ML20154D772
| ML20154D772 | |
| Person / Time | |
|---|---|
| Site: | Comanche Peak  |
| Issue date: | 05/17/1988 |
| From: | Charemagne Grimes NRC OFFICE OF SPECIAL PROJECTS |
| To: | Bloch P Atomic Safety and Licensing Board Panel |
| References | |
| TASK-AS, TASK-BN88-003 BN-88-003, NUDOCS 8805190334 | |
| Download: ML20154D772 (6) | |
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MAY I 71988 Docket Nos. 50-445/446 MEMORANDUM FOR: The Atomic Safety and Licensing Board for Comanche Peak (P. B. Bloch, W. H. Jordan, K. A. McCollom, E. B. Johnson)
FROM: Christopher I. Grimes, Director Comanche Peak Project Division Office of Special Projects
SUBJECT:
REPORT OF SPECIAL INQUIRY BY DAVID C. WILLIAMS, GA0 (BOARD NOTIFICATION NO. 88-03)
In Board Notification Nos. 86-24, dated December 11, 1986, 87-06, dated April 3, 1987, and 87 12, dated August 18, 1987, the staff provided you with information related to the Office of Inspector and Auditor (0!A) Report No.
86-10 and the results of the Comanche Peak Report Review Group (NUREG-1257).
cequestect thetr Subsequently, Congressional representatives dirc:te:"the Office of Special Investigations of the General Accounting Office to conduct an inquiry into this and other matters concerning the NRC's investigative practices. The results of the GA0 inquiry were recently released by the NRC in a press release (Enclosure 1) which attached the Special Report from David C. Williams (Enclosure 2).
Because this report addresses matters related to the referenced Board Notifications and inspection activities as they pt-tain to the Comanche Peak Steam Electric Station, the staff is providing this report for your information.
original signed by:
Christopher I. Grimes, Director Comanche Peak Project Division 8805190334 Office of Special Projects
Enclosures:
DISTRIBUTION:
- 1. Press Release No. 88-46 Docket Files (50-445/446) RFWarnick
- 2. Letter from David C. Williams, GA0 NRC PDR/ Local PDR JWilson to Lando W. Zech, Jr. , NRC, dated CPPD Reading MMalloy April 22, 1988, forwarding Special OSP Reading JMoore, 0GC Report SEbneter/JAxelrad SBlack CIGrimes ACRS(10) cc w/ enclosures: PFMcKee See next page JLyons OFC :AD/P:CPPD T s bfE bl W
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YAY I ' 1988
- <et Nos. 50-445/446 MEMORANDLM FOR: The Atomic Safety and Licensing Board for Comanche Peak (P. B. Bloch, W. H. Jordan, K. A. McCollom, E. 8. Johnson)
FROM: Christopher I. Grimes, Director Comanche Peak Project Division Office of Special Projects
SUBJECT:
REPORT OF SPECIAL INQUIRY BY DAVID C. WILLIAMS, GA0 (BOARD NOTIFICATION NO. 88-03)
In Board Notification Nos. 86-24, dated December 11, 1986, 87-06, dated April 3, 1987, and 87-12, dated August 18, 1987, the staff provided you with infomation related to the Office of Inspector and Auditor (OIA) Report No.
86-10andtheresultsoftheComanchePeakReportReviewGroup(NUREG-1257).l Subsequently, Congressional representatives requested that the Office of Special Investigations of the General Accounting Office conduct an inquiry into this and other matters concerning the NRC's investigative practices. The results of the GA0 inquiry were recently released by the NRC in a press release (Enclosure 1) which attached the Special Report from David C. Williams (Enclosure 2).
Because this report addresses matters related to the referenced Board Notifications and inspection activities as they pertain to the Comanche Peak Steam Electric Station, the staff is providing this report for your information. I q .
L1 w Christopher I. Grimes, Director I Comanche Peak Project Division l Office of Special Projects
Enclosures:
- 1. Press Release No. 88-46 l
- 2. Letter from David C. Williams, GA0 to Lando W. Zech, Jr., NRC, dated April 22,1988, forwarding Special Report cc w/ enclosures:
See next page R805190334
W. G. Counsil Comanche Peak Steam Electric Station Texas Utilities Electric Company Units 1 and 2 cc:
Jack R. Newman, Csq. Asst. Director for Inspec. Prograrrs tiewman & Hol tzinger, P.C. Comanche Peak Project Division hite 1000 U.S. Nuclear Regulatory Commission 1615 L Street, N.W. P. O. Box 1029 Wash.agton, D.C. 20036 Granbury, Texas 76048 Robert A. Wooldridge, Esq. Regional Aoministrator, Region IV Worsham, Forsythe, Sampels & V.S. Nuclear Regulatory Commission Wooldridge 611 Ryan Plaza Drive, Suite 1000 2001 Bryan Tower Suite 2500 Arlington, Texas 76011 Dallas, Texas 75201 Lanny A. Sinkin Mr. Homer C. Schmidt Christic Institute Director of Nuclear Services 1324 North Capitol Street Texa.i Utilities Electric Company Washington, D.C. 20002 a
Skyway Tower 400 North Olive Street, L.B. 81 Ms. Billie Pirner Ga'rde, Esq.
- Dallas, Texas 75201 Government Accountability Project' Midwest Office Mr. R. W. Ackley 104 East Wisconsin Avenue Stone & Webster Appleton, Wisconsin 54911 Comanche Peak Steam Electric Station P. O. Box 1002 David R. Pigott, Esq.
Glen Rose, Texas 76043- Orrick, Herrington & Sutcliffe 600 Montgomery Street Mr. J. L. Vota San Francisco, California 94111 Westinghouse Electric Corporation P. O. Box 355 Anthony Z. Roisman, Esq.
l Pittsburgh, Pennsylvania 15230 Suite 600 1401 New York Avesue, NW Susan M. Theisen, Washington, D.C. 20005 Assistant Atte.,rney General Environmental Protection Division Robert Jablon P. O. Box 12548, Capitol Station Bonnie S. Blair 1 Austin, Texas 78711-1548 Spiegel & McDiarmid !
