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| LAW orriccS MORGAN ASSOCIATES, CHARTERED DOCKETED 1899 L STR EET, N. W.
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| FN AN M J. ALB CMA, J A.
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| WASM t NGTON, Q. O. 2 CC36
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| ;1**" !S^ ~Jc' " 'f " a=: Aa-ma 52 OCT -5 mb d4 J. Rf CM A AC OO M EN PAU L r. C OLA AU Lil WI LLA AM A. CAG LCS CFFICE OF SECFETt 0 *
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| -o ps cAS7"^N DCC/.ETit:G a SEf(VT M ARY ANN MALL {f,[. [j{ y pAM C LA S. MC ACWITZ
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| #MCN OA u. wuGMCS SCOCATw.MUS5ANOS SUSAN S.MAPLAN
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| ;os Cp- J. Levin, J a.
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| CHAMLES MC ACAN, J A.
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| September 30, 1982 SA,ta v S. pA AvC A STEVEN C. vAGLE HAND DELIVERED _
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| c
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| ~ ~ '!''3:n Sf The Honorable Richard L. Ottinger PROD. S UTIL FAC.. . . . . . <.f.
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| Chairman, Subcommittee on Energy Conservation and Power Committee on Energy and Commerce United States House of Representatives 2241 Rayburn House Office Building Washington, D.C. 20515
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| ==Dear Congressman Ottinger:==
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| We write in response to your letter addressed to Chairman John S. Dyson dated September 24, 1982, and received September 28th, inviting the Power Authority of the State of New York, licensee of the Indian Point 3 Nuclear Power Plant, to appear before the Subcommittee on Energy Conservation and Power this Friday, October 1.
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| The Power Authority is a non-profit public benefit corpo-ration of New York State committed to the safe and efficient operation of its generation and transmission facilities. It builds and operates both nuclear and non-nuclear facilities in accordance with assignments f rom the State legislature with .
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| ; approval by the Governor.
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| The Power Authority has great respect for the members of the Subcommittee and the Nuclear Regulatory Commission and for the Subcommittee's right to inquire into matters within its jurisdic-tion. However, the Power Authority must decline the invitation to appear before the Subcommittee at this time.
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| Although the lateness of the invitation itself presents serious problems in preparing for a hearing of the scope you f 8210060235 BPO930 DR ADOCK 05000
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| "The Honorable Richard L. Ottinger September 30, 1982 Page 2 propose, our principal and overriding concern is with the con-stitutional and statutory implications of the Subcommittee's inquiry. The Subcommittee's investigation is an intrusion into an ongoing regulatory proceeding and, as such, threatens the independence of the Commission and its ability to render and maintain the appearance of rendering a fair and impartial decision.
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| As you are aware, the Power Authority's license to operate the Indian Point 3 Nuclear Power Plant is currently the sebject of a special investigatory / adjudicatory proceeding of the Commis-sion which could ultimately affect che operation of the plant.
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| It remains the Power Authority's view, as presented in its August 13, 1982 letter to you, that "the Subcommittee's hearing could threaten the integrity of the special proceeding, the rights of the licensees, and the ability of the Commission to expeditiously complete its investigation of Indian Point."
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| The Power Authority believes that grave errors have been committed by the subcommittee in deciding to open now its own investigation of the roles in the special proceeding of the Com-mission, parties, and the former Chairman of the Atomic Safety and Licensing Board. This is especially true where, as in this one-o f-a-kind proceeding , the Commission will itself determine the future operation of the plant.
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| As former Licensing Board Chairman Judge Louis J. Carter stated in his testimony before the Subcommittee, I think if my driver's license were a mat-ter of litigation I would not like to have the appellate court that might hear my case receive ex parte communications.
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| I Here, however, it is a subcommittee of the Congress of the United States, and not merely an jpc parte communicator, that seeks to j
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| probe the very thought processes of the Commissioners and the l
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| parties regarding th 3 special proceeding that is underway.
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| The Subcommittee's inquiry into the Commission's conduct of .
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| l the Special Proceeding threatens the independence of the Commis-This is like a legislative
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| ! sion's deliberations on Indian Point.
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| ! body asking a judge about his rulings during a trial or asking a f
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| : 1. Copies of that letter and the accompanying memorandum of law are attached.
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| l l
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| 'The Honorablo Richard L. Ottinger September 30, 1982 page 3 defendant to grade a jury while it is considering his fate.2 This Subcommittee's inquiry could in fact influence the future judgment of the Commission. At a minimum, there is the appearance of external political interference in the decision-making process of an independent agency's adjudication, a circumstance which may so cloud the process that no court could confidently find that the Commission had acted impartially.
