ML19224D595

Transcript of 790514 Deposition of P Oreffice.Pp 1-75

ML19224D595
Person / Time
Site:	Midland
Issue date:	05/14/1979
From:	Oreffice P DOW CHEMICAL CO.
To:
References
NUDOCS 7907130085
Download: ML19224D595 (76)

Text

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IN THE MATTER OF:

't DEPCSITION OF PAUL OREFFICE A.

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Midland, Michigan 1-75 Date.

Monday, 14 May 1979 Pages s

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UNITED STATES OF A?' ERICA 2

NUCLEAR REGULATORY COMMISSICN

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DEPOSITIOF OF PAUL OREFFICE i

5 Cow Center Patrick Road and Abbot Street 6

Euilding 2030 Executive Wing 7

Midland, Michigan Monday, 14 May 1979 8

Deposition of PAUL OREFFICE, called for examination at 9

10:35 a.m., pursuant to prehearing conference order of the 10 Atomic Safety and Licensing Board, before Helen M.

Rabbage, 11 a notary public in and for the County of Midland, State of 12 Michigan, when were present on behalf of the respective 13 d

parties?

14 WILLIAM J. OLMSTEAD, Esq., Office of Executive Legal 15 Directer, C.

S. Nuclear Regulatory Commissicn, Washington, D..C., en behalf of the NRC Regulatory 16 Staff.

17 WILLIAM C. PO':"IER, Jr.,

Esq., Fischer, Franklin, Ford, Simon & Hogg, 1700 Guardian Building, Detroit, 18 Michigan;

'R.

L.

DAVIS, Esq., Michigan Division, Legal Department, 19 47 Building, Midland, Michigan 48640; and LESLII F. NU"'E, Esq., Cow Chemical Ccmpany, Midland, 20 Michigan 48640, en behalf of Cow Chemical Ccmpany.

21 GERALD C*iAPlICFF, Esq., and ALLEN WEISEARD, Esq.,

Shaw, Pittman, Pctts & Trewbridge, 1300 M Streec, i

22 N.W.,

Washinc cn, D.

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20036, en behalf cf Ccnsumers ?cuer Ccc=any.

2 RCNALD G.

IAMAPCI, Esq., Isham, Lincoln & 3eale, 24 Cne First Nacicnal Plaza, Chicagc, Illincis 50603, en behalf of Censu=ers ?cwer Ccmpany.

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EXHIBITS:

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2 MR. OLMSTEAD:

On the record.

^

3 Whereupon, 4

PAUL OREFFICE 5

was called as a witness and, having been first duly sworn, s

was examined and testified as follcws:

7 MR. CLMSTEAD:

Mr. Oreffice, I'm William J.

a Olmstead, counsel for the Nuclear Regulatory Commission s

Staff.

10 The purposc of this deposition s a discovery 11 deposition he?

.o prepare #cr a case which has been 12 scheduled for hearings in July of this year, 1979, pursuant 13 to the Nuclear Regulatory Ccemission's Atomic Safety and

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14 Licensing Board's prehearing conference crder of May 3, w

15 1979-is The issues for that hearing in July are:

17 (1) Whether there was an attempt by the parties 18 or the attorneys to prevent full disclosure of, er to 19 withhold relevant factual information frcm the Licensing Boar *

' "e suspensien hearings; l

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3 (2) Whether there was a failure to make affirma- !

tive full disclosure en the reccrd cf material facts relat-

3 ing to Ocw's intentions cencerning performance cf its 24 centract with Consumers;

s (2) We. ether there was an attempt to present s_-

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2-B misleading testimony to the Licensing Scard concerning 1

2 Ccw's intentions; 3

(4) Whether any of the parties or atterneys 4

attempted to mislead the Licensing Scard concerning the 5

preparation or presentation of the Temple testi=cny; and s

(5) What sanctions, if any, should be imposed 7

as a result of affirmative findings en any of the above 8

issues.

9 DIRECT EXAMINATICN 10 BY MR. OLMSTEAD:

11 Q

On February 2, 1977 you were sworn as c witness 12 on behalf of Dov Chemical Company in the Midland remacd 13 proceeding in Chicago, Illinois.

Do you recall appeari.'s

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14 and testifying in that proceeding?

w 15 A

Yes, I do.

16 Q

dave you since had cccasion to review that 17 testi=Ony?

18 A

I have read it, yes.

19 Q

Did anycne else assist you in that review?

o A

What do you mean, did anybcdy assist me?

2:

Q Was semebody else present that you discussed your' l

testimeny --

A Nc, there was not.

When I reviewed it i. nediatel';

4 I reviewed it for anything that might have been incerrect,

s and I believe I gave my input en scme misspellings cf things.