1350 New York Avenue, NW l Mrs. Juanita Ellis, President Washington, D.C. 20005-4798 Citizens Association for Sound Energy l 1426 South Polk George A. Parker, Chairman Dallas, Texas 75224 Public iJtility Comittee Senior Citizens Alliance Of 1 Ms. Nancy H. Williams Tarrant County, Inc. l CYGNA Energy Services 6048 Wonder Drive 2121 N. California Blvd., Suite 390 Fort Worth, Texas 76133 Walnut Creek, CA 94596 l
O W. G. Counsil Comanche Peak Electric Station Texas Utilities Electric Company Units 1 anc 2 i
cc:
Joseph F. Fulbright Fulbright & Jaworski 1301 McKinney Street Houston, Texas 77010 Roger D. Walker Manager, Nuclear Licensing Texas Utilities Electric Company Skyway Tower 400 North Olive Street, L.B. 81 ^
Dallas, Texas 75201 Mr. Jack Redding c/o Bethesda Licensing Texas Utiliti9s Electric Company 3 Metro Center, Suite 610 Bethesda, Maryland 20814 .g William A. Burchette, Esq.
Counsel for Tex-La Electric Cooperative of Texas Heron, Burchette, Ruckert & Rothwell Suite 700 ..
1025 Thomas Jefferson Street, NW Washington, D.C. 20007 GDS ASSOCIATES, INC.
Suite 720 1850 Parkway Place Marietta, Georgia 30067-8237 l 1
Administrative Judge Peter Bloch U.S. Nuclear Reg'ulatory Commission Washington, D.C. 20555 Elizabeth B. Johnson Administrative Judge i Oak Ridge National Laboratory J P. O. Box X. Building 3500 l Oak Ridge, Tennessee 37830 1 Dr. Kenneth A. McCollom 1107 West Knapp Stillwater, Oklahoma 74075 l Dr. Walter H. Jordan
, 881 West Outer Drive j Oak Ridge. TN 37830 4
13 Texas Utilities Electric Company Comanche Peak _ (other) cc:
Mr. Paul Gosselink Attorney General's Office P. O. Box 12548, Capitol Station ;
Austin, Texas- 78711 Bureau of Radiation Control State of Texas ,
1100 West 49th Street Austin, Texas 78756 Office of the Governor ATTN: Darla Parker Office of Intergovernmental Relations P. O. Box 13561 Austin, Texas 78711 Honorable George Crtmp e-County Judge
- Glen Rose, Texas 76043 ,
Honorable Milton Meyer ,
County Judge Hood County Courthouse Granbury, Texas 76048 -
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Enclosure 1 1 1
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/ ""N. UNITED STATES I
/(ugf i NUCLEAR REGULATORY COMMISSIOrd Office of Govemmental and PubHc Affairs j i%f/
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88-46 FOR IMMEDIATE RELEASE No.
Tel. (Monday, April 25, 1988) 301/492-0240 SPECIAL INQUIRY ON NRC MATTERS COMPLETED Nuclear Regulatory Comission Chairman Lando W. Zech, Jr., announced today tbF "e NRC has received a report from David C. Williams of the General Account . ' ice concerning a special inquiry conducted by Mr. Williams into three 0 . matters of concern to NRC and the Congress. Mr. Williams, head of GA0' ce
. of Special Investigations, conducted the independent inquiry at the requeu, of the Comission. His report was made public today by the NRC.
In releasing the report, Chaiman Zech said:
"David Williams has performed m important service to the Comission. !'
agree with his coment that the 1.rc, ant mission and critical safety role of the NRC require that it possess a ' =>-rate. investigative capatity with resources that will assure the NRC's ooility to perform its function in a professional, competent manner. I am pleased that Mr. Williams' investigation found that the evidence does not support the allegation of improper discussions between the Executive Director for Operations and an official of TVA. I also am pleased that no evidence was develo;ed to indicate that substantive changes were made in the Office of Inspector and Auditor investigative report on the Comanche Peak matter during the review and editing stage. The Williams report recognizes that we already have reviewed the colicies and procedures for handling allegations involving Comissioners and their offices. The Comission will give careful consideration to Mr. Williams' entire report in our continuing efforts to assure that we carry out our investigative responsibilities fairly and efficiently."
Mr. Williams' inquiry at NRC focused on the adequacy of an Of fice of Inspector and Auditor (OIA) investigation of allegat4ns of staff misconduct l involving the Comanche Peak plant under construction in Texas; tne adequacy of l an 0IA investigation of allegations of improper communication between Victor l Stello, NRC Executive Director for Operations, and Steven Wh!te of the j Tennessee Valley Authority; and the circumstances under which Mid-South Utilities obtained an internal NRC document that appears to have core from the files of Comissioner Thomas Roberts' office, and the subsequent handling of i
that matter, 1
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. Enclos m 2 United States General Accounting Office GAO SPECIAL REPORT Office of Special 0
Investigations WW .
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NOTICE: Further release of this document may not be in the best interests of the government for reasons stated herein.
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l'nited States Geneml Accounting Omce Washington, D.C. 20548 Office of Special Insestigations April 22, 1988 The Honorable Lando W. Zech, Jr.
Chairman Nuclear Regulatory Commission Washington, D.C. 20555
Dear Mr. Chairman:
The U.S. General Accounting Of fice, Of fice of Special Investigations, has investigated three matters bearing on the adequacy of the Nuclear Regulatory Commission's (NRC) investigative proceedings and practices. Enclosed is our statement of findings.
t We have provided this report to the requestors: Chai rman Morris K. Udall, Subcommittee on Energy and the Envi ro nme nt , House Committee on Interior and Insular Affairs; Chai rman John D. Dingell, Subcommittee on Oversight and Investigations, House Committee on Energy and Commerce; Chai rman Phi' lip R. Sharp, Subcommittee on Energy and Power, House Committee on Energy and Commerce; and Cong ressman Ed wa rd J . Markey, Committee on Energy and Commerce, and Committee on Interior and Insular Affairs.
