ML20090M605

Requests Tape of 820604 Interview W/F Oltz to Verify Accuracy of Transcript Received from Region III Re IE Investigation Rept 50-358/81-13

ML20090M605
Person / Time
Site:	Zimmer
Issue date:	07/02/1982
From:	Charnoff G KAISER ENGINEERING (FORMERLY KAISER ENGINEERS), SHAW, PITTMAN, POTTS & TROWBRIDGE
To:	Jamarl Cummings NRC OFFICE OF INSPECTOR & AUDITOR (OIA)
Shared Package
ML20090M535	List: ML20090M598 ML20090M605 ML20090M609 ML20090M826 ML20090M831
References
FOIA-82-206, FOIA-82-A-11 NUDOCS 8405290092
Download: ML20090M605 (2)

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SHAW, PITTMAN, PoTTs & TROWBRIDGE A PARTNERSMap OF PROF ESSIONAL CORPORAftONS k

1800 M STR E ET. N. W.

WASHINGTON. D. C. 20036 (2021 822-4000 RAMSAY D POT TS. P C. IMOMAS A. SAATER. P C. JOHNM O NEILL JR ME NNETH J MAUTMAN i TEU ART L PITTMAN. P C J AME S M SURGER.PC J AY A. EPSTIEN Davio LA*RENCE MsLLER

1. ORGE F TROWBRsDGE. P C SHELDON J WEISEE . P C Ops E R RAND L. At LEN ANNE M MRAUSMOPF L TE! HE N O. POTTS. P C JOMN A McCULLOUGM. P C TIMOTMY B. McBRIDE FREDER8CM L ML EIN GERALD CHARNOFF. P C. J. PATRICM MtCMEY. P L. 12O21822-sO99 & 322-tees ELISABETH M P E N DL E TON GORDONR MANOFSMY PHILLip D. BOSTWiCM. P C GEORGE P McCM AELY. J8L. P C. PAUL A. MAPLAN JE F FREY S. GI ANCOLA W. TIMOTMY M ANLON. P C. . J THOMAS L ENMART. P C. -

M ARRY M. GL ASSPIEGEL M A N N AM E M LIE BE RM AN GEORGE M ROGE RS. JR., P C STEVEN L MELT 2ER. P C JEFF E RY L. VABLON SANDRA E. FOLSOM

• , EDA LITTL E. P C DEAN D. AULICM. P C. T ELEJL JACMsdcMAY MARCI A R N6RENSTEsN JOHN 8 RMINELANDER. P C. JOHN ENGEL. P C 89-7693 ISM AWL AW WSMB THOMAS M McCOMMIC M JUDITH A SANDLER BRUCE W CMURCMcLL. P C. CH ARL ES B. TEMKIN. P C. SUSAN M FREUND E DW ARO O YOUNG. m LESLIE A NsCHOLSON. JR., P C. STEPME N 5 MUTTLER, P C C ABL E "$N AWLA*" JOHN L. CARM. JR R 3BE RT L WILLMORC M ARTIN D MRALL. P C, WINTM8tCP N BROWN. P C- PHILIP J. M ARVEY ANDREW D ELLIS RICHARD J RENDALL. P C. JAMESB MAMLIN. P C ~

ROBERT M GORDON WENDELIN A WMITE J AY E. SIL B E RG. P C. RANDAL S. MELL P C B ARB AK A J. MORGE N STANLEY M. S ARG fi4.RSARA M ROSSOTTI. P C. ROBERT E 2AMLER BONNIE S GOTTLIE B MRtSTI L. LIMBO JOHN F. DE ALY* *

$ EORGE V. ALLEN. JR , P C RICH ARD E GAL E N MOWARDM SMAFFERMAN LESLIE R SMITH F RE.D DRASN ER. P C. ROBERTS RO B BIN S gogg DEBORAM S BAUSER VIRGING A S RUTL EDGE L ::E NLY WF BSTER. P C. STEVEN M LUCAS SCOTT A. ANE NBERG M ATHERINE P CME EK NATH ANIEL P. BRE ED, JR., P C. DAVID M PUBENSTEIN CAMPSELL MILLEFER J ANICE L EMRE R-STEaN M ARM AUGE NSLICK. P.C LYNN WHITTLESEY WeLSON SETH H MOOGASaAN TRAV1S T BROWN. JR EiNE ST L BLAME. JR . P &* M ATI AS F T RAvi E SO- DI A2 SMEtL A McC. M ARVEY GAsk E CURREY C.*4 A ETON S JONES. P C. VsCTORIA J PE RRINS DELISSA A RIDG W AT R'CM ARD M MRONTHAL STEPHE N 8 MEIMANN

