ML20204J253
| ML20204J253 | |
| Person / Time | |
|---|---|
| Issue date: | 04/04/1985 |
| From: | Cunningham G NRC OFFICE OF THE EXECUTIVE LEGAL DIRECTOR (OELD) |
| To: | Harold Denton, Stello V, Taylor J NRC OFFICE OF INSPECTION & ENFORCEMENT (IE), Office of Nuclear Reactor Regulation, NRC OFFICE OF THE EXECUTIVE DIRECTOR FOR OPERATIONS (EDO) |
| References | |
| NUDOCS 8504150562 | |
| Download: ML20204J253 (10) | |
Text
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MEMORANDUM FOR:
Victor Stello, Jr., Deputy Executive Director for Regional Operations & Generic Requirements James M. Taylor, Director Office of Inspection and Enforcement Harold R. Denton, Director Office of Nuclear Reactor Regulation John G. Davis, Director Office of Nuclear Material Safety and Safeguards Thomas E. Murley, Regional Administrator Region I J. Nelson Grace, Regional Administrator Region II James G. Keppler, Regional Administrator Region III Robert D. Martin, Regional Administrator Region IV John B. Martin, Regional Administrator Region V FROM:
Guy H. Cunningham, III Executive Legal Director
SUBJECT:
MATERIAL FALSE STATEMENTS Attached is a paper we propose to provide the Commission in response to the Secretary's March 4, 1985 memorandum. Please provide consents directly to Jim Lieberman no later than Wednesday, April 10, 1985.
Original signed by Guy H. Cunningham, til Guy H. Cunningham, III Executive Legal Director
Attachment:
as stated D
cc:
M. Malsch, 0GC 7560460%L B. Hayes, 01 S. Connelly, 0IA bec:LT.';Rehm, ED0f
\\ Opp J. Axelrad, IE 0FC :0 ELD
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NAME :Lieberman/cb:Cunningham :
DATE :4/ /85
- 4/ Y /85
MEMORANDUM FOR:
The Commissioners FROM:
William J. Dircks Executive Director for Operations
SUBJECT:
REVISION TO STAFF MATERIAL FALSE STATEMENT PROPOSAL As a result of the discussion at the Commission meeting on February 11, 1985, and the memorandum from the Secretary dated March 4,1985, the staff.has revised the proposed rule submitted in SECY 84-421. The enclosure to this memorandum is a redrafted rule.
The Commission directed that the definition for material false statements incorporate:
any written or oral statement that is made knowing that it is false, or is made with careless disregard for its accuracy or completeness.
- any omission that was done knowing that the omission was significant and was done with intent to deceive.
The definition of a material false statement in paragraph (c)(1) has been revised to include oral statements to the same extent as written statements.
In addition a new paragraph (c)(2) has been added to include as material false statements omissions of material information where a licensee has
concealed the existence of required information. In developing the language, the staff assumed that a failure to meet a Commission reporting requirement would constitute the failure to provide significant information.
Since reporting requirements would include the reporting requirement of paragraph (b) of the rule it was unnecessary to use the term significant.
If paragraph (b) is not adopted, paragraph (c) (3) could be added to capture omissions involving significant information. A reporting failure not meeting the standard of paragraph (c) would still be a violation of the underlying report-ing requirement with the severity level based on the circumstances of the violation.
There may be cases involving omissions under proposed paragraphs (c)(2) where the licensee knew the information was required to be provided and knew that the information had not been provided but the agency may not be able to show an intent to conceal. Such cases would, of course, be a violation of the reporting requirement at issue and under the existing enforcement policy could be categorized at a severity level I even without the label " material false statement." Alternatively, the Commission could adopt a definition for I
' a material false statement by omission that does not require intent to conceal, similar to paragraph (c)(1) for an affirmative statement.1/
The Commission also requested that we identify other elements that the Commission should address including a category of statements which are made in ignorance or lack an intent to deceive and which would constitute a violation. Paragraph (a) of the proposed rule would provide a basis to issue citations and take enforcement actions for inaccurate or incomplete state-ments that were not willfully made (i.e., not knowingly or with careless disregard). Paragraph (b) of the proposed rule as well as the existing reporting requirements provide a basis for issuing citations and taking enforcement actions for omissions that were not willfully made.
It should be noted that if willfulness is required for a material false statement as is proposed, paragraphs (a) and (b) are still needed to provide a basis for making a citation for an unintentional inaccurate or incomplete statement or an omission not constituting a reporting violation. The proposed rule will provide the basis for a citation under 10 CFR 2.201 which in turn provides a formal mechanism to obtain and document corrective action for the inaccurate or incomplete statement.
1/
For example:
"the omission of information required by statute, rule or order to be provided, which has the capability to influence a reasonable agency expert, where the licensee or applicant knew that the information was required to be provided and deliberately failed to provide the information to the Commission."
After reconsidering the rule, some changes have been made to paragraphs (a) and (b). The terms " substantial" and "significant respects" have been deleted from paragraph (a). These terms were originally proposed to establish a rule of reason in the requirement since we recognized that enforcement action would not be appropriate for every error without regard to whether the error was significant or trivial. We did not use the term " material" because we wanted to get away from legal terms and instead used " plain English." The regulation should be clear that we expect all information to be complete and accurate and we should rely on enforcement discretion to dismiss without enforcement action trivial violations. The enforcement policy should, there-fore, provide that citations will not be made for insignificant or nonsub-stantial errors.
