ML20203K099

Reply to NRC 860717 Answer Re Petitions Filed by R Arnold & E Wallace W/Commission for Determination of Whether Adverse Implications About Mgt Integrity Factually Substantiated. Hearing Requested.Certificate of Svc Encl

ML20203K099
Person / Time
Site:	Three Mile Island
Issue date:	08/01/1986
From:	Au T PENNSYLVANIA, COMMONWEALTH OF
To:	Atomic Safety and Licensing Board Panel
Shared Package
ML20203K092	List: ML20203K089 ML20203K099
References
CLI-85-19, CLI-86-09, CLI-86-9, EW, RA-EW, NUDOCS 8608060154
Download: ML20203K099 (12)

Text

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S EO August 1,lh U.S. NUCLEAR REGULATORY COMMISSION '4 pI .'gf gggkf G CCC

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BEFORE THE ATOMIC SAFETY AND LICENSING BOARD "'4 QJ ' .'/t.g-In the Matter of  :

Docket No. 50-289 EW GPU Nuclear Corporation,  : ' (Special Proceeding)

(Three Mile Island Nuclear Station,  :

Unit No. 1)  :

COMMONWEALTH OF PENNSYLVANIA'S REPLY TO NRC STAFF ANSWER The Commonwealth of Pennsylvania (" Commonwealth") hereby replies to the NRC Staff's answer, filed on July 17, 1986.

This proceeding was commenced by petiticas filed by Masrs. Robert Arnold and Edward Wallace with the Commission for a determination of whether the adverse implications about their management integrity are factually substantiated.

By order dated December 19, 1985 (CLI-85-19), the Commission requested interested persons to comment on four specific issues, all relating to whether there was a " reasonable basis" to believe that either Mr. Arnold or Mr. Wallace knowingly, willfully or with reckless disregard made a material false statement in response to a NRC Notice of Violation (NOV) . If such a reasonable basis existed, then the Commission was to consider conducting an adjudicatory hearing regarding the conduct of the individuals and whether the condition that GPU Nuclear Corp. notify the Commission prior to the individual's  !

8608060154 860801 PDR ADOCK 05000289 0 PDR

l employment at TMI-l should be lifted.

Af ter submission of comments from numerous interested persons, by Advisory Opinion and Notice of Hearing dated May 15,1986 (CLI-86-09),

the Commission took several actions. First, the Commission found that "there is no reasonable basis to conclude Arnold make a knowing, willful, or reckless material false statement in the NOV response, and it does not view Arnold's involvement in the NOV as requiring any constraint on his employment in the regulated nuclear industry.

Nonetheless, the requirement that the Commission be notified if Arnold

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is to return to a position at TMI-1 was retained, since Arnold assented to such condition.I Second, the Commission granted Mr. Wallace's request for a hearing because it found that it could not clear his name without additional evidence as to whether he recklessly, willfully or knowingly made a asterial false statement. (CLI-86-09, at 9)

Third, the Commission required the NRC Staff to participate in the hearing it had granted to Mr. Wallace (CLI-86-09, at 10), and thus

! squarely rejected the Staff's position that no hearing was necessary.

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1. Although the Commonwealth does not agree with the Commission's l conclusion with respect to Mr. Arnold, because the notification

. requirement was retained, the Commonwealth reserves the right to i contest any effort to remove the condition until such time as removal j is requested.

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Finally, the Commission required that any party advocating a position against Mr. Wallace bear the burden of going forward and persuasion, and that if no party advocates a position against Mr.

Wallace, then no hearing would be held and the notification requirement with respect to Mr. Wallace's employment at TMI-1 would be removed. (CLI-86-09, at 10-11)

Following this Advisory Opinion and Notice of Hearinf, the Commonwealth filed a petition for leave to participate as an interested state in the hearing.2 The Commonwealth chose this method of participation because of its interest in this significant issue of management integrity. However, the Commonwealth could not participate as a party since it does not have facts in its possession and therefore cannot meet,the burden of going forward and persuasion requirement imposed in the Commission's N3tice of Hearing. Rather, it is the NRC Staff, and only the NRC Staff, which has the facts, knowledge, and information to meet this burden.

The NRC Staff, by letter and submission dated July 17, 1986, has taken the position that notwithstanding its previously submitted comments indicating that a reasonable basis did exist for concluding that Mr. Wallace had made a willful, knowing, and reckless material false statement (NRC Staff Comments in Response to CLI-85-19,

2. Although the Commonwealth is seeking to participate in this proceeding, it reasserts its earlier position that both Masrs. Arnold and Wallace are estopped from even raising these issues. See Commonwealth of Pennsylvania's Comments on Commission Order CLI-85-09.

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at 13), and notwithstanding the Commission's directive that the Staff I

participate in the hearing, it would not advocate a position against ,

Mr. Wallace. Because no other person has chosen to so advocate, the Staff has requested the Presiding Officer to dismiss this proceeding.

This position is asserted by the Staff even though the Commission specifically stated in its Notice of Hearing that it could not clear Mr. Wallace without additional evidence.