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.:.ebody else might have been present in that sense.

1 I

I have recently reviewed it again by myself.

2 Q

Okay.

At transcript page 2688 you testified that 3

i you were employed by the Dow Chemical Company, President of Dow Chemical, USA, a member of the Board of Directors 5

6 !

of Dow Chemical, a member of the Dow Executive Committee, 7

Finance Committee, and the Public Interest Committea.

8 Has there been any change in your position with 9

the Dev Chemical Company since that time?

10 l A

Yes, there has.

I am now President and Chief i

11 i Executive Officer of the Dow Chemical Company. Also i

Chairman of the Executive Committee.

I am no longer on the 12 i

13 Finance and Public Interest Committees.

14 Q

Thank you.

j Do you recall having read the testimony of ' t.

15 16 Temple as presented in that proceeding?

l 17 i

A have not read the whole of his testimony.

Several years ago -- I'm talking about 77 -- after the 18

'9 thing, I scanned seme of it, but I did not read the whole 20 thing.

21 G

You testified at page 2689, which I believe is l

the next page there, that the testimony of Mr. Temple and 22 1

-i 23 i vcur testi.cny accu ately reflected the Icw cer crate I

24 pcsition as cf that date, Februarf 2,

1977, 25 A

That is ccrrect.

With one thing, that I stated

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I then, that I want to make sure we always keep clear we i

call it a corporate position, but it was the Dow Chemical, 2

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USA board at the time.

It was not the Dow Chemical Company's corporate board that made these decisions, 5

because we keep our operating decisions pretty well to 6

our divisions.

7 !

MR. POTTER:

Excuse me just one second.

I just 8

want to clarify for the record -- I'm sure the court reporter has already done so -- but I just want to make it 9

i 10 !

clear, at the time these questions are coming in, Mr.

11 Oreffice does have a copy before him of the testimeny that i

l ve gave him earlier, and he's making references to it in 12 i i

13 answering the questions.

l 14 Go ahead.

Thank you.

l L-15 BY MR. OLMSTEAD:

)

Q Does the testimony that you are P.ow referring 16 i i

17 to still currently reflect t2.e Dow USA position?

i 18 A

I don't know if I understand the question.

Does 19 the testinony still reflect today's position?

Has anything 20 changed since '77?

21 C

Right.

22 A

Well, I can't tell you accurately what changes 72 have occurred.

There's been a new cen_ract siened wich 24 Censumers Pcwer vnich has nade sene changes, and I have 25 frankly not followed the details en those because of my s=. n a a=ww.sa 444 o07 444 uCW?M CA8FCL STME U W A S HIN GTC N. O.C.

20001 (202) 347-3700 j

5 new responsibilities over the last year.

But the e's I t 2 !

certainly nothing in my tesi.imony in '77 that I've seen i

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3 I that I would wa:.t to change.

4 Q

During that testimony of 1977 you indicated that 5

you had ordered a review of the Dow position -- I assume 6

you meant the Dow USA position?

7 A

Correct.

a

,Q

-- with regard to the alternative of purchasing 9

steam frem the Midland Nuclear Power Plant.

10 When did you order that review?

11 MR. PO*:'ER :

Excuse me, Mr. Olmstead.

I want 12 to clarify something.

I think you said you were referring 13 to the Dow position as being the Dow USA position.

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think the review was to review the Dow Michigan Division U-ts position.

Is THE WITNESS:

Well, it was the Dow USA position 17 with reference to the Dow Michigan Division.

They estab-IF lished the position.

We Were reviewir y their PGsition.

19 BY MR. OLMSTEAD:

o Q

And the question is:

When did you o. der that i

1 21 review?

I A

In September of 1976.

Q Was that before or fo'. lowing r meeting of the

j boarf, the Ocw USA bea-d, concerning One cresentation of the v'"'"A Divisicn?

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The review was ordered before.

The Board met i

2 i after, to consider the recommendations of the Michigan 3

Division.

I 4 '

Q So the decision to order a review was yours 5 '

alone?

i 6

A Essentially.

7 Q

How did you learn of the Michigan Division's 8 !

position concerning the long-ter= desirability of nuclear i

9 '

steam?

l 10 !

A Prom Mr. Temple.

i 11 !

O Did you have ar.

other discussions with either i

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Dow USA personnel or Dow, Midland Division personnel prior 12 i

13 to ordering a review of the Dow positiin on the nuclear f^

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steam con' tract?

15 A

That's 2-1/2 years Tgo.

I've had a lot of 16 responsibilities.

I don't want to give you an answer that's i

17 l not 100 percent accurate.

I don't remember having an; others except for Mr. Rocke, Mr. David Rooke, who was H3 present during a discussion I had with Mr. Temple.

