ML20215F211
| ML20215F211 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 08/08/1985 |
| From: | NRC OFFICE OF INVESTIGATIONS (OI) |
| To: | |
| Shared Package | |
| ML20214X072 | List: |
| References | |
| NUDOCS 8610160121 | |
| Download: ML20215F211 (25) | |
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INTERVIEni OF 10 l
MICHAEL D.
SPENCE 11 AUGUST 8,
l'985 I
1: 03 P.M.
12 8
DALLAS, TEXAS
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A P P E A RA N C E S:
2 H.
BROOKS GRIFFIN 3
Investigator United States Nuclear' Regulatory 4
Commission - Region IV 611 Ryan Plaza Dr.,
Suite.1000 5
Arlington, Texas
.76011 6
APPEARING FOR NRC 7
B l'
WORSHAM, FORSYTHE, SAMPLES 9
& WOOLDRIDGE Suite 2500, 2001 Bryan Tower 10 Dallas, Texas 75201 11 l
BY: ROBERT A.
WOOLDRIDGE 12 APPEARING FOR TUGCO l
AND MICHAEL D.
SPENCE
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20 WITNESS: MICHAEL D.
SPENCE r-PAGE y
21 Examination by Mr. Griffin I
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MR. GRIFFIN:
For tne record, this i's 2
an interview of Michael D.
Spence 3
Is that S-p-e-n-c-e?
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THE WITNESS:
Correct.
. 5 MR. GRIFFIN's
-- who is the. president
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of TUGCO.
The location of this interview is Dallas,
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The date is August the 8th, 1985, and it is
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1:03 p.m.
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Present at this interview are Michael D.
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Spence and his personal representative, Robert 11 Wooldridge, W-o-o-1-d-r-i-d-g-e.
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12 MR. WOOLDRIDGE:. One of the f e w 't h a t-y A
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does that right.
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!!R. GRIFFIh:
For the NRC, myself, 4
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15 Brooks Griffin, Investigator.
This interview is Lj 16 i
being transcribed by a. Court Reporter.
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Mr. Spence, I need you to stand and raise
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lu your right hand, and let me swear you to the Fd 19 contents 9
of your testimony.
j 20 Do you swear that tne information you are a
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about to give is the truth, the whole truth, and n
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22 nothing but the truth, 'so help you God?
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F; 23 THE WITNESS:
I do.
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!!R. GRIFFIN:
Thanx you.
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1 EXAMINATION 2
BY 11R. GRIFFIN:
3 Q.
As I said before we went on the record, the 4
purpose of this interview is to gathe'r information 5
of wnica you have personal knowledge that rela'es to
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i the origins of the MAC report and the decision to 7
produce the report in 1985.
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I would like to tell you up front that many 9
of tne questions I'm going to ask you, you may have 10 no knowledge of.
But hopefully, when I le. ave here I
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touay,' I will have your full knowledge on the MAC 12 report issue.
4 13 We are trying to create a complete record.
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, If I fail, -- I will warn you in advance.
If I fail 15 k
to asx the appropriate questions, at the end of the 16 interview I'm going to kind of asx you an all l
encompassing question.
17 The NRC hopes to gather all 9
18
- , available evidence regarding the decision-making 19 I
originally to withhold the document and your 20 decision to produce.
So with that in mind, I would 21 like to begin.
22 Mr. Spence, you began your ' employment with
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23 Texas Utilities in 1963, is that correct?
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i 24 A.
I began my enployment witnin the utilities
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25 system specifically at specifically at Texas i.
EEDERAS COURT REPORTERS
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Power & Light Company.
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Q.
What were your duties?
What was your job 3
title at that time?
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A.
In 19637
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5 Q.
Yes.
,6 A.
I was hired as an engineer.
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Q.
And you became president in June 1983, is
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8 that correct?
9 A.
I became president of TUGCO in' June 1981.
