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Transcript of Commission 850226 Closed Meeting in Washington,Dc Re Exemptions 5 & 7
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Issue date:	02/26/1985
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{{#Wiki_filter:e j.. s n.# w,y w e -., m + rsanfr&t. ~ UNITED STATES OF AMERICA 1 NUCLEAR REGULATORY COMMISSION '2 3 DISCUSSION OF.PENDING INVESTIGATIONS 4 5 CLOSED MEETING - EXEMPTIONS 5 & 7 L 6 '7 Room 1130 8 1717 H Street, N.W. Washington, D.C. 9 Tuesday, February 26, 1985 10 The Commission met, pursuant to, notice, at 10:17 a.m. ' ' ' - 11 12 COMMISSIONERS PRESENT: NUNZIO PALLADINO, Chairman of the Commission 13 THOMAS ROBERTS, Commissioner JAMES ASSELSTINE, Commissioner 14 FREDERICK BERNTHAL, Commissioner LANDO ZECH, Commissioner 15 STAFF AND PRESENTERS SEATED AT COMMISSION TABLE: 16 S. CHILK 17 H. DENTON 18 R. HERR D. DRISCOLL 19 B. HAYES D. GALANTI R. PAUL 20 ^^'M. MALSCH 21 '~ AUDIENCE SPEAKERS: 22 B. MARTIN 23 H. THOMPSON ( 24 ~. 7 Ace-Federal Reporters, Inc, / 25 8908180349 890816 PDR FOIA BAUMANB7-535 PDR f i

aunsn.;-,us am . n na__,,__ 2 e P_ R_ O_ C E_ E_ D I_ N G_S_ I 2 CHAIRMAN PALLADINO: Good morning, ladies and 4 We are meeting today to hear reports on the status 3 gentlemen. of investigations on matters related to Louisiana Power & 4 Afterwards, the staff would like 5 Light facility Waterford-3. to inform us on how these investigations impact on the 6 7 Jicense in the meantime. This meeting will update the briefing we received 8 The Commission has a full power OL meeting 9 last December 14. 10 now scheduled for March 6. I understand OIA has a matter that it wishes to _ 11 12 discuss related to this facility. George Messenger is here At such time, we will need to limit the 13 to present that. 14 attendance. Are there any other Commissioner comments at this 15 16 time? 17 COMMISSIONER ZECH: No. 18 CHAIRMAN PALLADINO: All right, then let me ' turn the meeting over to Ben Hayes to present the presentation. 19 20 MR. HAYES : Thank you, Mr. Chairman. I would like to start by introducing members of my 21 Immediately to my lef t is Mr. Don Driscoll whom you 22 staff. met in December and Mr. Richard Herr, the Office Director from 23 24 Region IV. On my right is Mr. Galanti and on his right is Mr. Ace-f ederal Reporters, Inc. 25

.m.hw m.aw.wwe.umem.%, A g. These two gentlemen are really tne-investigators looking 1 Paul. 3 1 '2 - at the f alse document issues, intimidation and harassment 3. issues. What I would like to do is to-turn-it over to ~ "4 e Mr. Herr and rather than recap the _ previous briefings,_ ve would '5 a like to just take up from that particular point and give you 6 Dick?. what has transpired since the latter part of December. 7. 8 MR. HET.kr Yes, sir. 'As you recall, we had some conflicting statements 9 We had Mr. Kane saying he had no knowledge of 10. the l'ast time. the ' investigation, and we had Mr. Cavenaugh say he told him. 11 We had Mr. Leddick who said he had no knowfedge of the 12 We had Mr. Cavenaugh who said-he told him, and 13' investigation. the Plant Manager, who said he told him. 14 we have Barkhurst, i In' addition, you asked the last time atent the ^ 15 .There was.a question about a letter that.was 16 letter. It was a letter from l received and we did get a copy of that. 17 a Mr. Firloux who is the head of their Security Departinent. 18 24, 1983 and in the He sent a letter to Mr. Cavenaugh on May 19 letter was, a recommended " fitness for duty" rule which he had' 20 ( submitted to Mr. Cavenaugh for implementation. 21 u And in that letter or document he indicated or 22 At that time, Mr. referenced back to the investigation. 23 who has claimed Cavenaugh took it and gave it to Mr. Leddick 24 Ace.Fedarol Reporiers. Inc. that he placed it in his office and did not discover it until 25 ,y

m p-m.,,,,%, mv; m...a c,.. ~..._ >^ .f n m 4 -. t. W sometime in December of 1984 1 e 'CHAIRMA!! PALLADINO : Had Mr. Kane'left Lousiana-2 3. Power at that time? 4 MR. HERR: Mr. Cavenaugh had left -- . CHAIRMAN PALLADINO: Cavenaugh. 5 -6 MR. HERR: -- on the R2 5th of July, yes, sir. And. We have a that: pretty well. brings you up to date on that. 7 few other' minor things that came out, such as the plant manager 8 being advised by' two vice presidents of cooperation of his 9 .10 ' people which he cannot recall. That brings us up to date 11 pretty much on 'those issues. ~ 12 MR. HA'IES : Let me take it at this point. I'm sure 'that all of us are interested in the deferral'to the 13 I would like Department'of. Justice on this particular issue. 14 to tell you what we went through and what our plan is to 15 16 address that particular issue. 17 l I nade a trip to Dallas last week'and I briefly. ?' discussed the issue with Mr. Eisenhut and Mr. Martin. I 13 daen had members of my staff come to Washington Sunday night t 19 1 and we met, first thing Monday morning and went over all the b 20 L, 211 evider.ce. Pursuant t3 the nev policy, No. 22 that was adoptud, 22 t I believe, in January of this year -- just recently -- the .73 investigator on the case, Mr. Driscoll, drew a conclusion that 24 Ace-Federal Reporters; inc. Mr'. Kane and Mr. LedHck willfully intended to mislead he..and 25

m o 5 1 Mr. Herr. In looking at the evidence, it is my responsibility 2 to determine whether or not that evidence reaches the thres-3 And hold for a possible referral to the Department of Justice'. + 4 after talking to the staff, to my staff, and looking at the 5 evidence, I came to the conclusion that certainly at least in 6 Mr. LedHck's ' situation that it did cross the threshold for a 7 8 referral to the Department of Justice. As we speak, my staff in Bethesda is writing up a 9 transmittal memorandum referring the case to the Department of 10 4: 30 -- absent other direction f rom the 11 Justice. Todayl at ~ Commission -- my staf f will meet with the Department of Justice 12 take with them the evidence and both Mr. Herr and 13 officials, Mr. Driscoll will explain the evidence and explain our views. 14 We are in hopes of getting the Department of Justice 15 to make a decision "yes" or "no" on this case within two days. 16 17 In fact, I think we can do that. I called the Department of Justice last Friday and to3d them that we n.ay need an expeditio n 18 They review on this matter if our conclusion is for referral. 19 We snia theJ.vo 21d certainly attempt to accomoda te t. hat. 20 71I called again yesterday and they said, " Fine, come and see us ] 22 at 4:30 today." So, we do have a 4:30 appointment. I can assure you gentlemen that I am keenly aware 23 of the March 6 meeting on a full power license as well as, I 24 Ace-f ederal Reporters, Inc. was informed on the trip down here by Mr. Denton and Mr. Martin 25 1

-,n-__-_ he& w w w eare:o w e.m, % m % e S M .w .1 . that this utility would like to go critical sometime Saturday, the 4 - And we kicked around various views as'to what .2 or Sunday. - staff should be doing in this matter. 3 My recommendation to Mr. Denton was.that we should - 4 not.do anything at this point in terms of holding up 5 criticality or the meeting on the 6th-for licensing of full 6 I feel ' f airly confident that we' will have an answer 7 power. "yes" or "no" within a day or two and, depending upon 8

again, what that answer is, then we can discuss alternatives or the 9

10 staff and the Commission can. But in the interim I think we sho,uld just allow us 11 And that a couple.of days to attempt to resolve this matter. 12 And is my recommendation to the staff and to the Commission. 13 certainly, if I don't see that we are going to resolve the 14 let's say, by Friday, matter wi+;.h the Department of Justice, 15 then I wi31 get with Bill Dircks and Harold and notiff the 16 Commission of what the delay is. 17 ^ Why would the Department of COMMISSIONER DERNTEAL: 18 Justice be able -- rx,t to say "willing" - in' this case to 19 I recall, we have sat l act so expeditiously when in the past, 20 i around here and argued en to whether there should be 60 days 21 or 90 days, or 120 days allowed? 22 think the difference is the fact that 23 MR. HAYES. I in this particular situation because of the most imminent 24 decision, namely criticality on Saturday and a full power licen se Ac 4.dtras n.ponm. soc. 25

^ . ~, 1 a., 1 on March 6, at least consideration of it. I explained that 2 to them and they said they would accomodate that schedule. 3 If you remember when we were doing the Keaten investig'ation on TMI, the Commission was desirous of making '4 5 that public so that it could be a matter of record. And I personally hand-carried that case over and within a matter of 6 7 days -- I think five days -- we were allowed -- you know, they 8 didn't object to making that report public. 9 COMMISSIONER BERNTHAL: It shows they can move 10 quickly, though. - Il MR. HAYES: It shows that under,,you know, these 12 circumstances on a case-by-case basis they ca.1 come to those 13 conclusions. 14 COMMISSIONER BERNTHAL: Well, that was a lead-in 15 to the next question, Ean. And that is whether in your 16 j udgment,, I guess -- you obviously can't speak for their 17 l judgment -- in your judgment the case is so strong and clear 18 lI that it's going to be easy to make a decisien on, r,r is that 19 just presumptuous? ,1I 20 MR, HAY ES : Well, I ca.n giv2 you n.y perception of 2I the case 3 sir. 22 COMMISSIONER LERNTHAL: Yes. 23 MR HAYES: I think that with respect to Mr. Kane, 24 that's the weakest of the two. With respect to Mr. Leddi'ck, Ac> Federal Reporters, Inc. 25 I think we just crossed the threshold that would warrant a

..<.~ ~. _ _: ww.nws.m-w.u mim. i + 8 referral to the Department, that being suspicion of a potential L I 2 -criminal act. We have a couple of witnesses that are testifying just totally opposite of what Mr. Leddick testified to, and 3 -s .then he recanted his testimony when he discovered that there 4 5 are other witnesses saying, " Wait a minute." 6 COMMISSIONER BERNTHAL: Yes. 7 MR. HAYES: So, I think that it's a very narrow '8 issue. That. we are only talking six af fidavits here and it's - 9 a matter that can be reviewed within two hours. 10 COMMISSIONER BERNTHAL: Okay, I see. - 11 MR. HAYES: The report, I think,,is only ten pages 12 long. '13 COMMISSIONER BERNTHAL: Right. 14 MR HAYES: So, it's not something as complex as This 16 Keaten or one of the TMI leak rates, or what have you. 16 is a " cut and drieda issue here. 17 COMMISSIONER ASSELSTINE: Then I'd like to,-- as you said, the. Commission decided fairly recently that we .o 18 wanted to hear the conclusicar of the investigators, the people 19 1 L 20 who did.the work. Yon raertioned that Dor had reached the conclusion that both Kane and.Lediick had willfully intended 21 22 to mislead both him and Lick Herr. I wonder if we could hear from Don about the basis 23 for his conclusion and also hear from Dick about his view 24 . ActFed;rol Reporters, Inc. 25 of whether he concurs in that conclusion.

n. l( .9 L [ 1 MR. DRISCOLL: Are you asking me? COMMISSIONER ASSELSTINE: Yes. 2 I'm not attempting to be the judge in 3 . MR..DRISCOLL: I was asked for a conclusion based on 4 this particular case. our current policy relative -- 5 And I think we want that. COMMISSIONER ASSELSTINE: 16 -- relative to whether it is to be MR. DRISCOLL: 7 I believe that our current policy states - 8 referred or not. that if you have a reasonable belief that a law has been 9 10 violated, that it should be referred. And both in the case of Mr. Kand and Mr. Leddick. s. 11 believe that there was a reasonable belief, at least in my 12 thful -opinion, that they may have not been completely tru 13 14 with us. Can you explain a little bit CHAIRMAN PALLADINO: 15 more, was LaNdek remembering improperly the first tire: and 16 then realizing that he had remembered improperly come back 17 and gave you the facts, or do you think it was dif fetent from ' 18 - 19, that? Well, basically, sir, we spoko 20 ,__NR. ca.RCOLL: t I early on in the investigation with both Mr. Kane an$ Nr, Le&Edt-71 and later on talked with Mr. Cavenaugh who is now the CEO at 22 And he basically gave a statement 23 Mississippi Power & Light. contradicting theirs insomuch as they stated they had r.ot 24 He stated that he Ace-Federal Reporwrs, Inc. previously been aware of this investigation. 25

L .n 10 I had both of them concerning the investigation. Mr. Kane, he .c 2 stated, I believe, he briefed on severa1' occasions,.probably i I 3 -in his estire.ite around three times. And he stated he had ' briefed.kr. Ieddi& just prior to his departure, Mr. Cavenaugh 's 4 l 5 departure, regarding the investigation and'had told Mr. Leddig 6 that he should obtain a detailed briefing from both Mr. l. 7 Barkhurst and Mr. Friloux, the Security Manager, relative to 8 that investigation. '9 In discussing the matter with Mr. Cavenaugh, he 10 seemed to have very good recall with respect to both the - 11 investigation and his actions during that period of time, 12 whereas neither Mr. Kane nor Mr. Leddick seemed to have 13 particularly good recall. 14 Again,.it could be viewed either way by any of 15 a number of people but I personally believe that Mr. Kane and 16 Mr. Ieddi'ck both had a greater motive to lie than Mr. Cavenaugh. 17 voubl have, and I can go on if you -- 18 COMMISSIONER ASSiELSTINE: Okay. But I c6ke it I )' from what you are saying,' it's the number of inrtances in 17 20 whi ch these people were r.old about it, the significance of ' 21 the issue invi-1ved, the ability of Cavenaugh to recs.11 in 22 great detail -- 23 MR. DRISCOLL: That's correct. 24 COMMISSIONER ASSELSTINE: -- all of those events tee-Federal Reporters, Inc. Leddick's 25 that it just doesn't make, in your view, Kane 's and b

~ li:.ms;7mmaru,6bs;;gu, w&qv west.uz.tsnkwhy:;,:rm2mmea.au:x1 :. a..:. u. u a a x= a. m ^ statements to you credible. I 2 MR. DRISCCLL: Yes, sir; that's correct. Ani 3 _ matter of fact, one of the points that I made to Mr. Hayes was Mr. Kane and Mr. LecMick were aware of the focus, the 4 that bot initial focus of our investigation which was to determine why 5 they had discontinued their investigation and not re-6 7 initiated it, and I believe.that they were aware of this prior 8 to Mr. Herr and I interviewing them. And I believe their denials of knowledge with regard to this may have just been 9 an attempt to isolate themselves from what could otherwise 10 just have been a'n embarrassing situation.