' MOT ADMeTTED ene O C WRITER S DeM TCT DI AL NUMSER July 2, 1982 (202) 822-1032 ,

Mr. James A. Cummings -

Director Office of Inspector and Auditor U. S. Nuclear Regulatory Commission Washington, D. C. 20555 .

Dear Mr. Cummings:

I represent Kaiser Engineers, Incorporated with regard to matters relating to the Zimmer Power Station near Cincinnati, Ohio, and specifically with regard to the Notice of Violation issued by the Nuclear Regulatory Commission to Cincinnati Gas & Electric Company in November 1981.

In the course of that representation, we reviewed Region .-.,,

III's investigation report No. 50-358/81-13. Attachment A to that Report reflects that Floyd Oltz, a Kaiser employee, was interviewed on February 25, 1981, (p. 11), and on June 4, 1981, (pp. 3-5), and that at least the latter interview was tape-recorded and a transcript produced. However, the transcript was not attached to the Report, -

nor was any statement by Mr. Oltz. .

We, accordingly, requested from Region III a copy of the transcript of the June 4 interview, which was provided to us. We subsequently asked to be allowed to listen to the tape from which the transcript was prepared, and Mr. Robert Warnick of Region III agreed to make it available. However, he said it was in the custody of your office, and when we reached Mr. Puglia of your staff he suggested that we put our request in writing to you. -

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l- SHAW, PITTMAN, PoTTs & TROWERIDGE A PARTNERSHIP OF PROFESS 80NAL CORPORATIONS Mr. James A. Cummings July 2, 1982 page two We would like to listen to the tape of the June 4 interview of Mr. Oltz to verify the accuracy of the transcript we have received. We would also like to listen to any other tape recordings of interviews of Mr. Oltz or other Kaiser personnel during the course of that investigation. If it is more convenient, we can come to your office for this purpose, or we would borrow the tape and listen to it at our office if that if agreeable. Please call me at the above number, or my partner P-trick Ilickey at 822-1103, and let us know a time when we could do tnis.

Thank you for your cooperation.

Sincerel t

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L N 1 Gerald Charnoff i i

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January 5 1983 s "E!!0RAflDUft FnR: L. Bickwit, General Cou;.sel;.

FR0ft: James J. Cumings, Director ["J. eg% y' Office of Insoector and Auditor %b

SUBJECT:

RESP 0flSE TO C0!lGRESSitAfl UDALL'S DECEl'1BER 7,.1982, LETTER In response to Congressnan Udall's December 7,1982 letter, I bring to your .

attention the followinc: .

. The Office of Inspector and Auditor's (0IA) investigation into the Applegate alleoations - " Adequacy of IE Investigation 50-358/80-09 at '

the Hillian H. Zinner fluclear Power Station (OIA file 81-18)" - was opened in Decenber 1980 and a final report issued August 7,1981. The scope of this investigation, as defined by the Chairnan in a Decenber 15, 1980, nenorandun to ne, was quite specific. DIA was to determine whether the Office of Insoection and Enforcenent (IE) staff had cont ucted i an adeouate investigation of Appleoate's allegations (enchasis added). At the sane time IE was directed to investigate certain new safety issues raised by Applegate (see Attachnent A - Ahearne menorandun to Cumings .,

dated December 15,1980).

. In early August 1981 - alnost a year and a half ago - DIA concluded that the overall IE investigation of Applegate's allegations was unsatisfactory. The basis for that finding was, among other things, that:

- the investigation failed to detemine the correct status and history of several welds;

- the overall investigative effort was neither vigorous nor -

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sufficiently broad in scope;

- the finding of "non substantiated" with regard to.the allegation that defective welds in safety-related systens had been accepted is not consistent with the facts.

These findings are clear and unanbiguous and, by any standard, the language is hardly that which would be used if OIA's objectives were to put either the flRC or CG&E in a favorable light.

