ML20199H775

Partially Released Memo Re NRC Access to Licensee Investigative Documents

ML20199H775
Person / Time
Site:	Wolf Creek
Issue date:	01/15/1985
From:	Hayes B NRC OFFICE OF INVESTIGATIONS (OI)
To:	Roberts NRC COMMISSION (OCM)
Shared Package
ML20199G571	List: ML20199G567 ML20199H712 ML20199H775
References
FOIA-85-101, FOIA-85-A-42 NUDOCS 8604090409
Download: ML20199H775 (20)

Text

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UNITED STATES

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January 15, 1985

.issioner Roberts

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MEMORANDUM F  : C FROM:

en B. Hayes, Director f,OfficeofInvestigations

SUBJECT:

Ol's DECEMBER 24, 1984' REQUEST FOR COMMISSION -

GUIDANCE Your January 8,1985 memorandum to me poses several questions on this subject.

Although these questions are specific in riature, I. feel that our response would be more useful to you if we were to hddress the two larger issues that appear to represent the basis of these specific concerns. These appear to be I) why, and under what authority was 01 evaluating a licensee's investigative program, and 2) why did 01 choose to bring matters to the a'ttention of the.

Corr:ission as candidates for investigation that may not be explicit violations of NRC requirements. Let me' start with the first issue.

The 01 Field Office, Region IV while conducting an investigation of alleged wrongdoing at the Wolf Creek Generating Station (WCGS) discovered that the licensee also was conducting an investigation of the same matter. Although the licensee allowed the NRC investigators to review the investigative file, they were not pemitted to remove either the documents or copies thereof, apparently on the advice of their retained counsel, Mr. Gerald Charnoff of Shaw, Pittnan, Potts, and Trowbridge, a person not exactly unknown to this Office. It was and still is my view that the NRC has a leg 61 right to that material.

I subsequently discussed this issue with Mr. Charnoff. During this discus-i sion, Mr. Charnoff voiced the concerr. that if the material were given to the NRC, it could be subject to a Freedom of Infomation Act request at the completion of the investigation or inspection. Mr. Charnoff stated he was desirous of keeping his client's investigative files confidential. In my view, this is a legitimate, concern. At this time, Mr. Charnoff suggested that I personally review this investigative program. I agreed to consider such a course of action.

~

In early Fall 1984, our investigators encountered a similar situation at Waterford where the licensee at the advice of Mr. Charnoff denied 01 a copy of their investigative report. I could have forced the issue by requesting the Staff to issue either a subpoena or an order, assuming that the Staff and Commission would have acceded to my request. Faced with the prospect of this problen spreading to other of the many licensees which have engaged the services of Mr. Charnoff or his law firm. I elected to deal with the issue.

Although I have misgivings about accepting industry-conducted investigations in lieu of our own, car severe resource constraints impose an obligation on me

to explore any option that would allow OI to make the most efficient and i

effective use of what resources it does have. I discussed with our staff the possibility that a licensee-conducted investigation of alleged wrongdoing could serve to expedite our own investigation. In some instances, we might be 8604090409 860311 *-

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__ [ ._. ._ YOUNG 85-A -42

Commissioner Roberts  ?

able to adopt the licensee's report subject to a strict quality control review which could include selective verification or corroboration by 01.

Consequently, I accepted the invitation extended by Mr. Charnoff and the Kansas Gas and Electric (KG&E) Vice President - Nuclear who made the necessary a rrangements. Two senior members of my staff and I visited WCGS in mid -

September 1984 where we received a briefing from KG&E officials.and employees -

of the investigative group established at WCGS. This group is called, Quality First (Q1). I was pleased with the courtesy extended to ne and I found the briefing very useful. I did develop some misgivings that I felt had to be resolved before I could make any decisions regarding accepting the licensee's work product.

You will note that one of the issues ~ raised by our review was whether a licensee or applicant has a duty to notify the NRC of alleged wrongdoing.

We subsequently raised this question to the Office of General Counsel. I have enclosed our menorandum and their reply (enclosure 2) for your infor-nation.

This, then, is how we ended up at WCGS. We were not there to determine the licensee's compliance with NRC requirements per se. Rather, we went there both to attempt to resolve a problem in a non-adversarial manner and to explore a creative partial solution to our chronic resource shortfall.

Because of the latter. I plan to evaluate two other investigative prograns m

5,--

3 Comissioner Roberts in order to gather sufficient infonnation about their effectiveness to arrive at a generic position regarding what degree of reliance to place on them.

Turning then to your second implicit question, my decision to raise these issues to the Comnission was primarily predicated on ry understanding of the Comission's instruction to 01 not to investigate the character orThis suitability in-of licensees without first coming to the Comission for guidance. -

struction, which was the result of a November 8,1982 Comission Meeting on Discussion of 01 Policy and Procedures, is set forth in a November 24, 1982 Staff Requirements Memorandum which is enclosure 3.