_ 11 12 COMMISSIONER ASSELSTINE:

Go ahead. 13 CHAIRMAN PALLADINO: How did they change their 14 testimony? 15 MR. DRISCOLL: As it turned out, after we had interviewed Mr. Cavenaugn -- which I believe was in early 16 December, several weeks after we had spoken with Mr. Kane and 17 Mr. LediMk -- I believe Mr. Kane initially contacted the NRC 18 and stated that he was aware, or one of his repre.sentatives 19 contacted _ our of fice and sf.ated that be had become awcre of 20 the statement Mr. Cavenaugh had provided to us, and asked if 2I he could provide a supplemental statement with regard -- he had 22 provided us a sworn statement earlier. 23 24 COMMISSIONER ZECH: This is Mr. Kane? Acs Federal Reporters, Inc. We said that would be fine. 25 MR. DRISCOLL: Yes, sir.

J ex w I He' provided that statement to us and basic b 2 said that he would not challenge the statements Mr. Ca. L.' 3 had made. He stated that he just didn't have any recall 4 relative'to the breakings that-Mr. Cavenaugh stated he had ' -5 given him. Likewise, Mr. Le&* ek was re-interviewed at a later l ~ 6 7 date relative to a memo that was discovered -- I think Mr.. 8 Herr mentioned that memo a little earlier, it was a " fitness 9 for duty," proposed " fitness for duty" rule which Mr. Cavenaugh 10 had received from Mr. Friloux and had passed to Mr. Ledilck. ,,._ 11 Mr. Ieddick. voluntarily provided that to Mr. Herr 12 on -one of his visits down there and stated that he had found 13 this document in his desk. It generally referred to the 14 investigation. So, that particular document had been in his 15 possession for over a year. 16 We went back and talked to Mr. Cavenaugh once 17 again. He reiterated his former statements regarding briefing 18 Mr. Kane and Mr. Lakick relative to this inatter and he also 19 stated that he ha6 given that proposed " fitness for duty" 20 ruk to Mr. Iedlick along with some other documents during the 4 ~ I 21 course of the change-over. { 22 COMMISSIONER ZECH: When Mr. Leadick came into this 23 new role, taking Mr. Cavenaugh's place, where did he come 24 f.com before that? Was he in the company? WO Federal Reporters, lat. 25 PJt. DRISCOLL: No, sir, he was not.

~ v . - ~. p -COMMISSIONER'ASSELSTINE: No. 1 2 MR. DRISCOLL: I think he came from another utility. L 3 COMMISSIONER ZECH: So, this 'was a. new position for 4 him.- 5 MR. DRISCOLL: Yes, sir. 4 COMMISSIONER ZECH:- A new organization. 7 MR. DRISCOLL: Yes, sir.. 8 COMMISSIONER ROBERTS: And he took Cavenaugh's 9 position? 10 MR. DRISCOLL: Yes, sir. - 11 COMMISSIONER ROBERTS: And Cavenaugh went to 12 Mississippi Power & Light. When did that happen, when were 13 the briefings that allegedly Cavenaugh gave to Kane and 14 Leddick? 15 MR. DRISCOLL: The briefings that Mr. Cavenaugh He said 16 stated he had given to Mr. Kane were in early May. that he met with him once a week and briefed him regarding all 17 18 his activities. He said that he had briefed him.severhl times 19 during the course of the investigation which started, I think, on May 5 and went through somewhere in the neighborhood of 20 '21 June 15 and then suspended. 22 CHAIRMAN PALLADINO: What year? .23 MR. DRISCOLL: 19 83, I'm sorry. And he said he 24 was sure that he had briefed Mr. Kane a couple of times ActFederal Reporters, Inc. regarding the progress of the investigation and the associated 25

14 'I activities relative 'to that investigation. And those where 2 . Mr. Kane had immediately. wanted initiation of their investigation and discovery of some possible drug use by the. 3 4 'auxiliar reactor operators, had looked at the " fitness for: duty" rule that Lousiana Power & Light had in~ ef fect at that. 5 . time and'found it to be less than satisfactory, and.had asked' 6 . some people to -- to use his word -- strengthen it or improve-it 7 COMMISSIONER ZECH: How many times has Mr. Cavenaugh g 9 ' briefed. Mr. Ledii6k?' 10 MR. DRISCOLL: To the best of his recall only once,. 'and that was just prior to his departure. Mr. Cavenaugh --- ~ 11 COMMISSIONER ZECH: During this turn-over - period. 12 13 MR. DRISCOLL: Yes, sir, during the transition period, and I think his resignation was effective on July 25-14 Leddick had probably arrived like a week earlier. So, ' 15 ' and Mr. 16 it was during that period. COMMISSIONER ZECH: Orte time during the turn-over 17 18 period, which is a pretty busy time. 1Y MR..DRISCOLL: I understand that. 20 COMMISSIONER ROBERTS: And they are recalling events which took place 18 months previously is that correct? H 21 22 MR. DRISCOLL: That's correct. 23 COMMISSIONER ZECH: And he gave Mr. Ieddick a piece 24 of paper -- ' Ac& Federal Reporters, Inc. COMMISSIONER ROBERTS: Don't ask me what I did 18 25 C_in____________________---_-___-__

15 I months ago. 2 MR. DRISCOLL: No, he said that he had given Mr. Le&Eck a briefing regarding the investigation that had been 3 4 conducted. 5 COMMISSIONER ZECH: All right. And was this paper -- 6 he gave him a paper also? 7 MR. DRISCOLL: Yes, sir. He gave him this proposed " fitness for duty" rule, the new one that had been prepared 8 9 for him in response to his request. And he later came forward and 10 COMMISSIONER ROBERTS: "Here, yes, I found this in my offide?" II

said, Mr. Leddick did, yes, sir.

That was I2 'MR. DRISCOLL: 13 in December, I believe. How much overlap time was there Id CHAIRMAN PALLADINO: Leddick? 15 between Cavenaugh and I believe about a week. I0 MR. DRISCOLL: I7 CHAIRMAN PALLADINO: A week. As I understand it, when Bill Cavenaugh 18 MR. HAYES: got ready to leave he had, I believe, 23 projects that he was I9 ukEdek,. working.on, and he turned those projects over to Mike 20 One of the projects was the "fittness for duty" 2I rule which Bill Cavenaugh started to strengthen when this 22 He determined there were weaknesses in 23 investigation started. The applicant the policies and some non-existent policies. 24 AC3-Fedetol Repoders, thc. appeared to take an aggressive role in developing rules and 25

g ^- m ~16 e guidelines'because of the import of this investigation or the- .I e 2 facts /that developed during this investigation. And in. fact, 3 they did implement the new policies, I believe, in November of 1983 pursuant to this re-examination and look-see. A part 4 5 of that was one of the projects that Bill Cavenaugh started-and passed on to Mike Le& lick.-- the memorandum'is here -- setting 6 7.forth all of the proposed.new rules and guidelines on the 8 " fitness for duty" rule within LP&L. 9 COMMISSIONER BERNTHAL: I certainly don't want to 10 shorten what could be a nice long meeting, but it -seems to me - Il that at this point if this matter has been, referred to Justice 12 and we don' t have an answer from Justice, the threshold 13 decision for the Commission today is pretty simple. The 14. threshold question is, if Justice should decide to pursue the 15 case rather than not pursue it, are the individuals involved ) here significant enough that we would not proceed while Justice 16 l 17 is pursuing the case. 18 To me that's the key threshold question here.' It t i 19 seems to. me they are pretty high-level officials and while, to 20 be sure, at some point, suppose Justice does not pursue it, 21 then we have a more difficult things on our hands of deciding 22 whether we have a higher threshold that we need to apply 23 even though Justice may not have met its threshold. j 24 But if Justice meets its threshold and decides to Ace-r.d. rot a pors.rs, inc. pursue the case, we've got a pretty straight-forward decision 25 ) ) i

.h m l '- 18-K kcy 1 MR. BERNTHAL: We may very well...But to be sure we 2 hae a problem if Justice has decided to go ahead with criminal 3 ' proceedings against'two of.the senior managers. 4 CHAIRMAN PALLADINO: Did you have a comment? COMMISSIONER ASSELSTINE: Yes, I guess I would 6 agree.with what you said, Joe. I mean, I think we' clearly have a problem or dif ficulty if Justice says, "There is-enough l '7 '.) 8 here and we have the time and interest in pursuing possible 9 criminal violations by the CEO and the Nuclear Vice President 10 of this utility." , - 11 COMMIS,SIONER ROBERTS: Are those.,the precise 12 titles? I just want to understand. 13 MR. HAYES: 'Yes, sir, they are. 14 COMMISSIONER ROBERTS: Kane is the Chief Executive .l 15 Officer? 16 COMMISSIONER ASSELSTINE: Right. 17 COMMISSIONER FOBERTS: And what is Leddick's' title? 18 MR. HAYES: Executive Vice President for Nuclear -- 1 19 Senior Vice President. 20 COMMISSIONER ASSELSTINE: Who have, according to 21 what the staff said at the last meeting we had on this subject, 22 been the key players in the utility 's effort to come to -23 closure on the license over the past year or so, ever since 24 they have been in their positions. Aes Fedprol Reporters, Inc. 25 And it seems to me it is going to be very difficult 4

v [ N m. 19 for'the Commission.to go ahead in the face of a Justice -l + . Department decision to proceed with something on those two-2 3 individuals. "We don't. 4 But I also think, even if' Justice says, 'have any particular interest or inclination in doing that," 5 that the Commission still has a very difficult question to ~ 6 face and that is,.our investigators are saying these people 7 8 intentionally lied'to us. They withheld information and these 9 still are the key people. And with their positions in the ~ 10 organization I still think that that presents a very difficult question fcr the Commission that we have io face before March.6 II I2 CHAIRMAN PALLADINO: I wonder if I could ask a-Who all couple more questions regarding the investigation. 13 did you interview that impacts on the question of whether Id Leddig and Kane gave f alce information, Cavenaugh? 15 I0 I MR. DRISCOLL: Yes, sir. With respect to the contradiction in Mr. Kane's statement the only people I II i Those briefings interviewed were Mr. Kane and Mr. Cavenaugh. I .i 18 19 were between the two of them. ) .-- With regard to Mr. Ieddick, Mr. Cavenaugh stated, as 20 II I said earlier, he had briefed Mr. Leddick. In a later interview 22 of Mr. o, whorst, who is the LP&L Plant Manager -- 2 CHAIRMAN PALLADINO: Barkhurst. -- I believe that he did state that MR. DRISCOLL: Aes-Federal Reperiers Inc. 25 he had briefed Mr. Leddig. And then the third thing with

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I respect to' Mr. Ieddick's knowledge was the decument that he au ' .2 voluntarily provided to us, 3 yCHAIRMAN PALLADINO:- There was nobody.else you talked to like the Head of. Security who said he did or didn't -- ~ 4 5 MR. DRISCOLL: Yes, I did. I spoke with Mr. Nelson 'who-was the Senior Vice President for. Administrative-Services,, 6 and he told me that he had never briefed Mr. Kane regarding" 7 8 the.' investigation. Mr. Friloux, who is the Director.of'---?: 'F 9 CHAIRMAN PALLADINO: Frily? ) Friloux, F-r-i-1-o-u-x, he is the 10 MR. DRISCOLL: He stit~ed thaY 11 Security Manager, corporate Security Manager. 12 he had not briefed Mr. Kane or Mr. Leddide., u,. 13 COMMISSIONER ROBERTS: Is there any possibil'i'ty that 14 'Mr. Cavenaugh misspoke or has a faulty memory? And T Vuess 15 I would also then have to include Mr. Parkhurst.. 16 MR. DRISCOLL: With respect to -- Ee 17 COMMISSIONER ROBERTS: Whether the ; briefing w'as i: O r '. -5 18 held or not, 19 MR. DRISCOLL: I personally believe Mr. Cavenaugh. He is a very convincing individual and he seemed to be~ very 20 21 positive.: In both interviews he -- as a matt'er of fact, one-- of his comments was that Mr. Kane was as concerned about 22 this as I was and he, Mr. Cavenaugh, indicated that he was 23 very concerned about the matter, concerned enough to have the 24 Aes. Federal Reporters, Inc. 25 rules changed.

