ML20042A871
| ML20042A871 | |
| Person / Time | |
|---|---|
| Site: | Diablo Canyon  |
| Issue date: | 01/27/1982 |
| From: | NRC COMMISSION (OCM) |
| To: | |
| Shared Package | |
| ML20042A863 | List: |
| References | |
| REF-10CFR9.7 NUDOCS 8203240222 | |
| Download: ML20042A871 (69) | |
Text
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CLOSED MEETING - EXEMPTION 5 DISCUSSION OF DIABLO CANYON REPORT g.
January 27, 1982 paggg: 68 A;:
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1 1
UNITED STATES OF AMERICA 2
NUCLEAR REGULATORY COMMISSION 3
4 DISCUSSION OF DIABLO CANYON REPORT 5
6 CLOSED MEETING - EXEMPTION 5 7-8 Nuclear Regulatory Commission Room 1130 9
1717 H Street, N.
W.
Washington, D. C.
10 Wednesday, January 27, 1982 11 12 The Commission convened, pursuant to notice, at 13 10: 36 a.m.
14 BEFORE:
15 NUNZIO PALLADINO, Chairman of the Commission 16 VICTOR GILINSKY, Commissioner PETEP BRADFORD, Commissioner I
17 JOHN AHEARNE, Commissioner THOMAS ROBERTS, Commissioner 18 STAFF MAKING PRESENTATIONS AT MEETING 19 S. CRILK 20 L. BICKWIT F. REMICK 21 J. MURRAY R. DeYOUNG 22 W.
DIRCKS H.
DENTON 23 J. LIEBERMAN i
E. CASE 24 F. MIRAGLIA i
J.
FOUCHARD i
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2 CHAIRMAN PALLADINO:
I guess now we will go on 3 with the discussion of the Diablo Canyon Report.
4 Unless there are other suggestions, I am going 5 te suggest that we have a review of the options and 6 recommendations by the staff so that we can see where we 7 vant to go.
8 HR. DIRCKSa As we looked at it there were 9 three general areas in which decisions should be made.
10 There may be more but there were three up-front ones.
./-
11 One, is there any desire to proceed with some 12 sort of a civil penalty against the firm.
13 The second area in which a decision should be 14 made, or whether you want to make it now or later, is 15 the area in which we deal with Cloud.
Should we 16 continue to regard him as the independent auditor or 17 should we discuss other arrangements for Cloud in his 1
18 work.
19 The third general area is a more amorphous 20 subject of the sensitivity of the company to problems 21 such as this one that we have uncovered and others that
'T 22 I think we have discussed earlier, is there a need to 23 address with the company in more general terms our 24 f eeling s and reactions to the way they handled this 25 incident and past practices.
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1 Ihe four area, which I didn't mention the last 2 time, is the report itself.
We did not get into any 3 discussions of intent or otherwise in this report.
I 4 think what we tried to do is lay out the facts for the 5 Commission's views.
There was some discussion of 6 whether the Commission might want to ask Jim Cummings to 7 bundle it up and send it over to the Department of 8 Justice to see if they want to review it for any 9 particular aspect of their operations.
10 Those are the four decision areas.
11 COMMISSIONER AHEARNEt I guess I didn 't 12 remember tha t last one.
I don't remember that one 13 coming up at all.
/
14 HR. DIRCKS:
I know.
That is what I said.
15 COMMISSIONER AHEARNE:
You said there was some 16 discussion.
17 MR. DIRCKSs No.
There was discussion among 18 ourselves.
I said I didn't mention it the last time 19 bef ore the Commission.
20 CCHIISSICNER AHEARNEs Can I ask one 21 clarification of this.
You said on Cloud "We continue 22 to regard him as the independent auditor."
I didn't 23 think that we had reached that conclusion yet.
So the 24 words " continue to regard" ---
25 3R. DIRCKS.
Well, continue to evaluate him as A',$ERSoN REPORTING COMPANY,INC.
400 VIRGINIA Ave!
S.W., WASHINGTCN. D.C. 20024(202) 554 2345
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1 the independent auditor'.
2 COMMISSIONER GILINSKY:
Regard him as an 3 eligible candidate I suppose.
4 COMMISSIONER AHEARNE Yes.
5 MR. DIRCKSs There are reviews right now going 6 on on his qualifications for that program.
7 COMMISSIONER AHEARNE4 With that change.
8 COMMISSIONER GILINSKY:
That strikes me as the 9 aost time urgent question in that it would affect what 10 the comptny needs to do.
11 COMMISSIONER AHEARNEs Right.
12 CHAIRMAN PALLADINO:
In answering that 13 question how important do you think the segment two 14 report will be?
15 MR. DIRCKSs Let me just mention th a t point.
16 Tha t segment two or Phase II of the report will be 17 available by the 1st of February.
From what I gather 18 Region V has uncovered no substantial problems in this 19 review of Cloud's work and no substantial areas where 20 changes were made for which adequate explanations are 21 not available.
But we will get the report in on 22 February 1st.
l 23
' CHAIRMAN PALLADINO:
You are pretty confident l
24 of tha t da te ?
25 MR. DIRCKS:
Fairly confident, yes.
l l
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554 234S
4 5
1 If you care to understand where we are in the 2 review of the program plan and the qualifications of 3 Cloud, I might ask Harold to address that point because 4 that review is going on concurrently also.
5 MR. DENTON:
We have had a team of senior 6 people look at the submittal that came in and we have 7 also had a number of people out assisting Region V 8 actually reviewing the implementation of the plan.
We 9 have some problems with the plan in a number of areas 10 and we have had difficulty scheduling a mee ting between 11 all the parties on it.
12 Now it looks like the first meeting with the 13 com pany to go over their response to the Commission 14 order with regard to the independence of the contractors 15 a nd the adequacy of the program plan will occur either 18 the week of the 1st or the 8th, depending on when the 17 f ull power hearing is over.
l 10 CHAIRMAN PALLADIN0s You say you are reviewing 19 the plan.
Have you given them comments on the plan?
20 MR. DENTON:
We sent them I think on January 21 8th comments on the plan itself.
But then as a result 22 of our participation and Region V's participation l
23 actually watching what they are doing a number of other 24 questions have come up about the adequacy of the plan 25 and whethet or not it is responsive to the order.
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (2021 554 2345
6 1
CHAIBMAN PALLADINO:
Have you told them that 2 you have additional questions?
3 HR. DENTON:
Yes.
That is the purpose of 4 trying to arrange the meeting.
We have also received 5 comments from some of the parties to the proceeding, 6 what their views are on the plan.
So everyone 7 recognizes the need for such a meeting and it is planned 8 to occur right af ter the close of the hearing.
9 COMMISSIONER AHEARNE:
How tightly linked do 10 you see the plan being to Cloud?
In other word s., if we 11 were to conclude that Cloud is unacceptable or 12 Cloud /Teledyne are unacceptchle, and as I recall 13 Teledyne was another major subcontactor that they had 14 proposed, who would conclude they are unacceptable?
15 Does that also mesn that the plan is going to have to be 16 redone by some other group or is the plan transferable?
17 MR. DENTON:
I think the plan itself is 18 tra nsferable.
I think what we have found in observing 19 the work tha t is being done out there were questions 20 related to the robustness, the technical robustness I 21 would say of Cloud 's o rganization.
It is a small group 22 and he is finding a lot of things and they take a long 23 time to run down and understand.
24 I see as one pathway that if, for example, you 25 can come to a conclusion that Cloud doesn't somehow fill i
ALDERSON REPORTING COMPANY. INC, l
400 VIRGINIA AVE., S.W., WASHINGTCN, D.C. 200:4 (702) 554-2345
0 7
1 the bill himself he could be treated as part of the PGCE 2 company and then they would have to seek out someone 3 like Teledyne or someone that was big enough to do the 4 sort of overview that needs to be done.
But I think his 5 resources are considerably restrained.
6 COMMISSIONER AHEARNE:
They proposed Teledyne 7 in that package.