. As a result of OIA's August 1981 report and subsequent correspondence between 0IA and the EDO, both the Comission and Congressnan Udall's office were alerted to the potential problent regarding the Zimer

!!uclear Power Station. To now say that the exclusion of the llarpster intervicu fron OIA's report contributed to the delay in public .

recognition of the true status of the Zimer project is just not supported by the facts and is in ny view a lane excuse now being offered

~~i to olvert attentityi'auay fr5ia tpore771To fiiTIFo to recngnipe and take l G3e

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T action on a problem that was clearly identified sone year and a half ago

- by OIA (emphasis added).

In this reoard I would like to provide you with the following quote from a July 23,1981, letter to Chairman Hendrie from Edwin liarper, Deputy Director, 0!1B, discussing efforts to elininate fraud and waste fron Governnent: "One point, which I particularly want to call to your attention, is the result of a study done by one of our nost experienced Inspectors General. lie found that virtually every najor public scandal over a period of several years had been preceded by an audit report that was available to nanagement sone six nonths prior to oublic exposes of the problem. The basic point of this letter is to encourage you to stay in touch with the activities of your 'Insoector General'."

. In connection with OIA's Applegate investigation Terry Harpster, a former Region III IE Inspector, was interviewed by 0IA Investigators David Ganble and John Sinclair on !! arch 6,1981. About July or August 1981 I reviewed Parpster's interview in detail for the first time and decided that it was not relevant to the Applegate investigation but was relevant to another 01A investigation "Zimer Plant - Illegation re Deficient Construction (0IA file 81-39)" which had been cpened in !!ay 1981. This latter case dealt with nuch broader issues and was to address potential criminal issues which were being uncovered as a result of an

> ongoing IE investigation at the Zimer plant. Accordinq1y, I directed that the Harpster interview not be nade a part of the 81-18 report and that a copy of the Harpster interview be placed in the 81-39 file and be ,

l nade a part of any report issued in that case. I have again reviewed Harpster's flarch 6, 1981, interview and believe that my July / August decision was correct as the interview is void of any information which is related to the question of whether the IE staff had conducted an adequate j

investigation of Applegate's allegations (see Attachment B - Harpster L

interview dated flarch 6, 1981). Additional information on this subject is contained in my June 24, 1982, nenorandun to Bert Davis, a copy of l

which was furnished to both the Commission and Dr. flyers in June 1982 (see Attachment C).

2

. On its own initiative OIA brought potential criminal issues involvind construction of the Zimer plant to the Department of Justice's (D0J) attention in flay 1981 - almost two years ago. This too is hardly the action which would be taken by an office that was interested in placing the Zinner project in a nore favorable light or trying to delay public recognition of the alleged wrongdoing at the Zimer eite.

. flRC is currently in Federal Court litigating !!r. Applegate's suit against the agency relative to his F0IA request. Until the court adjudicates this natter it would obvinusly not be in the Government's interest to discuss any aspect of this natter publicly.

Finally, given the nnesidedness of the Udall letter and the publicity which Congressnan Udall's of fice saw fit to afford the letter be' ore getting a response fron llRC, I can only conclude that the whole exercise was designed not to deternine the true facts but to nake a nedia splash. It is absurd that DIA_it nou beino charaed by Conoressnan tidall with coverina un the Zimer l natter wheb in fact it pas OIA's inil$1 indepen@nt reportintj oftheZinnir

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situation - over a year and a half-ago - which was the forerunner to disclosing the problems associated with the.Zimer plant. ,

'Attachnents:

As stated above. c cc: Chaiman Palladino .

Comissioner Gilinsky .

Comissioner Ahearne Comissioner Roberts Comissioner Asselstine '

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! OIA File 81-18 4 l OIA rdr i

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. E NUCLE AR REGULATORY COMMISSION w AssiEc T ON. D. C. 20551,

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% December 15, 1980

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.i . c MEMORANDUM FOR: James J. Cummings, Diregtor, OIA ,

FROM: John F.' Ahearne

SUBJECT:

THOMAS W. APPLE ATE ALLEGATIONS I request that. OIA conduct an investigation into whether the Of fice of Inspect' ion and Enforcement conducted an adequate inves-tigation of the allegations presented to it by Thomas W. Applegate regarding activities at the William H. Zimmer Nuclear Power Station.

