol Sta.

Austin, Texas 78711 Dr. James C. Lamb, III Administrative Judge Oreste Russ Pirfo, Esquire 313 Woodhaven Road Office of the Exec. Leg. Dir.

Chapel Hill, North Carolina 27514 U.S. Nuclear Regulatory Comm.

Washington, D.C. 20555 Frederick J. Ghon Administrative Judge Jack R. Newman, Esquire U. S. Nuclear Regulatory Commission 1615 L Street, NW, Suite 1000 Washington, D.C. 20555 Washington, D.C. 20036 Melbert Schwarz, Esquire Daker and Dotts Mrs. Peggy Duchorn 300 One Shell Plaza Executive Director, C.E.U. Houston, Texas 77002 Route 1, Don 1684 Drazoria. Texas 77422 Atomic Safety and Lic. Dd.

U.S. Nuclear Regulatory Comm.

Diane Curran, Esquire Washington, D.C. 20555 Harmon, Weiss 6 Jordan 2001 S Street, N.W., Suite 430 Atomic Safety and Licensing Washington, D.C. 20009 Appeal Daard U.S. Nuclear Regulatory Comm.

Pat Coy Washington, D.C. 20555 5106 Casa Oro San Antonio, Texas 70233 Docketing and Gervice Section Office of the Secretary Ray Goldstein U.S. Nuclear Regulatory Comm.

Gray and Decker Washington, D.C. 20555 901 Vaughn Oldg.

007 Drazos Austin, Texas 79701 g_ __ g,_________________