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20 reme=ber that.

l But essentially no.

Essentially I looked at the l 21 f

22 recccmendations of the Mi higan Division and said that I 23 thought that a review needed to be done.

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But, as I said, 2-1/2 years have gene by, and I

I may have talked te ene of my other 1

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I i O

All right.

Who was Mr. Rocke?

2 l A

Mr. Rocke at the time -- he's currently President i

J of Dow Chemical USA.

He took my job.

At the time, September 1976, I'm not sure if he was already head of 4

operations, vice president in charge of operations of Dow 5

a Chemical USA, or i" he was just assuming that position and 7

he was still head of our hydrocarbons and energy.

8 In either situation he would have been very t

9 deeply involved.

I don't remember the exact date, because i

there were several changes in those days occasioned by the 10

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12 !

Q Do you recall what specific guidance you gave to I

13 the review g cup?

I C(-

14 A

What specific guidance?

Essentially - well, I i

l 15 don't know what you mean by specific - essentially I

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16 Wanted a whole review of the matter, to see whu e we were l

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coinc_.

18 Q

But you didn't just say do a whole review, you --

19 A

Well, we had a recen:=endation from the Michigan Division, and I asked them to take a look at the recccmenda-l 20 21 tien of Michigan Division to see what our position should 22 be.

O I have here a doct:nen-which was in the under-lying proceeding, Midland Intervenors Exhibit Nurther 60.

24

5

"'his is Exhibit CD, which is called " Draft !.EN" which :

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i 8 I l believe is Lee F. Nute, " Outline Supplied by Consumers 2 i Power, October 6, 1976," which I'm going to shrw to you, 3 Mr. Oreffice, and -- l MR. CHARNOFF: Just one moment, please, while we 3 get that out. 6 (P ause. ) 7 MR. CHARNOFF: Okay, we have it. i 8 (Document handed to the witness.) 9 SY MR. OLMSTEAD: 10 0 I want to go over -- there is a page, and then 11 there's a number 2, and then there's another page with the 12 Roman numeral II. Then,there's a Roman numeral III, then 13 Roman numeral IV of that testimony. l g-I 14 The first page of Roman numeral IV -- this was s 15 entitled, "Dow Chemical USA Review of Michigan Division 16 Position." 17 Mr. Oreffice, I'm going to ask you to take a la mcment to read IV-A, Scope of the Review. (Witness reviewing document.) 19 20 A Okay. j 21 Q The. next to the last sentence of that pa agraph I I says: i 22 "The g oup's cenclusions were to be censistene w:. n Ocw's centract cbligations witn Cens=ers Pcwer, I. 25 l and Ccw's censent crder with the Michigan Air Pollution =:: 7:ce=1 CS:ccitc.t. p r ~ r o !r:c AA .u wearu opers sTwert 4" wasmnarou. .c zoooi (202J 347-3700

9 4 { Control position." 1 2 i Do you recall giving guidance to the group, the i 3 l review group, of that type? i i 4 ' A These are the group's conclusions. I don't see l how that has anything to do with my -- 5 ' 6 Q Well -- 7 A It has nothing to do with the guidance I may I 8 have given them. 9 Q The paragraph says that you formed an independent review group, and the group was told to conduct an inde-10 11 pendent review. 12 A That is correct. i 13 Q And then it says: r\\ I l 14 ' "The group's' conclusions were to be..." which 15 I take to mean that was some guidance given to the group as 16 to how they were to conduct this review. My question ir 17 whether you recall giving guidance of that type. 18 A It makes sense, but I don't -- I do not recall 2-1/2 years later exactly what the instructions were I had 19 20 given them. 21 Q When were you informed of the conclusions of the ! review croup? 22 A I believe tne ::.rst One was at a meet =c c: t i

t I the C. S. Area Operating beard that heard the whcle review.

25 But, again, if they gave me any advanced nctice of wha: i A4~ uIi M M g g - en u.nu mm W A S HI N GTC N. 3.C. 10001 l 202) 347-J700

10 1 they were going to say, I consider it immaterial, but I j i 2 l just don't remember. i 3 C Did you recall receiving those recommendations i before or after you met with Consumers Power's personnel 4 5 concerning the contrcct? s' A Without looki.ng at a calendar, there's no way I i 7 ; can remember the minutiae of what day what happened. I a' O Do you still have a calendar from that time period? 9 l A~ I'm sure I have. 10 l 11 Q Along that same transcript page there, you I 12 testified that there had been no threats of litigation concerning the Dow-Consumers contract from consumers prior 13 i N I to September 1976, 14 s 15 A What page are you on? 16 Q I think it's the next page' 17 MR. CHARNOFF: What transcript number? 18 MR. OLMS"EAD: Well, it should be about 2692, or 19 is it -947 i

o Here it is.