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Prior to 1981, I was an employee of Texas Power &
t, 11 Light Company.
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12 Q.
I will also tell you that I get all the
'.k 13 companies confused.
So if I use the wrong name in, 4
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' M' 14 correct me.
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my questioning, p 1'e. a s e 3
15 A.
All right.
16 Q.
Are you aware of the original contract with 17 Hanagement Analysis Corporation in 1978 to perform lW l
the audit of the TUGCO QA Program?
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.I A.
I have not reviewed that contract.
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Did you have any input or did you --
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were you involved in any of the l
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23 A.
No, I was not.
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I notice you didn't assume your present i
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Correct'.
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Q.
And.that would h-ave been b e f o r e,, o,x a y.
In
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3 1980, the Intervenor case made a request to p.Toduce 4
whien included dqcuments.that the Utilities might c,
5 have received or produced itself or gathered from f.:
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third parties related to the QA Program and its 7
i implementation.
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l The Utilities dormulated a response and I 8-I 9
thinx followed up their initial response with lu 1
several clarifying letters.
Did you have any input i
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the Utilities to the Intervenor's request?
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A.
In 1980; no, none. whatsoever.
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i 14 Q.
Just out of curiosity, what were you doing 15
.' during that time frame?
16 A.
In 1980, I was vice-president of Texas 17 Power & Light Company.
1B Q.
Oxay.
So completely unrelated to what was 19 l
go,ing on in relation to nuclear at that time?
20 A.
That is correct.
21 Q.
Mr. Spence, Jet me drop back for a minute.
22 This is something I normally do at the very 23 beginning of the interview, and I passed over at i
24 inadvertently.
25 As a potential interviewee for the NRC, youJ i
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I have a right to be represented by anybody, anybody -
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2 that you c h o o.s.a.
It can Je a friend, a reN tive.
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For the purposes of this
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interview, iis Mr. Wooldridge your personal
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Yes, he is.
7 Q.
And is he also j-j representing the company for
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purposes of this interview *l
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9 A.
Yes, he is.
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Have you had any discussions with 11 Mr. Wooldridge should there arise a conflict between 12 what is good for you and what is. good for the
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Utilities?
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A.
I don't anticipate there to be a'. conflict 15.
'between my position and that of the company.
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Mr. Wooldridge and I have discussed it.
And we have 17 an understanding if either of us sees a conflict or j
18 a poten.tial conflict inrising, we will sit down and
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resolve the conf.lict.
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20 Q.
Oxay.
I'm sure.you are aware that l}
21 Mr. Wooldridge, probably under your direction, has
[7 22 initia11y'had the tasx.of performing a review or an 23 investigation of the origins of why this was not 24 p r o d u c'e d in
'80.
25 And I'm telling you this.
This is/not a g
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question I have.
I originally h'a d concerns about s
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poteritisi conflict of i n t.o r e s t.
In other words, the i
4 NRC is reviewing his work to a'certain degree, and J
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we are alert to potential conflicts.
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Mr. Wooldridge, if such a conflict should i;
7 i.arise, in your mind, what would be your course of
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action?
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MR. WOOLDRIDGE:
I think Mr. Spence 10 accurately reflected it.
I would have a
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(BY MR. GRIFFIN)
All right.
Now, back to
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Mr. Spence, what was your involvement in
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15 the ongoing prudency audit?
16 A.
The prudency audit by Cressment, McCornick 17
& Paxit?
(phonetic)
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Yes.
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19 A.
It is being done at my. direction.
1 20 Q.
Could you briefly describe what the purpose 21 of the prudency audit is?
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22 A.
The ultimate purpose would be to provide 1
l 2a evidence supporting inclusaon of our investment in 24 Comanche Peax, in our rate base for rate-making
.L 25 purposes before the Utilities Commission of Texas.
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As part of the prudency audit, does llomer 2
Schmidt worx under your dir,ect supervision?
3-i A.
Yes.