The I&E findings are set forth in I&E Report No. 50-358/80/9 (July 2, 1980).

I also wish to advise you that I&E has commenced an investigation of the safety issues raised at pages 13 and 14 of the pleading which the Government Accountability Project of the Institute for Policies Studies recently filed with the Merit Systems Protection Board.

cc: Victor Stello, IE -

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Interview of Terrv Ha'rpster ,_

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Terry Harpster, Reactor Preoperations Specialist, IE, on detail asand a Special Investigator to the Subco:noittee on Energy, Environment, Natural Resources, Government Operations Co==ittee, U.S. House of kepresentatives, was interviewed on }! arch 6,1981, by Investigators David Camble and John Sinclair, 01A.

He Harpster said he worked in Region III of NRC f rom 1974 through 1979.

said he was a technical support inspector initially for all plants in Region III. He later becc-nc a project canager f or particular plants:

first for DC Cook Unit 2, then Monticello, then both Zir.mcr and }fonticelle

• at the same tine. Harpster said he beF :n his inspection activitics at Zinner in October 1977 as a preoperations start-up inspector. He said he s'as assigned to this position until he 1 cit Region III in September 1979; however, he had no real involvement with Zic.mcr af ter the Torce Mile Island OF.I) accident in }! arch 1979. Harpster said that a pre-operations inspector picks up a plant shen construction is far enough al o,ng, i . e . , about 60 percent completed, to revice certain progransa Harpster e.g., the quality control program f or preoperational vorb.

said that To:n Vandel was his counterpart as the lead construction inspector.

Vandel had inspected Zimmer prior to Harpster's arrival but there was a period of overlap shen they both vorked there. Harpster said John Pfenning -

vorked with him as a preoperations inspector sho he was training.

Harpster said that }!cnning "took one look" and lef t the NRC because the progra: vas so bad. He related that one of ?!cnning's reasons for 1 caving was that he saw how little support the inspectors got on the job.

Harpster understood that !!cnning 1 cit to attend the University of Arirona where he is working on his Ph.D. in netallurgy.

Harpster said that when he picked up Zimmer the licensee (Cincinnati Cas and Electric Company) had littic appreciation for the . sount of resources -=

needed for the plant. He said they barely met ANSI Standard 18.1 shich is the criteria for staffing. Harpster explained that even this standard is a loose one which has since been upgraded. Harpster said that one of his jobs was to show the plant management that was requir ed to get the plant of f the ground. He said that his inspections documented a number of prob 1 cms at Zimner. Harpster said that, for cranple, the enployee who was being placed in charge of the start up operation only had about three rnnths of actual experience in the plant. He explained that the licensee counted as nuclear experience the amount of tine operations Another example employees s rre onsite during the construction of Zinmer.

van his,inpression that the plant personnel felt that, once the parts vere bought for the plant, they did not need any support from their a corporate of fices. He also believed that nany plant personnel felt 1

nuc1 car plant vas sinilar to the operation of a fossil fuel, plant.

Harpster said that he tried to resolve scne of these problens inforr. ally; including going up through the licensee nanagement chain to Vice President Earl Borgnann, but vi th no luck.

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11arpster said he was successful in gettinE a necting set up in Bethesde to discuss apparent waknesses with licensee's organization and staffing.

lie said this meetinF was held on July 13, 1978, only after he "screaoed" at licensing officials in Bethesda, particularly Irv Peltier sho was then project manager in b'RR responsibic for issuing the safety evaluation report (SER). 11arpster said that he presented his' concerns at that oceting and the utility agreed to upgrade their progrc: . lie recalled that the -specific response was to "' "y" an engineer f rom Cencral E1cetric te assist then.

Earpster said that the overall problem was that h*RC's licensing proces-was rolling much f aster than he could " rat chet" improvements at thelie plant end. 11arpster said that NRC's recuirements were a " joke."