Page 2692. l 1 21 "'HZ iTI"" JESS : "' hat testimony is correct, to my j kncwledge. 22 3Y M2. OUiS"'EAD : 24 0 Were you aware of, cr did ycu receive any 25 suggestions fr= Ocnsumers Power that they might sue if Ocw I b O l4 7 M y I A c r::

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E 11 i I failed to support -- to continue to s.pport the contract? 2 : A

Yes, i

3 Q Who made those? A Well, I think if you'll go over this testimony 5 it'was amply suated, and I'm sure my mind was fresher in i 6 '77 on these events than it is today. 7 There were some suggastions -- I heard about it 8 before meeting with Consumers, but then at the meeting we Q had with Consumers sometime in - 10 Q September 24. 11 A - September 24, Mr. Aymond, then Chief 12 Executive Officer of Consumers Power Company. i i 13 I Q And you considered that a t?rcat? l' r A I cert:._nly did at the time. 15 i Q Did you discuss this threat with anyone following 16 the meeting? 17 A Ch, I'm sure I did, with my people. '8 Q Do you recall anyone in particular? 18 A Nc. I'm guessing now, but I'm sure I must have i 20 discussed it with Mr. Temple and Mr. Rocke. Poss2-y with 21 .t. Nute, but I don't know for sure. l Q At any time did Cow censider suing Consumers i under the cntract? s A Yes, we did, as stated in ny testi en*r in '77. i 23 Q Were these thoughts ccmnunicated to Censumers? l

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1 12 1 A I believe so, bus I did not c%unicate it. I'm 2 J not certain. 3 Q If those thoughts were ec=unicated to Consumers, i 4 l' would vou consider those to be threats? I 5 I A Well, maybe a counter -- you can call it a l 6 l counter to a threat. i 7 ! MR. OLMSTEAD: I want to show Mr. Oreffice a 8 memorandum frcm Mr. R.C. Youngdahl to the :iles, dated 9 ! l September 16, 1976, and ask him to review t.st, t 10 i (Document handed to the witness. ) 11 (Witness reviewing document.) 12 l THE WITNESS: Yes, sir. 13 BY MR. OLMSTEAD: i ri 14 I Q All right. You will note that there are seven i '6 i Dow task force assign =ents listed by Mr. Youngdahl, which i 16 the memo indicates were co=unicated to him by Mr. Tample, 17 i of the Dow Company. And Consumers Power was invited to l 18 cec =ent on the -- quote - legal aspects of the decision, 19 which I assume was the Midland Iow position which was 'O cec =unicated to Mr. Youngdahl. 21 MR. PC'""IR : Is that your cuestion? ~, i j 3Y MR. OLMS'"EAD : 23 C Well, this repc-t f cm Te=cle t Yeungdahl .1 l indicates that you have appcinted a task fcree which is to do seven things, and that Censumers Power is being invited n - r c~:1.7e:c.:[ = egetch a :. 44.4 NC m OAP406 STREET W A S MihGTQ N. 3.0. 20001 1202J 347.J700

13 j 1 to co==ent en the legal aspects of the decision, i 2 Do you feel that that's a correct paraphrase of 2 I 3 l the memorandum to files? i 4 MR. PO"'TER : Well, I want to object. 5 MR. OLMSTEAD: Well, let me - I'll say it. 6 ! BY MR. OLMSTEAD: 7 Q Item number 2 here says: 8 " Review the legal aspects of tPe decision, past 9, present and future. Consumers Power Company is 10 invited to make comments." 1 11 ' Do you have any doubt that that's what Mr. Temple 12 cc=municated in this memo? 13 i A I have no knowledge of Mr. Temple communicating g4 14 to Mr. Youngdahl, whether Consumers Power was invited or 15 not invited. i l 16 Q You didn't have any knowledge that he was going 17 to ask Consumers Power to comment on the legal aspects of 18 the Dow position? 19 A If I did, I do not recall it. 2c Q Assuming for the moment that Consumers was 2: invited, pursuant to Mr. Temple's invitation te ec= ment en I t the legal aspects of the Dow task force review, and the t

i Ocw-Cens=ers dispute over the cenr act, would it have been

4 l a f air ass =ptien, given your understanding of the situation.