^ abusMMIF#7Ek f#$PifMMtMMfMMdnMNO%dTAct@Wd' WNRM&b? mum 21 1 COMMISSIONER ZECH: What was his recollection 2 regarding his conversation with Mr. uddick? 3 MR. DRISCOLL: That was, as I said earlier, he 4 stated'that prict or in,the transition period, just prior to 5 his leaving LP&L, he had briefed Mr. Leddick regarding the 6 investigation generally -- 7 COMMISSIONER ZECH: What was Mr. Ie:Eick's reaction 8 during the briefing, did he have any recollection of that? 9 MR. DRISCOLL: He did not. He said that he did not 10 remember it and furthermore, he stated -- 11 COMMISSIONER ZECH: No, I mean, what was Mr. 12 Cavenaugh's recollection of Mr. Leddick's reaction? Did he say 13 that Mr. Mttick said anything or understood it, or -- I4 MR. DRISCOLL : No, he didn't. He didn't comment 15 that way. 16 COMMISSIONER ZECH: -- or it was just part of a 17 day's briefing? 18 MR. DRISCOLL: He just said that he briefed him generally regarding that investigation and told him that he 19 20 should talk with Mr. Friloux and Mr. Barkhurst regarding more 21 intimate details of the investigation. 22 CHAIRMAN PALLADINO: Let's see if I put the right 23 things in my mind. With regard to Barkhurst, he said he 24 briefed Lettig. Ace-Federal Reporters, Inc. 25 MR. DRISCOLL: Yes, sir. lL____________

22 s 1 -CHAIRMAN'PALLADINO: He didn't say anything about ~2 briefing _Kane; did he? 3 MR. DRISCOLL:- No, sir. He saidLhe.did not brief.Kant 4 and had o knowledge whether Kane was ever briefed. 5 CHAIRMAN PALLADINO: .So, he neither briefed Leddi'ck. 6 nor Kane.- - 7 MR. DRISCOLL: Barkhurst did brief Leddick. 8 CHAIRMAN PALLADINO: I'm sorry. You are right, he' 9 briefed Leddig but not Kanel 10 MR. DRISCOLL: Yes, sir. ~ ' 11 CHAIRMAN PALLADINO: I got that iorong. Okay. - 12 Nelson -- 13 COMMISSIONER ZECH: Barkhurst -- 14 CHAIRMAN PALLADINO: Go ahead. 15 COMMISSIONER 2ECH: -- briefed Leddick, you say, I 16. and Cavenaugh? 17 MR. DRISCOLL: Yes, sir; that's correct. 18 CHAIRMAN PALLADINO: Barkhurst briefed Mick but 19 not Cavenaugh -- but not Kane. 20 MR. DRISCOLL: Yes, sir; that's correct. .21 CHAIRMAN PALIADINO: ' Nelson ssid he never briefed 22 Leddick;.is that right? l 23 MR. DRISCOLL: Mr. who? ' 24 CHAIRMAN PALLADINO: Mr. Nelson. I O AceFederal Reporters, Inc. 25 MR. DRISCOLL: Mr. Nelson said he never briefed

23' [- j .Leddig or..Kane. CHAIRMAN PALLADINO: 'Or Kane. Friloux said he 2 never briefed Ieddick: is that right? J e: 1.- .3 ~ 'MR.'DRISCOLL: That's correct. ~ 4 5 .MR. HAYES: Or Kane. '6 Let me clarify one thing here -- COMMISSIONER ASSELSTINE: If I'could, before you 7 pick up one thing which is my earlierJqcettibA-s do that, Ben, 9 To Dick..Do you agree'.with Don's conclusions? MR. HERR: most of them, yes, I do. We do have 10 one minor disagreement but that's more like in the: motive-type ~ - 11 z ? 12 thing. COMMISSIONER ASSELSTINE: Okay. 13' MR. HERR: Hut it wouldn't 14 COMMISSIONER'ASSELSTINE: As far as the.cdnc1Msion -15 16 about whether they -- I still feel pretty strong 7that there is 4 MR. HERR: 17 a conflicting statement and it's got to be referred,.lt6es6 tis 18 I don 't think we have a choice, to be -quite 19 no question. 20 honest with you. Ben, I'nf sWitpf.ed COMMISSIONER ASSELSTINE: Okay. 21 On the motive thing we might differ a MR. HERR: 22 j 23 little bit, on the motive. i 24 MR. HAYES: I have a dif ferent conclusion. My investigator feels as though Mr. Kane and Mr. Leddick; willfully ActFederal Reporters, Inc. 25

,q x 24 l 1 lied. I don't feel that way concerning Mr. Kane. I do not think the evidence' supports necessarily a referral, standing 2 f 3 on its own, to the Department of Justice. Had we not had the 4 evidence stacking up against Mr. Ieddick. I would not have referred this matter, or would not have made the decision to. i 5 l 6 refer this matter to the Department of Justice. All of the evidence is contained in a..very small 7 The transmittal letter that is currently being 8 report. 9 written for my signature will say, "Take a'look at Kane," but the essence of the referral involves Mr. -Ieddi_dc. I am-10 M ( not convinced, I.do not think our evidence,-- I disagree.with 11

~ ' -

my own staff -- supports the notion that Mr. Kane willfully 12 and intentionally with knowledge prior to meeting with my '13 14 staff lied to them. I think 15 Mr. Ieddi'ck is 'a question mark in my mind. that the evidence concerning the documentation and' two other 16 witnesses said, "Yes, we did brief him," coupled with the 17 fact that this was a very important situation at that particu'.ar 18 19 utility at the time. Tney were completely redoing their b " fitness _for duty;" they were getting ready for licensing; 20 they had senior executive meetings to suspend that investigation n, 21 It was something that top-level management was actively o 22 involved in during the investigation and on the decision to l L 23 24 suspend that investigation. Aes-Federal Reporters, Inc. 25 CHAIRMAN PALLADINO: Cavenaugh was involved in it. = - - - __

ieed!fd##Nb@2WMGMi@ MhNb M %E$IZ7M.MWS}$$@l6EdM$$iht ~ 25 1 MR. HAYES: Cavenaugh, Barkhurst, the Executive 2 Vice President of Admin, Nelson. 3 CHAIRMAN PALLADINO: But Barkhurst said he didn't -- ~ 4 no, I'm sorry. MR. HAYES: Barkhurst said he did brief Le&Eck on 5 6 this matter. CHAIRMAN PALLADINO: Nelson said he didn't. 7 MR. HAYES: Nelson said he didn't brief him. 8 9 CHAIRMAN PALLADINO: And Friloux. 10 MR. HAY ES : Friloux as a security person probably ~ ~ 11 would not be called to brief. He works for Nelson. Nelson 12 would be doing the briefing. CHAIRMAN PALLADINO: But he didn't brief hin either. 13 14 MR. HAYES: But he did not brief him. The evidence started to stack up against Mr. Lt< Mick., 15 COMMISSIONER ASSELSTINE: Why do you think the 16 17 I evidence is less compelling for Kanc? f i i is MR. HAYES: Because I don't -- when I loch at l 1 i 19 referrals, what I try to do is to get a sense of the bad l \\ { I think Cornissioner Zech at our last meeting l 20 purpose. 21 hit upon that particular idea. And I don't see Mr, Kane winning anything or losing anything at this point in terms of f l 22 I I just don 't trying to intentionally mislead the Commission. 23 24 see the motive there to do that. AcC>Tederal Reporters, Inc. What's the motive for TuWck? 25 CHAIRMAN PALLADINO:

n. .n ^ s '26 c i 1 MR. HAYES: Well, its difficult -- it's difficult because the 2 to' pin 'down a specific motive for even Mr. Leddiidt L. '3 only thi,ng I can come up' with is' -- and this is must my personak ' opinion -- Mike Ieddick dropped the ball early o'n. He 4 5 did not pursue the matter and determine, you know, what .really transpired during the investigation, nor did he 6 7 institute its continuation. 'And when it was brought to the' applicant's attention .8 I just think they looked for a defensive answer. 9 10 COMMISSIONER ASSELSTINE: Why doesn't that same Il motive apply to Kane? He dropped the ball'too. 12 MR. HAYES: It could very well apply to Jim Kane.- I just' think the evidence is more pronounced against Lecklick. 13 14 COMMISSIONER ZECH: Let me just offer an observation 15 concerning Leddig. During a turn-over period like that when you are taking on a new job -- and I believe you mencioned ~16 17 ' thare were at least 23 specific issues that they were going over -- I know from my ein experience that when you are taking 18 19 I on a now assignment like that, there are an awful lot of briefings _and an awful lot of issues to discuss and got into. I 20 21 Certainly, you try to remember them all and cover J I 4 22 them all and keep track of them all. But it's a very hectic time, especially if you are coming to a new organization and 23 24 all that. AcvFede of Reportws, Inc. 25 So, I would submit that, you know, at least we would } )

,3 y-7_ ftb ' n '. s. t w 27 gr 21 have: to; be kind of careful; and.I think, Ben, you have indicated .s. q m 2 a; degree of-. carefulness in' coming to your'own conclusion. 3 But certainly, it's a busy time. 'It's a time when 4 things:can slip.by. It's whether.this was called to.his .5 attention to the' degree that it should or should not.have. 6. slipped by. which' I think.is very important. -7 But; all I'm saying. is, when you are taking on a new 8 ' assignment-like this and all kinds of new responsibilities, 9 you have to-kind of.put things..in-perspective. And to pick out y 7 10 one item like we have here and say, "My goodness sakes, how could he possibly not have remembered something so important," i 11 ~ '12 I~ submit that he was~ reviewing an awful lot of important 13 things. I don't know, :: think we have-to be careful before.we-14,make a; judgment that is so clear. 15 It's not clear in my mind, anyway. In any case, I. 16f think you've got to realize'the circumstances he was under Z 17 and the pressurce he was under, and all the rest of it. 1 do 18 think t hat's an import, ant conrideratio;a. e i9 COMMISSIONER ASSELSTINE: That's a valid paint, but I -l 20i think you,_also hr.ve to look at the natnre of the information I 21 in judging whether someone would remember it. And I would h 22. submit to you that if any of us in our first week on the job 23 had been told, " Hey, we've got a drug investigation going on 24' whether the people who man our Incident Response Center are L Ace-Federal Reporters, lac. 25 using drugs," every one of us would have remembered that. There L- _= _ - -

L ~ 31 I were weighed at least in my mind. 2 You are absolutely right, and I think you are right 3 too. I put myself in Mike Leddig's position, and I don't care 4 if it's y first day on the job or my tenth year, if somebody 5 comes to me and says, " Hayes, your Region IV is doing dope 6 out-there," I just don' t think I could -- I mean, that would 7 have a heck of an impact on me as a manager. And I find it 8 dif ficult that one could forget or set that particular 9 notification aside without some type of follow-up. 10 I will pass on a comment that I just got a week ~ 11 ago that is not in this report from Mr. Nefson. When I was-12 in Dallas I met with Mr. Leddi'ck and Mr. Nelson and members 13 of LP&L and Region IV staff. And Mr. Nelson and Mr. Ross 14 Barkhurst are the common thread in that scenario. That is, 15 they were there and participated in the decision to suspend 16 the investigation. 17 CHAIRMAN PALLADINO: Who is this, Barkhurst and -- 18 MR. IIAYES: Mr. Barkhurst, the plant raarager and 1 Mr. tielson, the Executive VP for Admin. They were tAere 19 h 20 then and they are there now. The security, internal security 21 force is under Mr. Nelson and I asked him, "Why didn 't you re > 22 institute the investigation?" And he said he felt it wasn 't 23 important -- it wasn't important. 24 CHAIRMAN PALLADINO: Why didn't he think it was Ace-Federol Reporters, Inc. 25 important? ._________O

k, A 32 1 COMMISSIONER ZECH: Who said that? 2 MR. HAYES: Mr. Nelson. L 3 COMMISSIONER ASSELSTINE: Even though, as I recall, 4 there was some evidence within the company's preliminary-l l 5 investigation that indicated that supervisors had either '6 cooperated or conspired with the 7 MR. HAYES:- There were allegations of that, that is 8 correct. 9 CHAIRMAN PALLADINO: Why didn't Mr. Nelson think 10 this was important? - 11 MR. HAYES: Because the. company had recognized that 12 its policies --'and help me here, Dick. The company 13 recognized that 'its policies were weak, its fitness for duty 14- . rules. ~ It instituted policies even more stringent than other -15 Mid-South compan.tes. And I don't want to put words in his 16 mouth, but that's the essence of wha t. I thouaht he was telling i 17 me, tfaat they identiff.ed the problera and corrected it. There-1 18 fore, there is no need to re-institute tne investigation to IV cally pin devn some of these -- j 20 _f.OMMISSICNER ZECH: w'hc Faid they had identified 1 21 and corrected it? 22 MP. HAYES: Pardon? 23 COMMISSIONER ZECH: Who said they had identified and 24 corrected it? WFedeni Reporters, Inc. 25 MR. HAYES: I think Mr.Leddidk and Mr. Nelson --