8 ER. DENTON:
Yes.
9 COMMISSIONER AHEARNE:
Have they gone ahead 10 and contracted with Teledyne?
11 MR. DENTON:
That would be one of the things 12 ve meet with as to who reports and what role does 13 Teledyne play.
14 3R. DIRCKS:
Have they signed a contract yet?
15 MR. DENTON:
I don't know for sure.
16 COMMISSIONER AHEARNE I read in one of the 17 trade journals that PGEE had contracted with Stone and 5
18 Webster.
19 MR. DIRCKS:
I haven't it yet, but I 20 understand they have sent it in.
Phase II, going back 21 to several months ago, they were using Cloud for seisnic 22 and they were going to use someone else for the 23 nonseismic reverification.
I have heard that it has 24 arr.ived in our of fice but it hasn't gotten to me yet, a 25 package saying they have selected Stone and Webster for ALDERSON REPORTING COMPANY. INC.
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8 1 the second phase of their study.
2 CHAIRMAN PALLADINO:
They have told you that?
3 MR. DENTON:
I hear that is what they have 4 said.
I haven't seen the letter.
5 MR. CASE:
Stone and Webster is under Cloud.
6 CHAIRMAN PALLADINO:
What is that?
7 MR. CASE:
It is Cloud and a subcontractor to 8 Cloud is Stone and Webster for Phase II.
9 COMMISSIONER GILINSKY I believe that is 10 correct.
11 COMMISSIONER AHEARNE:
Teledyne was to be a 12 subcontractor for Phase I.
Are you saying that it 13 appears that they have hired the subcontractor for Phase 14 II but not for Phase I?
15 MR. MIRAGLIA:
Perhaps I can amplify.
I am 16 Frank Miraglia of the staf f.
Their December 4th
~
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l 17 submittal which was Phase I which is essentially 18 directed to r.esponding to the requirements of the 19 Commission's order has R. L. Cloud and Associates as a 20 principal contractor.
As a subcontractor to Dr. Cloud 21 is Roger I believe Reedy or Robert R. Reedy, 22 Incorporated, which is directed at conducting the CA l
l 23 review and procedural review of the QA aspects.
24 In that December 4th submittal the utility had 25 indicated that they have also acquired the services of ALCEASoN REPORTING COMPANY,INC.
400 VtRGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
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1 Teledyne to act as an overview and audit of the work 2 performed by Cloud and his subcontractor Mr. Reedy and 3 Associates.
4 CHAIRMAN P ALLADINO:
Did they hire Teledyne?
5 NR. MIRAGLIAa Well, their intent was to use 6 Teledyne.
Whether the contract has actually been 7 consummated or not, I don 't kno w.
8 CHAIRHAN PALLADINO:
And PGEE expressed its 9 intent to use Taladyne?
10 HR. MIRAGLIA:
Yes.
There were three proposed 11 entities in their December 4th proposal, Dr. Cloud, 12 Reedy as a subcontractor of Cloud and then Teledyne as 13 an independent overview of the work performed by those 14 two entities.
15 A letter of January 13th was directed to the 16 staff and it was received late last week.
We have
~
17 copies in the form of board of notification procedures.
18 If you don't have them you should have them shortly.
In 19 that letter it indicates their intent with respect to 20 Phase II which is essentially responding to the items in 21 the staff letter that went out in conjunction with the 22 Commission's order on November 19th.
23 The proposal is essentially the same, but in 24 addition to having Cloud have Reedy and Associates as a 25 subcontractor the proposal is also to have Stone and ALDERSoN REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
10 1 Webster as a subcontractor to conduct certain 2 reverification efforts in the nonseismic area.
Teledyne 3 and everything else is exactly the same.
Co there are 4 the three antities of Teledyne, Reedy and Cloud as 5 before with the addition of a subcontractor as Stone and 6 Webster.
7 COMMISSIONER ROBERTS:
Would Teledyne do the 8 review of the second phase?
9 MR. MIRAGLIA:
Again, an overview of Dr. Cloud 10 and his subcontractors.
That is how I understand the 11 reading.
12 MR. DENTON:
Straightening this out would be 13' the purpose of this meeting that I talked about during 14 the week of the 1st or the 8 th in trying to get the 15 relationship straight.
We have gotten out of phase.
16 Cloud, as I understand, has almost accomplished all of 17 t h e ---
18 COMMISSIONER AHEARNE:
This almost sounds like 19 reviewing a plant to see whether or not it should be 20 built af ter it is built.
We seem to have two paths.
21 One path is examining who ought to do the work and what 22 work ought to be done, and the other path is the work is 23 already done.
24 MR. DENTON:
The company recognized that they 25 hired Cloud and Teledyne and possibly Stone and Webster I
ALDERSoN REPORTING CCMPANY,INC.
l 400 VIRGINIA AVE S.W., WASHINGTON. D.C. 20024 (202) 554 2345
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1 all at their own risk and they went ahead while other 2 things were occurring around them.
3 Some of our concerns now are, for example, 4 that the program plan doesn't follow up.
They exclude 5 Westinghouse, for example.
6 CHAIRMAN PALLADINO:
It doesn't follow up what?
7 MR. DENTON:
Their program plan, for example, 8 exludes Westinghouse from any alternate review.
There 9 are a number of things both about the adequacy of the 10 program plan and about the hierarchy of review between 11 Cloud and Teledyne and the company that we don't 12 understand.
13 So in ef f ect Cloud will have completed his 14 original effort before we get formally on the record 15 with our comments about the adequacy of that effort and 16 whe ther Fe is the righ t person.
We will have to then in 17 phases straighten that out and get additional work done 18 or get someone to review what he has done all over again.
l 19 The company clearly recognized that it had the 20 potential to get that way.
When they sent their letter 21 in I think the letter said they were going ahead with 22 this plan and this contractor on their own.
23 CHAIRMAN PALLADINO:
Do you sens'e a reluctance 24 for them to meet with you promptly?
l 25 MR. DENTON:
No.
It has just been more that i
l ALDERSON REPoRENG COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) $54-2345
12 1 ve didn ' t want to interfere with some of the other 2 things that were goino on.
So it is just a need to 3 straighten out the statements that were made and take 4 the depositions.
Then the full power hearing had gotten 5 schedule and the need for most parties to prepare for 6 that.
That is due to come to a close any day now and 7 that would facilitate getting back.
Then we had the 8 holidays falling in there.
9 MR. DIRCKS:
I think you had a conflict of 10 availability of the people from the Governor's office 11 that wanted to submit comments and participate in some 12 of these reviews.
~13 MR. DENTONa We do now have the Governor's 14 comments on the plan and that will make the meeting most 15 p roductive.
18 CHAIRMAN PALLADINO:
And what?
17 MR. DENTONs That would make the meeting 18 productive to have those in writing.
19 COMMISSIONER AHEARNE:
And you say you do or 20 do not?
21 MR. DENTON:
We do.
22 CHAIRMAN PALLADINO:
Somehow the fact that 23 PGEE is going ahead does seem to complicate the 24 situa tion.
Is it time to sit down with the PGEE 25 management and make sure that whatever strategy they are ALDERSoN REPORTING COMPANY. INC.
400 MAGINIA AVE, S.W., WASHINGTON. D.C. 20024 (202) 554 2345
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1 following is not conflicting with what we are trying to, 2 do to get approval of the plan and the independent 3 auditors?
4 MR. DENION:
Well, the Governor had requested 5 I think on December 17th that we order Cloud's efforts 6 suspended.
This was a letter directed to the Commission.
7 COMMISSIONER GIIINSKYs Well, he sent a couple 8 of telegrams.
9 MR. DENTON:
That we haven't replied to.
I 10 think maybe af ter today's meeting if you come to some 11 conclusions in this area vould be the time at least with 12 regard to the second phase, the Stone and Webster phase, 13 which hasn't had time to begin, we could start out on a 14 new track on that one.
15 CHAIBMAN PALLADIN0s Would such action better to get the attention of the company to try and develop a 17 resolution that follows the instructions we had given?