25 f in 1975, that Cens=ers would view Dow's abandening the i c r: 7e:::al Merc::::1. Sn:. 444 N C R TN C A P 'TC L STREET W A S HIN GTO N. lll.C 20001 1202) 347 3700

l l i 1 1 nuclear steam project as a breach of contract? l 2 MR. POTTER: Again, I'm going to object. You're i t 3 asking Mr. Oreffice to co= ment on material that's contained i 4 l in a memorandum that apparently was recorded by Mr. l l 5 Youngdahl, who was a Consumers Power Compan'! employee, 6 recording the results of a conversation he had with Mr. 7 l Temole. f 8 Now, Mr. Oreffice, to my knowledge, did not 9 part =ipate in that conversation. I don't see how he can i 10 : correctly interpret or pass on anything in th2s memorandum. i i 11 ! MR. OLMSTEAD: Well, I note your objection. I 12 i But my concern is if he had knowledge of that comnunication, i f 13 if it did occur, whi.:h is subject to later proof. g' 14 l MR. PO"rER: He has just testified he has no i l 15 knowledge of what Mr. Temple may ha' a comunicated to i 16 Consumers Power Company. I think in pursuing that line of f questioning you're asking him to -- 17 i 18 MR. OLMSTEAD: I'm asking him to -- i 19 l MR. CHARNCET : May we go off the record? 20 (Discussion off the record.) 21 MR. OMS"'EAD : Back on the record. i SY MR. OLMSTEAO: 23 0 Cid you assign seven cask fcree assignmenrs cc 24 the Ocw review cc " ttee? 25 A There were several specific points, which I cra. nd =w=. sx ._=.4,_ 444 017 W A S HI NG*O N. 3.0 20001 (2C2) 3 7 3700

15 assume to be correctly seven, assigned to the task force 2 l to be done in this review. ~ t { Q And was one of.those task force assignments to 3 l l 4 l review the legal aspects of the decision, past, present 5 l and future? I i 6 A Yes. t 7 ; Q Assuming that Consumers Power was aware of the t l 8 purpose of the Dow review through a communication with Mr. i 9 Temple, what would you have thought if someone has asked l 10. you to ec= ment on the legal aspects of abandening the i 1 11 i nuc1* ear steam contract, had you been Consumers? I 12 i A I don't know what they think. That's not -- 13 Q I'm not asking you what they -- t .s l MR. POTTER: I'm going to object to your charac-14 15 i terization of the communication to Consumers Power to be 16 that it was the abandoning of the nuclear stear. Contract. i 17 To my knowledge that's not what was cccmunicated to 18 Consumers Power. I think that's an unfair characterization i 19 of what Mr. Tc=ple did. l i 20 But either way, this witness dcesn't knew l l 21 anything about that aspect. l 22 TEI hTII;ISS : Lcok, it's cbvious, in asking fcr i 22 a review I'm asking for all of the legal aspects of the 24 whole thing. But I knew nothing of what yeu're : ying to 25 lead to. 44a 01R m, O ff* J C f7Jl 0 OCff C Cf. ede N C 8t W CA P !'O I. ST14 EZ* W A$ MI N GTO N. 3.0. 20001 (2C2) 347470c

16 t 1 BY MR. OLMSTEAD: I Q Were you aware that Dow Che~ical Corporation and Consumers Power Company were having major disagreements \\ 4 over the nuclear steam contract? I 5 A Yes, we had for some time talked of redoing the 6 I contract. The contract has since been changed substantially'. 7 Q And you previously told me in response to an 8 l earlier question that Dow had considered the possibility 9 of legal suit for breach of contract against Consumers I 10 Power, is that correct? MR. POTTER: What was the question again? i 12 i l MR. OLMSTEAD: I think he previously told me i 13 that he had considered suing Consumers for breach of i 14 r / contract. I 15 ,v2. POTTER: Thank vou. l 1 i 16 THE WITNESS: As best I recall, that was after 17 the threat from Consumers Power. 18 BY MR. OLMSTEAD: i i 19 i Q Would it have been reasonable to assume that i l U where the two parties were in disagreement over the centract, that both parties might view the centract as i l being one which they might sue en? i A It's possible, but I ve_rf strencly renn~"er l that all alcng we had been :-fing to renegotiate the i e i cor. tract en certain peines, where both sides had changed t -*m - o a m C'*:** _I C C*.al C H C C*tC~1, $CC,. ~ m .p .xf 444 NCRN O A P'?O L ST1t EE* ,,, g g,, W A S HINGM N, O.C, 20001 ./ (102) 347 370C