As agreed by our requestors, we are providing a copy of the report to you as the Chairman of the NRC.
Shoul'd you have any questions regarding the content of this r e po r t , please contact me at (202) 272-5500. l Sincerely yours, j hO C WM David C. Williams Director Enclosure
On June 22, 1987, four members of the U.S. House of Representatives requested that the U.S. General Accounting Of fice (GAO), Of fice of Special Investigations, investigate three matters bearing on the adequacy of the Nuclear Regulatory Commission's (NRC) investigative proceedings and practices.
Specifically, these members, Cong ressmen Mor ris K. Udall, Edward J. Markey, Philip R. Sharp, and John D. Dingell, asked that GAO do the following :
-- Ascertain if the NRC Of fice of Inspector and Auditor (OIA) properly investigated and accurately reported on allegations relating to the inspection prog ram at the Comanche Peak Steam Electric Station (CPSES). An NRC inspector at that Texas facility charged that he had been harassed, intimidated, and pressured by his superiors to alter or delete findings f rom his repo rts.
-- Evaluate the thoroughness of OIA's investigation of an allegedly improper discussion between the NRC's Executive Director for Operations (EDO) and an official of the Tennessee Valley Authority (TVA). The discussion concerned; a major NRC enforcement initiative focused on TVA. ;
-- Determine if the NRC properly handled the question of whether a regulated utility had uncontrolled access to internal NRC documents. These documents concerned defects in a Louisiana nuclear plant and were found in the possession of the utility licensed to construct that plant.
In follow-up meetings with the requestors, GAo was asked to expand the scope of the work as necessary. Therefore, GAO reinvestigated certain portions of each of the three matters.
In summary, we have concluded on the basis of our investigation that the evidence does not support the allegations concerning th,e inspector at CPSES or the allegation of improper discussions between the EDO at the NRC and an official of TVA.
However, as discussed in detail below, our work revealed a number of serious deficiencies in the conduct of these investigations by the NRC. We have concluded that the allegation concerning access by a regulated utility to internal NRC documents was also improperly handled.
BACKGROUND The NRC is responsible for licensing and regulating nuclear facilities and materials, and for conducting research in support of. the licensing and regulatory process, as mandated by the Atomic Energy Act of 195$, as amended . OIA is the internal investigative arm of the NRC and is charged with investigating misconduct by NRC employees and verifying the adequacy of NRC operations.
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l On April 9, 1987, during a hearing conducted by the Senate Committee on Governmental Af f airs concerning the need to legislate an independent NRC inspector general, allegations surfaced that re flected on the adequacy of the NRC's internal investigative processes. After the Senate hearings, the NRC Chairman, Lando W. Zech, Jr., and four members of the U.S. House of Representatives called for an independent review of the allegations.
In response to the Cong ressmen's request, in July 1987 GAO initiated an investigation of the three cases. This report includes the histories of the three incidents, the NRC's handling of the matters, and GAO's investigative analysis of the NRC's disposition of the matters.
METHODOLOGY GAO's investigation included a review of the following: l
-- the NRC's policy documents, applicable laws, regulations, and standards;
-- relevant NRC investigative reports; .
-- thousands of pages of transcribed interviews and congressional testimony that related to the three matters; .
-- relevant OIA case files;
-- pertinent NRC correspondence with various congressional committees; and
-- other related documents, such as the report prepared by the Comanche Peak Report Review Group.
GAO supplemented its evaluation of documents with interviews of individuals involved in the three matters.
CASE 12 ' COMANCHE PEAK STEAM ELECTRIC STATION Results in Brief l
Although OIA's report might have reached the proper !
conclusion with respect to allegations of harassment and intimidation of NRC Inspector Shannon Phillips, GAO found serious problems with OIA's investigative processes. Phillips' allegations called into question the handling of inspection 2
findings by NRC Region IV managers. Among other things, GAO found that OIA did not interview several witnesses who could have added a needed perspective to Phillips' allegations. ;
Furthermore, GAO found insufficient evidence to support the OI A l investigator's claims that NRC managers interfered with the r conduct of the OI A investigation or that the results were incorrectly reported. l 1
Backg round In March 1986, Shannon Phillips, an employee of NRC Region IV in Texas, telephoned NRC Commissioner James Asselstine and outlined allegations concerning Region IV's management of its j inspection prog ram at the Comanche Peak Steam Electric Station.
Phillips serves as the Senior Resident Inspector for Construction '
at CPSES. Asselstine referred the allegations to the acting Director of OIA, Gary Eddles, and expressed concern that Phillips' allegations were serious and warranted attention.
(OIA's Director, Sharon Connelly, was on administrative leave pending completion of an investigation of her conduct in the handling. of an unrelated matter. Connelly returned to her ;
duties as head of OIA on March 28, 1986.) In agreement with I Asselstine, Eddles assigned OI A Investigator George Mulley to conduct the inquiry. Additionally, he agreed that all interviews would be conducted under oath and be transcribed. l On March 19, 1986, Mulley interviewed Shannon Phillips under )
oath. In the interview, Phillips made the following allegations:
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-- In January 1986, his Region IV supervisor, Thomas Westerman, made a statement about Inspection Report 84-32/11 that Phillips considered threatening.
-- Westerman directed him to delete f rom draf t Inspection Repo rt 85-07/05 any reference to an inspection trend analysis that Phillips had performed at the direction of his former supervisor. The analysis was a computation of data relating to the frequency of unresolved quality assurance issues.
-- Westerman had harassed and pressured him and another inspector to change or delete findings in draf t Inspection f Re po rt 85-07/05. l l
-- Region IV's data on NRC Form 766, Inspector's Report, was inaccurate. The 766 program is an information management system designed to capture, maintain, and report statistical and planning data concerning inspection and enforcement i activities.