18 MR. DENION:
I think from our standpoint it 19 certainly would make it sinpler to clear the issues up 20 with the contractors and their relationships and the 21 scope of the effort before it began.
22 COMMISSIONER AHEARNE:
To follow up on the 23 Chairman's question, have you concluded the company is 24 reluctant to have the scope include what you wanted?
25 MR. DENION:
No.
ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554 2345
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COMMISSIONERLAHEARNEs I didn't think so.
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2 think the complication is just it is out of phase.
3 MR. DIR"KS4 The complication seems to be the 1
4 cole of Cloud in this whole procedure.
5 MR. DENTON:
And the need to involve the other 6 parties who wanted to have enough time do review the 7 program plan before they could comment and that sort of 8 thing.
9 COMMISSIONER GILINSKY Well, there is no 10 complication if you regard these efforts as the company 11 simply trying to get on top of the f acts as well as they 12 can for themselves.-
13 The complication is as they keep involving 14 more and more groups in this ef fort the number of 15 eligible other dependent groups diminishes and there may 16 in the end be no one lef t.
17 (Laughter.)
18 COMMISSIONER AHEARNE:
They involve people who 19 otherwise would have been viewed as eligible and who may 20 still be eligible.
21 COMEISSIONER GILINSKY:
That'is really the 22 com plication.
I mean after all they are free to 23 investigate this problem as much as they want with 24 anybody they want to hire.
25 COMMISSIONER,AHEARNE:
Yes.
That is the s
/
ALDERSoN REPORTING COMPANY. INC.
400 VIRGINlA AVE S.W WASHINGTON. D.C. 20024 (202) 554-2345
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1 dif ficulty with stopping them.
2 COMMISSIONER GILINSKYs In fact, I think it 3
3 makes a lot of sense from'their point of view to try and 4 get on top of the problem as fast as they can and as 5 vell as they can.
4 6
COMMISSIONER AHEABNE:
I guess the real 7 complication is thb slowness with which we grind through i
1.
'8 the process and that slowness I think is probably j
~ S directly attributed to this problem that came up.
10 COMMISSIONER GILINSKYa The what now?
? '
11 COMMISSIOSER AHEARNE:
The slowness has really 12 been com licated by this problem that came up.
13 CHAIRMAN PALLADINO:
What problem?
14 COMMISSIONER GILINSKY:
The November 3rd, the 15 statements and so; on.
,/
16 MR. DIRCKS:
Well, if you look at it as a
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m 1,7 series of questions that have been asked, the first 18, question started of f as was the plant built as designed c
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19 to reverification.
In order to get to that question 5
20 there was a question of sn independent auditor and
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2; 1ookinc at how independent that a'o tor was in bis 22 program plan.
That was complze c e6 sy the role of other 23 D at ties th a t wantad to look at$ participate in the 24'a ns wering of that, question.
Then what diverted us from 25 that activity was this othe r issue.
1 ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554-2345
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COMMISSIONER GILINSKYs This is like level 2 three.
We seem to go through these levels in a lot of 3 instances.
4 MR. DENTON:
And the Cloud reverifica tion 5 effort has turned up a number of additional technical 6 questions such as the spectra for the auxiliary building 7 and spectri for the intake structure.
So even 8 technically the effort of Cloud has unraveled and forced 9 us to f ollow down those paths to stay abreast of what 10 Cloud is doing.
11 COMMISSIONER GILINSKY:
He was going to hire 12 people from outside of his organization f rom a number of 13 other groups that were mentioned.
Has he not done that ?
14 MR. DENTON:
I don't know where that stands.
15 CHAIRMAN PALLADINO:
Forrest, you had a 16 com ment.
17 MR. REMICK:
Yes.
The staff has indicated 18 they have a problem with the plan.
Conceivably if t.her 19 d o, the instructions to Cloud or to PGEE is that those 20 problems might be changed with time.
21 It seems to me that one of the important l
22 questions is the independence of Cloud.
Now in 23 information that the staff requested I think they were 24 asked to address the question of independence and I 25 think the staff has drafted proposed criteria to ALDERSoN REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W., WASHINGTON. 0.C. 20024 (202) 554-2M5
17 1 determine independence.
2 I was wondering if that could be addressed, do 3 they meet the criteria on independence, because it seems 4 to me that one of the most difficult and embarrassing 5 predicanents is this goes done the line and then 6 subsequently if Cloud is found not to meet the 7 independence test it throws presumably the whole thing 8 out.
It seems to me that that is one of the crucial 9 near-term decisions is are they considered independent 10 or not.
11 I realize it has been held up by the
'12 investigation that has been going on, but there is the 13 question of do they meet the staff's proposed 14 independence status.
15 CHAIRMAN PALLADINO:
It has also been held up 16 in that I wasn't quite in agreement with nuances of some 17 of the points.
I gather there has been a mixture of 18 reactions f rom Commission offices.
A redraft was 19 prepared yesterday that I guess is going to be discussed 20 with the various Commission offices.
21 COMMISSIONER GILINSKY:
What are you referring 22 to now?
l 23 CH AIRM A N PALLADINO:
These were the criteria 24 that you listed in I think it was the Ottinger/Dingell 25 letter.
i l
ALDERSON REPORTING COMPANY,INC, l
400 MAGINIA AVE., S.W, WASHINGTON, D.C. 20024 (202) 554-2345
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COMMISSIONER GILINSKYs I see.
2 MR. CASE:
In direct answer to Forrest's 3 questicr, we don't have enough information to know 4 whethen it would ratisf y those proposed criteria in the 5 Dingell letter.
6 MR. DENTON We have not pressed that point 7 pending a final decision about what the proper criteria 8 vere.
That really wasn't the issue today.
9 MR. DIRCKS s The issue today is we will to continue to evaluate and I think that is important.
I 11 guess the question we are asking is was there anything 12 in the Commission's mind that was contained in this 13 investigation that would now lead you to a decision on i
14 Clo ud ?
15 CHAIRMAN PALLADINO Vic indicated that he 16 f elt this was the most important so far as time was 17 concerned.
I asked earlier to what extent will segment l
18 two of the report bear on the consideration of Cloud as 19 an eligible candidate for independent auditor.
t 20 MR. DIRCKSa We will have the report by 21 February 1st, but the early indications that we are l
22 ge t ting from the region is tha t that report will show l
23 tha t there have been no substantive changes made in the j
24 Cloud report that could not be explained 25 satisf actorily.
l ALDER $oN REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554 2345
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CONHISSIONER ROBERTS:
That is not exactly 2 answering the question the Chairman asked.
3 HR. DIRCKS:
In a way it does.
This report 4 probably will show that Cloud made changes in the report 5 but the reasons for the changes were technically 6 explainable.
o 7
CONNISSIONER AHEARNE:
And supportable?
l 8
HR. DIRCKS4 Explainable and supportable.
In 9 that sense I gather you would follow to a conclusion
-10 that. the independence of Cloud has not been affected.
1 11 NB. DENTON:
I think that addresses the 12 question of did prior editorial control get exercised by 13 the company over Cloud and that seems to be coming out k
14 that the answer is negative based on the initial look at 15that.
16 CHAIRMAN PAL 1ADINO:
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17 18 f
19 CONNISSIONER BRADFORD:
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COMMISSIONER AHEARNE:
It is very hard to read 2 into what happened at a meeting by reading the 3 transcript.
We have all, I am sete, seen that problem 4 in many transcripts.
But from reading the transcript I 5 can't frankly see into it a lot of what we are now 6 extracting out of it.
For example, I just don't get 7 that clear question that we were focusing on how 8 independent are you, are you sending drafts or any of 9 tha t.
10 COMMISSIONER GILINSKYa Why do you have to ask 11 somebody whether you are sending drafts?
12 COMMISSIONER AHEARNE:
Vic, all I am saying is 13 that I don't see that that was the sense of the meeting 14 f rom the transcript.