This, however, was not the only reason for bringing. it to the Comission's attention.

The NRC has not definitively addressed standards of character or suitability for licensees. The closest that we have appears toYet, be the security access thi.s issue of charac-eligibility criteria set forth in 10 CFR Part 10.

ter/sultability or management inteority is an extrenely relevant matter if I properly understand some of the issues relating to TMI, D.C. Cook, or Water-ford. It is my belief that this is an iss'ue that is very difficult to discuss in the abstract. Consequently, I felt that this paper might help the Comis-sion to focus on this subject by providing some concrete examples pertaining to a real plant.

I do not wish to suggest that 01 feels that the matters raised in our request for guidance are not important even in the absence of explicit agency policy. WCGS

,For instance, the person implicated by much oj this ir. formation occupies is the of trust.

a key position i .

(It is reasonable to assume that he or sne snould be cf sufficier.t character to invite such trust. This is especially so since the W:GS, sthe allegation resciution activities of which have received at least some degree of NRC reliance. Yet in this indi-vidual's case, we find that 1) He allegedly instigated activities that resulted in documents being removed from an employee's personal effects located in the employee 's personal vehicle without the knowledge of the employee (I will coment on the legality of this, below). 2) He later, in the opinion of at least two 01 personnel, betrayed the (former) employge's confidentiality and allegedly caused an offer of employment at, J tc be withdrawn We add to ,

that the information that he is under investigation ta kG&E for tNe acceptance of kickbacks and may have shown undue favoritise in hiring practices.

Stopping there, does any of this information bear on the character expecta-tions that the NRC would have for a person in a pcsiticr. of this importance?

Our request for guidance uses the phrase, *01 would propose to ascertain at least the following:", to introduce the questions which we felt flowed from this fact pattern. We did not mean to suggest that we were recommending that ,

01 investigate the matter. We meant to convey the sense that these questions appeared relevant to the issue at hand. I apologize if this lack of precision

)

created the wrong impression. Again, the purpose of our request was to solicit l m

. l 1

..*== . .

Comissioner Roberts 4 Commission guidance as we have been instructed to do in these matters. Wp included the matter regarding the WCGS

.because he. loo .is a key manager. Amon'g other things, he is the de facto In that capacity alone, especially_in view of his respon-sibilities regarding

.it is clear that a person of questionable moral charac.ter could jeopardize site safety and ,

security.

The issue of sexual harassment was raised due to -its relevance to a charac-ter/ suitability detemination irrespectiv'e of whether it also violates NRC requirements. On the other hand,10 CFR '19.32 does speak to sexual discrimination. It seems reasonable to construe sexual harassment as a subset of sexual discrimination. A female subjected to harassment merely because she is female clearly is being treated differently from the work force as a whole, i.e. she is discriminated against because of her sex. We do not know whether this putative discriminatier. violates NRC regulations. That would be an OGC determination. At the same time 01 is riot taking a position whether sexual discrimination should be investigated by the NRC. It was the character / suit-ability iriplication that led us to bring it to your attention.

We do not be'ieve that the applicant's activities regarding the confiscation and destruction of the documents taken from the employee's vehicle violated either explicit NRC requirements or laws within NRC jurisdiction, nor did we mean to imply that we did so believe. The characterization of these activities as being "possibly illegal" was attributed to a member of the KG&E corporate legal staff who was partly briefed by the parties involved in the~se activities (according to the KG&E report regarding this incident). It is unclear if he called thec serendipitously or if they called him for consultation, but the KG&E file reflects that the attorney urged that the docunents be returned, presumably due to his qualms about whether the documents were properly seized.

It is fair to say that the actions regarding these documents were improper.

KG8E evidently shares this assessment in view of the disciplinary action that they took against the employees involved. I would aise add that a search of a person's vehicle and personal effects by anyone, private employer or govern-ment agency, without the owner being Dresent, let alone informed, is highly irregular unless done for exigent safety or security reasons. Even in latter -

instances, which did not pertain in this' case, the owner is at lust informed after the fact. Whether the facts of this case speak to a violation of law by KG&E or its agents is a legal question beyond 01's competence to determine. I can state that such actions by government agents would result at least in disciplinary action against the agents, and could lead to civil if not crimi-nel action against them.

l One last point about the treatment of the former employee is that all of it, I the search and seizure as well as the alleged " blackballing" purportedly was a direct result of his having previously raised safety concerns to Quality First.

I believe that this is the key factor in placing the events in the proper NRC perspective.

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Consnissioner Roberts In closing, I hope that the foregoing If not,isI responsive would be pleased to the questions to meet with that you you asked in your memorandum to me.

and your staff, or provide whatever additional written documentation . that you desire.