6 ^ 7 33 l while it may' not be in the report '-- lef t 'me with lthe l 2: impression last week that because'of.the investigation:they i ' 3 re-examined their. internal' rules and guidelines on.the use of narcotics on-site and off-site and established new d guidelines,.and implemented an orientation and educational 5 process within their company, holding meetings. They have. 6 dogs that-snif f in the control rooms and the cars. -- '7-8 COMMISSIONER' ZECH: Now you.mean that's wha't'is 9 taking place. - 10 MR. HAYES: Yes. But that program, Commissioner, , was designed and-developed ~ in May of 1983, you see, as a 11 -12 consequence ' of this investigation internally. . 13 What I am telling'you is, Bill.Cavenaugh recognized ~ i early 'on they didn't have sufficient guidelines to their 14-15 employees to deal with the situation. -The investigation 10 pointed to that, as to whether or not they would require .17 their employees to take a -- 16 COMMISSIONER ZECH: Was that in place when Mr. lLeddicktookoverfromMr.Cavenaugh? 's 9 . 20 ' MR. HAYES: Well, the memorandum that Mike Leddick' found $as the corporate security people writing. to Bill' l '21 Cavenaugh saying, "Look, here is our views and recommendations 22 ' fitness for duty' rule," and that was one of the 23 on a proj,ots that he turned over to Mike Leddig for ultimate 24 25 implementation. cAce.9ebsal cReposters. Dix. ~. ~. - -.... - m-..-.- _________m.______

,A . w. 34 And in fact, 'it was implemented. There were numerous 1 And I have been told by Mr. Martin that their 2 changes 1made. current program is one of the strongest that he has -- 3 When were the changes made? COMMISSIONER ZECH: 4 c MR. HAYES: Bob, do you know when that LP&L program 5 6 'went into existence? My date is November of '83. r It was Maout November of ' 83 that the MR.. MARTIN: 7 8 program was strengthened. I Forgive me, gentlem n, we are having a problem, 9 think, with adjectives as a perception that there was no '10 program and then a program was instituted? 11 There was a program in ef fect and it was' reviewed 12 along with all the other programs of all.cther plants entering 13 construction and in operation, I think, in the 1932 time 14 They had a progran comparable to any other 15 frame by I&E. 15]k program in tghe industry. l As a consequence ci the May-J une investigation r d 17 activities, they recognized diet they had nome weaknesses in [ 13-I their program, they themselver., and they strengthened the 19,) I believe, it was in program,thrcugh changes made up through, a 2'J j 21 the November '83 tire frame, Those changes have now made that program stronger 22 than any, certainly, in Region IV, and probably based on 23 assistance we got from Region II, stronger than any alcohol 24 and drug abuse program in Region II just in terms of numbers of j . AczJederal Reporters, Inc. 25 l i

l 35 1 plants. So, they had a very strong and very aggressive I'm afraid I sense that perhaps there was some 2 program. sensing by the Commission that they had virtually a very weak 3 That prograd and now they have brought it up to standard. 4 really is not a fair characterization. 5 They had a very comparable program and they 6 7 strengthened it significantly. I think this is the only utility I know of -- now that doesn't mean that there aren't 8 others -- it's the only utility I know of that makes of f-site 9 use an issue for termination of an individual. 10 - 11 CHAIRMAN PALLADINO: Now, this strengthening was 12 done after Leddig came on board? 13 MR. MARTIN: I believe, sir, it was - the I strengthening of that program was contained -- although I have 14 15 not reviewed it for content -- was contained in the elements of the proposal of one of these items that Mr. Cavenaugh 16 identified to Mr. Leddig for, yoe know, continuation. 17 38 COMMISSIONER ZECH: But it was strengthened after 19 Mr. Ieddick came; is that 2 ighc? i 20 Mk. MARTIN: It went. It did in fact happen. 21 COMMISSIONER ZECH: It took place. 22 MR. MARTIN: Certainly, Mr. LedSick did not stop it 23 from happening. I don't know whether or not it had a momentum of its own and it was in the Noverber time frame 24 Actfederal Reporters, tric. 25 that it came into being.

y-- .~ 36 .M!. CHAIRMAN PALLhDINO:. Is the whole issue coming down 1 ,C to whether people were briefed or not briefed; is that the -- 2 3 , MR. HAYES: That's about it, Mr. Chairman.. COMMISSIONER ASSELSTINE: No,Hno -- 4 i 5 MR. HAYES: Were they recognized. Were they. We have witnesses -- 6 ' recognized I think would be better. CHAIRMAN PALLADINO: No, tell me. 7 We have witnesses that tell us that they 8 MR. HAYES: briefed Mike Leddig on.the narcotics investigation in 1983. 9 10 CHAIRMAN PALLADINO: Yes. Mike DQrIds says, "N3." We have "a" 11' .MR. HAYES: 12 witness that says he briefed Jim Kane -- COMMISSIONER ASSELSTINE: Several times. 13 -- several times in 1983, during the 14 MR. RAYES: investigation. That's Bill cavenaugh, and it's Bill and-Kane 15 We head-to-head on that one, or one-on-one, if you will. 16 have no supporting information or evidence either way. 17 18 Now, let me -- 19 CHAIRMAN PALLADINO: But doesn 't it come down to is that the issue? And 20 ' whether they were briefed or not; then I want to ask, what's the significance of it? 21 Well, this whole thing, when we started 22 MR. HAYES: if you remember, I asked my staff to look at the managerial 23 impact or lack of impact on stopping that investigation. In 24 Ac r.d.rci n.p.n.n, Inc. pursuing that -- and we found no fault in stopping that 1 25

..s ? 37 1 investigation.. The conflicting testimony arose, so the whole 2 essence of the investigation shifted from, what role did- .3 management play, to the integrity of particular high-level L 4 executives of that utility.. 5 CHAIRMAN PALLADINO: With regard to remembering 6 whether or not they were briefed. 7 MR. HAYES: Or acknowledging it, that is correct. 8 That's correct. .9 COMMISSIONER BERNTHAL: I think, Joe, in a word the 10 issue 'comes down to perjury on the part of at least one.and 11 maybe two people. Isn't that right? 12 COMMISSIONER ASSELSTINE: That's right. 13 MR. HAYES: Yes. 14 CHAIRMAN PALLADINO: But I was trying to get where 15 was the -- 16 COMMISSIONER BERNTHAL: I'm not r?aking a judgment, 17 I'm just saying that's the question. That's the reason, 18 that it's being referred to Justice. 19 MR. HAYES: That's right. 20 _.. CHAIRMAN PALLADINO: I wasn't even thinking of 21 Justice. 22 MR. HAYES: Potential. 23 CHAIRMAN PALLADINO: I was thinking of our trying to 24 cope if Justice says it's a criminal act. w.d.r.: n.pw rs. i c. 25 COMMISSIONER ASSELSTINE: The same issue. 1

J 38 CHAIRMAN PALLADINO: Well, I'm thinking even if they 1 2 say it isn't we still have a problem. COMMISSIONER ASSELSTINE: That's right. You still 3 4 have th same issue to face. 5 MR. HAYES: That's right. But it comes back -- CHAIRMAN PALLADINO: I was leaving whether it's 6 7 criminal or not up to Justice. If it 's criminal, then ee 've 8 got a dif ferent story. If it isn't criminal, I still would like to get a better handle on the situation. 9 10 MR. BAYES: My recommendation is to the staff and to the Commission that we not do anything until we have some ~ 11 indication from the Department as to what their opinion is 12 13 of this particular matter. CHAIRMAN PALLADINO: Since motivation is a factor 14 here, and there seems to be a difference between Mr. Herr and 15 16 Mr. Driscoll on motivation, could we hear what that difference 17 is? Well, basically as you heard Mr. Driscoll 18 MR. HERR: indicate, he felt that Mr. Kane and Mr. Leddick both had a 19 I'm not 20 motive putting off on someone else togetherness. 21 suggesting any more than that. Mine was a little bit different. I feel that Mr. l 22 I If he allowed the investigation to go 23 Leddick had a motive. on, of course, he would lose his supervisors and his operators. 24 Acchderal Reponers, Inc. So, he was brought in to clean the thing up he wouldn't have 25

n L 39 ranybody lef t if he continued the investigation - ' there wast a I 1 b 2 risk there. 'And I think-he probably'did not. encourage the renewal of the investigation and his motive was more like 'self-i. 3 4 protection. N,. COMMISSIONER ASSF.LSTINE: But that's a differe,nt 5 e 6 ques tion. That's a question of not only the business,about. did they lie to us, but did Leddick consciously and willfully 7 I'm not about to start this investigation;over,_ 8 say, " Gee, again because it.could interfere with my ability to get the 9 10 plant running." 11 MR. HERR: And things were going along fine.unti}. ~ .;.;;n ,3 12 we --- COMMISSIONER ECBERTS: But didn't Ben just say that -13 14,.you had concluded that it was acceptable to end the

t;.,;

15 . investigation? Didn't you say that_two minutes ag,o? 2 3,. ; g. We can find no violations, restric.tions, 16 MR. HAYES: or anything that would preclude that utility from suspending 17 its investigation -- unless someone is aware of it.,. _.,3..,, 18 19 COMMISSIONER ASSELSTINE: Let me go back to Dick Herr How about on the question of whether Leddick apd 20 though. Kane in essence lied to you and to Don during the interviews? 21 22 Do you disagree with Don -- 23 MR. HERR: I agree with Don half and half. I. agree with Don that Mr. Leddick, without any question in my mind, 24 Ace-Federal Reporters. Inc. 25 lied to us. l

s '40 1 COMMISSIONER'ASSELSTINE: Okay. 2 MR. HERR: And he had a~ motive to do it. ..4 3 COMMISSIONER ASSELSTINE: All right. 4 MR. HERR: Now, Mr. ' Kane I'm not' one-hundred. percent 5 sure'because the evidence is one-on-one. Other things L 6 bothered me.like why didn't Mr. Nelson who was in charge of; ^ 7 all the investigators there, the Senior Vice President, ever 8 brief'his boss?. That.really bothers me'. 9 And lacking that, I won't go that extra step 10 saying that. Kane willfully and intentionally h'ad a motive to Il lie to;us. I think he forgot. I think;that's what happened. 12 COMMISSIONER ASSELSTINE:. Okay. 13 MR. HERR: And I think when he remembered -- if he 14 , remembered or not, I don't know. 15 COMMISSIONER ASSELSTINE: But Leddick, you are 1. convinced a'hundred percent. 16 17 MR. HERR: I am totally convinced, yes'.- There is '18 no question in my mind about him. 19 COMMISSIONER ASSELSTINE: Okay. 1 20 _,MR. HERR: But we just differ -- very small. 21 MR. HAYES: Now, you gentlemen are raising some 22 significant points. I don't want you to say this is a cop-out, 23 but we didn't do a criminal case and you are raising questions that are addressing more the criminal standard here. If we 2d ~' ctFederal Reporters, Inc. 25 run into a criminal case -- .c

i ~ 3.. [., b 41 i CHAIRMAN PALLADINO: I wasn't even. thinking of. P 2 ' criminal. .3 MR. HAYES: There are a lot more things that' we could L 4 have ~ and wotad have done.- We: stopped at1 the point where we. 5 felt we had met our regulatory' responsibilities to. properly. 6 ' advise the ~ staf f and this Commission as to what our views 'were ~ y 7 and we could substantiate those views. 8 COMMISSIONER ZECH: Ben, let me ask.you a question 9.because perhaps -- I think you have done certainly what you 10 think is right. Do you refer things individual, or cases 11 like this, to the Department of Justice without the Commission 12 even knowing about it? 13 MR. HAYES: Yes, we do. I advice you. 14 COMMISSIONER ASSELSTINE: YoO inform us. I 15 MR. EAYES: We do inform you. I send you a copy' 16 of my transmittal memorandum to the Department of Justice 17 routinely. 18 COMMISSIONER ASSELSTINE: But Ben has the authority 19 to make referrals. 20 .-COMMISSIONER ZECH: You refer directly to the 21 Department of Justice without us knowing about it. 22 COMMISSIONER ASELSTINE: He informs us, but he makes 23 the decision. It is a ministerial decision of whether the 24 standard is met. Aca-Federal Reporters, inr.. That's done 20 some times in the last 25 MR. HAYES:

42 I two years. In fact, I think this about our 26th matter. .o COMMISSIONER ZECH: Are you informing us today? 2 3 Are we going to get a copy of your -- 4 MR. RAYES: You.will get a copy of my transmittal Eut of course, we are informing you also. 5 letter. ~ HAIRMAN PALLADINO: The transmittal letter hasn'E~~ C 6 7 gone yet. 8 MR. HAYES: No, sir. It's being drafted right now and we are putting our reports together to hand-deliver to 9 the Department and sit down with them today. 10 ~ 11 COMMISSIONER ROBERTS: Do we get a copy of the 12 report, or just the transmittal? l 13 MR. EAYES: You may have a copy of anything. COMMISSIONER ASSELSTINE: I 'd like the report, too. 14 COMMISSIONER ROBERTS: What's the routine? 15 Routine, we would give you a copy of 16 MR. HAYES: the transmitted memorandum, unle'ss you gentlemen ask for all 17 18 the exhibits and report, and what have you. COMMISSIONER ROBERTS: It has ten pages? 19 20 MR. EAYES: The report -- well, without the exhibits. l It is a Nery short report. Anticipating you might want to 21 read it, we made copies for you and brought them with us. 22 23 CHAIRMAN PALLADINO : I think we would want to 24 read this. AcC-Federal Reporters, Inc. 25 MR. HAYES: It's 15 pages.