-- Westerman made improper statements for a regulator.
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-- Westerman directed him to destroy draf ts of Inspection Reports 85-07/05 and 85-13/09 because a Freedom of Information Act request had been received.
-- Westerman had pressured and harassed him over technical differences on draft Inspection Report 85-14/11.
-- Westerman improperly handled the allegations of a consultant g roup working for the utility.
-- West 'rman had pressured, harassed, and intimidated him to change draft Inspection Report 85-16/13.
-- Eric Johnson, a Region IV manager, criticized him for how he had written a memorandum concerning possible wrongdoing relating to fire seals.
-- Johnson told the Senior Resident Inspector at the Port St.
Vrain facility in Region IV not to write certain violations and to downg rade others. l Phillips further claimed that his disag reement with Region IV management's handling of his allegations resulted in his being harassed, intimidated, and isolated by Region IV management.
Between March 19, 1986, and November 26, 1986, Mulley, with the assistance of te.chnical and support staf f, investigated the allegations and prepared a 47-page report with attachments detailing the findings. The repo rt, entitled Allegations of Misccaduct by Region IV Management With Respect to the Comanche Peak Steam Electric Station, was issued on November 26, 1986, as OIA Re po rt 8 6-10. The report concerned the allegations made by Phillips and was divided into the following three issues:
(1) Did Region IV management harass and intimidate inspectors to pressure them to downgrade or delete proposed inspection findings at CPSES?
(2) Was the Region IV Quality Assurance Inspection Program at CPSES inadequate?
(3) Was data documented in Region IV's NRC Form 766, Inspector's )
i Re po rt , inaccurate?
In reference to the first allegation, the OIA report j concluded that Phillips' findings were downgraded or deleted f rom '
draft inspection reports and that these changes were made at the direction of Region IV management. Mulley's technical advisors questioned the actions taken by Region IV management regarding certain inspection findings; however, OIA's investigation failed to substantiate that the Region IV supervisor, Westerman, 4
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intentionally harassed or threatened Phillips in connection with these findings.
The OIA report generally concluded that the second and third allegations were accurate, and reviews performed by the technical assistants were used to buttress OIA's conclusions.
OIA Report 86-10 had considerable impact on the NRC. In response, in January 1987 the Commission approved the formation of a special review group comprised of senior NRC of ficials to address the specific issues raised in the OIA report. This review group, the Comanche Peak Report Review Group, issued its repo rt on March 12, 1987, which reflected the following conclusions:
- None of the draf t findings that had been downgraded or deleted were significant in terms of any direct adverse impact on plant safety.
-- Region IV management acted appropriately in downgrading or deleting some of the inspectors' 34 draft findings; howevert part of the problem could have resulted f rom the inspectors $ ,
f ailure to fully develop the issues of co.1cern. Regional i management should have provided the inspectors with guidance to properly focus and develop these items, rather than deleting them. .
-- There we re previous gaps in the Region IV Comanche Peak Quality Assurance Inspection program in relation to 1986 requirements, but the current augmented review and inspection ef fort at that location compensated for those !
gaps.
-- The Form 766 data base was not used in making safety decisions, and its accuracy, completeness, and timeliness l were not adequate for many needs.
-- Some f actors that came to light in the OIA investigation and its af te rmath might have implications for other f acilities.
On April 9, 1987, Mulley appeared before the Senate Committee on Governmental Af f airs and testified concerning the conduct of the Comanche Peak investigation (OIA Report 86-10) .
In his testimony, Mulley asserted the follo. wing:
-- He limited the scope of the Comanche Peak investigation because of pressure from EDO Victor Stello and OIA Director Sharon Connelly.
-- His draf t of the OIA report was modified by Connelly as follows:
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She removed the conclusion that Region IV managers acted inappropriately to limit violations assessed and that Phillips was harassed and intimidated in an ef fort to get him to downgrade or delete his inspection findings.
She focused the report on the technical issues underlying the violations, an area outside the expertise of OIA.
She removed quotations of Region IV personnel that substantiated the conclusions stated above and demonstrated the lax enforcement attitudes of Region IV manag eme nt .
-- The dacision to distribute the OIA report would make it extremely difficult to get NRC employees to cooperate in ongoing investigations.
-- Phillips tried to inform the NRC that Region IV demonstrated an attitude of trying to help the utility .c obtain an operating license for Comanche Peak. [
On October 8, 1987, the Senate Committee on Environment and Public Works, Subcommittee on Nuclear Regulation, held hearings at which Mulley again testified with reference to the Comanche Peak case. At that hearing Mulley stated the followings
-- All of the facts and information developed during the )
investigation were in the report. l 1
-- He disagreed with the OIA Director, Sharon Connelly, about the way in which the report was prepared, particularly the overemphasis on technical issues, an area in which OIA lacked expertise.
-- He was more interested in the treatment of Phillips than he was about the technical validity of the inspection findings.
-- He believed that Phillips had been harassed by Region IV manag ement .
-- The staff of EDO Victor Stello was qualified to address technical issues and decide the validity thereof.
-- He disagreed with some of the changes Connelly made; however, he did not think that anything was wrong, illegal, or "immoral" about what she did. The report was dif ferent f rom the way he would have written it. Stello wanted the report out because he wanted a document with which to work.
In an effort to respond to the EDO, Mulley started to put it together quickly. He decided there were certain issues 6
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. l that, at the time, did not need to be included in the report. No one attempted to alter the content of the r e po rt.
GAO's Investigative Analysis GAO determined that OIA's investigation of allegations that NRC managers in Region IV mishandled findings proposed by NRC Inspector Shannon Phillips was accurate; however, the investigative processes used by OIA were questionable. )
I In support of 'the proposition that Phillips' findings had I been improperly altered or deleted, OIA Investigator Mulley relied, in part, on statements by a former Region IV manager that Region IV management had a lax enforcement attitude. When l interviewed by GAO, however, this same individual said that the ,
OIA investigator misunderstood his meaning and that the point he was trying to make was that there were philosophical dif ferences about how well developed a finding must be before it should be cited as a violation. Region IV managers Westerman and ,
Johnson insisted that violations be cited only after the findings' !
were fully developed and supportable, whereas some inspectors and managers believed in citing violations and placing the burden of proof on the utility to disprove them, i
In contrast to his testimony of April 9, 1987, at the Senate ,
Committee on Governmental Af f airs hearing, Mulley told 'GAO that l it was only his "opinion" that Phillips had been harassed and intimidated and that' it might not have been done intentionally.