Enclosures:

As stated cc: Chairman Palladino Commissioner Asselstine Commissioner Bernthal '

Commissioner Zech ~

S. Chilk, SECY H. Plaine OGC J. Zerbe, OPE W. J. Dircks, EDO T l hl j hoffb/AEK OI:c/f 01:r/f -

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OI OI OI WJWar /jh RAFortuna BBHayes 01/14/85 01/ ./85 01/ /85 l

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c NUCLE AR REGULATORY COMMISSION

$ WASHlfvGT08d O C. 20555 January 15, 1985 MEMORANDUM F -: C .issioner Roberts FROM:

, en B. Hayes, Director i e Office of Investigations l 1

SUBJECT:

01's DECEMBER 24, 1984' REQUEST FOR COMMISSION {

GUIDANCE Your January 8,1985 memorandum to me poses several questions on this subject.

Although these questions are specific in dature, I feel that our response would be more useful to you if we were to Address the two larger issues that appear to represent the basis of these specific concerns. These appear to be

1) why, and under what authority was 01 evaluating a licensee's investigative program, and 2) why did 01 choose to bring matters to the attention of the {

Corr:ission as candidates for investigation that may not be explicit violations l of NRC requirements. Let me' start with the first issue.

l l

The 01 Field Office, Region IV while conducting an investigation of alleged l wrongdoing at the Wolf Creek Generating Station (WCGS) discovered that the '

licensee also was conducting an investigation of the same matter. Although the licensee allowed the NRC investigators to review the investigative file, they were not permitted to remove either the documents or copies thereof, apparently on the advice of their retained counsel, Mr. Gerald Charnoff of Shaw, Pittnan, Potts, and Trowbridge, a person not exactly unknown to this 4 Office. It was and still is my view that the NRC has a legal right to that material.

I subsequently discussed this issue with Mr. Charnoff. During this discus-sion, Mr. Charnoff voiced the concerr. that if the material were given to the NRC, it could be subject to a Freedom of Information Act request at the completion of the investigation or inspection. Mr. Charnoff stated he was desirous of keeping his client's investigative files confidential. In m/

view, this is a legitimate concern. At this time, Mr. Charnoff suggested that I personally review this investigative program. I agreed to consider such a course of action.

In early Fall 1984, our investigators encountered a similar situation at

~

Waterford where the licensee at the advice of Mr. Charnoff denied 01 a copy of their investigative report. I could have forced the issue by requesting the Staff to issue either a subpoena or an order, assuming that the Staff and Comission would have acceded to my request. Faced with the prospect of this problen spreading to other of the many licensees which have engaged the services of Mr. Charnoff or his law firm I elected to deal with the issue.

Although I have misgivings cbout accepting industry-conducted investigations in lieu of our own, osr severe resource constraints impose an obligation on me j to explore any option that would allow OI to make the most efficient and ,

effective use of what resources it does have. I discussed with our staff the possibility that a licensee-conducted investigation of alleged wrongdoing i could serve to expedite our own investigation. In some instances, we might be

! g W A> 2-

, m ~ sw Com.issioner Roberts  ?

l able to adopt the licensee's report subject to a strict quality control review which could include selective verification or corroboration by 01.

Consequently, I accepted the invitation extended by Mr. Charnoff and the Kansas Gas and Electric (KG&E) Vice President - Nuclear who Nede the necessary i arrangements. Two senior members of my staff and I visited WCG5 in mid -

September 1984 where we received a briefing from KG&E officials.and employees -

of the investigative group established at WCGS. This group is called, Quality First (QI). I was pleased with the courtesy extended to me and I found the briefing very useful. I did develop some misgivings that I felt had to be resolved before I could sake any decisions, regarding accepting the licensee's work product. .

You will note that one of the issues ' raised by our review was whether a

~

licensee or applicant his a duty to notify the NRC of alleged wrongdoing.

We subsequently raised this question to the Office of General Counsel. I have enclosed our menorandum and their reply (enclosure 2) for your infor-mation.

This, then, is how we ended up at WCGS. We were not there to determine the licensee's compliance with NRC requirements per se. Rather, we went there both to attempt to resolve a problem in a non-adversarial manner and to explore a creative partial solution to our chronic resource shortfall.

Because of the latter. I plan to evaluate two other investigative prograns 1

._s-..

3  ;

Comissioner Roberts in order to gather sufficient information about their effectiveness to arrive at a generic position regarding what degree of reliance to place on them.