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| The Power Authority cannot lend itself to such a result.
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| It is not appropriate for the Power Authority to participate in a hearing that would violate its constitutionally and statutorily guaranteed due process rights and those of its customers and bondholders and would adversely affect the interests of the citi-zens of New York. For these reasons, the Power Authority must, therefore, respectfully decline your invitation.
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| We also respectfully urge that the members of the Commission and the Subcommittee reconsider their course and suspend these hearings until such time as they can be undertaken in a manner not inconsistent with the mandates of the Constitution and laws of the United States.
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| Sincerely,
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| /
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| 6harles Morgan, J ff.
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| Counsel to the Po r Authority of the State of New York F,nclosure CM,Jr./ pat cc: Nuclear Regulatory Commission Hon. James P. Gleason Hon. Frederick J. Shon -
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| Hon. Oscar H. Paris Official Service List
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| : 2. That the proceedings are adjudicatory is clear. For example, the Commission in its January 8, 1981 order remarked:
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| "The Task Force report . . . will be tested in an adjudicatory setting . . . . Because the Commission itself is designating by this Order the issues it wishes to be addressed in the adjudica-tion . . . .
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| " Memorandum and Order at 6, 7 n.4. (NRC Jan. 8, 1981).
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| 3ecause c:. :.,.e Commiss ion , s one. cine. proceec., nc. , the Authori v is obliced-reseectfully
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| - . - ec acvise you c: its belief
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| :na: Ocnc.ressional invest:vation at this tr:e is inac.c. roc.riate and of the Authority's consequent inability ec provide testimony at the hearine.. The Authoritv.r however, is fully silling to
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| serious concerns and legal constraints noted above.
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| Sincerely,I r--
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| A T- @
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| . w ac..n :. w -, -, ,o4 ,r Assistan: General Counsel
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| MEMORANDUM August 12, 1982 To: Power Authority of the St- e of Net York Charles Morgan, J*
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| * From: %
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| Re: Congressional Investigation of Indian Point Proceeding The Power Authority of the State of New York (Power Authority), licensee of the Indian Point Unit 3 nuclear power plant, should decline to appear on August 16, 1982, before the House of Representatives Subcommittee on Energy Conservation and Power of the Committee on Energy and Commerce. The hearing to be held by this subcommittee to investigate the nuclear Regulatory Commission's (Commission's) special proceeding on Indian Point may create undue pressure or prejudice, or the appearance thereof, which may deprive the participants in the Commission's adjudicatory proceeding of their right to a fair trial.
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| Because of the nature of the Commission's ongoing proceeding, congressional intervention is inappropriate at this juncture. " Congress intended that the Commission be independent not only from pressure brought to bear by the President, but from all external pressures." Westinghouse Electric Corp. v. NRC, 598 F.2d 759, 775 (36 Cir. 1979) (emphasis added). "The fundamental justification for making agencies independent is that since they exercise adjudicatory powers requiring impartial expertise, political interference is undesirable." Consumer Energv Council of America v. FERC, 673 F.2d 425, 472 (D.C.Cir. 1982). An independent agency "is to be nonpartisan; and it must, frc the
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| 2-verv nature of its duties, act with entire impartiality."
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| Humphrev's Executor v. United States, 295 U.S. 632, 624 (1935).
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| The cuestioning of the members of the Commission or its Atomic Safety and Licensing Board (Board) by a congreasional committee " endangers, and may undermine," the impartiality of the Commission anc its acm nistrative law judges,1 see American Public C.as Association v. FPC, 567 F.2d 1016, 1069 (D.C.Cir.
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| 1977), cert. denied, 435 U.S. 907 (1978), who must be permitted to conduct their administrative hearings free frc= external pressure. See Pillsburv Co. v. FTC, 354 F.2d 952, 964 (5th Cir.
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| 1966); see also SEC v. Wheeling-Pittsburgh Steel Corp., 648 F.2d 118, 130 (3d Cir. 1981) (parties in an administrative proceeding "are entitled to a decision by the SEC itself, free from third-party political pressure") (emphasis in original). "With regard to Judicial decisionmaking, whether by court or agency, the appearance of bies or pressure nav be no less objectionable than the realitv." D.C. Federation of Civic Associations v. Volpe, 459 F.2d 1231, 1246-47 (D.C.Cir. 1971), cert, denied, 405 U.S.