15 CtaMISSIONER GILINSKYs But you are talking 16 shout reports.
As Peter said earlier, it is much more 17 important if you are giving somebody drafts.
The final 18 report is the final report.
19 COMMISSIONER AHEARNE:
That is not the issue.
20 COMYISSIONER GILINSKYa You know, that doesn't 21 get changed.
If they have it for a few days so what?
22 COMMISSIONER AHEARNEa All I am saying is that 23 I read the transcript 24 COMMISSIONER GILINSKYa That is a draft.
That 25 is a big deal.
ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVEL. S.W., WASHINGTON. D.C. 20024 (202) 554 2345
25 1
CHAIRMAN PALLADIN04 One at a tim e.
2 COMMISSIONER AHEARNE:
When I read the 3 transcript of the meeting ---
c.
4 COMMISSIONER GILINSKY I thought I was the 5 one.
6 COMMISSIONER AHEARNE:
--- I don't see the 7 message that you people are drawing out of it.
8 COHEISSIONER GILINSKY:
"You people" includes 9 who now?
10 COMMISSIONER AHEARNE:
That includes you and 11 Harold a acaent ago.
I do not see reading through tha.t 12 that was the focus of the meeting.
So I can't reach 13 that same level of conclusion.
l (s.
14 I admit that when I first read the extracted, 1
15 just those short portions of the transcript, yes, it was 16 very disturbing.
But when I rer.d the whole -meeting 17 transcript and when I read the interviews I don't come 18 away with that same view.
19 CHAIRMAN PALLADINO:
John, are you saying that l
20 ve need more. information before you address th'is?
21 COHHISSIONER AREARNE:
No. I am not.
22 CHAIRHAN PALLADINos 23 l
24 COHHISSIONER AHEA R3 :.4 25 ALDERSoN REPCRTING COMPANY. INC, 6 AR rwa WMIN@TCN. D.C. 20024 (202 $54-2345
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15 16 COHHISSIONER AHEARNE:
17 18 CHAIRMAN PALLADIN0s 19 20 CONNISSIONER AHEARNE:
1.
CHAIRMAN PALLADINOa 22 2'3 (Laughter.)
24 ODEMISSIONER AHEARNE:
25 A.DERSON REPORTING COMPANY. INC.
_ _ _. Q3 VIRGINEA AVE, S.W WASHINGTON. 0.C. 2002
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17 18 19 to 21 22 23 COHNISSIONER BRADFORD:
24 25 ALDERSON REPORTING COMPANY. INC.
400 WIGINIA AVL S.W.
WASHINGTON. O.C. 20024 (202) 564 2346..
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10 CHAIRNAN PALLADINO:
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N 14 ER. DeYOUNG:
15 CHAIREAN PALLADINOa 7
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COMMISSIONER GILINSKYs Let's see, now that 2 the staff knows what we think could we find out wha t the 3 staff thinks?
4 MR. DIRCKS:
I think what we have done is to 5 provide yot with everything that you need.
6 COMMISSIONER GILINSKY A Commissioners' kit.
7 (Lauchter.)
8 COMMISSIOhER BRADFORD:
You did provide a 9 package with the citation you would issue with regard to 10 the material f alse statement.
" Citation" is the wrong 11 word, but anyway it is the document that you issue.
You 12 concluded that it was severity level three.
Which 13 policy were you using.
14 MR. DeYOUNG:
It is the policy that is now in 15 eff ect and not the one that you would have yet to 16 approve.
17 COMMISSIONER AHEARNE:
Tha t is the interim 18 enf orcement policy.
19 MR. DeYOUNG:
The interim enforcement policy.
l 20 COMMISSIONER BRADFORD:
How did you come out 21 with a level three in that context?
22 MR. DeYOUNG:
I would rather turn this over to 23 the Chief of the Enforcement Branch, Jim Lieberman.
24 MR. LIESERMAN:
Severity levels one, two and 25 three violations are significant violations.
Severity ALDERSON REPORTING COMPANY. INC.
400 VIRGINIA AVE., S.W WASHINGTON. D.C. 20024 (202) 554 2345
31 1 levels one and two are considered highly significant.
2 COMNISSIONER GILINSKY What is one?
3 MR. LIEBERMAN:
Sevacity one?
4 COMMISSIONER GILINSKYa Yes.
I mean one and 5 two can' t be the same.
6 MR. LIEBERMAN:
Under the interim policy the 7 distinction between severity level one and two is more 8 like in severity one that a problem actually occurred.
9 A system was called upon to work and it didn't work and 10 it was needed to work.
Whereas severity level two is a 11 system would not work but it was not called upon to work.
12 COMMISSIONER GILINSKYs That sort of criterion 13 doesn 't seam to apply to what we are talking about.'
14 HR. LIEBERMAN:
That is the ceneral 15 distinction from severity level one to severity level 18 two.
Severity level one is that much more important 17 than severity level two.
18 What we have been doing in the material false 19 statement area under the interim policy is we have 20 concluded that material false statements by their very 21 nature are significant and we have been calling them 22 severity level three's.
23 COMMISSIONER GILINSKY:
No matter what ther 24 a re ?
25 MR. LIESERMAN:
If there was deliberateness ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE, S.W, WASHINGTON. D.C. 20024(202) 554 2345
32 1 involved then we would increase it to a higher level, 2 one or two.
It would generally be the level of the 3 underlying substance of the material.
4 COMMISSIONER GILINSKYa What if it involves a 5 reckless disregard for the truth?
6 HR. LIEBERHANs I consider that wilf ull within 7 the meaning of the Administrative Procedure Act and I 8 would escalate tha t to at least a two level.
9 COMMISSIONER GILINSKY What if it involves
,10 just gross negligence on the part of the company in not 11 seeking out the truth and conveying it to us?
12 HR. LIEBERHAN Gross negligence and 13 recklessness, these terms are terms of art that 1-4 different people, different judges have different l
15 interpretations of what these terms mean.
I have tried l
16 to stay away from the different categories of negligence 17 because I think it is very confusing.
18 COMMISSIONER GILINSKY:
What you are saying is 19 tha t it can never be a one in the way you are viewing 20 it.
If it is deliberate it is a two and if it is 21 something else it is a three.
Is that a fair 22 characterization.
23 NR. HURRAY: I think it would be a one if 24 someone withheld information deliberately covered up 25 with some guilty purpose in mind.
That would be the
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ALDERSoN REPORTING COMPANY,INC,
@ N M N 0 6 @ $ 85334 68 E k 993-M
33 1 criminal type thing.
2 MR. LIEBERMAN:
I said at least a two.
3 MR. DeYOUNGa He said at least a two.
4 COMMISSIONER BRADFORD:
What was Pilgrim?
5 MR. LIEBERMAN:
Pilgrim was a severity level 6 three.
7 COMMISSIONER AHEABNE:
Could I ask a question 8 on the violations rule.
You have. embedded in it, you 9 say at the November 3rd meeting the NRC staff " inquired 10 of the licensee whether the licensee had received i
11 reports dealing with the seismic reverification study 12 being conducted by R. L. Cloud and Associates, l
13 Incorporated."
I wonder whether you could point to me 14 in the transcript where we inquired whether the licensee 15 had received reports dealing with the seismic 16 reverification study?
17 MR. LIEBERMAN:
I was referring to Mr.
18 Denton 's sta tement on page 215.
"Do we get the same 19 reports as he gives you?"
I read into that do you have 20 reports concerning the reverification program.
21 COMMISSIONER AHEARNE:
The following sentence 22 saysa "The licensee" and I guess that is " responded 23 indicating that no written reports existed."
Where does 24 he say that?
I gather since you have just pointed to l
25 that question then it must be Mr. Maneatis saying you l
ALDERSON REPORTING COMPANY,INC.
dMYiG6Mn /MLStKL NT@No @,@. FOB 4 678) 554 2345
34 1 just got it.
2 MR. LIEBERMANs That is correct, together with 3 Mr. Norton on the next page saying:
"I might add we do 4 not have it.
It is not a question of us reviewing it."