If the Commission is to consider lifting the notification requirement regarding Mr. Wallace, a hearing on the questions of whether he made a willful, knowing, or reckless material false statement is necessary in light of the Commission's commitments and finding made during the TMI-1 restart proceeding and in light of the Commission's conclusion that more evidence must be adduced before Mr.

Wallace can clear his name. Moreover, the Presiding Officer should reaffirm the Commission's directive that the NRC Staff participate in the hearing and present its evidence, rather than allowing the Staff to usurp the Presiding Officer's function of determining what conclusions should be drawn from the evidence.

If a hearing is not held on Mr. Wallace's petition, as envisioned by the Commission May 15, 1986 decision, the issue of Mr. Wallace's

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management integrity will be buried under the weight of the Commission procedures.

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I. A Hearing Regarding Mr. Wallace Is Necessary in Light of the Commission's Prior Statements Regarding Management Integrity in the

, Restart Proceeding.

To the extent that the issue of the management integrity of former officers and managers of TMI-l was not resolved in the restart proceeding, it was because the Commission relied on the fact that the culpable individuals were no longer associated with TMI-1. In its decision to remove the management integrity issues from the restart proceeding, the Commission stated:

There are no factual controversies regarding licensee's response to the NOV. It appears that licensee made material false statements in its response, but the two individuals primarily responsible (Arnold and Wallace) are no longer associated with

! TMI-1. (CLI-85-02, at 82)

The Commission attributed great significance to the fact that these individuals were no longer involved in the management of TMI-1, and the favorable conclusion concerning management competence and integrity did not encompass Masrs. Arnold and Wallace. (CLI-85-09, at 16 n.23, 28)

In allowing the restart of TMI-1, the United States Court of Appeals for the Third Circuit noted that the Commission had made 1

certain findings on the issue of current management integrity. Three Mile Island Alert v. NRC, 771 F.2d 720, 726, 732-4, 736 (3rd Cir.

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1985). First, the Court noted that Commission found that the 1979 l

response to the Commission's Notice of Violation (NOV) contained false information. Next, the Court noted that the Commission found that source of the false information was Mr. Wallace. Third, Court noted that the Commission could rely on the fact that since the two individuals most culpable for the false information were no longer associated with TMI-1, the Commission was not requira.d to further examine the issue of management integrity. 771 F.2d at 736.

By disposing of the management integrity issue in such a manner, the Commission has stated to the public and to the courts that

as long as these individuals are not associated with the management of i

TMI-1, their absence does not present a significant management integrity issue. However, if the license conditions and notification requirement are changed, as the Commission's orders concerning the outcome of this proceeding suggest, this assurance of management integrity would no longer remain valid.

II. A Hearing Is Necessary in Light of the Commission's Explicit Finding that Mr. Wallace's Name Cannot Be Cleared Without Additional Evidence.  ;

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t The Commission specifically stated that it cannot clear Mr.

I Wallace's name without additional evidence. (CLI-86-09, at 9).

Further, it ordered the NRC Staff to participate as a party in the 1

hearing. The Staff has acknowledged that additional evidence might l exist. (NRC Staff Comments in Response to CLI-85-19, at 15). In 6

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4 addition, the Staff has acknowledged that the current evidence could lead a reasonable person to conclude that Mr. Wallace knowingly, willfully, or recklessly made a material false statement. (NRC Staff Comments in Response to CLI-85-19, at 14). Despite this, the Staff apparently is refusing to present that evidence. In order to rectify this situation, and remain consistent with the Commission's fundamental conclusion concerning Mr. Wallace, it is appropriate to order the Staff co participate and present its evidence.

The Staff, in its Answer to the Commonwealth of Pennsylvania's petition, does not offe.r to participate to any extent. Apparently the Staff has decided that participation in a hearing is not warranted

because it would involve the expenditure of agency resources. (See NRC Staff Comments in Response to CLI-85-19 at 15) Instead, by its Answer, the Staff requests that this proceeding be terminated without hearing. This request is unjustifiable, in light of the long history of this proceeding and in light of the Commission's ruling that the Staff is to be a party. (CLI-86-09, at 10) The Staff's Comments and Answer attempt to prematurely terminate the hearing process by prejudging its conclusion.

l III. A Hearing is Necessary Because the Adverse Implications Concerning the Management Integrity of Mr. Wallace Were Derived From

the Staff Reports.

It is the NRC Staff which initially took the position that the response contained statements which were "neither accurate nor i

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complete and .. contrary to other information in possession of the licensee." NUREG-0680, Supp. No. 5 at 8-19. Indeed, in its Comments ,

to the Commission in response to CLI-85-19, the Staff stated:

• ...the Staff concluded in the two above-described respects, Licensee's December 5,1979 Response to the October 25, 1979 Notice of Violation constituted material false statements.

(Comments at 5)

• ...Mr. Arnold's and Mr. Wallace's knowledge and involvement in making the statements do provide some " indication" of willful or reckless conduct by each of them.