He reports directly to me..
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Is Mr. Smith in charge of the Utilities'
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'.: t part of the prudency audit?
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,6 A.
Yes.
He is managing the prudency audit.
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Q.,
Mr.. Spence, when did you first become aware
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W of the existence of the MAC report?
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9 A..
In Hay of 1985.
10 Q.
Tnat was the first time you ever heard of l
11 it?
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A.
That is correct.
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How did it come to your attention?
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It was brought to my attention by
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16 Q.
When Mr. Wooldridge contacted you about the f,
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report, was it related to the prudency audit, or MAC e.j lb was it related to the potential producibility'under ti e$
19 the original discovery on the request from the i
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20 Intervenor?
n 21
- 9 A.
Mr. Wooldridge became aware of the MAC 22 report because it was discovered by our personnel
'I 23 working on the prudency audit, putting documents 24 togetner in connection with the prudency audit.
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But when ne approached you witn ene 5
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relationship between this document and the original
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4 A'.
Yes.
We discussed that potential
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Are you the person that directed that n-
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investigation to 8
determine why this'had not been produced earlier?
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.A.
Yes.
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Q.
Could you recount the essence of your 11 instructions to Mr. Wooldridge?
'j l '2 A.
When Mr. Wooldridge brought the MAC report j
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to my attention, he asked me if I was familiar with.c: ;.,
14 it, had I been aware of it.
And I told him No.
15 And as we discussd it, I asked him to look into the
'16 matter a.n d find -
gather all the facts he could 17 about its origin and whether or not it was covered g
18 by tne
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case discovery request, in his, opinion.
And 19 if it q
should have been produced, why it had not been 20 produced.
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Had you already formulated your own opinion g3 22 on the subject of whether it should have been l
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23 produced?
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24 A.
At that time, I had not read tne report.
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Did you subsequen.tly read it?
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Yes, I have subsequently read the report.
2 Q.
Have you formulated an opinion?
3 A.
Based on the information I have in' light of 4
4 current circumstances and on the advice of counsel,
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I believed it c
was producible' and we produced it in l
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May.
7 Q.,
Oxay.
Were you the one that made the fi, 8
ultimate decision to produce the document?
9 A.
Yes.
After reviewing it with 10 Mr. Wooldridge, I directed him to produce it.
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Q.
All right.
One of the documents t h a' t 4
was
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forwarded to the'NRC and the ASOB and parties to the 9
l 13 hearing were the results of Mr. Wooldridge's review
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to determine why it had not been produced.
As part 15 of the. response under Wooldr'idge's signature
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16-MR. WOOLDRIDGE '
Over, I think.
17 HR. GRIFFIN:
Over, okay.
Correct.
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(BY MR. GRIFFIN) it. states that s.
19 1,
sometning to the effect that there would be a review p.;
20 of other documents to determine if this situation 1.
21, had occurred related to other, anything else.
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22 Since the MAC report was founded and 23 produced, have there been any other documents r
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24 relocated that would fall within the producibility 25 l
under the Intervenor's request, to your xnowledge?
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that I'gLaware ot.
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Q.
Okay.
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3 MR. WOOLDRIDGE:
Brooks, I don't want I
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4 the impression that we are through with
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that because we are not.
I mean through with our*
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inspection of the records.
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7 THE WITNESS:
That is still ongoing
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too.
9 MR. WOOLDRIDGE:
Yes.
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Q.
(BY HR. GRIFFIN)
So this is sometning i
4 11 separate?
You are beyond the prudency audit?
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,:4 12 A.
This is separate from it.
The statement
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that you just referred to in tnat letter from J-1
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14 Mr. Wooldridge is separate from any review of the
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16 the prudency audit.
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17 Q.
In other words, you nave people assigned to i
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~ 19 audit for the purpose of seeing if there are any 20 other documents that would be producible under the i
21 Intervenor's original reque'st?
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22 A.