5 COMMISSIONER AHEARNE:
Wait, wait, wait.
6 Let 's talk to "it" there.
That is Eisenhut asking when 7 vill we be expecting to see that short-term report.
8 COMMISSIONER GILINSKY:
But you have Norton's 9 statement saying that what he had in mind was any 10 report.
He wasn't fooling around.
He wasn't dancing 11 around and hiding behind draft reports.
12 COMMISSIONER AHEARNE:
But the "it" that was 13 basically asked for there.
Eisenhut asked ---
14 COMMISSIONER GILINSKY Look, it is clear.
15 Norton, if he had known he says he would have told the 16 N RC.
Furbish recognizes the difference.
He said if he 17 had know about it he would have told the NRC.
They 18 understood what the question meant and so did everybody 19 els e.
20 CHAIRMAN P ALL ADIITO:
I was trying to 21 understand John 's ' point with regard to ---
22 COMMISSIONER AHEARNE:
I guess my basic point 23 is that we have now finally verk through this transcript 24 and I guess I was quite disturbed when I read now that 25 ve were put out.
I think it is misleading.
ALDEPSON REPORTING COMPANY,INC,
, O$$ VIQiNIA AVE., S.W., WASHINGTCN. D.C. 20024 (202) 554-2345
35 1
CHAIRMAN PALLADINO:
What was wrong with 2 Norton 's statement ?
3 COMMISSIONER AHEARNE:
We have two sentences 4 here.
"We inquired whether the licensee had received 5 reports dealing with the seismic reverification study."
6 The next sentence is "The licensee responded indicating 7 that no written reports existed."
8 "I asked what did the first question refer 9 to? "
That referred to Denton asking do we get the same 10 reports he gives to you?
I would have concluded reading 11 this paragraph that the licensee responded had to refer 12 then to the question we just asked.
But it doesn't.
It 13 ref ers to Mr. Norton who is now answering a different 14 question, namely, Mr. Eisenhut's question.
15 COMMISSIONER GILINSKI:
But Norton understood 16 wha t he was being asked.
17 CHAIRMAN PALLADINO:
Even though they said 18 they referred to one question, I thought th ere we re l
l 19 several places where the staff inquired of the licensee l
20 whether the licensee had received reports.
21 COMMISSIONER AHEARNE:
I don't think so.
22 CHAIRMAN PALLADIN04 One of 'them was Eisenhut.
l 23 COEMISSIONER AHEARNE:
I don't think so.
24 COMMISSIONER GILINSKY:
He understood the 25 question to be that way.
He understood tha t that is ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE.,3.W., WASHINGTON. O.C. 20024 (202) 554-2345
36 1 what he was asked.
2 COMMISSIONER AHEARNE:
I am not sure what 3 Norton understood.
I know what Norton said in his 4 testimony.
5 CHAIRMAN PALLADINO:
I wonder if I could 6 follow up with my question.
Read Eisenhut's question 7 again.
8 COMMISSIONER AHEARNE:
"When will we be 9 expecting to see that short-term report?"
Bob Cloud 10 said, "It is essentially complete."
11 CHAIRMAN PALLADINO:
All right.
What did 12 Norton repond to that?
13 COMMISSIONER AHEARNE:
Norton said:
"Dr.
14 Cloud, could you answer that."
Then Cloud said:
"We l
15 vill be turning it in either this week or next."
Norton to then said:
"I might add we do not have it."
17 CHAIRMAN PALLADIN0s That is the point.
That 18 is the answer which is being referred to here I 19 believe.
"The licensee indicated tha t no w ritten 20 reports existed."
That implies that no written report l
21 exists.
22 COMMISSIONER GILINSKY:
Joe, you know what you l
23 are saying would make some sense if we were dealing with 24 Norton who was saying wait a minute, when you asked thus 25 and such I had in mind the followilg, but that isn 't the ALDERSON REPORTING COMPANY,INC, 6 M RCmC/Jfaf&iTONJgCe fjifj$4 q@ 900-$KG.
37 1 case.
He understood the question and I think everyone 2 else understood the question.
3 COMMISSIONER AHEARNE:
No, : don't think he 4 understood the question at all.
I think that he didn't 5 know very much at all.
He had done very poor 6 preparation for what the situation was, but he was out 7 there speaking for the company.
He heard Cloud say the 8 report isn't there.
So then he made a very strong poin t 9 that no, it isn't here yet.
I think his words flov 10 specifically f rom Cloud just having said we vill turning 11 it into you this week or next.
12 COMEISSIONER BR ADFORD:
I am not sure about 13 the point on poor preparation, John.
I thought he had
\\
14 asked this question on a Sunday and had been told then 15 by PGCE.
16 COMMISSIONER AHEARNE:
One question, a 17 fleeting question.
l 18 COMMISSIONER BRADFORDs Well, but how many l
19 questions do you ask when yt a get what you think is a 20 clear answer?
You go on
.o the next topic.
I know a 21 lot of your feelings about lawyers, but one thing a 22 lawyer wouldn't do is cross-examine his own client.
23
( La ughte r. )
24 COMMISSIONER BRADFORDs I mean if ho asked hi; 25 client if they had l
ALDERSON REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON, D.C. 20024 (202) 554 2345
38 1
COMMISSIONER AHEARNE:
He wouldn' t do his 2 probing questioning of his own client in preparation?
3 COMMISSIONER BRADFORDa Of his own client?
No.
4 COMMISSIONER AHEARNE If he wants to really 5 know well what the situation is?
8 COMMISSIONER BRADFORD:
Why in the world would 7 he expect his own client to lie to him?
8 COMMISSIONER AHEARNE:
You mean if the lawyer 9 asks questions it is because he thinks he is being lied 10 to and not to get more information?
11 COMMISSIONER BRADFORDs I would say when a 12 lawyer is dealing with his client f or the most part he 13 accepts what he is told.
14 CHAIRMAN PALLADINO:
I think we are getting a 15 little bit off the point.
The licensee responded 16 indicating that no written reports existed.
Now in my 17 mind the licensee did respond that no written reports 18 existed.
Whether he responded expressly to the question 19 as raised by the staff here is a little different, but I 20 certainly in reading that transcript got the feeling 21 tha t, hey, I had indicated that no written reports 22 existed.
Now it may not be exactly tied in the way this 23 is tied in.
24 COMMISSIONER AHEARNE I was prepared to have 25 that conclusion when I first read the extracts of the ALDERSCN REPORTING COMPANY,INC.
c!S VIR$1NIA AVE, S.W, WASHINGTON, D.C. 20024 (202) 554 2345
39 I transcript a month or so ago.
As a result of the 2 investigation I reached a different conclusion and I 3 think that paragraph is misleading in the same sense 4 tha t this transcript is misleading.
5 COMMISSIONER GILINSKY:
But look, John, not 6 on_y did Norton understand the question but Furbish 7 understood the question and he says so.
He said that 8 had he know that there were draft reports he would have 9 spoken up.
He understood perfectly vell.
Now, you to know, he explains it away in various ways, but he 11 understood the question perfectly well and he understood 12 his obligations.
13 To some extent even the president understood 14 it.
His statement is inconsistent, but at least at one l
l 15 point he said that he didn't think it was a material 16 f alse statement in considering what the people knew at i
17 the time or something like that[ what the group knew.
18 Well, anyway.
And we all understood it that way.
I 19 don't th' ink anybody walked away from the meeting saying, l
20 a h ha h, there are no final reports but we didn't ask 21 about draf t repo rts.
Reports a re reports.
All of these 22 are draf t reports.
23 CHAIRMAN PALLADINO:
John, can I ask you, are 24 you concludino there was no material f alse statement?
25 COMMISSIONER AHEARNE:
That is correct.
ALDERSON REPORTING COMPANY,INC.
400 VIRGINIA AVE S.W WASHINGTON. D.C. 20024 (202) 554-2345
40 1
CHAIRMAN PALLADINO:
Or are you concluding 2 that it wasn 't serious enough to pursue it?