(Comments at 13)

• For Mr. Wa n ace, more so than Mr. Arnold, there is a significant

, amount of credible circumstantial evidence that could indicate i wi11 fulness or recklessness... .

(Comments at 13)

• The Staff acknowledges that, with respect to each of Messrs.

. Arnold and Wallace, reasonable persons could disagree on the question of whether he acted winfuny, knowingly, or with reckless disregard for the truth, in making a false statement.... Thus, the Staff acknowledges that "there is information which could form a reasonable basis for concluding that either Wallace or Arnold winfully, knowingly, or with reckless disregard for the truth made a material false statement."

(Comments at 14) l i The NRC Staff response does not provide a basis for its refusal j- to participate in this hearing. In its December 19, 1985 order, the 1

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Commission requested comments only on whether there is a " reasonable l basis" to believe that either Mr. Arnold or Mr. Wanace knowingly,

willfully or with reckless disregard made a material false statement.

The Staff Affidavit states: "Although we cannot reach a conclusion that either Mr. Arnold or Mr. Wanace actuany engaged in winful or

! reckless conduct, we acknowledge that reasonable persons could disagree on the question whether they acted willfully or with a i

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reckless disregard for the truth in making the false statement."

(Affidavit of William T. Russell and Robert A. Capra at 9) If reasonable persons can disagree based on the current record, then there is a reasonable basis for the hearing requested by Mr. Wallace.

The NRC Staff was not requested by the Commission to act as judge in this proceeding. However, the NRC Staff has stated it cannot reach a conclusion of willful or reckless conduct based on a " preponderance of the evidence." (Affidavit of William T. Russell and Robert A.

Capra at 9)3 It is not the Staff's duty to weigh the evidence. The Presiding Officer has the duty to assess the evidence, after a full hearing is conducted.

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3. It is at best unclear how the Staff defines the phrase

" preponderance of the evidence."

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Conclusion For these reasons, the Commonwealth of Pennsylvania restates it comments to the Commission, dated January 24, 1986. In light of the NRC Staff's recently stated position, the Commonwealth requests the Presiding Officer to conduct a hearing, as envisioned in the Commission's order of December 19, 1985 and notice of May 15, 1986.

August 1, 1986 Respectfully submitted, mor, l/ . t. -

Thomas Y. Au /

Assistant Counsel Barry M. Hartman Deputy General Counsel Counsel for the Commonwealth of Pennsylvania Rm. 514 Executive House P.O. Box 2357 Harrisburg, PA 17120 (717) 787-4488 1

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U.S. NUCLEAR REGULATORY COMMISSION 1 In the Matter of a '

Edward Wallace Docket No. 50-289-EW (GPU Nuclear, Three Mile Island, Unit 1)

CERTIFICATE OF SERVICE I hereby certify that copies of the focegoing Reply has been served' upon the following persons by first class mail in accordance with the requirements of 10 CFR 2.712: x Docketing and Service Section (3)

U.S. Nuclear Regulatory Comm.

Washington, DC 20555 ,

Ivan W. Smith Administrative I4w Judge Atomic Safety and Licensing Board U.S. Nuclear Regulatory Comm.

Washington, DC 20555 Michael B. Himmel '

Greenbaum, Rowe, Smith, Ravin, Davis & Bergstein Engelhard Building P.O. Box 5600 Woodbridge, NJ 07095 Three Mile Island Alert, Inc.

315 Peffer Street Harrisburg, PA 17102 Joanne Doroshow The Christic Institute 1324 North Capitol St., N.W.

Washington, DC 20002 Marjorie M. Aamodt Committee on Health Aspects & Management of Nuclear Power Box 652 Iake Placid, NY 12946 Susquehanna Valley Alliance

, Box 1012 Lancaster, PA 17604 Michael W. Maupin .

Hunton and Williams P.O. Box 1535 Richmond VA 23212 i

s Ernest L. Blake Shaw, Pittman Potts

& Trowbridge 1800 M Street, NW Washington, DC 20036 Louise Bradford Three Mile Island Alert, Inc.

1011 Green Street Harrisburg, PA 17102 Nicholas S. Reynolds Bishop, Liberman, Cook, Purcell, Reynold Suite 700 i 1200 17th Street, N.W.

I Washington, DC 20036 Joel R. Gray /4,3 A/ 7,,.f Office of Executive Legal Director U.S. Nuclear Regulatory Commission Washington, DC 20555 Ellyn R. Weiss Harmon & Weiss 2001 S Street, N.W.

Washington, DC 20009 Henry D. Hukill, Vice President and Director, TMI-1 GPU Nuclear Corp.

P.O. Box 480 Middletown, PA 17057 Michael F. McBride LeBoeuf, Iamb, Ieiby & MacRae 1333 New Hampshire Ave., N.W.

Washington, DC 20036 J. R. Thorpe Director of Licensing 100 Interpace Parkway Parsippany, NJ 07054 Dated at Harrisb'rg, u Pa this 1st day of August , 1986.

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Thomas Y. Au 4 Assistant Counsel

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