Mulley could provide no direct support for his contention that Philllps had suf fered harassment or intimidation. By f ailing to l interview other Region IV supervisors, Mulley unintentionally )
skewed the harassment question. GAO interviewed other NRC personnel who provided a balancing perspective on Phillips' allegations and the proper oversight function of regional officials. Phillips stated he was being harassed and intimidated by his supervisors because his findings were critical of the utility. However , Phillips' supervisors advised that this was not the case. They stated Phillips f ailed to fully develop his findings and/or present them clearly in writing. l GAO's review indicated that Mulley was correct in asserting OI A should not have focused its report on the technical issues.
Even with technical assistance, OIA lacked the expertise to resolve such issues in a competent f ashion. If OIA found a need to challenge the technical judgments of Region IV management, it should have employed NRC's established procedure for resolution of dif fering professional opinions.
Finally, GAO was unable to verify Mulley's assertions that (1) he had been pressured to limit the scope and otherwise expedite completion of his investigation of. the Phillips matter 7
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and (2) his draft report had been substantially altered by Connelly. Mulley testified before the Senate Committee on Environment and Public Works that although he might have l disagreed with some of the changes to his report, he did not l think there was anything wrong with the changes made by the OIA Director. Furthermore, Stello denied that he had applied undue ,
pressure on Mulley concerning the report. GAO reviewed all l available draf ts of Mulley's report and interviewed the principals involved in the preparation, editing, review, and approval process. No evidence was developed to indicate that substantive changes were made during the review and editing stages.
With regard to the distribution of Mulley's report, GAO found no basis to question the conduct of the EDO who explained j that the Commission authorized the distribution to assist NRC management in addressing important matters, such as health and !
safety issues requiring immediate action. Witnesses told GAO l they were disturbed about the distribution of the report I I
containing unredacted transcripts of their statements to high-level management of ficials and to the principal witnesses. :
Rowever, none of the witnesses interviewed asserted that they haj been subjected to reprisals. Moreover, none of the witnesses !
identified in the OIA report or transcripts asked for or received I a pledge of confidentiality from anyone in OIA, and Mulley voiced no objection to the release. .
CASE 2: IMPROPER TVA DISCUSSION Results in Brief GAO's investigation revealed that OIA did not thoroughly investigate an alleged improper discussion between an NRC official and..an official of the Tennessee Valley Authority concerning a major NRC enforcement initiative focused on TVA. l OIA inadequately planned its investigation and f ailed to !
interview one of the two parties to the conversation. GAO learned that key OIA personnel did not know the purpose of their investigation of this matter.
Although the conversation was investigated by OIA, the NRC does not prohibit or discourage such conversations. A report of such contacts is now required by NRC regulations; however, none was required at the time of this incident.
Backg round On December 19, 1985, a member of TVA's Nuclear Safety Review Staff (NSRS) briefed NRC Commissioner James Asselstine on the condition of the Watts Bar Plant. NSRS' position contrasted 8
sharply with the TVA's prior certification to the NRC that the plant was ready for f uel loading . In the briefing, NSRS listed several technical areas in which they believed deficiencies existed, which indicated to them f undamental weaknesses in the Watts Bar quality assurance prog ram.
NSRS' perception that the plant was not ready for fuel loading prompted the NRC to request that TVA officially certify its position on NSRS' technical concerns. By letter dated January 3, 1986, the NRC's Office of Nuclear Reactor Regulation (NRR) requested that TVA certify its position on whether or not the quality assurance program met the criteria outlined in 10 CFR Part 50, Appendix B. The NRC's letter allowed 6 days for a sworn response and 30 days for "info rmation on an item-by-item basis supporting the TVA corporate position." The Director of NRR, Harold Denton, subsequently ag reed to extend the 6-day deadline.
The extension was made to allow the TVA adequate time to consult with staff and because the new head of TVA's nuclear program, Steve White, would not report for dttty until January 13, 1986.
On March 20, 1986, White responded to Denton of NRR with TVA's position and addressed each of the issues underlying the NSRS :
perception. Af ter White signed the letter and transmitted it l for hand delivery by a TVA of ficial, he determined a need to clarify one section of the letter. White contacted the courier while he was en route and directed him to go by TVA's Washington, D.C. , of fice where the change was incorporated. The letter was subsequently delivered to the NRC. -
On April 7, 1986, Ben Hayes, Director of the NRC's Of fice of Investigations (OI), info rmed then-NRC Chai rman Nunzio Palladino that NRC's Executive Director for Operations, Victor Stello, had been overheard discussing TVA's response to Denton's letter with Steve White on or about the time that the TVA response was dispatched. OI is responsible for NRC investigations involving allegations of intentional violations of regulations by licensees, permittees, applicants, contractors, and vendors. At the Chairman's request, Hayes passed this information to the NRC's Director of OIA, Sharon Connelly. Hayes informed her that the Stello-White conversation had been overheard by Denton and the NRC's Director of Inspection and Enforcement, James Taylor .
OIA Director Connelly decided to investigate the matter and assigned the case to Keith Logan, then OIA's Assistant Director for Investigations. Logan interviewed Hayes on April 11, 1986.
The transcript of the Hayes interview reveals the following po ints :
OI was investigating a possible material false statement made in February 1985 by TVA's former nuclear power program manager.
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-- In the course of OI's false statemant investigation, centon was interviewed and advised that s . or about March 20, 1986, while he, Taylor, and Stello we re together in an NRC vehicle, Stello had a telephone conversation with White about the 10 CFR Part 50, Appendix B, matter.