3 COMEISSIONER AREARNE:
I guess in my limited s
4 experience with this terminology here I had seen that 5 there were gradations.
I thought material false 6 statement was yes or no.
c 7
CHAIRHAN PALLADINos Then the second question 8 iss You can have a material f alse statement; yes or 9 no?
Then I think the gradations come in when you want 10 to decide what to do about it.
l 11 COEHISSIONER AHEARNEt To me I must admit that i
12 material f alse statement as a phrase is still. kind of I
l 13 fuzzy.
It doesn't have crystal clarity so that I can
(
14 look at,'some. thing and say yes or no on it.
In general 15 ar impression here is that I would not reach the level 16 that this is a material f alse statement.
17 About the most I would have gone to is writing 18 letters 'of censure, if you would.like, to ---
19 COREISSIONER GILINSKY:
Well, let's see, why?
20 CHAIREAN PALLADINO:
That is where the 21 gradation comes in, what you do about it.
22 COMMISSIONER GILINSKY:
Do yot think it is an 23 immaterial f alse statement or do you think it is a 24 material f alse statement?
25 COMMISSIONER AREARNE:
ALDERSCN REPORTING COMPANY. INC.
400 VIRGINtA AVE., S.W., WASHINGTCN. D.C. 20024 (2@ $54 2346
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- 12 COBHISSIONER AHEARNEs-i 13 COMMISSIONER BRADFORD l.
14 (Laughter.)
l' 15 CHAIRMAN PALLADINO:
16 17 l
18 i
Now I took time to go through. the VEPCO 19 20 decision and it seemed to h' ave pretty good sense about 21 it and it would c'onvince me that this was a material 22 f alse statenent.
These two sentences aren' t quite 23 right, but I come down to whether there was a material 24 f alse statement.
Now the question is.what do I do about 25 it.
As I say, I have trouble decidin7 Tet where to go ALDEASoN RdPCRTING COMPM4Y,INC.
N r N M E A M D 5%9
43 1 on that.
-s 2
The staff I gather says, and don't let me put 3 words in your mouth, but I an iapiring that you believe 1
4 ve ought to take action on a civil penalty in this 5 regard; is that right?
6 MR. DeYOUNGs Do you want my view?
7 CHAIRMAN PALLADINO:
Yes.
8 HR. DeYOUNGs 9
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11 12 13 6
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46 1
2 COMMISSIONER GILINSKYa 3
4 COMMISSIONER ROBERTS:
5 6
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47 1
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9 COHNISSIONER BR'ADF0lRD:
10 11 CHAIRMAN PALLADINO:
12 13
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14 15 16 17 HR. DeYOUNG4 18 COHNISSIONER BRADFORD:
Dick, can I ask it 19 another way.
Supposing that this were a run-of-the-mill 20 case, that the decision since it is severity level three 21 were with you and not with us, would you impose a civil' 22 penalty?
23 ER. DeYOUNGa It might come out that we would 24 propose notice of violation without the civil penalty..
I 25 But it depends and you have to look at each case.
1 ALDER $oN REPORTING COMPANY. INC.
400 VIRGNA AVE. S.W. WASHINGTON. D.C. 20024 (202) 584 2344
48 1 think we need to get the attention of this company some 2 way.
3 COMMISSIONER BRADFORDa Harold, do you feel 4 that NRR was in f act misled in a material way in this 5 matter?,
6 MR. DENTON:
Prior to the meeting I have been
. 7 having a number of discussions with other parties, 1
8 including Herb Brown, the Governor's representative, and 9 with Mr. Maneatis by phone, and we have talked about the 10 kinds of concerns that were beginning to surface around 11 this time.
12 I certainly lef t the meeting with the 13 impression that there had been no' reports exchanged.
So 14 to that extent I was misled in that there had been a 15 draf t report.
l 16 COMMISSIONER BRADFORD:
I must say that I come 17 out, and one could debate the level, b6t I come'out on 18 the side of a penalty here, especially because if it 19 weren 't for the fact that somebody somehow got word of 20 these draf ts to some Congressmen's offices we would 21 still today be in ignorance of their exitence.
It is l
22 not as though the company would have eventually gotten 7
23 its act together and decided that they had misled the 24 NRC.
This could have gone on practically indefinitely.
25 COMMISSIONER AHEARNE:
Could I ask though that l
ALDERSON REPORTING CCMPANY,INC, 400 VIRGINIA AVE S.W WASHINGTCN, D.C. 20024 (2021 554 2345
49 4
1 if let us suppose we didn't find out at.out the drafts 2 and the report was sent in, if as Region V has been 3 reported as saying that there was no substantive change, 4 I as having difficulty understanding the relevance then 5 of the f act that there had been drafts.
6 COMMISSIONER BRADFORD:
The issue of a 7 substantive change doesn 't necessarily matter because if 8 in fact all of the changes are technically justified and 9 there were no changes of another sort rejected it really to doesn 't tell you very much about the relationship 11 between Cloud and PGCE.
12 It seems to me, as Harold as indicated before, 13 that if he had gotten en accurate answer at that point 14 in time he would have probed further and rules would 15 have been set up surrounding the exchange of draf ts and 16 the documenting of changes and the process would have 17 proceeded in a more orderly fashion as far as being able 18 to trace the origins and the nature of changes.
That 19 may or may not manifest itself in actual changes in 20 conclusions regarding reports and hardware in the plant.
21 It is pretty hard to go back and create an 22 alternative chain here in the way that one could in 23 Pilgram where there was an operating plant and a 24 specific piece of hardware.
But it is clear I think 25 f rom what Harold said that he would have set up a ALDERSON REPCRTING COMPANY,INC, 400 VIRGANIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554-2345
50 1 different set of procedures had he been aware that the 2 draf ts were being exchanged.
3 COMMISSIONER AHEARNE4 That is entirely 4 possible.
I will point out that it is not completely 5 obvious that we would have immediately been able to 6 reach a decision on what independence was because we 7 found out there had been draf ts since it is now many 8 mon ths ---
9 COMMISSIONER BRADFORD:
No, I agree with that.
10 CHAIRMAN PALLADINOs It isn't whether or not 11 they would have but could they have, and I think they 12 could have.
13 COMMISSIONER AHEARNE:
True.
14 CHAIRMAN PALLADIN0s Can I ask Dick a 15 question.
You said another possible action is a notice 16 of violation.
Suppose we find a material false 17 sta temen t.
Is a notice of violation ---
18 MR. DeYOUNG:
Without a civil penalty.
19 CHAIRMAN PALLADINO:
Without a civil penalty.
20 What form does that take?
If they do violate it, then 21 it scolds them for having done it?
22 MR. MURRAYa Corrective action.
23 MR. DeYOUNGs Just a corrective action 24 requirement.
25 CH AIRM AN PALLADINO:
That comes closer to my ALDERSON REPORTING COMPANY,INC.
400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) $54-2345
51 1 own leaning.
It seems to me that there has been a 2 material false statement.
I think I made this point at 3 the end of the last time that I don ' t think it is all 4 that great, although I hate to be misled at any point in 5 the operation.
6 I was using as a reference well, we put 7 $250,000 on Boston Edison for a material false 8 sta temen t, but there actual safety systems were 9 involved.
I agree with you they need to have their 10 attention called to the matter, but I am not sure I am 11 ready yet to go to a civil penalty.
I had not thought 12 of a notice of violation and that may be a point that at 13 least represents where I come out on my leaning.
14 C05HISSIONER GILINSKY You mentioned this 15 before, Joe, about the relative importance of this cas'e 16 and the Pilgrim case.
I must say I come out
~
17 differently.
I realize the other one involves a 18 hardware system the importance of which I think is not 19 entirely clear to me.
20 Here you are talking about the top brass of 21 the company coming down all of them before you and 22 telling you one thing when another is true.
While there 23 is not, you know, a specific change in a hardware system 24 that is at issue, but what is at issue is just the whole 25 regulatory process, the whole relationship wi th them and ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554-2345
52 1 with everybody else out there.