Turning then to your second implicit question, my decision to raise these issues to the Comission was primarily predicated on ny understanding of the Comission's instruction to 01 not to investigate the character orThis suitability in-of licensees without first coming to the Comissior. for guidance. -

struction, which was the result of a November 8,1982 Comission Meeting on Discussion of 01 Policy and Procedures, is set forth in a November 24, 1982 Staff Requirements Memorandum which is enclosure 3. This, however, was not the only reason for bringing it to the Comission's attention.  ;

The NRC has not definitively addressed standards of character or suitability for licensees. The closest that we have appears to be the security access eligibility criteria set forth in 10 CFR Part 10. Yet, this issue of charac-ter/ suitability or management integrity is an extrenely relevant matter if I properly understand some of the issues relating to THI, D.C. Cook, or Water-ford. It is my belief that this is an iss've that is very difficult to discuss in the abstract. Consequcntly, I felt that this paper might help the Comis-sion to focus on this subject by providing some concrete examples pertaining to a real plant.

I do not wish to suggest that 01 feels that the matters raised in our request  :

for guidance are not important even in the absence of explicit agency policy.

,For instance, the person implicated by much o this ir. formation is the WCGS occupies a key position of trust.

(It is reasonable to assume that he or sne snould be of sufficier.t character to invite such trust. This is especially so since the W:GS.

the allegetion resclution activities of

'which have received at least some degree of NRC reliance. Yet in this indi-vidual's case, we find that 1) He allegedly instigatec activities that resulted in documents being removed from an employee's personal effects located in the employee 's personal vehicle without the knowledge of the employee (I will coment on the legality of this, below). 2) He later, in the opinion of at least two Q1 personnel, betrayed the (fomey) employge's confidentiality and allegedly caused an offer of employment at, J tc be withdrawn We add to .

that the information that he is under investigatior t) KG&E for tMe acceptance of kickbacks and may have shown undue favoritise in hiring practices.

Stopping there, does any of this information bear on the character expecta-tions that the NRC would have for a person in a positicr. of this importance?

Our request for guidance uses the phrase, "01 would propose to ascertain at least the following:", to introduce the questions which we felt flowed from this fact pattern. We did not mean to suggest that we were reconsnending that 01 investigate the matter. We meant to convey the sense that these questions appeared relevant to the issue at hand. I apologize if this lack of precision created the wrong impression. Again, the purpose of our request was to solicit

Comn.issioner Roberts 4 Comission guidance as we have been inf,tructed to do in these matters. Wp 1 included the matter regarding the WCGS j

.because. he. ..too .is a key manager. Amon'g other things, he is the de facto i In that capacity alone, especially_in view of his respon-sibilities regarding

~

..it is clear 1 that a person of questionable moral charac.ter could jeopardize site safety and .

l security. -

The issue of sexual harassment was raised due to its relevance to a charac-ter/ suitability detennination irrespectiv'e of whether it also violates NRC ,

requirements. On the other hand,10 CFR 49.32 does speak to sexual l discrimination. It seems reasonable to construe sexual harassment as a 'sobset '

. of sexual discrimination. A female subjected to harassment merely because she is female clearly is being treated differently from the wo'rk force as a whole, i.e. she is discriminated against because of her sex. We do not know whether i this putative discrimination violates NRC regulations. That would be an OGC determination. At the same time. 01 is n'ot taking a position whether sexual discrimination should be investigated by the NRC. It was the character / suit-ability iriplication that led us to bring it to your attention.

We do not believe that the applicant's activities regarding the confiscation and destruction of the documents taken from the employee's vehicle violated either explicit NRC requirements or laws within NRC jurisdiction, nor did we mean to imply that we did so believe. The characterization of these activities

, as being "possibly illegal" was attributed to a member of the KG8E corporate legal staff who was partly briefed by the parties involved in these activities (according to the KG8E report regarding this incident). It is unclear if he called then serendipitously or if they called him for consultation, but the KG8E file reflects that the attorney urged that the docunents be returned, presumably due to his qualms about whether the documents were properly seized.

It is fair to say that the actions regarding these documents were improper.

KG8E evidently shares this assessment in view of the disciplinary action that they took against the employees involved. I would alse add that a search of a person's vehicle and personal effects by anyone, private employer or govern-ment agency, without the owner being present, let alone informed, is highly irregular unless done for exigent safety or security reasons. Even in latter -

instances, which did not pertain in this case, the owner is at least informed after the fact. Whether the facts of this case speak to a violation of law by KG&E or its agents is a legal question beyond 01's competence to determine. I can state that such actions by government agents would result at least in disciplinary action against the agents, and could lead to civil if not crimi-nel action against them.

One last point about the treatment of the fonner employee is that all of it, the search and seizure as well as the alleged " blackballing" purportedly was a direct result of his having previously raised safety concerns to Quality First.

I believe that this is the key factor in placing the events in the proper NRC perspective.

. u.' ~ ' .. .:

5 Comissioner Roberts In closing, I hope that the foregoing If not, is Iresponsive to the questions would be pleased thatyou to meet with you asked in your memorandum to me.

and your staff, or provide whatever additional written documentation that you ,

desire.