-- Taylor, in a later discussion with Hayes, confirmed that the conversation had taken place and indicated that he was uncomfortable with the conversation.
-- On April 7, 1986, Hayes advised Chairman Palladino about the Stello-White conversation.
-- The Chainnan indicated that he wanted Hayes to discuss the matter with Connelly of OIA.
-- Hayes informed Commissioner Asselstine about the Stello-White conversation in the event the issue came up in the Commissioner's forthcoming visit to TVA.
Fo.llowing Logan's interview of Hayes, nothing more occurred j in the OIA investigation until June 6, 1986. On that date, , ,
Asselstine asked Connelly about the status of the investigation !
during a briefing she was making to the Commission on unrelated OIA activities. In response, Connelly erroneously stated that the witnesses to the conversation had been interviewed and that stello would be interviewed within the next two weeks." Four days later, Connelly corrected the record to show that neither witness had been interviewed, tha case had been reassigned to .
Investigator Anthony Ward, and the first of the witnesses would be interviewed on June 10, 1986.
Ward interviewed Denton on June 10, Taylor on June 16, and Stello on July 30, 1986. On August 26, 1986, Ward telephoned an attorney in the NRC's Office of General' Counsel, Sebastian ,
Aloot, and synopsized the results of the four OIA interviews. I Aloot stated that, based on the facts as presented, there was no apparent conflict of interest or impropriety on the part of Stello.
Two days later, George Mulley, who in June 1986 had been appointed CIA's Assistant Director for Investigations, signed OIA Report 86-30, and connelly transmitted it to the Commission. The report did not indicate that other NRC officials had similarly discussed TVA's Appendix B response with White. The report concluded, "There was no information developed during this inquiry to substantiate any impropriety on the part of Stello during his telephone conversation with White." The report was correct in its conclusion; however, OIA's method of having 10
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reached such a-determination was questionable since they f ailed to interview the second party of the alleged improper conversation.
On April 8, 1987, Mulley, in preparation for his testimony at the Senate Committee on Governmental Af f airs hearings, wrote a memorandum explaining why the investigation took as long as it did to complete and why, in reviewing the draft report, he saa no l reason to interview Steve White. Mulley's memorandum stated that j he was not involved with this investigation during the April to July 1986 time f rame because of his preoccupation with the Comanche Peak and other investigations. Accordingly, the memorandum indicated, Mulley could not explain why the Stello-White investigation had taken so long to complete. The memorandum reported that Mulley reviewed the Stello-White report and "noted no conflict regarding the topic of the telephone conversation; the only point in dispute seemed to be the propriety of...(Stello's) actions." The memorandum further i stated that "(Mulley) did not discern a need to interview l (White) . ..because he would have provided no new significant info rmation regarding (Stello's) . . . actions." [
GAO's Investigative Analysis GAO investigated the Stello-White telephone conversation to determine the propriety of the interaction between the principals and to evaluate the thoroughness of OIA's investigation of the matter. On March 14, 1988, the NRC's Office l of Investigations is' sued a report entitled Watts Bar Nuclear Plant: Possible Willf ul Attempt by TVA Management to Mislead the NRC. OI's report concluded that White knowingly and willf ully made a material f alse statement in his March 20, 1986, certification letter to the NRC. Because it was beyond the scope of the request made of GAO, GAO did not evaluate the OI investigation or report. However, GAO did review transcripts of OI interviews that we re relevant to White's March 20, 1986, conversations with Stello and Denton.
GAO concluded that OIA's investigation of the alleged ,
improper conversation between Stello and White was not suf ficiently thorough. OIA f ailed to determine what it was investigating, e.g., there was inadequate ef fort devoted to determining the nature of what was said and the impact that the conversation had on the actions of either party. Furthermore, OIA f ailed to pursue the investigation in a timely and systematic manner. The investigation should not have been initiated without a proposed plan of action and specification of the rule, law, or regulation that might have been violated. This was 11
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l evidenced during GAO's interviews of Ward, Mulley, and Connelly since not one of them could provide a convincing justification fo r their f ailure to interview White about the alleged improper conversation.
During GAO's interview of White, he denied having sought or obtained improper pre-approval for TVA's position. White stated that the purpose of his calls to NRC of ficials was to assure that TVA's letter was fully responsive to the NRC's request. White asserted that it was his discussion with Denton, not with Stello, that led him to make a clarification in TVA's response. White made contemporaneous notes of his conversations, which he provided to GAO. These notes, which were part of White's ongoing diary for this period, add credence to his version of what transpired in his conversations with NRC officials.
When interviewed, Stello and Denton's account of the events coincided with White's version of what transpired in the telephone calls of March 20, 1986. White asserted that he was not trying to discern if TVA's position was acceptable, but to assure himself that the letter was fully responsive to the NRC's r request for information. White told GAO that his change to the a letter did not reflect a substantive change in TVA's position, but only served to clarify a detail that Denton considered impo rtant. GAO was not able to develop any information indicating that Stello, Denton, or other NRC officials coached White on what position TVA should adopt to assure f avor.able action by the RRC. GAO learned in its interviews of Denton and Taylor that their discomfo rt with the Stello-White conversation was only because they felt White was going around them in dealing with Stello.
An NRC regulation (10 CFR 0735.49a) prohibits employee actions that might result in, or create the appearance of, giving preferential treatment to any person or making a government decision outside official channels. Under I?RC policy applicable to the time frame in question, GAO believes that this regulation did not prohibit the type of discussions that apparently took place in this case. Until recently, the NRC policy with reference to this regulatory provision was permissive, as evidenced by the commentary of Chairman Zech on July 10, 1987, wherein he stated "so long as it is understood that any staff discussions do not constitute the staf f's formal judgment on the merits of any issue." He further stated in his commentary, "The agency views preliminary discussions and informal preliminary staff opinions as important ways to better understanding on the part of all concerned of the issues surrounding a potential request for regulatory action."