2 I realize you are saying that you think it was 3 a f alse statement and it was ma terial, but if people can 4 do that then they can do anything.
5 CHAIRMAN PALLADIN04 I wasn't letting them off 6 free.
7 COMMISSIONER GILINSKYa No, no, I understand 8 tha t.
But what I was saying is that to my mind just the 9 f act tha t a hardware system, an actual safety system was 10 specifically involved, the detail on it, doens't to my 11 mind make the Pilgrim case more important in the overall 12 scheme.
13 CHAIRMAN PALLADINO:
Well, I thought it did.
14 COMMISSIONER GILINSKY:
No, I understand that, 15 and I was just telling you why I thought otherwise.
16 COMMISSIONER AREARNE:
The Pilgrim case though 17 was so much clearer.
18 CHAIRMAN PALLADINO:
Yes.
19 COMMISSIONER AHEARNE:
I still argue that this 20 just isn 't that clear.
21 COMMISSIONER GILINSKYs John, on the one hand 22 you are not sure whether it is false and on the other 23 hand you want to censure people.
I must say I don't 24 understand your point of view.
25 COMMISSIONER AHEARNE:
When I read the l
l l
l ALDERSoN REPORTING COMPANY. INC, 400 VIRGINIA AVE. S.W., WASHINGTON. D.C. 20024 (202) 554-2345
53 1 transcript all that you people are reading into it just 2 doesn't come out.
3 COE!ISSION'ER GILINSKYa Well then why do you e
4 vant to censure anybody?
5 COMMISSIONER AHEARNEs 6
C 7
8 9
CONEISSIONER GILINSKY 10 11 COHNISSIONER ROBERTS:
12
'13 HR. BICKWIT:
i, 14 CORNISSIONER BRADFORDs 15 16 (Laughter.)
C5HEISSIONER ROBERTS:
17 18
)
19 COHNISSIONER GILINSKY:
Wait a minute, you 20 didn't let me finish the sentence.
~
l 21 (Laughtar.)
22 COMMISSIONER AHEARNE:
You didn't let me 23 finish what I was saying either.
24 (Laughter.)
25 COHNISSIONER GILINSKYs Why don't we stop ALDaRSoN REPORTING COMPANY,INC, 400 vlRGINIA AVL 3 W. WASHINGTON, D.C. 20C24 (202) 554 2346
Su 1 there.
2 COMMISSIONER AHEARNE:
The other point that I 3 tried to get across is that I do think that what we did 4 see here tracks with what Dick said is characteristic of 5 the company and I think that is an issue that we ought 6 to get to and I don 't thank that trying to, to me you 7 use some convoluted logic to get a penalty out of this 8 issue.
9 I think the message that comes across there 10 speaks more about the way we are villing to after the 11 f act look at something as opposed to getting a message 12 to the senior people in the company th a t the way that 13 that whole operation is running is wrong.
I thought 14 that was the point that Dick made last time which I felt 15 was much more significant.
I still think that you ought 16 to some way reach to either the CEO or the chairman of 17 the board of the company.
18 COMMISSIONER BRADFORD:
That same point cost 19 Pilgrim what, 7200,000, that the company wasn't running 20 right.
21 COMMISSIONER AHEARNE But there is was a lot 22 more extensive.
23 CHAIRMAN PALLADINO:
You are really addressing 24 more the third point by writing the censure letters to l
25 getting management, and I forgot how you put it, to get l
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE, S.W., WASHINGTON D.C. 20024 (202) 554 2345
55 1 management more on track in what they ounh*
+n ha doing.
2 COMMISSIONER GILINSKYs
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17 COHEIESIONER AHEARNE:
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21 COMMISSIONER GILINSKY 22 COHNISSIONER BRADFORD:
23 24 25 ALDERSON REPORTING COMPANY. INC.
l 400 VIRGINIA AVL 3.W. WASHINGTON. O.C. 20024 (202) 554-2345
1 56 1
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.7 COMMISSIONER AHEARNE:
I will try not to make 8 this point again because either I as wrong or it is not 9 being understood.
A lot of the discussion today would 10 lead me to conclude that ve.are talking about a November 113rd meeting and the subject was are there draf t reports 12 or what type of report is being written and when is it
.13 going to' be submitted.
Maybe those few who were at the 7\\.
14 neeting understood that was the topic.
That is not what 15 the. transcript comes across as.
l 16 COMEISSIONER GILINSKYa You are making a 17 distinction between a draf t report and a report?
18 CONNISSIONER AHEARNEs It is a side point as 19 f ar as I can tell embedded in this.
20 CONHISSIONER BRADFORDs One of the reasons 21 though that it takes up so small a space in the 22 transetipt was that Harold got what he thought was a 23 conclusive answer to his question.
The reason that that 24 point wasn't discussed any further was that Harold was 25 told that thera vss nothing there to discuss.
So that ALDER $oN REPCATING COMPANY.INC.
400 VIRGNA AVE. S.W. WASHINGTON. D.C. 20024 (202) 554-2345
57 1 instead of a five-page discussion it is a two-page 2 discussion.
3 COMEISSIONER AHEARNE:
Except that it is t
4 almost 100 pages into the transcript that the issue 5 comes up.
6 COHEISSIONER BRADFORD I am not saying it is 7 the. major point.
I think it is. an important one.
But 8 you know when you look at Commission meetings here ther 9 vander some.
10 (Laughter.)
11 COMBISSIONER BRADFORD:
But the Commission 12 assumes that when it asks the staff for information on 13 any particular point in the course of those vanderings
(
14 that it is getting an accurate answer and that if some t
15 of the people at the table have misgivings they will 16 speak up on that.
~
17 CHAIRHAN PALLADIN0s 18 f
19 20 21 22 23 24 25 I,. ~,,., ;
ALDERSoN REPORTING COMPANY,INC,
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- COHNISSIONER GILINSKYs.
I want to amend my 11 response to John and say at least that I don't believe 12 some of them anyway when I said that they didn't think 13 it was misleading.
(
14 I did want to say something.about the fact l
15 that these exchanges didn't take ' a lot of time.
Norton l
16 responded very forcefully.
He said, you know, I resent
^
17 th'is line of question'ing.
I'was there and, yoh know, I 18 don 't remember if he banged the table, but it was a very 19 forceful and indignant response, you know, who do you l
20 think we are?
What sort of people do you think we are?
21 We don't do these sorts of things.
I told you that you 22 were going to get it at the same time I do c" we do.
23 I certainly walked away thinking, well, you 24 know, they just decided that that is the way they are l
25 going to do it and they are annoyed.
In f a ct, I have to ALDERSoN REPORTING COMPANY. INC.
400 VIRGIMA AVE., S.W, WASHINGTON, D.C. 20024 (202) 554-2346
)
61 1 be honest that I thought Harold was a little forward in 2 pressing them.
I mean, here they were saying, you know, 3 they are upstanding citizens and so on and indignant and 4 they were going to play it straight and it turned out it 5 was not that way a t all.
6 COMMISSIONER AHEARNE:
I have seen Norton in 7 action so I could imagine how he answered you.
8 CHAIRMAN PALLADIN0s Incidentally, I have some 9 other little problems but I don't want to address them 10 now.
11 I guess at the moment I
.sonally am not 12 ready to make a decision on this.
I don 't know where 13 you are.
I do feel though having spent a bit of time 5-14 last night trying to understand the material and going 15 through the statements that I did come down that there 16 was a material f alse statement.
~
17 I didn't come down to where it was in anywhere 18 near the same severity class as the Pilgrim situation.
l 19 I didn 't know where to come down.
Now that you have 20 mentioned the notice of violation, I guess I should have
(
l 21 remembered that that is a possible out but I didn't come 22 up with that last night.
23 With regard to whether Cloud should continue 24 as a eligible auditor, I guess I don 't see the evidence 25 tha t says he should not be at this time an eligible ALDERSON REPORTING COMPANY,INC.
400 VIRGINIA AVE, S.W WASHINGTON D.C. 20024 (202) 554 2345
62 1 auditor.