A h . 43 .i COMMISSIONER ASSELSTINE: I'd like the report and-t -2 the' exhibits. I also think you ought to bring to Justice 's 3 attention' that you. had'. a ' meeting with. the. Commission and ask- 't 4 'them whether they.want the transcript'of this meeting because 5 .I thinkfthere.is some elaboration.in'.this' meeting on the 6 views of your. investigators on what they.found. 7 MR. HAYES: Well, the investigatorsare going.to be 8 present'today.. They are going' with the report and Mr.. Fortuna 9 .and sit' down with them so that they can be fully heard and 10 answer any questions that the Department may raise today or. 11 tomorrow.. They *will stay' in town hopefully until a decision l 12 is made. L 13 CHAIRMAN PALLADINO: Any other questions or comments? 14 MR. DRISCOLL: I would like. to make one additional 15 point. l 16 COMMISSIONER ASSELSTINE: Sure. 17 .MR. DRISCOLL: We have had some disagreement here 18 with ' respect to our personal conclusions relative to this 19 matter, and as I said in the very beginning, I base my 20 -conclusions on our standard for referral, and that is a 21 reasonable suspicion or a reasonable belief. 22 And I am not trying to say that either one of these 23 men could be proven guilty based on the information that is 24 in this report. L ue.r. ant n.p.nm sac. 25 COMMISSIONER ASSELSTINE: But'.that's not the standard -__....a._. ---_m-_m_ -._m-_____

44 . j -for a referral. MR. HAYES: That's correct, 2 3 MR. DRISCOLL: That is our standard for referral s and'that's what I-base my conclusions on. And the' Justice 4 ' Department will have to ma.ke 'their. determinations and a judge 5 or jury will' have. tofdecide any thing else. 6 CHAIRMAN PALLADINO: Well, ' leaving the criminal 7 pects aside, a question I am struggling with, here our 8 s investigators feel that there was -- I'll use your words -- 9 10 lying on the part of at least Leddick. Now, h'ow do we come out and disc'6rn whether or not ~ . 11 for the purposes of our operation or purpose of our decision 12 whether this plant should operate? How-does this thing get' 13 How do we be sure we are fair to.the public on 14 resolved? . health and safety and f air also to the extent that I think we 15 . 16.ought'to be with the individuals?- (Simultaneous conversation) 17 COMMISSIONER ROBERTS: That's not Ben's question to 18 19 answer. 20 CHAIRMAN PALLADINO: No, I wasn 't asking Ben. 21 That's the reason we are here. I was going to turn to Marty and ask him where do we go from here if that's the situation, 22 23 aside from what DOJ is going to do. 24 MR. MALSCH: Well, I guess you've got to decide, one. ' ActFed;tol Reporter >4 lac. whether you think Ben and his people are correct, that there 25

'i' N m '45-1 1-9 }j ' 1 is reasonable. ground to' believe that there was: a deliberate -falsehood and then, if you' agree with that, the question then 2 is,-are you prepared to go' forward to issue'an operating 3 'l' ice se to a company ' which-has employees, or high-level- ~4 L

employees, with respect to whom you have reasonable grounds 5

16 to beliehe they deliberately lied, p 7 COMMISSIONER ASSELSTINE: Or even to allow the plant 8 _to'go critical. ,4 i 9 MR. MALSCH: Well, yes, that's a separate question,- whether you want to take enforcement action to prevent them 1 10 ~ 11 from using their~ low power license. u 12 . ~Now, -let me say it would be 'important to get the l a Department of Justice's views fast because not only/ o they ~ d 13 offer a second opinion, but it would be dif ficult to actuallyj l Id 'take enf orcement ' action to suspend the low power license if. 15 .you can't advise the licensee as to what the facts and bases 16 17 are for your suspension. And that might in turn require l disclosing due reports and that might also prejudice any 18 on-going Department of Justice investigations. 19 Insofar as taking action on the full power license 20 .~ concerned, that is really a policy matter for the Commission, 21 j l I think the Commission has fairly broad discretion to suspend 22 consideration of licensing matters while it pursues separate 23 investigations or while the Department of Justiice pursues 24 4..r.d.r.: n.ponm, i.e. I think you've got a lot of discretic. 25 separate investigations. j

^ m 46 I to take into account the facts as you see them and decide to 2 either go forward or suspend consideration. 3 At some point way down the line you've got to make + 4 a decision up or down on the license. Now, at that point in 5 time hearing rights will take place and there.will be rights 6 to hearing on the part of the licensee and anybody else. ~ 7' But at this point it's discretionary. 8 CHAIRMAN PALLADINO: That's where I was trying to 9 go is facing up whether or not we at least go to full power, 10 or go above five percent. 11 Now, w'e could presumably make a $1 cense condition ~ 12 that that only be allowed if person X is segregated, so to 13 speak, until something is done. 14 MR. MALSCH: You could. That's in effect suspending 15 a little piece of the action. 16 CHAIRMAN PALLADINO: Yes. And then, I guess, that 17 individual could come back and request a hearing. 18 MR MALSCH: He could, 19 CHAIRMAN PALLADINO: That's where I was trying to 20' go. Cou.ld.you lead me through what would happen? 21 MR. MALSCH: Okay. If we were to issue -- well, if 22 we were to issue a full power license conditioned upon these 23 people not being involved in management or plant operation, We could 24 they would have a right to ask for a hearing on that. wr.d rol Reporters, tac. 25 in effect postpone any direct consideration of that pending

=r c----- i e; .n

47

~ 1 . completion of~our own investigation. ~ 1 2 At that point we could make: a final decision on 3 JtheLsuspension, either make it permanent or remove it. At that-poIntin. time, they would-have rights to hearing._ 4 5 CHAIRMAN PALLADINO : ~ Also, we would:have to judge 6 ,whether or not whatever person they bring in to subst,itute 7 for that individual is competent and -- 8 MR. MALSCH: That's right. There is a safety,. l 9 implication of changes in personnel and their absene,e or 3; l 10 presence. 4- - ' II COMMISSIONER BERNTRAL: Oh, I suppose that'.s..an.. 12 issue 'that we-could get to today if we wished. But ultima,tely 13 I would like to hear from -- whether today or whether after-

)

Id we hear from Justice -- we need to hear from Harold and, 15 Darrell and whoever is involved here on whether that plant.can f a 16 be run in the absence of at least one, possibly those 3 wo n t I7 individuals. 18 MR. DENTON: I think you have hit the two issues I9 that I wanted to put on the table today and suggest.a _cours,e of action a3_d. get your concurrence on it. 20 21 I think one is, do we revoke, suspend, or modify i 22 the license today before we have any advice back from DOJ..On - 23 that one I would propose as Ben has, that we not act until we 24 hear from Justice. It seems we ought to get that input. - Ace Federal Reportert Inc. 25 The plant does have a valid five-percent license now ~ ~ - - - -.--__-~_.____.____:,__,

p. O' 48 i [ 1 and if we do not ' interfere 'they could be loading : fuel and e 2 going critical over the weekend. 'I' guess the f uelt is essentially. 3 loaded. F 4 The next question is, should we make a full power. 5 decision before Justice acts. -6 ' CHAIRMAN PALLADINO: Before what? y 7 MR. DENTON: Before Justice. acts 'one way or another. 8 'I think there we need another Commission meeting af ter Ben ~ 9 has gotten-the views of Justice to decide-how to proceed, on-10 whether they are interesting in proceeding with one individual - 11 or two, or more based on what they have heErd. It makes'a l 12 difference in how we would react. 13 So, I think the immediate decision today is, d'd V'e 14 let the existence license remain in effect.. And my proposal, 15 as I think Ben has said also, is to do that and let's re-meeYU 16 after Ben has had an opportunity to meet with Justice. ~ T' hat 17 might occur before criticality, but we should recognize that 18 maybe it would occur next week sometime. 19 And I would recommend not having a meeting' on ful,- l 20 power unt,il. we 've gotten some view from Justice back because 21 it's very difficult to decide how to proceed in this case 22 if it has criminal overtones. If it turns out to have civil 23 overtones only, then we can obviously proceed on a different ' 1 24 path. 4c.4.daoi it.por,.ri, sac. 25 So, I think the issue today is, do we act on the _____________._..__..___._m_____._.._.___.____m_

4 49' ] ^1 < license ^and:I1would propose not. But I'did want to get the 6, 8 2 Commission's concurrence'in that because of the fact that.it is =3 being referred today. ,4 ' _a You havelmy. concurrence. .I. COMMISSIONER BERNTHAL: 5 think that's the right way.to go. 6 COMMISSIONER ZECH:7 I agree. 7 CHAIRMAN PALLADINO: So do I.. 8 COMMISSIONER ASSELSTINE: My view is~, I voted against 9 the low power license because of just this kind of concern, 10 that with this' investigation outstanding we. find ourselves - 11 in.this kihd'of a situation. I think it 'sun fortunate. 12 I would not let this plant go critical. I would not-13 to revoke or suspend the license right now, but I'would not let 14,this plant go critical with this kind of a cloud over the l 15 senior management of the company. 16 I think if Justice can get back to us in' a couple 1 17 of days we ought to have another meeting before the plant is L 18 scheduled to go critical. L 19 COMMISSIONER BERNTEAL: I think that's what we've 1> 20 agreed to, though; isn't it? 21 COMMISSIONER ASSELSTINE: That's not what Harold said. 22 CHAIRMAN PALLADINO: No, that's not -- 23 COMMISSIONER BERNTHAL: Harold, you are saying that - 24 we should let the plant go critical and meet on the question of Acc.r.d.r n.por,.ri, inc. 25 full power, is that --

50 I COMMISSIONER ASSELSTINE: At some point down the-V 2 roa'd. 3 MR..DENTON: I would say meet as soon as Ben can get d ^.an opinion back from Justice on how they see the case. Otherwise, I.think we have to act to prevent them from going -5 critical because it's not certain, I guess, that you would hear 6 7 by Friday,.it might be next week. .So, unless we put a string on the license, they can 8 9 go critical.-- 10 CHAIRMAN PALLADINO: You did say in a couple of II days, or.in two days. .12 MR. HAYES: What I am anticipating is, if we start - 4:30 and we stay with it, I'm -- my optimisti a 13 this afternoon at ' view is we may have an answer tomorrow; hopefully by Th'ursday 'I4 at the latest if they have to run their decision up their 15 management chain.for concurrence and what have you. 16 I7 MR. DENTON: My reason for the view I expressed was, this is a low power license, very little is going on. 18 We think we have dealt with them on a lot of the safety matters I' and have_. confidence that they can proceed in these low power 20 tests without affecting public health and safety, regardless 22 of how Justice comes out. But that is an important judgment call and that's 23 why I wanted to get it on the table as to which way we should 93 24 I . w%,,,g g But if we don't get a decision 25 CHAIRMAN PALLADINO:

/ ( O-l 51' .), from DOJJ by: Friday', Lfor: example,.according to youre proposal. c.. 2 we'would go' ahead and allow them'to go critical.on Saturday. 3 MR. DENTON: Yes, sir; +. ~. 4 -COMMISSIONER BERNTRAL: .I: guess.my_inclinationiis 5 that IE think. you mayl have good arguments, Harold.

ButLfrom, 6

what I ~ have = heard in.the: last day or two, I don't believe.in :.: 7 crossing bridges until you come to them. I think there is a ' 8 .very good chance we-will hear from the Justice Department by. 9 Thursday: or Friday, and.I would propose that.we then consider. y 10 the question of.whether they should be permitted to proceed - 11 over the weekend to go to criticality.- 12 COMMISSIONER.ASSELSTINE: I agree with Fred.and.1:: [13 think what.we.ought to do, Ben, is tell Justice that the:..: i f 14, Commission would like to meet by the end of this week.-. 3,1; -15 COMMISSIONER BERNTHAL: That's right.

. 3;r 16 COMMISSIONER ASSELSTINE: - -- before the plant goes 17

' critical and would like if at all possible to hear whAte_ 18 Justice's conclusion is if they can provide it by that ' time. 19 And I think we ought to tenatively set aside a time on Friday..y . :s: 20 to meet., 21 CHAIRMAN PALLADINO: Well, I won't be here Friday,3 22 so it will be a four-person decision. 23 MR. HAYES: My instructions to my staff when we meet 24 with the Department this afternoon is that we want an answer Actfed;rol Reporters, Inc. 25 no later than Thursday. I put Thursday because if the

s :e f, 3 52 -1 Commission decides to do something,. we will~ need one day to 2 issue the appropriate orders or take the appropriate-action,. . hatever you gentlemen' decide to do. 3 w 4 So, we are pushing for Thursday-morning' at the very 5.-latest.. ~~ ' ~ COMMISSIONER BERNTHAL: What about Thursday 6 -7 afternoon? 8 . COMMISSIONER ASSELSTINE: Afternoon, set aside some 9 time Thursday afternoon. 10 CHAIR %N PALLADINO: Does anybody have a schedule- ' ll here? I didn' t bring mine. 12 COMMISSIONER BERNTHAL: Well, we've got a management 13 meeting scheduled at 3:30, Affirmation and Agenda Planning 14 .at 2:15. 15 CHAIRMAN PALLADINO: Which hearing.is this? 10 COMMISSIONER ASSELSTINE: Is this the consolidation? 17 CHAIRMAN PALLADINO: Udall? 18 COMMISSIONER BERNTHAL': Yes, Udall. '19 COMMISSIONER ASSELSTINE: Udall in the morning. , MR. DENTON: I would certainly like to meet as soon 20 21 as we hear from Justice. I guess I would be pessimistic as 22 you were, Commissioner, that we might not hear this week. So, 23 that leaves the question still open that if Thursday rolls l l L and we haven't heard anything back from Justice, what do we do? 24 ace-Federal Reporters, lac. 25 COMMISSIONER ASSELSTINE: Okay.

.~ 4 53 3 z) COMMISSIONERLBERNTRAL: Well,.then we wi41 have to 2 ' decide whether.or not to let:them go! critical, I guess.. ~3 COMMISSIONER ROBERTS: You are going out of town; ,a 4

Friday morning?