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Accordingly, GAO's investigation substantiated that the Stello-White convers& tion did not contravene relevant NRC regulations as applied at the time in question.
CASE 3: LEAK OF NRC DOCUMENTS Results in Brief GAO concluded that the NRC did not properly address the issue of whether a regulated utility had access to its internal documents. Commissioner Roberts' investigation of the matter was very limited, but none of the Commissioners seemed to have had an appreciation of that fact. A significant f actor explaining why the matter was not properly addressed was the failure of the NRC to refer the matter to OIA at the outset as required by NRC guidelines.
Backg round On. June 8, 1983, James Joosten, a technical assistant to i then-NRC Commissioner Victor Gilinsky, sent Richard DeYoung, an :
NRC of ficial, documentation that he had received f rom a f ree-lance reporter regarding alleged safety problems with a nuclear power plant in Louisiana. DeYoung served as Director of the NRC's Of fice of Inspection and Enforcement. The memorandum transmitting the documentation called attention to the ~ reporter's concerns about cracks in the concrete under the containment vessel at the Louisiana Power and Light Company's (LPL) Waterford III plant. The materials included published articles written by the reporter that raised questions about possible collusion between LPL and NRC inspectors. Joosten's memorandum suggested DeYoung assure that the reporter's concerns be reviewed l objectively. Joosten sent copies of his memorandum and l
attachments to Steve Chestnutt, technical adviser to Commissioner Thomas M. Roberts, and to other NRC officials. Copies of the Joosten memorandum were publicly released by NRC three months later pursuant to a Freedom of Information Act request.
In March 1985, OI Investigator Bill Ward, while working on an unrelated case, discovered a copy of the Joosten memorandum and attachments in an LPL file at the Waterford plant. Attached to the material was a cover memorandum dated June 15, 1983, from George White, a vice president of Middle South Utilities, the holding company for LPL. The White memorandum was addressed to John Cordaro, an executive of the company, and read as follows:
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" Attached is a memorandum which I have received f rom sources in' side the Nuclear Regulatory Commission regarding Waterford Quality Assurance matters. This memo is fo r your information but I would hope that you limit its distribution to protect the source within the NRC."
On March 13, 1985, af ter conferring with his staf f on what to do about the discovery, OI Director Ben Bayes took a copy of the documents to then-NRC Chairman Palladino. Following a discussion with his legal advisor on what actions the ciscovery warranted, Palladino decided to make Commissioner Roberts aware of the matter. Palladino did so because the copy Hayes provided appeared to have been duplicated from Roberts' office file copy.
Af ter obtaining the documents from Palladino, Roberts assembled his staff and asked each member if he or she had leaked the documents. Roberts tape-recorded the staf f interview.
During the taped interview, none of Roberts' staff acknowledged After the meeting, having given the documents to George White.
Roberts' staff established that the Joosten memorandum had been released to the public on September 23, 1983, pursuant to a .
Freedom of Information Act request. I e
On March 14, 1985, Palladino sent a memorandum to Ben Hayes informing him that NRC's Reorganization Plan No. 1 of 1980 made it the responsibility of the individual Commissioners to supervise personnel in their immediateOn offices and, therefore, the matter was Roberts' to deal with. March 15, 1985, Hayes and Ward met with Roberts and his legal advisor, James M.
Cutchin. At Roberts' request for all documents related to the matter, Hayes turned over to him copies of the White memorandum, along with two pages of handwritten notes that Bayes had made of his discussions with Palladino.
In his discussion with Hayes, Roberts made a remark .that Hayes and Ward interpreted as an express' ion of concern that the matter might .become an issue in Roberts' upcoming confirmation hearing. The matter did not arise in the June 18, 1985, confirmation hearing; however, it surfaced just prior to the Senate Committee on Governmental Aff airs hearing on April 9, 1987.
On March 30, 1987, White prepared an affidavit for the Senate Committee on Governmental Af f airs staf f. In it he stated the following under oaths
-- The June 15, 1983, memorandum attached to the Joosten material and bearing what appears to be his signature, was, in f act, dictated f rom Washington D.C. , signed by his 14
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secretary, Peggy Balsamo, in New Orleans, and was not the type of memorandum he was accustomed to sending or r eceiv ing .
-- He had no recollection of preparing or dictating the memorandum or receiving the attachments thereto.
-- He did not recall ever having had possession of internal NRC documents or inforr.ation regarding Waterford nuclear plants that would not have been provided or left for Middle South Utilities, or made available for the public in the normal course of business.
-- He did not recall ever having had a source or having heard of a source for internal NRC documents or information within the NRC, and he did not consider anyone then or formerly employed by the NRC to be a source for such documents or info rmation .
At the April 9, 1987, hearing, Senator John Glenn, the ::
Committee Chairman, questioned Roberts about his investigation of how White obtained the Joosten materials. Roberts testified that he had not questioned White about the matter but satisfied himself that no one in his office had leaked the documents.
Roberts said he met with the other Commissioners and informed each of them that he was terminating his investigation..without having determined the source of the leak. At the hearing, Roberts testified he destroyed all copies of the documents that Palladino and Bayes had given him. Roberts explained he did this because he was "somewhat paranoid" and thought someone might be out to gut him. A day af ter the hearing, Roberts notified Senator Glenn that he had located the documents he had previously testified to having destroyed. Senator Glenn subsequently referred the matter to the Dopartment of Justice for consideration of possible criminal prosecution.
On April 14, 1987, an NRC management meeting was held in which the Office of General Counsel was requested to review the policies and procedures for handling The allegations General Counsel involving the replied Commissioners and their offices.
that OIA had authority to investigate such matters, subject to the judgment of the Commission.
During testimony before the Senate Committee on Environment and Public Works in October 1987, OIA Director Sharon Connelly was asked if, in cases of alleged wrongdoing by the Commissioners or their staf fs, she thought the NRC should determine whether to refer the matter to OIA or not. Connelly responded that she thought the Commission had determined that all such allegations were to be referred to OIA and, if not, to the FBI.