2 I do think though with regard to your third 3 point that management needs some admonition with regard 4 to getting on the ball.
5 I gather on the first issue we are split and I 6 quess on the second issue we sre split.
I don't know
. 7 where we are on the third.
But we are going to have to 8 come up with a decision.
I would hate to rush it 9 because I think it would be better if we took another 10 couple of days if we can.
The only reason I say another 11 couple of days is I don't think we can fit it in 12 tomorrow and I don't know if we can fit it in Friday 13 unless we rancel something.
14 COMMISSIONER GILINSKY Are we releasing the 15 report toda y?
16 CHAIRMAN PALLADINO:
That is what I was coming 17 to.
I said there is one decision I think we do h' ave to
(
18 make and that is are we releasing the report today and 19 with the release, if we release it, do we want to say 20 anything.
21 COMMISSIONER GILINSKYa I thought we committed 22 ourselves.
23 CHAIRMAN PALLADINO:
Well, I read Sam Chilk's 24 note and I didn't realize that it was as strong as his 25 note said and I didn't know where to put it.
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE S.W., WASHINGTON. O.C. 20024 (202) 554 2345
63 1
COMMISSIONER GILINSKY:
I thought it was 2 utterly unqualfied, whether that was wise or not.
3 (Laughter.)
4 MR. FOUCHARD:
I don't know about anybody 5 else, Mr. Chairman, but I committed us.
6 (Laughter.)
7 COMMISSIONER GILINSKY:
We were unprepared, 8 Joe.
9 (Laughter.)
10 MR. F30 CHARD:
And I believe that I had 11 everybody listening.
12 (Laughtar.)
13 CHAIRMAN PALLADINO:
What did you believe, 14 Joe, that we had rommitted?
15 MR. FOUCHARD:
I believe I sat here and told 16 you.
I was going to say we expect to and I was told no,
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17 ve vill.
18 COMMISSIONER AHEARNE4 That is what I thought, 19 too.
20 CHAIRMAN PALLADINOs So we vill release the 21 report.
22 Is there any question on releasing it?
23 COMMISSIONER BRADFORD:
I would rather not, 24 b ut if Joe has made a commitmen t then I think we should.
25 (Laughter.)
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554-2345
64 1
COMMISSIONER AHEARNE:
We can put a footnote 2 on that Commissioner Bradford would rather not release 3 it.
4 (Laughter.)
5 COMMISSIONER BRADFORD:
I think this doesn't 6 rise to that level.
7 (Laughter.)
8 CHAIRMAN PALLADINO:
Is there any statement 9 that you think ought to be made with the release of this 10 except that we vill be asked questions and we vill have 11 to say that we are still deliberating any action.
12 HR. FOUCHARD:
I would take that course of 13 action, sir, that the Commission is still discussing the
?
14 report.
15 CHAIRMAN PALLADIN0s Let me ask the members of 16 the Commission do any of you feel that you are waiting
~
17 for the segment two report before making a decis' ion?
18 COMMISSIONER AHEARNE:
A decision on?
19 CHAIRMAN PALLADINOa On whethe r we are going 20 to take an enforcement action and whether or not we are l
21 going to continue Cloud on the eligibility list.
22 (No response.)
23 CHAIRMAN PAL'LADINos All right.
Well then I 24 guess the main point would be that we release the report 25 and we have not yet made a decision with regard to that ALDERSON REPORTING COMPANY. INC.
400 V'RGINIA AVE., S.W., WASHINGTON. D.C. 20024 (202) 554 2345
65 1 report.
2 ER. BICKWIT Just one final point.
All of 3 the discussions of violations so far as centered on the 4 material f alse statement violation.
We believe a good 5 case can be made for a violation of Section 103(b)(3).
6 CHAIRMAN PALLADINO:
What was that again?
7 MR. BICKWIT 103(b)(3).
I don 't think it is 8 productive at this time to get into a discussion about i
3 it, but as you consider your options we think ---
10 CHAIRMAN PALLADINO:
Could you help me 11 understand a little bit better what it says?
12 MR. BICKWITs It says "The Commission shall 13 issue such licensas to persons applying therefor who 14 acree to make available to the Commission such technical f
I 15 information and data concerning activities under such 16 licenses as the Commission may determine necessary to 17 promote the common defense and security and to protect 18 the public health and safety."
19 HR. MURRAYs We of course disagree with that.
20 COMMISSIONER BRADFORD4 Why of course, Jim.
l 21 (Lauchter.)
22 MR. HURRAYa I have been talking with Len 23 about it for the last couple of days.
I 24 CHAIRMAN PALLADINO:
Why do you disagree?
l 25 ER. EURRAYs We disagree, Mr. Chairman for l
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W, WASHINGTON, D.C. 20024 (202) 554-2345
66 1 about three reasons.
2 One is that the licensee has to agree to make 3 available the inf ormation according to statute, it has 4 to be technical information data and it has to be 5 determined by the Commission to be necessary, presumably 6 determined in advance.
7 COMMISSIONER AHEARNE:
We haven't allowed the 8 last to bother us so far.
9 MR. MURRAYs No, sir.
That is one of Len's 10 arguments.
11 MR. BICKWITs What, to determine in advance?
12 Well, our response is that the determination in advance 13 is viewed on the transcript and that Harold's questions 14 constitute that determination.
15 I would say that our view on this one is about
(
16 the same as our view on a material f alse statement which 17 is that chances of prevailing are slightly better than 18 even.
l l
19 (Laughter.)
l 20 CHAIRMAN PALLADIN0s It doesn't make it very 21 easy, does it..
22 (Laughter.)
23 CHAIRMAN PALLADINOs Any other opinions on the
- 24 material f alse statement?
25 (No response.)
l l
ALDERSoN REPORTING COMPANY,INC, 400 VIRGINIA AVE., S.W WASHINGTON, D.C. 20024 (202) 554-2345
I 67 1
CHAIRMAN PALLADINO:
Well, unless you have 2 f urther comments ---
3 MR. DIRCKSa-Could I make just one 4 clarification.
The dacision on Cloud, however you come 5 down on it in this segment, if you rule him in our out, 6 ve vill just then accept that and exclude that from 7 further consideration on the other parts that Harold is 8 investigating.
9 CHAIRMAN PALLADINO I didn't follow you, Bill.
10 MR. DIBCKS4 In other words, if you say he is 11 still eligible we will not then when we evaluate him 12 f urther in connection with the criteria and so on, we 13 vill not then consider this factor any more in our 14 evaluation.
15 CHAIRMAN PALLADINO4 At this point in time.
16 COMMISSIONER AHEARNE:
Isn't what you are 17 saying is when you look at a list of who is eligible and 18 Cloud is up there and you look at the points for and 19 against, if we conclude this does not disqualify him 20 then that will not be added as a negative.
21 MR. DIRCKS We don't want to argue that point 22 again.
23 CHAIRMAN PALLADINO:
Yes, and I seem to think 24 tha t at least three of you feel that way.
25 Unless anybody else has any other point on ALDERtoN REPORTING COMPANY. INC, 400 VIRGINIA AVE., S.W., WASHINGTON D.C. 20024 (202) 554 2345
68 1 this we vill stand adjourned.
2 (Whereupon, at 12 Noon, the meeting adjourned.)
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o m
NUCLEAR muCIT C: F'SICN This is 30 ceMif'I t: hat the. accached proceedings befcre the COMMISSION MEETING in the sattar cf:.
CLOSED MEETING - EXEMPTION 5 - DISCUSSION OF DIABLO CANYON REPORT.
Cate cf Frcceeding:. January 27, 1982 O c c !k s t U t.u n k e r :
Flace of Proceeding: washington, D. C.
mee held as herei: appears, ace chah this is the criginal :: ansc: 1;E therect fcr che file of the Cc
- ssicc.
Mary C. Simons Cfficial Repe nar (77:ed)
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A rri M r
Officizi F.epercar (Sigsscurs) l l
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