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| 1030 (1972) (emphasis added).
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| Yet, in public statements the subecmmittee demands "a full explanation and justification regarding Section II D of the Commission's ruling on the Licensing Board's conduct of the i
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| : 1. The Commission has already noted that its appearance before the subcommittee to discuss an ' adjudicatory proceeding before it" raises serious concerns. Letter from Nunzio J.
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| Palladino to the Honorable Richard Ottinger at 1 (Aug. 5, 1982)
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| ("There are, of course, legal limitations on the form and content of Commission discussions concerninc. a n v. adjudicatorv oroceedinc.
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| before it.").
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| 3-proceeding"1 and terms the Commission's order an " alarming decision."2 The subcommittee has announced its list of 21 specific inquiries to the Commission. Illustrative of these imprcper inquiries are:
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| (3) The July 22 order further states the Commission's concern that the Board needs to
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| " assure that the proceeding remains clearly focused on the isues of the Order." What in the Board proceedings is perceived by the Commission to be unfocused or beyond the scope of inquiry? What is the basis for that judcment?
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| (9) What affect (sic) did the pre-filed testimony of the intervenors have on the Commission's decision about the Order and guidance?
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| (10) How does the Commission characterize the July 22 Order? Does the Commission assert that the July 22 Order reiterates instructicas previously established, refines the original guidance, cr changes the instructions?
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| (12) Did the Commission ask the OGC to provide any guidance or evaluation or to render a systematic review of the Board's proceedings? If not, why not?
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| (21) The Subcommittee also requests that the NRC previde all relevant documents on this Decision and order, including transcripts of meetings, staff notes, internal memoranda,
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| : 1. Letter from Richard L. Ottinger to the Honorable Nunzio Palladino at 1 (Aug. 3, 1982).
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| : 2. News Release, Subec=m. on Energy Conservation and Power cf the House Cc=m. on Energy and Ccmmerce (July 28, 1982) (the subec=mittee "want(s) a full explanation and justification from the (C] ommission f or this alarming dc: cision") .
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| . . draft orders, guidance cc=monts, and other communications involving commissioners or staff, including the Office of General Counsel.
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| Letter from Richard L. Ottinger to the Honorable Nunzio Palladino at 2-4 (Aug. 6, 1982) (emphasis added).
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| The actions of the subcommittee raise serious questions, for
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| " Congress may (not] interfere with an independent agency's decisions without regard to separation of powers." Consumer Energv Council of America v. FIRC, 673 F.2d at 472. The power to conduct investigations is not unlimited, see Watkins v. United states, 354 U.S. 178, 187 (1957):
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| when [a congressional] investigation focuses directly and substantially upon the mental decisional processes of a Commission in a case which is pending before it, Congress is no longer intervening in the agency's legis-lative function, but rather, in its judicial function. At this latter point, we cecome concerned with the right of private litigants to a fair trial and, equally important, with their righ" '+ 'he appearance of impartial-itv, wnicn cannot ce maintained unless tnose wno exercise the judicial function are free from powerful external influences.
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| Pillsburv Co. v. FTC, 354 F.2d at 964 (emphasis in original and added); see also Citizens to Preserve overton Park, Inc. v.
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| Volpe, 401 U.S. 402, 420 (1971) (" inquiry into the mental processes of administrative decisionmaking is usually to be ,
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| avoided"). As Commission Chairman Nunzio J. Palladino stated, close Congressional probing of the deliberative process of an independent regulatory agency with regard to an adjudication pending before that agency presents extremely serious legal problems, capable of rendering the outcome of that proceeding void as a matter of law.
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| . .. Letter from Nunzio J. Palladino to the Honorable Richard L.
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| Ottinger at 1 (Aug. 11, 1982).
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| The conduct of this hearing in which the Power Authority's rights are at issue is a denial of due process of law. Pillsbury Co. v. ?TC, 354 F.2d at 964. " Congress . . . has responsibility to protect the (Commission's] decisional integrity." American Public Gas Association v. FPC, 5 67 F.2d at 1069. There exist
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| " legal constraints on the Commission which are designed to insulate and protect the integrity of the regulatorv. process."
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| Letter from Nunzio J. Palladino to the Honorable Richard Ottinger at 1 (Aug. 5, 1982).
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| In view of the foregoing, the Power Authority should decline to participate in this hearing. ,
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| . . ~ ...,,a
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| .}}
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