Enclosures:

As stated cc: Chairman Palladino Commissioner Asselstine Comissioner Bernthal '.

Commissioner Zech ~

S. Chilk SECY H. Plaine, OGC J. Zerbe, OPE W. J. Dircks, EDO a

fsjhalfbl'Ed DI:c/f 01:r/f -

WJWard 01 OI 01 WJWar /jh RAFortuna BBHayes 01/14/85 OI/ /85 01/ /85

g) , e -

'*:  : 't ,

- [p.e n*e

• UNITE D STATES

/*

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} NUCLE AR REGULATORY COMMISSION wasmotow.o c.sosss t

g January 15, 1985 MEMORANDUM F  : C .issioner Roberts .

FROM: )

f.enB.

Office Hayes, Director of Investigations

SUBJECT:

Ol's DECEMBER 24, 1984 REQUEST FOR COMMISSION GUIDANCE Your January 8,1985 memorandum to me poses several questions on this subject. 1 Although these questions are specific in riature, I feel that our response '

would be more useful to you if we were to 6ddress the two larger issues that )

appear to represent the basis of these specific concerns. These appear to be  ;

1) why, and under what authority was 01 evaluating a licensee's investigative program, and 2) why did 01 choose to bring matters to the attention of the Corr:ission as candidates for investigation that may not be explicit violations of NRC requirements. Let me start with the fir,st issue.

The 01 Field Office, Region IV while conducting an investigation of alleged wrongdoing at the Wolf Creek Generating Station (WCGS) discovered that the licensee also was conducting an investigation of the same matter. Although i

the licensee allowed the NRC investigators to review the investigative file, they were not pemitted to remove either the documents or copies thereof, apparently on the advice of their retained counsel, Mr. Gerald Charnoff of Shaw, Pittnan, Potts, and Trowbridge, a person not exactly unknown to this Office. It was anc' still is my view that the NRC has a legal right to that material.

I subsequently discussed this issue with Mr. Charnoff. During this discus-sion, Mr. Charnoff voiced the concerr. that if the material were given to the NRC, it could be subject to a Freedom of Infomation Act request at the completion of the investigation or inspection. Mr. Charnoff stated he was desirous of keeping his client's investigative files confidential. In my view, this is a legitimate concern. At this time, Mr. Charnoff suggested that I personally review this investigative program. I agreed to consider such a course of action.

In early Fall 1984, our investigators encountered a similar situation at Waterford where the licensee at the advice of Mr. Charnoff denied O! a copy of their investigative report. I could have forced the issue by requesting the Staff to issue either a subpoena or an order, assuming that the Staff and )

Commission would have acceded to my request. Faced with the prospect of this .

problen spreading to other of the many licensees which have engaged the  !

services of Mr. Charnoff or his law fim, I elected to deal with the issue.

Although I have misgivings about accepting industry-conducted investigations in lieu of our own, car severe resource constraints impose an obligation on me

\ to explore any option that would allow OI to make the most efficient and i effective use of what resources it does have. I discussed with our staff the possibility that a licensee-conducted investigation of alleged wrongdoing could serve to expedite our own investigation. In some instances, we might be

-- - - n 9 g

. e

. i. ,-

Comm.issioner Roberts  ?

able to adopt the licensee's report subject to a strict quality control review which could include selective verification or corroboration by 01.

Consequently, I accepted the invitation extended by Mr. Charnoff and the Kansas Gas and Electric (KG8E) Vice President - Nuclear who made the necessary a rrangements. Two senior members of my staff and I visited WCGS in mid -

September 1984 where we received a briefing from KG&E officials and empicyees of the investigative group established at WCGS. This group is called, Quality First (Q1). I was pleased with the courtesy extended to me and I found the briefing very useful. I did develop some misgivings that I felt had to be resolved before I could make any decisions regarding accepting the licensee's work product.

l You will note that one of the issues raised by our review wcs whether a licensee or applicant has a duty to notify the NRC of alleged wrongdoing. l We subsequently raised this question to the Office of General Counsel. I have enclosed our menorandum and their reply (enclosure 2) for your infor-i ration.

This, then, is how we ended up at WCGS. We were not there to determine the licensee's compliance with NRC requirements per se. Rather, we went there both to attempt to resolve a problem in a non-adversarial manner and to explore a creative partial solution to our chronic resource shortfall.

Because of the latter, I plan to evaluate two other investigative prograns

_ _ - . . ._. _- l

3 Comissioner Roberts in order to gather sufficient information about their effectiveness to arrive at a generic position regarding what degree of reliance to place on them.

L Turning then to your second implicit question, my decision to raise these issues to the Comission was primarily predicated on ny understanding of the Comission's instruction to 01 not to investigate the character or suitability of licensees without first coming to the Comissior, for guidance. This in-struction, which was the result of a November 8,1982 Comission Meeting on Discussion of 01 Policy and Procedures, is set forth in a November 24, 1982 Staff Requirements Memorandum which is enclost re 3. This, however, was not the only reason for bringing it to the Comission's attention.