5 CHAIRMAN PALLADINO: No. But I think we ought to 6 anticipate where we are going to go.- I f. Justice. says, "Well, 17 there is a criminal problem here" and they want to go 8 investigate, I think.then we would have a direction to go. 9 But if they say they don't, we still have to face 10 what the direction ought to be, and I think' we ought to be 11 thinking about it in the interim so that we don't suddenly 12 start to think about the issue when we find out one way or the. 13 o ther. 14 COMMISSIONER BERNTHAL: Harold, how critical is 15 Mr. Leddick'.to the-operation? Is he the sum and substance of 16 the management or if it were another plant, what would you say? 17 MR. DENTON: I think our view as we expressed last 18 . time was that the loss of Mr. Leddick could be withstood by - 19 the plant. 20 CHAIRMAN PALLADINO: Could be what? 21 MR. DENTON: That the plant could stand the loss of 22 Mr. Leddick. If it's both Mr. Leddick an-I Mr. Kane, the two l 1 23 top senior officials, then we might have a different view 24 and that's why I would be interested in how Justice perceived Aco Federal Reporters, lac. 25 the two cases. ] a-----.._._m_,_..m._, _.____.__,,..m_

y, l 1 l t 54 [ I COMMISSIONER BERNTHAL: Yes. 2 MR. DENTON: It's far more serious, I think, if l 3 ~ Justice takes both individuals than if they'take one or.more -- 1 .s 4 LI guess, Ben, you could answer the question.. When they take L 5 the case, do they take all individuals.or do they pick and l 6 choose? 7 MR. EAYES: Yes. Let.me again give you the conclusion 8 I reached after looking at the evidence. .9 If I were looking at just Mr. Kane's situation solely 10 by itself, I would not refer this matter to the Department' of ' ~ 11 Justice. I don't think we have sufficient evidence that 12 crosses that' threshold'-- even though we do have one on one 13 .to me' conflicting testimony absent evidence of willfulness 14 and intent and knowledge, and deception and what have you 15 doesn't constitute or doesn't reach the threshold, in my 16 . opinion. 17 But since we did, in my view, reach the threshold i 18 with Mr. Leddick and we have the whole thing in one report of l'5 pages with 15 exhibits, they are going to look at everything, 19 20 They are,. going to look at Mr. Barkhurst's role; they are .21 going to look at the Executive VP for Admin. You know, there 1 22 are four individuals in this particular investigation, the 23 four players. 24 You cannot help but look at everyone else 's role. Acs Fed:ral Reporters, Inc. 25 You must look at everyone else's role to properly assess the

w 55-a- 1 Trole of Mr. Leddick ~ and-Mr. Kane.. So; theylwillLlook at it g 2 all. 3 COMMISSIONER BERNTHAL: Ben, : do. you think they ares likely to-indicate which in'dividuals they intend to pursue, 4 5 so to speak? Or are:they just going to say,'"We are going-6 to pursue the case?" 7 In that case, we've got very little help. 8 MR. HAYES: That's right. I am going to try.to get. 9 them to say,.if they decide to pursue the matter, to single _... 10 out those individuals'that they feel warrant their 11 investigation. .12 COMMISSIONER BERNTHAL: Good. 13 MR. HAYES: Absolutely. You are right, absent that, 14 we are no better of f than what we are today. 15 COMMISSIONER BERNTHAL: Then we might as well decide 16 today. 17 COMMISSIONER ROBERTS: Not by name but by title, .18 with whom are you meeting at Justice? 19 MR. HAYES : I'm sorry. 20 ,_ COMMISSIONER ASSELSTINE: Who are you meeting at ) 21 Justice? i 22 COMMISSIONER ROBERTS: Not by name, but by title. l 23 MR. HAYES: We are meeting with the same Department of Justice official that is heading up the grand jury looking 24 Ace Fed. col Reporters, lac. 25 at this Commission. .i

y--' 'l 56 l I (Laugh ter). 1 --t 2 CHAIRMAN PALLADINO: I thought you weren 't going to ' H 3 give us the'name. 4 (Laughter) ' 5 COMMISSIONER ASSELSTINE: He didn't. 6 CHAIRMAN PALLADINO: -I understand. 7 COMMISSIONER ASSELSTINE: He gave him a function. 8 (Laughter) 9 CHAIRMAN PALLADINO: Okay,.any more questions or-10 comments? Il COMMISSIONER ASSELSTINE: You have my view on 12 criticality, Harold, in the event that we don't hear from 13 Justice and in the event. that the Commission doesn't meet. I 14 ' guess everybody has expressed their view. 15 CHAIRMAN PALLADINO: Let me understand, then, whether 16 or not everybody did vote on the same issue. 17 COMMISSIONER BERNTHAL: I think we maybe didn't. 18 CHAIRMAN PALLADINO: I don't think we all understood 19 the issue the same way. So, why don't you restate it, Harold, -l l 20 and then.-see if the answers come out the same. 2I MR. DENTON: I think the issue I stated, do we 22 revoke, suspend, or otherwise modify the license before we hear 23 back from DOJ. That was the first part. 24 COMMISSIONER ASSELSTINE: In the event that we don't Aes-Federal Reporters, Inc. 25 L. hear"from Justice by the end of the week. j,

h , = - 57 n CHAIRMAN PALLADINO: No. 1 2 COMMISSIONER BERNTHAL: No, that's not what he.said. b 3 MR. DENTON: I was just saying do nothing more, I 3 4 certainly not meet on full power. 5 COMMISSIONER ASSELSTINE: Okay. p 6

MR. DENTON

Then, do we let the ilow power' remain in 7 effect until we hear from Justice. That was the way I_would 8 phrase it until I have heard any other instructions. 9 COMMISSIONER ZECH: I agree with that. 10 CHAIRMAN PALLADINO: And I would agree with that. 11 I~think we would'be interfering if we did anything else. ~ I2 COMMISSIONER ASSELSTINE: And I disagree with that. 13 I have heard enough today to convince me that I would not allow Id the plant to go critical until the Commission can meet to 15 discuss the matter further, af ter hearing from the Department of -16 Justice. 17 COMMISSIONER ZECH: I would like to see the copies 18 of things you can give us, Ben, whatever you can, so we can 19 review it here. I would like to review it in the next day or 20 go, 21 Frankly, I have not made any determination myself as 22 to the guilt of not guilt of either of those two individuals. 23 I would like to study it and think about it. 24 CHAIRMAN PALLADINO: Can you get that to us this Actfed:rol Reporters, Inc. 25 af te rnoon?

r 5 58' p; ,m 4. j 1 MR. HAYES: Yes,. sir. b COMMISSIONER BERNTHAL: 'My vote isvery simple. I L2 p 3 ' believe. that we should plan to meet, if it's Thursday 4 afternoon.or Friday morning, or whatever. And I am hopefuli that we will have some decisions f rom.the Department of Justice 5 .6 at.that time. 7 COMMISSIONER ASSELSTINE: And"I agree with that as A 8 .well. .9 COMMISSIONER ZECH: I think that would be appropriate. . 10 COMMISSIONER.ASSELSTINE: Good. 11 CHAIRMAN PALLADINO: I am willirig to meet as late on Thursday as the Commission is willing to', but I can't do it 12 .13 on Friday morning or Friday any time. Well, Harold, do you want to work it out 14 MR. HAYES: 15 with SECY for Thursday af ternoon, then? 16 COMMISSIONER ASSELSTINE: Fine with me. 17 COMMISSIONER ZECH: Fine. 18 -CHAIRMAN PALLADINO: Okay. Ben, do you have any 19 more? 20 .. MR. HAYES : Well, I did. 21 COMMISSIONER ASSELSTINE: Yes, we've got some others 22 -too, right; base mats? The base mat, we had scheduled the base 23 MR. HAYES: mat issue that we briefly touched upon in Decenber, and then 24 Ace-Fed aol Reporters, lac. about nine other issues, nine other cases. We might be able to 25 .- _ ______=-

g,,.y I F 7;.. 59' , c p" I 1 : just ' capsulize those.particular investigations. But I think-E 2 -the base mat issue we should give you.an update.on that. Don? L; p l 3 MR.-DRISCOLL:- I will-restate the allegation so that-4 everybo y can' recall it'. That the LP&L licensing manager. ,5 provided-f alse information to NRC regarding the discovery of j ~ . cracking. in the Waterford base mat in a leftiF dated ' October. '-'~ '6 7 26, 1984 written in response to an; inquiry b'/ the NRC. >i 8 CHAIRMAN PALLADINO: Who falsified? l 9 MR'.-DRISCOLL: Licensing, LP&L licensing manager. 10 I said it'was the. allegation. 11 I talk'ed with the individual whomade the allegation -- the letter 12 and he provided documents to me which indicated i -l indicated, the LP&L letter indicated,-signed by the. licensing-13 14

manager, was in fact erroneous.

l 15 I talked with the licensing manager and he stated-E 16 he did not believe that the documents which identified' cracks i 1 I '17 - which were not discussed in the letter -- prhaps I better 18 back up a little bit. 19 Cracks were discovered in '77, I believe inside 20 the ring,. wall. Other cracks were discovered outside, in the 21 base mat outside the ring wall in 1983. 22 The question was, were any cracks discovered between 23 ?77 and '83, and the licensing manager said, no. An Ebasco engineer provided me documents indicating cracks had been 24 , Acca.da,. aw. inc. discovered outside the ring wall in 1977 and in another area of 25 ~ 1 C_Lm._____ .1

b p j 61 ife indicated that these were some isolated cracks i 1 =.. 2 uhich were: found away from the center' line out11n the 3 auxiliary building and another. in the fuel handling building,- 4 I belie e. And that he didn't consider those to be the 5 focus of the question NRC had asked him, and indicated he ~ 16 believed his answer was in face accurate and responsive' to' the 7 NRC question. That aside from the problems it had. created, l 8 he would probably still answer the question the same way 9 today. That was his statement. 10 I later received come additional documentation from '~ ~ 11 ELD, indicating *that other statements, otder false statements, .{ 12 may have been made by the utility to NRC relative to this 13 same -- 14 COMMISSIONER ASSELSTINE: I take it that's the 15 view of the ELD attorney, one of the ELD attorneys in the 16 case that we heard from at the last meeting; right? 17 MR. DRISCOLL: Yes', sir; that's correct. 18 ' COMMISSIONER ASSELSTINE: Okay.

..-~.

19 MR. DRISCOLL: I have not obtained the complete 20 documents. in which these -- there was a March 26, 1984 21 LP&L response to the NRC relative to cracking, and there were 22 two statements in there which said there was no cracking 23 between '77 and '83 And those were in response to some specific questions as to whether there were any. 24 Aa Federal Reporters, Inc. 25 So, I still have to obtain the document and find out

b ..n 62- .1 o 1 iwho the responding official was on.that,.I'm.not sure. I- .z 2 don't think it.wasLthe licensing manager. . ell, you know, we get into:

j COMMISSIONER BERNTHAL

W 4 an area here that we' talked about in a-public. meeting on 5

material false. statement, of intent to. deceive,.it seems'to me

~ ~ 6 and whethe( a special threshold should apply tv near-term. 7 'eperating plants that does not apply;to operating plant.s.. 8 You know, I'm not making any judgment -- let me 9 finish. 10 COMMISSIONER ASSELSTINE: Okay. 11 COMMISSIONER BERNTHAL: -- on these particular - n., 12 issues heree, But if we' start -- and I don ' t know whethe.r. 1 '13 you are holding a different standard or we are proposing to - 14 apply a different standard. If we start doing that,; we Are 15 going to be right back where we were with lots of people,e 16 ' coming in and dwmping allegations on the table at the last 17 minute. m 18 It just seems to me there ought to be a consistency 19 in the way we deal with that kind of thing, unlets you,;are 20 suggesting here that there was intent to deceive, that this was 21 a malicious incident. 22 MR. DRISCOLL: I'm not suggesting that. 23 COMMISSIONER BERNTHAL: I don't think you are '24 suggesting that. ' Ace Federal Repoders, Inc. 25 MR. DRISCOLL: I still haven't asked all the questions.

m. s- ..x 'l ' COMMISSIONER'ASSELSTINE:- I don't remember, Fred, any discussion that you would-apply a dif ferent standard for ~

2 whether. something was an intentional. f alsehood to us, depending 3

4 = upon the status of the plant. 4 5 COMMISSIONER BERNTHAL: No .6 COMMISSIONER ASSELSTINE: I mean the question is~ -- 7 COMMISSIONER BERNTHAL: I thought that was implicit 8 of the history of our treatment of allegations as you approach 9 low power or full power operation. that all straightened out,-I hope we 10 Maybe-we got L v 11 have. l 12 COMMISSIONER ASSELSTINE: I gather you've got an on-going investigation on the base mat issue that you are not 13 14 done with. 15 MR. DRISCOLL: That's correct, I'm nearing 16 completion. 17 COMMISSIONER ASSELSTINE: And I take it so f ar you ~ don't see sufficient evidence to support a reasonable belief '18 that one or more individuals within the company intentionally 19 Is that a fair withheld _information on the base mat cracking. 20 characterization, or is it that you don't know yet? 21 I'm not clear what a material false 22 MR. DRISCOLL: 23 statement is. 24 (Laughter) Ac r.a oi n.pon anc. I'm familiar with the VEPCo decision 25 MR. DRISCOLL:

~ .,nm. 64 1 - and some other documents that talk about it, but funtil I have 2 - a clear definition I would-beg of f on any sort of conclusion - 3 aat all.. COMMISSIONER BERNTRAL: Well,: 2et's not use that 'A l 1 Let's ask whether there, in your judgment, there is 3 term. L '6 any evidence -- and I'd like that as a. summary statement in f act for all of those things, intent to deceive or malicious-7 ness'_on the part of the individuals involved. 8 1 COMMISSIONER ASSELSTINE: In fact, break it down l 9 l-10 into two questions. One, was the response incorrect -- E 11 COMMISSIONER BERNTRAL: Yes. I' COMMISSIONER ASSELSTINE: -- and two, was the '12 l incorrect response done intentionally by anyone. Do you have 13 (enough information to reach a judgment on either of those 1 14 two questions at this point, or is' it an open question? '15 16 MR. DRISCOLL: Well, there are a couple of 17 ancillary issues associated with that. 18 COMMISSIONER ASSELSTINE: All right. 1 19 MR. DRISCOLL: But I don't believe with respect to this particular one, particular alleged material false 20 statement by the licensing manager, I don't believe he made 21 that statement intentionally at the time he made it. 22 You mean with intent to deceive. 23 CHAIRMAN PALLADINO: 24 MR. DRISCOLL: That's correct. Ace rwerol agems h 25 COMMISSIONER ASSELSTINE: You think he has provided a l t u___._________

65 I credible explanation for why he didn't include those other 2 cracks? 3 MR. DRISCOLL: Well, he told me that he didn 't know 4 d about those other cracks. 5 COMMISSIONER ASSELSTINE: Okay. 6 MR. DRISCOLL: It's my personal opinion since the 7 individual who told me about them was the so-called site expert on the base mat cracking issue, I would personally 8 , say the the licensing manager may have been somewhat negligent 9 10 in not asking that gentlemantbefore he made a response. II COMMISSIONER ASSELSTINE: Yes. I2 MR. DRISCOLL: And secondly, it came to my attention that shortly after the licensing manager provided 13 his response to the NRC, he was made aware of those cracks by Id 15 the same individual and did not correct his statement. 16 COMMISSIONER ASSELSTINE: All right. 17 h MR. DRISCOLL: And a considerable amount of time -- be fore we became passed prior to -- or subsequent to that 18 l9 involved in it. So, he had more than adequate time to -- 20 - COMMISSIONER ASSELSTINE: You are right, there are 21 some interesting ancillary issues. One, whether there was careless disregard in providing the information and, second, 22 23 whether there was a false statement by omission by not correcting the statement once the guy knew it was false. 24 l Aca-Fedorol Reporters, Inc. 25 MR. DRISCOLL: That's correct, l

~ 66. ) 1 COMMISSIONER ASSELSTINE: Okay. X 2 COMMISSIONER BERNTHAL: Ben, you were going to. f r 3 provide a summary,.I think, an overview of these? I don't 4 know whether -- 5 CHAIRMAN PALIADINO: I thought he was going to - l 6 take this one in a little bit of depth and the other ones -- 7 MR. HAYES: That's right. Unless you want to -- 8 there is or,e other issue that is hanging that might impact j i '9 on your_ decision. That is, if you remember the Commission j 10 directed NRR to review the control room operators at TMI-2 and determine whether or not they were goi$g to request an j 11 12 investigation by OI. 13 They in fact requested seven investigations, Id 'seven operators. t e 15 COMMT.SSIONER ASSELSTINE: Ben, before you get to let me just ask one close-out question on the base l 16 that one, l II mat issue. l Have you looked yet at the other -- in detail -- 18 at the other information that the ELD attorney provided you? i II f L N _ MR. DRISCOLL: Yes, sir. I II COMMISSIONER ASSELSTINE: Sufficient to reach a ) conclusion on those, or is that still under investigation? 22 23 MR. DRISCOLL: I don't have the complete document. I was provided with excerpts from a variety of documents with 24 Acc4ederal Reporters, Inc. highlighted portions, and after reviewing those and talking j 25 i

67 I with the attorney who provided them to me, I think we came to 2 the conclusion that there were on" two of those that could 3 really be considered to be, or could be material false 4 statements. The rest were general enough in nature that I 5 don't think you want to try to characterize them as a material 6 false statement. 7 But as I said, I don't know the specific documents 8 that they came from or who they were addressed to. I just have 9 excerpts from the documents such as, one of the responses made 10 by LP&L. This, I think, was a March 26, 1984 response. It 11 was an answer to an NRC question, "Were any cracks discovered 12 in 1977 outside the ring wall. Provide documentation if none." 13 Essentially they talked about,-- NRC '-- were None 14 ' generated relative to cracking inside the ring wall. 15 were -- no evidence of cracking outside the ring wall. One 16 of the documents provided to me by the former Ebasco engineer 17 indicates there was at least one crack of approximately ten feet found in the auxiliary building area outside the ring wall 18 19 in 1977. 20 , So, that would in ef fect make that a f alse statement. 21 COMMISSIONER ASSELSTINE: Yes. Okay. And when do you expect to complete your investigation on this whole -- the 22 23 base ntat set of issues? 24 MR. DRISCOLL: As quickly as I can. Ac> Federal Reporters, Inc. 25 (Laughter)

g. 3 68 r i,..: -1 MR. DRISCOLL: Hopefully in'theinext couple of -- 2 COMMISSIONER ASSELSTINE: A good answer. 3 MR. DRISCOLL:. -- weeks. I don't. foresee this- _4 4 being too time consuming, 5 oMR. HAYES: I think we have 'an estimated completion-o 6 date.of April 15, 1985 on that. Remember, we agreed to this 7 ' April, some place along there. 8 COMMISSIONER ASSELSTINE: Okay. 9 MR. HAYES: If you want me to summarize.the operator 10 ' situation, I will do so. ~ 11 CHAIRMAN PALLADINO: I think that would be very-12 important. 13 MR. HAYES: I think so since this doesn't look good.. 14 (Laughter) 15 CHAIRMAN PALLADINO: I still'think it's important. 16 MR. HAYES: Mr. Denton requested us to look at 17 seven particular individuals.- Four of the seven are.still at' 18 .TMI. Two'of the seven are at Waterford-3. One of the seven 19 is~at SONGS-2 and 3. 20 .,_ CHAIRMAN PALLADINO: Could you repeat those 21 statistics? Seven individuals -- 22 MR.-HAYES: Seven individuals, four are still at 23 TMI, at least at the time of the referral. Two are at '24 Waterford-3. One is licensed at both SONGS-2 and 3. sc.-r.d w ra. pore.c,:=. If you gentlemen will remember the discussion with 25 k _ _ z _ __-

~ 69 l p 1 Mr. Bill Russell from NRR and MR. Keith Christopher ~from my Region I, where both of those individuals interviewed Mr. 2 3 Bewer angl Mr. Dennis Olson. I think if you looked at their testimony on that d day, one could conclude from their testimony that both 5 individuals feel as though the facts developed in their 6 inquiry indicates that those two gentlemen. lied to both Mr. 7 8 Russell and to Mr. Keith Christopher. 9 I have those particular situations here or 10 instances if you are interested at it. But the bottom line II as far as I am concerned is, I asked my OI staff in Region I to prepare an interim report on these two individuals. I2 The evidence 13 That report is currently on my desk. in my opinion indicates that those gentlemen lied to Mr. 14 15 Russell and to Mr. Keith Christopher. We do have four or five other operators to interview 16 At the conclusion of the entire 17 and to tie down here. investigation, absent any additional information of mitigating 18 circumstances, esculpatory material, it is my intention to 19 We refer these two gentlemen to the Department of Justice. 20 have adequate evidence, both physical and oral testimony, that 21 in my opinion or my conclusion is that they lied to members 22 23 of this Commission. 24 COMMISSIONER ASSELSTINE: I agree with that Ac:-Federal Reporters. Inc. conclusion a hundred percent, by the way, after looking at the 25

~ 70 other material; that you provided the Commission. 1 2 MR. HAYES: But I'm not referring it until we are 3 through. g But it may impact on your decision and Harold's 4 decision concerning licensing. In the interest of time, let me give you my summary 5 of the existing matters still on the table with respect to OI. 6 7 COMMISSIONER ASSELSTINE: Do you know when that referral, by the way, on those two individuals ' would go to ~ 8 9 Justice 2 10 MR. HAYES: We still have, if I'm not mistaken', Er other individuals out of the original seven 11 Commissioner, To be very candid, we have had to hold Keith 12 to investigate. Christopher up because of the Shoreham matter that we have 13 just gotten involved in, and we just haven't addressed the 14 15 other four. We immediately moved into the Waterford situation 16 But we because of its potential impact on your decision. 17 18 have not 19 COMMISSIONER ASSELSTINE: Which is the one other 20 individual.that you have investigated? 21 MR. HAYES: The gentleman at SONGS-2 and 3. I have 22 forgotten his name, Commissioner. 23 COMMISSIONER ASSELSTINE: Okay. Does he fall in the same category as the two Waterford individuals in terms of 24 acer.d.r l R.po,*rs, sac. 25 your conclusion? -__________________j

71 ~ ^ I MR. HAYES: I'm not sure. I have not focused on 2 the evidence on that particular indivisual. 3 COMMISSIONER ASSELSTINE: Okay. 4 MR. HAYES: I'm not sure. l 5 MR. THOMPSON: Excuse me, Ben. This is Hugh 6 Thompson, NRC staff. 7 I believe theeindividual at SONGS was in fact the 8 first individual, Mr. Cooper, that we did talk to, and that report has been prepared and completed and he does not fall 9 10 into the same category as the other ones. Il So, I -don 't know who the fourth individual, the ~ 12 other individual was. But we have completed all our 13 investigations and interviews with Cooper at SONGS. I4 MR. HAYES: We have done three with four remaining. 15 COMMISSIONER ASSELSTINE: Okay. And he does not I0 f all in the same category. 17' MR. THOMPSON: That's correct, he does not. 18 MR. HAYES: No wonder I don't know about it. 19 COMMISSION:IR ASSELSTINE: Okay. 20 COMMISSIONER BERNTHAL: Would you care to elaborate? 21 Just a little, maybe. 22 MR. THOMPSON : Well, he was very forthright, very admitted his mistakes at the time and there was no 23

honest, 24 lying to the NRC individuals.

Ace-Federal Reporters, it<. 25 COMMISSIONER BERNTHAL: I see, all right. I wasn't j

.I. 72 n. S I ~ sure. 2 COMMISSIONER ASSELSTINE: Did he say he falsified 3 leak rate tests? 4 .MR. THOMPSON: I don't remember precisely the words, 5 -I wasn't' involved, didn't go back over the transcript. In 6 essence he indicated that' he was. aware of the influence. He 7 did not willfully go in and say, "Aha, I 'm going to jury-rig 8 the leak rate results._" But he knew it didn 't hurt and, ./. 9 you'know,: they took advantage of the system. 10 COMMISSIONER ASSELSTINE: Okay. It sounds like he Il came pretty clor,a, then, to acknowledging his own responsibility I2 in what was going on at the time. 13 MR. THOMPSON: That's the-information that Mr. 14 Russell gave'me when he got back from that trip. 15 COMMISSIONER ASSELSTINE: Okay, very good. 10 MR. HAYES: If I can, gentlemen, draw your attention 17 to the document entitled, " Status.of Waterford-Cases" that I 18 passed out to you. I will briefly go through those cases. 1 19 With your indulgence, I will skip around here. 20 The third-investigation form the top, 484020. We have 21 concluded that investigation and we find no wrong doing. That 22 report is in typing and it will be out next month, 23 Investigation 022, we don't think that is going to be 24 an issue with the staff or the Commission. There is just one Acw.d.rw a. pori.rs, lac. 25 small glitch in there but we don't think it is significant in L_ _ _ - _ _ __ _- _

~ ~. '. 73 I terms of wrong.doing. c 2 CHAIRMAN PALLADINO: What does that mean,_no wrong. 3 doing? 4 MR. HAYES: Yes. I mean, itic-not willfulness, no 5 intent, you know. There may be something very small technical 6 butiit's just not a -- 7 On.the next page, 049, we have concluded that particular inquiry and we find no-wrong doing. 8 The balance of what is left within my office basicall" 9 r centers on the intimidation and harassment issues and false 10 ~ II documentation. 12 We have interviewed a number of individuals and we of either 13 have 18 instances, alleged instances, where membert; 'LP&L or subcontractors were harassed, intimidated, what 14 15 have you. 16 We have documented a half dozen of those -- don't pin me to those numbers -- but approximately half a dozen of 17 But I think the important thing here is that I8 those instances. during our investigation we asked whether or not those 19 individu.als felt that they were "put pressure on," or felt l 20 falsified documents or did something less than 21

pressure, what they correctly should have been doing given their duties 22 23 and responsibilities.