I' l circumstances. And, of course, as.I say, this has been l 2 done since them. 3 Let me just add, we're not a litigious company. We'd rather see things settled in an amicable way, and 3 discuss the contract, than have any kind of suits. 6 Q okay. I'd like you to look at the Durand 7 memorandum to files, September 29, 1976, page 10. i 8 l (Witness reviewing document.) 9 You may want to read the first two lines at the to bottom of page 9. 11 I A Who is Judd? 12 l Q Judd Bacon, an attorney for Consumers Power. 13 ! A And who is Rex? O 14 0 Rex Renfrow, an attorney for Const:aers Power. x t L 15 Milt is Milt Wessel. 16 A I know Milt. i 17 How far do you want me to read? 18 Q Just that paragraph. 19 A okay. 20 Q You'll note that it is stated in those notes l that, " Milt stated if Consumers Power pushed further on t i 22 this info matio. then the parties may get into a situation i 1 where Ocw i= mediately filed suit against Consumers Power." 24 i Would ycu view that as a threat? i -c 1 A I den't know what, areng lawve s, I den't knew lf*. 1 F / t c~:r ~aca c ecuci. .c. 444 MCRW O A PPOI. S7EP W A S HI PeGTO N. 0.C 20001 (202) 347 370C

I yg i 1 1 i what you people thought about it. 2 Q Milt Wessel was authorized to represent Consumers 4 3 Power Company, was he not? \\ 4 i MR. POTTER: He didn't represent Consumers Power. l 5 i MR. CLMSTEAD: I'm sorry. Dow Chemical. 6 THE W TNESS: Yes. t 7 ! I dcn't consider -- you made me read one para-8 graph. I don't consider that a threat. I consider it just 9 statement of fact, as he viewed it. i l BY MR. OLMSTEAD: 10 I 11 Q Very well. 12 i During your testimony before the Licensing Board 13 you indicated that if the facts changed Dow might reach a r-i 14 different conclusion, and that Dow was keeping its options i t i 15 l open to re-review the contract again. 16 Has Dow re-reviewed the contract? 17 A Yes. There have been substantial changes of the 18 centract since 1977. 19 Q Is Dow satisfied with the current contract? i 20 MR. P C'"'"IR : I'm going to object. I redily can't I 21 understand where we're going en this kind of - 22. MR. CHAPliOFF : Can I have it read back? I i i 23 MR. ?CT'"ER : Again, I wanc to inte pese an i 2# cbjection. We've get a 10: Of deposing to de in the next i ac three days, and then going at it in the folicwing weeks. C"T:: =.,*:::: C$2yCT!:"4 $CC. ./ ng4 m so m caerreu erwer- /l11f UcI ~ ^ = ~ ~ arc ~ = =

==oa ' (202) 347-3700

i 19 1 i And if we're going to engage in inquiries as to what 2 positions the parties have in the present cor. tract - - I I 3 i don't understand that to be the scope of wha : this proceed-4 ing is before the NRC now. I think it goes back to the 5 preparation of the Temple testimony, at the time of the i hearing around -- what was it - November 30, December 1andf 6 7 2, 1976, and Februa:.y 1977. 8 I just really don't see the relevancy of where i 8 we're going, Bill. 10 i MR. 004 STEAD: Well, I think it's very relevant, but I don't need to make the argument here. i 12 l MR. POTTER: Well, okay, I've made the 13 i objection. I ( b-14 i vou can answer the question, Mr. Oreffice. i 15 THE WITNET,S: Would you re-read the question? 16 : l (Whereupon, the reporter read from the record, 17 ' as requested.) 18

• HE WI* NESS:

Well, it's a better contract than '9 it used to be. I think our people are satisfied with it 1 20 as it is now, yes. But I do not know that. 21 3Y MR. CUDS"' TAD : 22 Q Eas any emnicyee of Ocw suggested cc you since 23 your testimeny before the Nuclear Regulat y Cc:=issicn i 2# that ane der cor crace review is in order? e A No. '~ A l A ~ fl Q}} c r::- ;::e::i rneyc::: i. 44 N C it 'M CA Pf*01. S'4EET W AS HI N GTO N. 3.C. 200C1 @2) 247-3700

20 l Q At transcript page 2694 you testified concerning 1 i 2 the meeting on September 24 with members of Consumers Power 3 Company. 4 ! Yot-indicated that you remembered very clearly i 5 one part of that meeting that was important to you, and s that was when Mr. Aymond said that if the plant was not 7 ! ready to supply Dow by 1984 Consumers would let Dow off 1 8 the hook. 9 You also testified as to one of Consumers' f lawyers objecting to that. 10 l 11 Then you said you asked your people to follow up 12 on that. i l 13 Who did you ask to investigate that? (C' 14 A My best guess -- and it's a guess -- is that I 15 asked -- I first asked, I remember asking mic of the lawyers, i 16 I and I don't know if it was Hanes or if it was Nute - one 17 of our lawyers, well, what does this all mean? Because I 18 thought Mr. Aymond was making a legitimate offer in good 19 i faith, and it was obvious that he greatly upset his lawyers. I 20 And so I remember asking our lawyers why were 21 his lawyers upset, and they gave me an explanation, which l ! frankly dcn't exactly reme.ber. And I asked semebody in 73 I the creur., either the lan_ ers, er Joe Te ele, er semebcdy 1 24 I vhc was dealine directle with Cens mer: ?cwer, to follcw.:p. I 25 ; O Co you recall any conclusions frem that felicw-up? I f i} (; ) ') 5::- 3rd:::! rSerc::eu,.0c:. b*

• w NCRN C A PTTC b STit EET W A S MENGTC N. O.C.