In connection with the statement of that 23 letter, we initiated in eftect a separate review, i-24 separate from the prudency audit, to go bacx and see I
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25 if there are any other documents in our files that
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Perhaps are producible under the discovery request.e 2
in the ASOB docupants that any have not been -
3 p.roduced.
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i Q.
Who have you as. signed to head that review?
1 5
A.
John Beck, our vice-president, in advising l
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6 and directing it.
I 7
. Q.
Hr. Spence, are you familiar.with 8
l Mr. Wocidridge's letter and the details as to why t
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the MAC report was withheld in 19807 10 l
A.
Yes.
11 l
Q.1 Have you held any discussions with 12 i
Mr. Fikar and Mr. Clements regarding the logic or
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the. re.asoning for having withheld this document?
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14 A.
Yes, I have.
I 15 i.
Q.
I'm.'asking you a
now to provide-me with some L.
16
'l <xind of narrative of their explanation to you.
i 17 A.
I discussed the matter with Mr. Fikar.
And
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it was his view that in 1980, the MAC report was not j
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subject to discovery because it had -- was not done i
20 with the intent of being part of the permanent plant L:
21 records.
It was done for a few members of I
22 management to serve as a management tool in managing i
p 23 the QA Program at Comanche Peax.
And it had been
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24 treated as a proprietary document since 1978.
And I 25 l
believe it was his view, at that time, that the u.-
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document was not subject to discovery.
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2 Q.
I notice.that, more recently, t
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Mr. Wooldridge here provided.me with copies of tne 4
l original response by th's Applicant to the Intervenor's l
request f3 5
to produce.
And I got a flavor that over a D.
-!.periodof 6
a couple,of years, there were other 7
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documents produced based on thi's request like
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believe it is the Lobbin Report and Ebasco Report.
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! So if I'm interpreting all this correctly, a 10 determination was made,over' a period of years that 11 other documents fell within this request.
12 Do you happen to know if M'r. Fikar applied 1?
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'13 this propriety to any other documents other than -
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this MAC report?
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i 15 A.
No, I don't know.
In the case of the l-16 Lobbin Report, I know that that report was not l.
17 issued until 1982.
So it didn't even. exist at the l
18 time of the original request.
'A 19 Q.
So as soon as it became available, it
, as w
I 20 produced?
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A.
More or less.
I am not sure how much time M
passed, but not much.
22 23 Q.
In your conversations with Fixar, did he I
24 i
identity any other documents that he had dubbed or 25 oecided were proprietary other than this '78 MAC a
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1 report?
2 A.
No.
3 Q.
Do-you know of any otner third party 4
reviews of the QA' Program at Comanche Peak which
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.were treated as proprietary by the Utilities?
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6 A.
I Know of none.
11 i
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7 Q.
Did Mr. Fikar' offer any other or an 8
expanded explanation et why he decided this 8
t' 9
particular one was proprietary?
10 A.
I believe my previous answer pretty well 11
,' stated his view, as I recall it, that the HAC report i
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in.'7s was not intended to be a part of the
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'(7 13 p3rmanent plant records.
Was not intended to be'
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.i.done.in any way to meet in. compliance with the j
15 Appendix B requirements within our QA Program.
Was I.
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done solely for the use and benefit of a small L'
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number of senior managers.
18 l.
I And it was not widely distributed once the l.:
19 report was received in 1978, and was treated as L '.
20 i
I' confidential by those for whom the raport had been
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21 done.
And in that, 1 believe, was the. basis for t
,,j 22 l Mr. Fikar's justification in 1980 that the report 24 was not producible.
l 24 Q.
What I fail to understand is why other' i
1 25 documents were offered up as evidence t h.a t the j
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Utilities had audited the QA Program for Comanene 2
Peak, but this one was somehow treated differently.
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,! And you don't have any understanding or explanation
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1 6
5 l
A.
No, no personal Knowledge that would help, y
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l answer th'at question.
i 7
.I Q.