Those individuals said that notwithstanding the fact 24 wr.deral n.poen. inc. they felt a lot of pressure, scheduling pressure, construction 25

1 [ l 74-d 1 Pressure and what have you, they did what they thought was 1 right in the QA/0C Department or whatever it might be. 2 3 . So, in summary I think -- if I could be presumptuous. - for your decison, yes, we are going to have some documented. 4 harassment and intimidation. But its : ultimate ef fect on the 5 documents of that installation probably will be minimal -- 6 7 minimal at this time. We had The next issue involves falsified records. 8 an allegation concerning the alleged falsi'fication of. 9 10 inspectors' resumes. As I think we briefed you in December, 11 that allegation as proven to be correct. There were resumes falsified -- material added, upgraded in the resume 12 f o support a higher level for QA/QC purposes. t 13 We have a couple of instances where initials on 14 documents have been falsified. I think it's important also 15 that I mention that all of these particular instances of 16 document falsification or harassment. or what have you, the 17 18 staff has been made aware of them. Again, as you remember early on, the staff looked at these areas in an envelope-19 type conpept and just recently we met with Denny Crutchfield 20 and -- I don't want to put words in his mouth, but I think 21 from a technical standpoint we've got these issues covered 22 23 notwithstanding OI's findings. 24 CRAIRMAN PALLADINO: What do you mean, it's not a Ac04ederal Reporters, Inc. 25 bar to start-up?

e . n -- 'R 75 o 1 MR. HAYES: Well, it wasn't in December. ;The t t 1C ) '2 staff felt as.though notwithstanding the issues that-we had-3 raised ap that point, that they had from a technical standpoint \\ overcome any false documentation in a given area or what 4 F 5 have you. (Commissioner Asselstine leaves meeting) 6 7 MR. HAYES: Another significant area of false o Yes,'the 8 documentation is the heat transfer -- excuse me. heat' numbers on half-inch piping if I'm not mistaken. 9 (Commissioner Asselstine rejoins meeting) 10 II MR. HAYES: We pretty much docum'ented that there s were heat numbers placed in various records without really 12 determining whether or not that heat number really was I3 ' stamped on that particular section of pipe. Id I think the staff has also looked at that from a 15 I0 technical standpoint. I don't know of any other major issues that might I7 impact on your decision at this point. 18 IE CHAIRMAN PALLADINO: Any questions or comments? - COMMISSIONER ZECH: No. COMMISSIONER ASSELSTINE: No. I'll just comment on this 22 COMMISSIONER BERNTHAL: question of the two operators, Joe, I won' t comment in any 23 As' I indicated in the memorandum I sent around, I 24 length. , Actr.d.r.1 n.p.n.ri. Inc. don't see the consistency for isolation of these individuals 25

L + j 76 1 'at TMI and not taking similar action at Waterford and SONGS. i \\ 2 I think OGC's explanation is pretty weak, its j l 3 rationalization for doing that is pretty weak, whether or l .+ 4 not the utility had chosen to do it by itself, TMI, I rather 5 suspect that we would have if th6y hadn 't. 6 You know, I felt all along we ought to -- we've 7 now got a paper in front of us that tells rs what our enforce-8 ment options are with respect to those individuals and I just 9 think we owe it to those people to let them know whether they 10 are going to be hung or not. ~ It's just not right to let let these things drag 11 12 on and on where individuals' careers are affected. If they 13 run the red light, let's fine them and let them get on with it, 14 'and we can get on with it. 15 CHAIRMAN PALLADINO: Well, I'll have my answer, I 16 hope, by the end of the day. And I'll probably be consulting 17 somebody because the course is not as clear-cut even if we 18 are going to do what we were proposing. 19 COMMISSIONER ASSELSTINE: Fred, I agree, I think we 20 should do-something. I advocated doing something two months 21 ago on the Waterford operators. 22 I do think the Waterford operators are in a somewhat 23 dif ferent position than the operator at San Onofre because 24 the big difference is, as I understand it, the San Onofre Ate Federal Reporters, tre. operator has been f airly forthright and candid in discussing 25

8 17 7

~ j 1 his. participation and in: acknowledging his responsibilityffor 4 i 2 what went on, whereas the. two guys at Waterford, according to 3 thef people who did the investigation, have repeatedly stone-s 4 walled and lied to us once again which is a separate actionable 5 item as. Ben says, and now-that is going to the Department of-6 J us tice.- Quite frankly, I think we should do something about-1 7 those-two operators. We should have done it.before now. 8 .but we should at least do it before that plant goes into 9 operation, and I think-we should come down hard on them;. 10 COMMISSIONER BERNTHAL: Well, I should have said, F - 'll I agree with you, obviously from what these gentlemen have 12 said there is a difference between the San Onofre individual 13 and' Waterford, and I shouldn't be unfair to that San.Onofre 14 , operator. 15 MR. THOMPSON: If I could just add one point of 16 clarification so that I understand the issue -- it may not be 17 important. 18 The operators of concern at at Waterford and ~~ ~ 59 San dnofre who were involved in the leak rate problem at 20 TMI-2, you.also have operators on TMI-2 There are none of 21 those operators on TMI-1. So, the' set that you should, I believe, 22 have in mind are the TMI-2 licensed operators, the Waterford 23 licensed operators, and the one at San Onofre. 24 COMMISSIONER BERNTHAL: I understand that. Aca Federtl Reporters, Inc. 25 COMMISSIONER ASSELSTINE: Although, let me just ask

L: 78 h l-1 one question. Are there'any former TMI-2 operators who are.

r. _

2 within this group that' is under review who have responsibilities ~ i 3 .at;TMI-1 other than as licensed operators? 4 ~ MR. THOMPSON: It's my understanding there are two ' ndividuals at TMI--l who were not involved after our review i 5 6 of those operators who appeared to have-improperly followed 7 leak rate' testing on TMI-2 that are now.at TMI-1. 8 So, TMI-l has no operators that were associated 9 with this activity. 10 COMMISSIONER ASSELSTINE:

Okay, i.

11 COMMISSIONER BERNTHAL: It sounds, like the building 12 is falling down. 13 CHAIRMAN PALLADINO: Yes. Sam, what's going on? 14 MR. CHILK: I don't know. I just sent someone out-15 to find out. 16 CHAIRMAN PALLADINO: All right. 17 Let me ask, first of all, Harold, did you have any 18 more that you wanted to -- 19 COMMISSIONER ASSELSTINE: We've got OIA, right? 20 CHAIRMAN PALLADINO: We have OIA. We are going to 21 have to sk the staff and all other people not directly 22 reporting to the Commission to leave and we 'll get the OIA i 23 report. 24 COMMISSIONER BERNTHAL: I'm going to have to leave see F.d. ret a. porters, Inc. 25 in about five minutes. ___.__-..-.________m________.-_____

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79 y1 1

1 COMMISSIONER ASSELSTINE: So wil'l'I. Hopefully 'A 2 it will'be brief._ o - 3 .(Whereupon,'at 11:55 a.m., the Commission proceededi if 4 to othei business.)' fi, y s 7 8 9 10 11 12 i.- _33

14

-15 16 17 .18 19 20 -21 22 23 24 cc Federal Reporters. Inc. '25

. n.. ; a. p THanson/r&t' ~ .I UNITED STATES OF AMERICA .l 2 NUCLEAR REGULATORY COMMISSION. 3 -s 4 DISCUSSION OF PENDING INVESTIGATIONS 5 6 CLOSED MEETING - EXEMPTIONS 5 s'7

7 8

Room 1130 ~i 1717 H Street, N.W. 9 Washington, D.C. i .10 Tuesday, February 26, 1985. 11 The Coinmission met, pursuant to recess, at 11:55 a.m. ~ 12 COMMISSIONERS PRESENT: 13 NUNZIO PALLADINO, Chairman of the' Commission 1 THOMAS ROBERTS, Commissioner l 14 JAMES ASSELSTINE, Commissioner FREDERICK BERNTHAL, Commissioner l 15 LANDO ZECH, Commissioner 16 STAFF AND PRESENTERS SEATED AT COMMISSION TABLE: ( 17 S. CHILK .l G. MESSENGER 18 H. BLUMENTHAL i M. MALSCH 19 20 4 21 22 23 24 3 Aes-Federal Reporters, Inc. 25 1t.

m--

. v of.

2 3 ib P R O C E E_ D_ I_ N_'G_ S_ 1 Is the room cleared of staff 2 CHAIRMAN PALLADINO: people?,Can we get the doors closed? 3 I. turn the meeting'over to George Messenger.to bring 4 5 us up to date on the'OIA matter. 6 MR. MESSENGER:.' Okay. -My name is George Messenger. On my right I have Henry Blumenthal 7 I am Deputy Director, OIA. 'who is the investigator who was doing the one inquiry that AL 8 9 we have on-going on Waterford. First.of ' all I would like to _ say that we don 't have 10 a lot of new information since we informed you on February 21, 11 1985 in'a memo from Sharon Connelly to the Commission on the - 12 13 status of the on-going inquiry. 1985 OIA By way of background, on January 4, 14 received from Region IV materials containing allegations from 15 anon mous sources and from Ms. Billie Garde of the Gove 16 concerning ineffective NRC inspections' 17 Accountability. Project, of the licensee's quality assurance-quality control program 18 19 and related issues. - OIA analysis of the Region IV issues that were sent - 20 to us revealed 13 generalized allegations which require more 21 specificity from GAP to determine the investigative merits. 22 OI efforts to obtain necessary interviews from 23 i cognizant GAP representatives have thus far met with negat ve 24 l c. 02bcontacts were made with them on February 6, 11, Ace Federal Reporters, In 25 results.

g %. -x _- 3

1 19, 20, 22 and 25th.

We made contacts with them trying to get in touch 2 3 with Billie' Garde. .+ ~ 4 CHAIRMAN PALLADINO: Were those dates in February? 5 MR. MESSENGER: Yes. And in fact, it was January 30, 2 yGr) 1985,we sent her a memorandum outlining the 13 generalized - 6 L issues that we needed more specifics'on. If the' Commission 7 'would iike, I will provide them with copies of that 'menorandume 8 -- 9 the generalized issues. Right now, with our -latest contact with her on 10 That February 25 -- a'nd we have only talked to her twice. - 11 was on February '20 and the 25th -- we are now trying to 12 13 se't up '.a meeting. Our goal is for March 1, 1985. So, ' the ' only_ excuse we are given -- and' Mr. ~14 ~.. I gather Blumenthal is the one that was trying to contact herg 15 that she had the flu for a while during this period, and now 16 when we talk to her she-either wants to be, when she is b. 17 interviewed she wants to have with her either Thomas Devine or 18 19 Lynn'Bernabei. 20 ,_, CHAIRMAN PALLADINO: Who? Thomas Devine or Lynn Bernabei 21 MR. MESSENGER: she wants to have with her when we talk to her about these 22 23 issues. So, that's where we stand, we are stuck with these 24 Ace Federal Reporters, lac. 13 generalized issues and we just -- 25

b L. ,, ~. . ~. ~ o .n 4 L .) COMMISSIONER BERNTHAL: Haven't been able to get l' t- '2 anythingldone. -3 MR. MESSENGER: That's right. 4 And that's'all we have on-going right now. 5 CHAIRMAN PALLADINO: But did.you in writing ask for 6 :any specifics? 7 MR. MESSENGER: Yes.- On. January 30, 1985 we out-8 lined. the 13 issues that we needed specifics on. 9 CHAIRMAN PALLADINO: Die they indicate they were v-10 going to provide that information? 11 MR. MESSENGER: We ll, they haven,' t. said "no. " 12 MR. BLUMENTHAL: Mr. Chairman, they haven't said" 13 "no." ' They have been somewhat evasive with me on the telephone, l 14 I have inoicated to them the importance we attach-to their 15 allegations, we need to obtain more specific information.- They 16 have been somewhat receptive in the past to contact, sitting 17 down with us. Now it's a matter of defining the exact date. l 18 CHAIRMAN PALLADINO: Well, I think they havea 1 y responsibility to come forward in a reasonable period of time.. 19 20 I think your ef forts to try to get that information are very ] 1 21 important. h 22 Okay, any further -- 1 23 COMMISSIONER BERNTHAL: No, I think we are just 24 " steady as we were" in cases like this, i Ace-Federal Reporters, lac. 25 CHAIRMAN PALLADINO: We stand adjot:rned. ( li::-t ~r.

, & l.

' ' : w. :. - -. ---_--,.-.----------------_.---------.__--.--_w___ K

>.4 s 5 g.. 'T'- '6 1 L . \\ 0 - l (Whereupon, at '12. o' clock noon, the meeting' of the 2 Commission was adjourned.) + - i t' 3 _e 4 g 5 6 7 L. 8 9 1 l 10 - 1 j Il i 12 1 l 13 14 .15 16 17 i I 18 i 1 19 20 22 23 24 Ace Federal Reporters, lac 25

g% U n. f~ .. CERTIFICATE.0F OFFICIAL REPORTER This is to, certify. that the attached proceedings before the UNITED STATES -NUCLEAR REGULATORY COMMISSION in' the ~ . matter of: NAME;OF PROCEEDING: Pending Investigations Closed Meeting -- Exemptions 5 & 7

j.,

- ' DOCKET NO.: PLACE: Washington, D.C. DA,E: February 26, 1985 T were held as herein appears, and that this is the original transcript thereof for the file of the United States Nuclear Regulatory Commission. N/M O (sigt) (TYPED) M. E. Hansen . ~ - Official Reporter Reporter's Affiliation Ace Federal .___________________._-_______._____m_______.__-m

_ 7-{ g iggr]ggggf[gigg,{g;g g ^ m F 4 i I TRANSCRIPT OF CLOSED COMMISSION MEETING .The attached transcript (and attachments,'if any) has been information b determined.to.contain, in whole or in part, f which the Commission is authorized under the Government in the Sunshine Act, 5 U.S.C. 552b to withhold from public This transcript has been providedLfor use disclosure. - consistent with Commission requirements as follows: Disclosure of any portion of this transcript to any a). person outside the Commission or, where' appropriate, outside your'immediate office is expressly prohibited. This transcript-is to be kept in a secure storage b) area when not in use, and, when no longer needed, should be disposed of in a manner suitable for sensitive, limited distribution material or returned to the Office of the' Secretary. This transcript may not be reproduced, any additional if needed, must be obtained from the Office of 6 c)

copies, the Secretary.

For information concerning further disclosure of this d) transcript, please contact the Secretary's office (4-1469) or the General Counsel's office (4-3288). j 1 $5 i NiWMynTNWMMMM9?NTNPMMMMMyyM l

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