The NRC has not definitively addressed standards of character or suitability  ;

for licensees. The closest that we have appears to be the security access ,

eligibility criteria set forth in 10 CFR Part 10. Yet, this issue of charac-ter/ suitability or management integrity is an extrenely relevant matter if I properly understand some of the issues relating to TM , D.C. Cook, or Water-

~

ford. It is my belief that this is an issue that is very difficult to discuss in the abstract. Consequently, I felt that this paper night help the Comis-sion to focus on this subject by providing some concrete examples pertaining to a real plant.

I do not wish to suggest that 01 feels that the matters raised in our request for guidance are not important even in the absence of explicit agency policy.

,For instance, the person implicated by much of this ir. formation is the WCG5 occupies a key position of trust.

(It is reasonable to assume that he or sne snould be c' sufficier.t character to irvite such trust. This is especially so since the W GS.

sthe allegation resclution activities of which have received at least some degree of NRC reliance. Yet in this indi-vidual's case, we find that 1) He allegedly instigatec activities that resulted in documents being removed from an employee's personal effects located in the employee's personal vehicle without the knowledge of the employee (I will coment on the legality of this, below). 2) He later, in the opinion of at least two Q1 personnel, betrayed the (forme,r) employge's confidentiality and ailegedly caused an offer of employment at, J tc be withdrawn We add to that the information that he is under investigatier. ta kG&E for-tMe acceptance of kickbacks and may have shown undue favoritise ir. hiring practices.

Stopping there, does any of this information bear on the character expecta-tions that the NRC would have for a person in a positier. of this importance?

Our request for guidance uses the phrase, "01 would propose to ascertain at least the following:", to introduce the questions which we felt flowed from this fact pattern. We did not mean to suggest that we were reconsnending that 01 investigate the matter. We meant to convey the sense that these questions appeared relevant to the issue at hand. I apologize if this lack of precision created the wrong impression. Again, the purpose of our request was to solicit

Commissioner Roberts 4 Comission guidance as we have been instructed to do in these matters. WJ included the matter regarding the WCGS

,because he. 100 is a key manager. Amon'g other things, he is the de facto In that capaci.ty alone, especially_in view of his respon-

~

sibilities regarding l' -.it is clear that a person of questionable moral charac.ter could jeopardize site safety and security.

The issue of sexual harassment was raised due to its relevance to a charac-ter/ suitability determination irrespectiv'e of whether it also violates NRC requirements. On the other hand,10 CFR '19.32 does speak to sexual discrimination. It seems reasonable to construe sexual harassment as a subset of sexual discrimination. A female subjected to harassment merely because she is female clearly is being treated differently from the work force as a whole, i.e. she is discriminated against because of her sex. We d'o not know whether this putative discrimination violates NRC regulations. That would be an OGC i determination. At the same time 01 is riot taking a position whether sexual discrimination should be investigated by the NRC. It was the charactar/ suit-ability iriplication that led us to bring it to your attention.

We do not believe that the applicant's activities regarding the cor.fiscation and destruction of the documents taken from the employee's vehicle violated either explicit NRC requirements or laws within NRC jurisdiction, nor did we mean to imply that we did so believe. The characterization of these activities

, as being "possibly illegal" was attributed to a member of the KG&E corporate legal staff who was partly briefed by the parties involved in these activities (according to the KG&E report regarding this incident). It is unclear if he called them serendipitously or if they called him for consultation, but the KG&E filt reflects that the attorney urged that the docunents be returned, presumably due to his qualms about whether the documents were properly seized.

It is fair to say that the actions regarding these documents were improper.

KG8E evidently shares this assessment in view of the disciplinary action that they took against the employees involved. I would also add that a search of a person's vehicle and personal effects by anyone, private employer or govern-ment agency, without the owner being present, let alone informed, is highly irregular unless done for exigent safety or security reasons. Even in latter instances, which did not pertain in this case, the owner is at least informed after the fact. Whether the facts of this case speak to a violation of law by KG&E or its agents is a legal question beyond Ol's competence to determine. I can state that such actions by government agents would result at least in disciplinary action against the agents, and could lead to civil if not crimi-nel action against them.

One last point about the treatment of the fonner enployee is that all of it, the search and seizure as well as the alleged " blackballing" purportedly was a .

direct result of his having previously raised safety concerns to Quality First. l I believe that this is the key factor in placing the events in the proper NRC i perspective.

s

, ub ' ' '

5 Consnissioner Roberts

'N 1

In closing, I hope that the foregoing is Iresponsive If not, to the questions would be pleased thatyou to meet with you  ;

asked in your memorandum to me.  ;

and your staff, or provide whatever additional written documentation .

that you desire. I

Enclosures:

As stated cc: Chairman Palladino I

Commissioner Asselstine Comissioner Bernthal '

Comissioner Zech S. Chilk, SECY H. Plaine, OGC J. Zerbe, OPE W. J. Dircks, EDO W  ?