'Were you aware that Management Analysis j.
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8 company also performed independent reviews of the
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Brown & Root QA Program at Comanche Peax?
10 A.
The only knowledge I have of that is that 11
' it has come to my attention in the last couple of 12 days that you have asked other of my employees that
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13 question.,That is the first I had known of it.
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- 1. 4 Q.
Have you had other experiences, since you i
I 15 have been president here, of applying these 16 l
conditions of propriety to'any other documents I
17
~
related to the QA Program for Comanche Peax?
1, 18 A.
No, none that -- None that I recall.
You I
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19 are talxing about reports by outsiders?
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20 O.
Yes.
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A.
No.
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Q.
As a part of your subordinates' adnerence h
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to Appendix B, do you require your people to 'eview 24 l
the On implement e
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or implementation of the
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QA Program to the contractor and subcontractors?
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I am not sure I understand that question.
2 Would you either repeat it or try another way, 3
Brooks?
4 Q.
Oxay.
It is my. understanding that -- I
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It is my understanding 5
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6 that the Utilities is required to not only conduct c
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its own audits for the reviews of the QA Program, h,
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9 some degree subcontractors, their adherence to the 10
.- QA Program and their implementation.
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Do you know if your subordinates, or if any J
12-j of your subordinates have. reviewed or do r'egularly 3
4 1
13 review the QA Program for the contractor and
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subcontractors?
l 15 A.
If your question is; Do we comply with 16 7
Appendix B,- my a n s w o-r o b v i o u s l y is; yes.
And to the d
17 i
extent enat that requires ua to review vendors and 18 QA Program of contractors, then; yes, we do that.
't 19 l'
Q.
I have noticed -- I don't think I have a 20 i
full record of what has been produced or what was 3
d 21 produced under the Intervenor's original request in U
22 1980.
But to my knowledge, there were no documents 3
23 produced related to like Brown & Root or 24 Westinghouse.
25 I'm asking you now:
Have you discussed or L'
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6 A.
I don't have any firsthand famili'arity with 7
what we have produced under the original case 8
discovery either.' And no, I have not had any i
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conversations about what may or may not'have been i
10 produced from the files of our contractors and
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12 Q.
Have you had any conversations as a r'e a u l t k
13 of the production, or the fact that when you first t, ;
1.4 became awars of the MAC. report Have% you had any 15 conversations with Dave Chapman or Ron Tolson aoout l
- 16 why their opinion regarding the producibility of the 17 MAC report w'a s not tactored into Fixar's decision?
H 18 A.
No.
I have not discussed it with either of Cd 19 those two gentlemen.
20 Q.
You are aware that in Mr. Wooldridge's l
response 21 as to why ttgey had indicated tnat it was
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22 their opinion that it was producible?
g 23 A.
Yes, I'm aware of that statement in there.
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In your discussions witn Mr. Fixar -- And I
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In your 2
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.N o ', he did not indicate that he did.
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discussion with Mr. Fixar, he satisfied I
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8 satisfied myself that he had made the decision to --
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,I that the MAC report was not discoverable, and that 10 he had not snared in that decision with any otner l
11 TUGCO managers nor had he sought the advice of legal 12 counsel in maging that decision.
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In your discussions with Mr. Fixar, did he g
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tell you that he had received the opinion of some at 15
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producible?
3 17 A.
No, he did not tell me that.
i 18 Q.
All right.
To expand on that, did you asx 1
1 19 him whether he was aware that other people in other i
t 20 positions of authority within the Utilities believed i
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22 A.
I was aware through my discussions with i
23 Mr. Wooldridge that I
I believe it was Mr. Chapman A
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.and Tolson were of the view that the report was j
25 uiscoverable.
But as far as I know, Mr. Fixar was 4
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Did he tell you that?