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GAO's Investigative Analysis Without determining how NRC documents came into the (
I possession of Middle South Utilities, GAO has been unable to ascertain whether any federal law or NRC regulation was violated.
In his affidavit to the Senate committee on Governmental l Af f airs, White did not deny dictating the June 15, 1983, memorandum that transmittedIn thethis material to LPL. GAO interviewed interview, White "seemed to White on January 29, 1988.
recall" that he had dictated the memorandum and stated that he employed words in it containing a certain amount of "puffery" designed to impress his superiors. White stated that in retrospect, had he seen how the words looked on paper, he might not have signed the memorandum. White told GAO that he did not remember where or from whom he obtained the documents, except to say that it was not from a source or sources within the NRC.
Additionally, White advised GAO that no of ficial of LPL or Middle South Utilities who was an addressee of his "confidential" memoraridum acknowledged having received the materials.
.r GAO's investigation verified that no LPL or Middle South a 8
Utilities official brought to the attention of the NRC an employee's assertion of the existence of a "mole" within the NRC. White's memorandum, no matter how self-serving, demonstrated that a regulated utility secured unauthorized access to NRC documents. The ability to obtain such material.s could impact on the NRC's enforcement program, licensing functions, and regulatory procedures.
GAO determined that Roberts did not concern himself with the ,
question of how White obtained the NRC documents, but only addressed the issue of whether someone on his personal staf f might have been the utility's avenue of access. In this instance, Roberts dismissed the leak implication by simply asking his small staff if any of them provided the documents to the utility. By'doing this, Roberts ignored the potential of a ;
broader problem in that a utility official claimed to have a f j
"source" within the NRC. r Chairman Palladino's referral of the matter to Roberts for f handling did not oblige Roberts to adhere to relevant investigative stanJards. Palladino, like Roberts and the other Commissioners, app.coatly believed that the referral and disposition of this t tter was an exclusive delegation of investigatory authority and discretion. An April 16, 1987, opinion from the NRC's General Counsel appropriately points out the error in this assumption by distinguishing between the f unctions of supervision and investigation.
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Prior to the April 1987 Senate hearings, Roberts learned l
l that his handring of this matter would be subjected to scrutiny.
On the day prior to his testimony, Roberts met with a former NRC General Councel. In this meeting, Roberts advised the former NRC official that he knew this issue would surface at the April 9, 1987, hearing.
The less-than-professional handling of the matter by the NRC, combine 1 with Roberts' cursory investigative ef fort, might well have jtopardized any possibility for determining where or how White obtained the NRC documents. When the issue first surf aced in 1985, a pr operly conducted investigation, including an interview of White, might have provided NRC with the identity of "the source Nithin the NRC."
GAO'S INVESTIGATIVE OVERVIEW GAO was advised by the requestors to expand the scope of its work as necessary to cover unforseen but related matters that ,
might develop. During the course of its investigation, GAO notqd apparent problems with the NRC's investigative capability. t The NRC and the U.S. Department of Justice (DOJ) have failed to execute a Memorandum of Understanding governing the referral of possible criminal violations stemming from questionable actions of nuclear licensees. Critics have cited such' cases as the D.C. Cook, Three Mile Island, and Permi cases as examp',es of the NRC being too cozy with the industry it is charged with ,
r eg ulating . In each of these cases, allegations surf aced that ,
NRC officials engaged in actions that adversely affected the potential criminal prosecution of the concerned utility.
The Senate Committee on Governmental Affairs hearings revealed deficiencies in the NRC's investigative programs and led the Committee to report, "0IA lacks authority, competence and indepe ndence ." GAO's analysis of the Comanche Peak matter suggests that a supervisor-employee conflict was elevated to the highest levels of the NRC. The matter was raised to such levels because OIA failed to provide NRC management with a proper perspective on the matter under investigation. In another instance, OIA failed to understand the basic issue that they were investigating, thus they were unable to properly serve the needs of the agency. GAO conducted a review of several closed OIA investigative case files. This review found that OIA routinely initiates investigations without first establishing a threshold for acceptance. When interviewed by GAO, Connelly acknowledged this to be true. Additionally, GAO's review of OIA records f rom 1984 to the present reflects that OIA has not successfully presented a case for criminal prosecution.
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NRC management is faced with a problem in which its two primary investigative organizations, OI A and OI, demonstrate a mutual lack of trust, respect, and cooperation. This is evidenced by the OI Director's involvement with the matters GAO reviewed. The OI Director advised that when he learned of the alleged improper conversation between the EDO and a utility of ficial, he did not make a direct referral to OIA, but instead took the information to the Chairman. In the leak of the "sensitive" document matter, the OI Director stated he brought the information to the Chairman, not to OIA, because it concerned a Commissioner. Appropriately handled, both matters should have been referred to OIA for evaluation of wrongdoing. OIA Director Connelly's statement that she is suspicious of the nature of any investigative referral that she receives f rom OI further demonstrates the lack of cooperation between the two NRC investigative offices.
These three issues suggest a need for the NRC to evaluate l its investigative capability. The NRC should assure that its investigators conduct their work in a competent manner using professional standards. Accurate , complete investigative a findings are of ten of major importance to NRC management and ther:
Department of Justice. When investigations focus on criminal matters, the NRC must assure that evidence is properly gathered, saf eguarded, and referred to the Department of Justice. The NRC should continue to support the Justice Department throughout the investigative and adjudicatory period. The NRC should assure that its two investigative of fices work together with a high level of coordination and cooperation. Their respective missions complement one another and of ten overlap considerably. This fact requires strong close professional relations. Lastly, the NRC should develop and enforce a strong, clear policy directing the manner in which investigations are initiated, conducted, and referred for judicial or management action that will assure independence and professionalism.
The impo'rtant mission and critical safety role of the NRC require that it possess a first-rate investigative capability with resources that will assure the NRC's ability to perform its function in a professional, competent manner.
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