20001 6202) 347-3700 1

21 i i 1 i A Well, the next thing I heard is that instead of i 2 le,tting us off scot free, I'd have to say, which is what i, 3 Mr. Aymond was i= ploying, there was a big amount of cash 4 involved. And I tcu'.ified to that in 1977. 5 0 Did you receive any conclusions from that follow 1 l 6 up in any kind of written communicacicn? 7 A You mei.n a conclusion frcm our people? 8 Q

Right, i

9 ' A Not that I can recall. i 10 O Did that suggestion frem Mr. Aymond that he i 11 would let Dow off the hook by 1984 lead you to push for l 12 any concessions or any other terms in the renegotiated 13 contract? 14 A No, because between the time he made this i 15 suggestion and the time they came back with what they -- '~~ 16 their interpretation about it, was videly different in i 17 ! my mind. 18 Q So the renegotiated centract now has a cutoff 19 date, is that correct? 20 A "' hat was considerably later. You're talking 21 about later when the con _ract was renegotiated? I'm sure i 22 i that it must have been brcught up when they -- again, I' l l ' awing conclusiens because I wasn't in en any cf these 2 negotia: Lens. i 25 j Q Okay. If you'll lock at c anscript page 2706 1 i s ,- r g c ::- :e c::1 =R::=:ca. sac n t.7 444 NCftm OAPTTOL STM E C W A S HI N GU N. 3.0 20001 t2cM 347 3700

22 i 1 I and 2707, you testified that the suggestion of a inusuit i 2 ^ by Consumers Power came before the corporate review, yet 3 after the time.when the Midland Division h.id recommended s i 4 abandoning the nuclear steam option. 5 Is that a correct su=ms y of what you were 6 saying there? 7 MR. CHARNOFF: Could I have that question read a back? 9 i MR. OuiS*EAD: Just let me repeat it. I 10 He testified on cross-examination that the 11 'i suggestion of the lawsuit by Consumers Power occurred 12 I at the September meeting which he attended, which, I take t 13 : l it, to be the September 24 meeting, which came before the [_ 14 corporate review,*yet after the time when the Midland i m. ,g Division had recommended abandoning the nuclear s Sam i 16 option. 17 THE WITNESS: As I testified here, it came 18 during this corporate review. It was during the time the 19 i task force was in operation. But it was certainly before I ~c ' we met to hear the results of the task force. 21 I BY MR. CRIS TrAD: l O Wi.s this the first time that you -- the i ~, i September 24 meeting the first time that yo were aware of suggestions of lawsuits by Censumers under the centract? = ~~ A Directly, yes, althcuch prcbably a couple of d::- 3ede=I =Rcc:ters, Sc.: 444 025 4.d.4 NORTH C A PTTO L. SM EIT W A S HI N GTO N. % 20001 (2011 347.J7tlr -

[ 23 1 days before I'd heard something from one of our people -- 2 ! again, I don't reme=ber who it was -- that there might i i I such a thing in the air. 3 l 4 ! Q When the corporate review position, the', was 5 presented to the members of the Dow board, do you recall 6 what your recommendations were with regard to the 7. conclusions reached by the review group? l 8 i A Well, *e task force made its review to the i 9 whole management co=mittee of Dow USA, which is ccmposed cf quite a few people. 10 l i 11 Then the Dow USA board retired into a separate 12 room to take the reco=mendations of the task force under advisement. And the recommendation of the task force, I 13 j O l A 14 l believe I testified two years ago, was that if the costs i 1 15 were, indeed, $1,670,000,000, with a startup date by i l 1s March of 1982, that the nuclear power alternative was still I 17 l the most satirfactory alternative for the M.ichigan Divisicn. i is ! Q Then it would be fair to conclude that the 19 basis of the decisicn was primarily econcmic? I

r A

No, I don't think you can make that single 21 conclusion, and if you review mv 77 testimony it was time and again asked whether the th eat of litigation was an 1 i i

l i.pc-ant censide ation or not, and I testified then -

I

l and I haven't introved in two vears -- that I ius: canne:

25 divorce the two things, becauSe I was given a bunch cf 4 m 1 A %7Cf* -.< D C [ C I C C U l U. f2f. p) Y[ A a 444 MCmW CA MTOI. STR E Z* I W a S MI N Q?C N. D.C. 2000f 3 i202) 3d7-3100