• said that NRR was about to issue the SER and they set up a necting of the Advisory Committee on Ecactor Saf eguards (ACRS) to stich he was not invited.

chain and presented Earpster said he vent up the Region III manageracnt his concerns. lie said he attended the ACRS necting anyway, lic recalled that when licensee of ficials were questioned by ACRS Chairnan Eender, they said several things that were not t ru e. Earpster noted that not

- only did h_e e f eel they were not true, but lienning also believed they were not true. 11arpster said he presented this conflict to his boss, Robert lla r n ick, when he returned to the regional of fice. lie said that he and !!cnning .

later talked with one of the licensee of ficials who hadDuring testified to the their ACRS (Jim Schott who was the plant nanager of Ziruner).

conversation, 11arpster had t!arnick read Schott's .testinony to Schott over the phone, lie said that Schott then ag reed that the testimony did not convey the correct inpression. Although Schott assured liarpster and

!!cnning that he would clarify this at the next ACRS meeting, he did not.

11arpster believed that Schott's subsequent testimony even aggravated his earli er st atements.

11arpster said he briefed his nanagement on this matter.

lic recalled -=

that his Regional Director, James 1*cppler, sent a letter to the ACRS inf orning then of the situation. 11arpster understood that this letter '

was later fewarded to the Ato.iic Safety and Licensing Board (ASLB).

11arpster expla ir$cd that, af ter the ACRS meeting, he also inforned Pel tier (in !!cnning's presence) of his concerns. Tie said that Teltier later clained that he did not recall l!arpster's expressing his concerns to q him. 11arpster explained that Peltier is a " pro-nuclear" " pro-licensing" e cploye e, lie also explained that during a start-up of a nucicar plant, NPa is on a very tight schedule; the IE inspector is of ten vicued by liRR as an adversary when he uncovers deficiencies thich liRR has aircady

" blessed." '

Peltier told 11arpster that he hadinf orned the licensee about an IE investiga tion under ay un the subject of'the licensec's testinony before '

the ACES. Pelt ier niso inf orned 11a rpster that Charles Earth (attorney eith the Of fice of the Executive 1.cgal Director) had called Janes Yore (Chai rr.a n of the JSI.B Panel) and told Yore to throw away 1*cppler's letter describing t he disc repanci es. Ihrpster pointed cut that these latter two r.atters were ti,e subje ct of a recent invest iga t ion by 01A. Ih rpst er said inh?2

~mm, nha nPdln Man n nBgtped@@ vhere the syste;u broke down:

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- Harpster said that borFmann vas-alsoHarpster putting also the h2ct en hia that understood by, for the estample, sending a letter to Keppler.

Chairman of the licensee sent a letter the to President

'nti accidentCarter and others Harpster said that it was about this time that been occurred.

back to Zimmer since.

He said he was assigned to "DfI and Zinner he has still not had probicas. A principal Harpster one was that, said that, when he lef t.as a practical matter, there was no QA p He said that all Zimmer had was one person assigned to this function and the job required.

that person could not possibly do all that Harpster said that realistically the IE codular inspection program '

lif t.. does not deal with the things you have to focus on early in a plant s He said that an inspector must deal with the probicos he knows areEarpster said important and then deal with other problems in addition. Zinner. He that he had to deal with the construction people somewhat at said that the licensee had raininal involvement with the everything vas controlled by its contractor. He said that this construc Zinner:

is a problem because, af ter the plant is built and the contractor He said 1 caves,  :

the licensee muld not have any expertise to handle the plant.no on that for example there va.e Harpster felt that this re' actor instrumentation and control systems.

licensee was "in over its head."

Harpster said that people of ten bring natters to an inspector's there attention Ile said that an inspector can deal with some of these matters, but harpster said that sometimes so runy things are some which he canno-.is out of control. liarpster concluded that "Zimmer are wrong that a plantHarpster explained that a licensee's ability to was out of control." (b y , e . g . , the get roney for the construction of a nuclear power plant sale of bonds) is based upon the percentage of cc:yletion He said that they are ready. Harpster attempt to turn things over as completed befort. properly said that eat then happens is that the licensee staff is notUc said when the li prepared or trained to handle them. them properly. Vnat they .=

things that are wrong, they cannot fix or test died.

nust do is give the probicos back to construction to be reme Harpster not work.

said this is indicative of a construction the licensee QC pr t ries to head "of f. He said that one exanple of this was thatAccording to had not ordered any spare parts. it causes a to obtain additional or replacement equipment is so longback-upi equipment.

r.ajor problem to licensees trying to resupply or obta n Harpster. said that sometimes plant nanagenent get things done.putc so He noch said that pressure o their personnel that the personncI cannot h the same these personnel then sometines use NRC inspe,ctors to acco.mplis the inspector things: they feed inspectors infornation so it appears that found the deficiency rather than the plant personnel. Harpster said that, f ro.: what he could see, it appeared that the construction program '

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he was not directly f abi11cr with, the con 3tructica cetivitics but he CW the results - including the QA problems. Harpster said that Inspector

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Tred Maura has documented nuch of these problems f rom the operations side.