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N NUCLE AR REGULATORY COMMISSION

, E :I wasemenvow,o c.sosss January 15, 1985

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MEMORANDUM F  : C .issioner Roberts ,

FROM:

j f.enB.

Office Hayes, of Investigations Director i

SUBJECT:

01's DECEMBER 24, 1984' REQUEST FOR COMMISSION -

! GUIDANCE i Your January 8,1985 memorandum to me poses several questions on this subject.

Although these questions are specific in stature, I feel that our response would be more useful to you if we were to Address the two larger issues that

! appear to represent the basis of these specific concerns. These appear to be l 1) why, and under what authority was OI evaluating a licensee's investigative i program, and 2) why did 01 choose to bring metters to the attention of the j Corr:ission as candidates for investigation that may not be explicit violations j of NRC requirements. Let me' start with the first issue.

The 01 Field Office, Region IV while conducting an investigation of alleged f wrongdoing at the Wolf Creek Generating Station (WCGS) discovered that the l

licensee also was conducting an investigation of the same matter. Although the licensee allowed the NRC investigators to review the investigative file, i they were not pemitted to remove either the documents or copies thereof, I

apparently on the advice of their retained counsel, Mr. Gerald Charnoff of

Shaw, Pittnan, Potts, and Trowbridge, a person not exactly unknown to this Office. It was and still is my view that the NRC has a legal right to that material.

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I subsequently discussed this issue with Mr. Charnoff. During this discus-i sion, Mr. Charnoff voiced the concerr. that if the material were given to the

! NRC, it could be subject to a Freedom of Infometion Act request at the

completior. of the investigation or inspection. Mr. Charnoff stated he was desirous of keeping his client's investigative files confidential. In my view, this is a legitimate, concern. At this time, Mr. Charnoff suggested that  !

! I personally review this investigative program. I agreed to consider such a course of action.

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In early Fall 1984, our investigators encountered a similar situation at Waterford where the licensee at the advice of Mr. Charnoff denied 01 a copy of their investigative report. I could have forced the issue by requesting the i Staff to issue either a subpoena or an order, assuming that the Staff and i Comission would have acceded to my request. Faced with the prospect of this <

j problen spreading to other of the many licensees which have engaged the l services of Mr. Charnoff or his law firm I elected to deal with the issue. l Although I have misgivings about accepting industry-conducted investigations i in lieu of our own, osr severe resource constraints impose an obligation on me to explore any option that would allow 01 to make the most efficient and i effective use of what resources it does have. I discussed with our staff the

] possibility that a licensee-conducted investigation of alleged wrongdoing could serve to expedite our own investigation. In some instances, we might be

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Commissioner Roberts  ?

able to adopt the licen. se's report subject to a strict quality control review which could include selective verification or corroboration by 01.

Consequently, I accepted the invitation extended by Mr. Charnoff and the Kansas Gas and Electric (KG8E) Vice President - Nuclear who made the necessary a rra ngements. Two senior members of my staff and I visited WCGS in mid -

September 1984 where we received a briefing from KG8E officials and employees of the investigative group established at WCGS. This group is called, Quality First (01). I was pleased with the courtesy extended to se and I found the briefing very useful. I did develop some misgivings that I felt had to be resolved before I could wake any decisions regarding accepting the licensee's work product. -

e You will note that one of the issues raised by our review was whether a licensee or applicant has a duty to notify the NRC of alleged wrongdoing.

We subsequently raised this question to the Office of General Counsel. I have enclosed our menorandum and their reply (enclosure 2) for your infor-mation.

This, then, is how we ended up at WCGS. We were not there to determine the licensee's compliance with NRC requirements per se. Rather, we went there both to attempt to resolve a problem in a non-adversarial manner and to explore a creative partial solution to our chronic resource shortfall.

Because of the latter I plan to evaluate two other investigative prograns

3 Comissioner Roberts in order to gather sufficient information about their effectiveness to arrive at a generic position regarding what degree of reliance to place on them.

Turning then to your second implicit question, my decision to raise these issues to the Comission was primarily predicated on ny understanding of the Comission's instruction to 01 not to investigate the character or suitability of licensees without first coming to the Comission for guidance. This in- -

struction, which was the result of a November 8,1982 Comission Meeting on Discussion of 01 Policy and Procedures, is set forth in a November 24, 1982 Staff Requirements Memorandum which is enclosure 3. This, however, was not i

the only reason for bringing it to the Comission's attention.

s, The NRC has not definitively addressed standards of character or suitability  ;-

• for licensees. The closest that we have appears to be the security access eligibility criteria set forth in 10 CFR Part 10. Yet, this issue of charac-ter/ suitability or management integrity is an extrenely relevant matter if I properly understand some of the issues relating to TM;, D.C. Cook, or Water-

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ford. It is my belief that this is an issue that is very difficult to discuss in the abstract. Consequently, I felt that this paper night help the Comis-sion to focus on this subject by providing some concrete examples pertaining to a real plant.