In addition, paragraph (b) has been modified to include licensee or applicant identified significant public health and safety and common defense and security matters in order to be consistent with the Commission's major statutory obligations under the Atomic Energy Act. While we recognize that OGC, 01 and 0IA believe that it is not appropriate to defer to a licensee's judgment for what constitutes significant information, the staff disagrees. This is because in our view (1) the obligation and responsibility is on the agency to establish reporting requirements for information it considers necessary, (2) the extensive reporting requirements that have been promulgated, (3) the important role that licensees have in protecting the public health and safety, i
and common defense and security, and (4) the lack of any significant category l
of information that we are not now receiving, together justify deferring to
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, the licensee's judgment as to significance of information. Abuse of a licensee's responsibility under paragraph (b) if not reachable as a violation of paragraph (b) or a material false statement under paragraph (c), would be reachable under the Commissioner's authority to issue orders to modify, suspend, or revoke a license.
On the other band in 0GC's, OI's and 0!A's view......
During the February Commissior, meeting on material false statements a ques-tion arose as to the duty to correct previously submitted inaccurate or incomplete information.
In SECY 84-421 the staff stated that a failare to correct erroneous information would not constitute a separate violation.
However, the circumstances surrounding the failure to correct may be con-sidered relevant to the determination of enforcement action for the initial erroneous submittal.
If the initial submittal wcs accurate when made but later turns out to be erroneous because of newly discovered information or advance of technology, a citation would not be appropriate if when the infor-mation became available, it was corrected. Hcwever, if it was not corrected and the licensee recognized it was significant, a citation could be made under paragraph (b) of the proposed rule if not reportable under some more specific requirement such as 10 CFR 50.72(b)((ii).
1
. Finally, some may argue that paragraph (c), in defining material false state-ments to include statements which are oral or not in an application or a section 182 response, goes beyond the limitations for a material false state-ment in section 186. This argument need not be answered because the defini-tion in the proposed rule is divorced from the section 185 material false statement. What is being proposed here is a definition for material false statements which is independent from section 186 and the limitations, if any, on material false statements contained in the first clause of section 186a. _2_/
The proposed rule is based en section 161 and the licensing provisions of the Act. This gives the Comission a firm basis for issuing civil penalties for violations of paragraphs (a) and (b) of the preposed rule. A violation of the Commission's rules is a basis for revocation under the last clause of section 186a. 3/ In addition, untrustworthy action by a licensee is a basis for revoca-tion under section 186 even if a section 186 material false statement is not involved since untrustworthiness would be a basis which would warrant refusir.g to grant a license on an original application. 4_/ See, Hamlin Testing Laboratories, 2 AEC 423, 428 (1964). Therefore, violations of paragraphs (a) and (b) meeting the definition contained in proposed paragraph (c) would be subject to the
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"[F]or any material false statement in the application or any statement of fact required under section 182...."
3/
"[V]iolation cf...any regulation of the Commission."
-4/
"[B]ecause...of any report, record, or inspection or other means which would warrant the Commission to refuse to grant a license on an original application...."
~
7-full range of enforcement action whether or r.ot the violations ~are labeled a
" material false statement." In sum, the label " material false statement" j
becomes significant not from a legal perspective but from the enforcement
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policy perspective in that it signifies the degree of concern the agency has with a willful false statement. The absence of the label " material false i
i statement" does not prevent the agency from taking any appropriate action.
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Except as indicated above concerning paragraph (c) of the proposed rule. 0GC concurs to this memorandum. Following Commission guidance on the above t
matters, we will propose a revised rulemaking package.
William J. Dircks i
Executive Director for Operations
Enclosure:
As stated.
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8 xx.xx Completeness and Accuracy of Information Provided to the Commission, a.
Information provided to the Commission by an applicant for a license or by a licensee shall be complete and accurate.
b.
Each applicant or licensee shall notify the Commission in a timely manner of information identified by the applicant or licensee as having for the regulated activity a significant implication for public health and safety or common defense and security. This requirement is not applicable to information which is already required to be provided the Commission because of other reporting or updating requirements such as 10 CFR 20.402.408, 21.21, 50.34, 50.71, 50.72 and 73.71.
c.
A violation of the above provisions or a viola-tion of a reporting requirement may be labeled a material false statement where:
(1) an inaccurate or incomplete written or oral statement by an applicant or licensee was made knowing the statement was inac-curate or incomplete or was made with care-less disregard for whether the statement was accurate or complete, and the incom-plete or inaccurate statement had the cap-ability to influence a reasonable agency expert.
(2) the omission by an applicant or licensee of information, required by statute, rule, or order to be provided the Commission, had the capability to influence a reasonable agency expert, and was made knowing that the informaticn was required to be provided and with the intent to conceal the existence of the information from the Commission.
(3)
[ optional if paragraph b is not adopted]
the omission by an applicant or licensee of information was made knowing that the information for the regulated activity had a significant implication for the public health and safety or common defense and security and with the intent to conceal the existence of the information from the Commission.
Document Name:
DRATT COMM. MEM0 Requestor's ID:
ROSETTAV Author's Name:
James Lieberman Docurrent Comments:
2/14/65; MFS proposal
.