Rarpster said that both the site construction nanager, Mr. Gear (phonetic) and the site QA manager Mr. Schweirs were friends of Vice President Borgnann.

Harpster believed that Schweirs was assigned by the licensee to keep the plant nanager (Schott) under control. Harpster said Schwrits even called the regional of fice to try to Fet some of the It inspection reports changed. Tiarpster said Schweirs also asked him to send IE -

inspection reports to hin (Schveirs) so he could decide which natters vould be sent on to Schott.

Barpster said part of the prob 1cm was that NRC does not have explicit regulations to inspect against. He said,that the preoperations inspector is faced with the task of trying to get control of the site and helping the licensee to solve its problems. He said that the inspector only docu-nents a small percentage of this "helpinE vork." Harpster said the licensee had no people hvolved with preoperations and test acceptance.

He said that everythinF vas bought under contract so the contractor was able to do whatever 'it wanted. Harpster said the licensee then had no one who kneu how to handle the problems that were " built-in." .

Harpster said he tried to Ect the plant managers out to take tours of the plant. He said that one assistant plant canager said he was scared .

to tour the plant because of the convicted felons working out there.

Harpster said that sometirnes the licensec's own security force could not handle disturbances and they had to call the local sherif f's office.

Ilarpster explained that there is r.ome drinking of alcohol on all nocicar construction sites. !!owever, the If censee at Zimmer did not have nuch control of things. Harpster said there were a lot of " tough guys" vorking at the plant and the situation got vorse when they were drinking.

-2 Harpster said that there are many allegations at any nuclear power plant; however, usually only a certain number are true. !!arpster said that one could tell that there were a large number of problems at Zinmer because so nany allegations were coming up.

Harpster said there was a lot of pressure on individual IE inspectors Harpster because of the nomentum generated by the NHC licensing process.

said that pressure is also created on construction personnel by the contractor's veld production schedules. He cyplained that the construction nanager has to have a certain number of velds conpleted to Icep the piping incta11ation on schedule. He said that probicos arise when the conctrucif on personnel are pushed. Harpster caid that for a QC inspector to stop constructiun for any deficiencies, he sould have to hold up nany

.' phases of the construction of a $1 billion plant; so the QC incpectors

! norna11y do what they are told.

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M rp;tcr said that nu':locr p:ver picnts c:nplcy p3rscnnal sp2cificolly designated to serve n's their liaison with NRC.' He said that thi.s is h'elpful because it overcomes the problem IE inspectors f ace in trying to find their way through the great a:nount of paperwork at the plant. '

Harpster said, however, this liaison person also " steers" the inspectors' activities. Harpster said that dealint with this liaison person does i allow the inspector to get through 1mC's nodular inspection program very well. Harpster noted that there is no real internal audit of the NRC's inspection progra:r..

Harpster described the " helping activities" that an IE preoperations inspector engages in as a process of gettinF all the procedures and '

controls in place. He said that this activity constitutes only about two lines in the IE procedures, but it is the largest part of a preoperations *  ;

inspector's time. '

l Tiarpster estiranted that the interest cost alone in holding up construction of a nuclear power plant for one day would be several hundred thousand .:

dollars. He observed that, with the increased pressure on NRC to If eense power plants, he would expect even core pressure to be placed on IE inspectors. ile said that pressures on the licensee personnel to make exceptions to the acceptance criteria in the preoperations tests are very real. He said it is dif ficult f or an IE inspector to tell Wether the licensee's exceptions are based on valid engineering analyr.es. He said that all inspectors cannot possibly be experts in all areas.

11arpster said the inspectors must rely on the licensee's people to review the exceptions. Harpster said that this represents a flav in the l NPC's systm because the licensee's reviewers are under the r.ane pressure to approve exceptions. Harpater pointed out that the licensee, because '

it is a utility company, cannot pans on the amortfintion conts ta the '

ratepayers until the plant reaches the point of completion, f.e., the state of comercial operations.

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