I do not wish to suggest that 01 feels that the matters raised in our request for guidance are not important even in the absence of explicit agency policy.

,For instance, the person implicated by much o this information is the WCGS occupies a key position of trust.

(It is reasonable to assume that he or she snould be of sufficier.t character to irvite such trust. This is especially so since the WCCS, i

pthe allegation resciution activities of which have received at least some degree of NRC reliance. Yet in this indi-vidual's case, we find that 1) He allegedly instigated activities that resulted in documents being removed from an employee's personal effects located in the employee's personal vehicle without the knowledge of the employee (I will coment on the legality of this, below). 2) He later, in the opinion of at

least two Q1 personnel, betrayed the (forme,r) employte's confidentiality and allegedly caused an offer of employment at, J tc be withdrawn We add to .

that the information that he is under investigatior. tg KG&E for tNe acceptance of kickbacks and may have shown undue favoritise in hiring practices.

Stopping there, does any of this information bear on the character expecta-tions that the NRC would have for a person in a pcsitier. of this importance?

! Our request for guidance uses the phrase, "01 would propose to ascertain at least the following:", to introduce the questions which we felt flowed fron l

this fact pattern. We did not mean to suggest that we were reconnending that 01 investigate the matter. We meant to convey the sense that these questions appeared relevant to the issue at hand. I apologize if this lack of precision created the wrong impression. Again, the purpose of our request was to solicit t

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Cnmmissioner Roberts 4 I l

l Commission guidance as we have been ingtructed to do in these matters. Wp included the matter regarding the WCGS

.because he.100 is a key manager. Amon'g other things, he is the de facto in that capacity alone, especially_in view of his respon-sibilities regarding

..it is clear that a person of questionable moral character could jeopardize site safety and security.

The issue of sexual harassment was raised due to its relevance to a charac-ter/ suitability detennination irrespectiv'e of whether it also violates NRC requirements. On the other hand,10 CFR 49.32 does speak to sexual discrimination. It seems reasonable to construe sexual harassment as a subset of sexual discrimination. A female subjected to harassment merely because she is female clearly is being treated differently from the work force as a whole, i.e. she is discriminated against because of her sex. We do not know whether this putative discrimination violates NRC regulations. That would be an 0GC determination. At the same time 01 is riot taking a position whether sexual discrimination should be investigated by the NRC. It was the character / suit-ability iriplication that led us to bring it to your attention.

We do not believe that the applicant's activities regarding the confiscation and destruction of the documents taken from the employee's vehicle violated either explicit NRC requirements or laws within NRC jurisdiction, nor did we mean to imply that we did so believe. The characterization of these activities as being "possibly illegal" was attributed to a member of the KG&E corporate legal staff who was partly briefed by the parties involved in these activities (according to the KG&E report regarding this incident). It is unclear if he called thec serendipitously or if they called him for consultation, but the KG&E file reflects that the attorney urged that the docunents be returned, presumably due to his qualms about whether the documents were properly seized.

It is fair to say that the actions regarding these documents were improper.

KG8E evidently shares this assessment in view of the disciplinary action that they took against the employees involved. I would aise add that a search of a person's vehicle and personal effects by anyone, private employer or govern-ment agency, without the owner being present, let alone informed, is highly irregular unless done for exigent safety or security reasons. Even in latter -

instances, which did not pertain in this' case, the owner is at least informed after the fact. Whether the facts of this case speak to a violation of law by KG&E or its agents is a legal question beyond 01's competence to determine. I can state that such actions by government agents would result at least in disciplinary action against the agents, and could lead to civil if not crimi-nel action against them.

One last point about the treatment of the fonner employee is that all of it, the search and seizure 45-well as the alleged " blackballing" purportedly was a direct result of his having previcusly raised safety concerns to Quality First.

I believe that this is the key factor ~in placing the events in the proper NRC perspective.

5

~ Connissioner Roberts i

In closing, I hope that the foregoing is responsive I would be to the questions pleased that you to meet with you asked in your memorandum to me. If not and your staff, or provide whatever additional written documentation . that you desire.

Enclosures:

As stated cc: Chairman Palladino Commissioner Asselstine Cornissioner Bernthal '

Commissioner Zech ~

S. Chilk, SECY H. Plaine, OGC J. Zerbe, OPE W. J. Dircks. EDO fs/ YOI b#*C OI:c/f OI:r/f l

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