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Mr. Spence, I want to ask you tnat
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9 Can you thinx of any other information that 10 sneds any light on any phase of the MAC report; I
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either failure to produce, its potential 12 relationships with hearings as there were witnesses
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or your decision to produce it here in 1985, or the 15 origins of its location in relation to'the prudency 16 l
audit that we have not discussed that you have t
17 personal xno,wledge of?
18 I'm just asking:
Is there any other
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intornation that you have to offer in relation to t..
L 20 the MAC report that would clarify the history of it?
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21 No, I can't recall anything.
But I do A.
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recall in one of your earlier questidna that you 23 asked me about discussions with Fixar and/or 24 Clements.
I told you generally about my discussions 25 with Fixar.
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1 Q.
If I cut you off, then tell me.
2 A.
I will finish that, perhaps not in response 3
to your global question, but t'o finish that answer.
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I als.o did discuss the matter of the MAC report and 3
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had_not read the MAC report, he was generally aware 4.(
9 of.it in.1980.
Knew of the decision to -- that it -
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was not producible and did not seek to revisit that 1
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I notice that the phrasing as contained in lh
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remembered that.
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Mr. Clements indicate to you whether he was aware I
16 that Tolson and Chapman believed that it was i
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Did he have any comments to you to that 1
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. i, 19 A.
I don't recall our discussion along those 1
20 lines.
I believe that Mr. Clements was aware that j
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21 probably Mr. Chapman felt that the report was 3
22 should be produced.
And because the decision had.
23 already been made by TUGCO officers prior to e
24 Mr. Clements taxing corporate responsibility for QA, l
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whicn was taxing place about tnat time, and,for.the I
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Did he indicate to you that he had made a i
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,l A.
No, he had not been involved in the MAC 7
audit.
Had not been interviewed during the
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Had not read the report.
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9 So it would be my view that he probably would not i
10 nave been in a position to maxe the juagment on its 11 content one way or the other at that time, from
'a 12 titsthand knowl[ edge.
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.l Q.
Did'you q.uestion him^at the time he a s s u m ed '. l.:
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decision by Fikar?
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A.
In the 19uO time frame, it is my
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not reexamine the decision to not produce.
He dio
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21 not read the report.
I believe now that he agrees s',.
22 i
that that decis' ion should have been revisited by nim.
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25 Q.
Did he indicate, or --
24 Did he tell you that he had given seignt to 25 the fisct enat Mr. Chapman believed it should be t
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i A.
Will you asx that again?
I'a sorry.
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Q.
I say:
Did he.tell you whether he had R
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given weight to Mr. Chapman's opinion that it was 5
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'6 producible when he made his decision not to revisit?
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7 A.
He.didn't mention that one way or the other 01 '
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in.his discussion with me.
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9 Q.
Can you think of any other areas of wnich
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10 you have personal knowledge that would reflect on 11 the histor.y of the MAC report?
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12 A.
No, I can't recall any other areas.
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13
._ Q.
Okay.
Mr. spence, have I threatened you in 14 i
any manner?
g-4 15 A.
No.
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Or offered you any rewards for the f*j 17 statement in this matter?
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18 A.
No.
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Have you given the statement freely and 20 voluntarily?
21 A.
Yes, sir.
1 4
22 I
Q.
Is there anything further that you care to f
23 add for the record?
.4 24 A.
No, sir.
^ x Y.,
25 Q.
Okay.
I appreciate your time.
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i (Interview concluded at 1:3(,,/
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CERTIFICATE OF OFFICIAL REPORTER 2
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3 i-This is to certify that the attached procee' dings
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COttMISSION in the matter of:
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,.NAME OF PROCEEDING:
OFFICE OF INVESTIGATION 8
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(CLdSED)
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PLACE:
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Tid DALLAS, TEXAS i<
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DATES-AUGUST 8, 19e5 la l
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j 16 were held as herein appears, and that this is the D
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20 United States Nuclear Regulatory Commission.
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Offic!,a1 Reporter d
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