24 i 1 I data that said, here are the econcmics, and here's the 2 l threat of a S600 million litigation. And the decision was 3 ' made based on the whole cackace of information. t 4 i j I cannot conclude what I might have thought if 5 one of those things was not present. sl Q Was Mr. Wessel present. at that board meeting? 7 j A Not in the board where we made the conclusion. ~ 8 i At the presentation from the task force he might have been. i I don't remember. 10 Q Did you have a dis ssion with Mr. Wessel or i 11 Mr. Nute concerning how the Dow beard reached their i 12 ! decision? 13 A I don't remember. I just - it's two years, l n ^( 14 I just. if you tell ne I had one, you're probably 1 l 15 : right. But I just don't remember, 16 l Q Do, or did, the other members of the Dow USA 17 ! board generally follow your advice and recommendations on 18 ; such matters? 1s A Well, it wasn't just mine. It was a conclusion 20 of the group. It wasn't my decision. I didn't arrive at 2' this decision by a 51 percent vote. It was a decision cf ] the Icw USA beard. And in general I chink - I think it was a unanimcus decisien, if I rememcer ccrrectly. ~~ i 'd O Was anybcdy en the bea-d critical cf he review -e g cup 's conclusiens or the Mif r.d Divisien conclusions? 444 027 c"= ~i=== S= a m l w genm cae'Th sTn tr* W AS MIPe G1 3.0 2000% !202) 347-3700

I 25 1 A No, not that I can remember. 2 i o You testified during those hearings that Joe 3 Temple did not have a piece of data available to him that 4 f was available to you, and that was the threat of litigation. 5 i Do you recall that? A No. I uhink that's wrong. I den't think I 7 i testified to that. a I'll tell you what I think I did testify to. i 1 9 ! Joe Temple did not have a piece of data when he first made 10 his recommendation. He got his data one at a time. I got 11 those two pieces of data together to make a decision. 12 I think this is the difference, because if you 13 ! ask me can you make a decision purely on economic grounds, O I ,--Q without t?e threat of litigation, he could have because t 15 that was his first step. He didn't know about litigation t 19 at the time. l 17 But I didn't, because I got two pieces of data 18 together. IS Q To your knewle'ge had either veu er :t. Temple t a l '0 recuested legal advice frem Dew's attorneys concerning t i 21 Cow's respensibilities and obligations under the centract? l 1 22 A Well, that's what the legal review was all abcut. 22 ! The fact there was a task force for legal review, was whac l Cur chil. *aci ;ns Were 'O. der the cen' Tact, of CcOS'.0".GO s ' -c Cbligations. You have te gut it in cente.'C".. This is a '~ s c-- r a m g 02 i 444 c OA = ..._.m.=_ U402) 3474700 l

26 'l 1 plant that was originally supposed to be on stream i.n the I 2 mid seventies, and we were now already talking of 1982, 1 l and there had been continuous delays, some which we felt 3 may have been Consumers' faulu, some which were the fault 4 5 of the whole regulatory process and the intervenors, and 6 so forth. 7 But the fact was that we were trying to find cut 8 what all alternatives were and what the legal position was, i i I think that's a prudent businessman's attitude towards 9 ' 10 scmething. I 11 ' Q And weren't you advised that there was a risk i 12 of litigation for breach of contract if Dow attempted to 13 terminate its agreement with Consumers? f 14 A Well, we didn't intend to just up and terminate I 15 an agreement for no goed reason. So I don't think I ever I i 16 got any advice on that point, because that was not the l l attitude. We felt there might be cause for terminating it. 17 18 Q I show you a document that's captioned Intervenors 19 Exhibit Number 7. This is another memo to files from I 20 a Consumers person by the name of Mr. Keeley. l 21 MR. POT"ER: This is a memorandum dated March i l 4, 19 76 frem M:. Keeley to file, with copies to Youngdahl, 22 i 23 j Ecwell. 24 ! MR. CHAE';CFF : May I look cver your shoulder? I 733 W--',;ESS : Do you want me to read -he whcie 25 444 029 d= 3='c=! =*===' D* e44 NCRTW OA p f7C I,, m EET W A S HINGTC M. 3.C. 20001 (101) 3d7-3700

t 27 1 i thing? ? i 2 MR. OLMSTEAD: Yes, I would like you to read fs 3 over here to item -- through item g. 4 l (Witness reviewing document.) i 5 i BY MR. OLMSTEAD: 6 i Q This is a document which shows a meeting 7 between certain Consumers Power personnel and Dow personnel 8 regarding the Midland-Dow contract. 9 i In attendance at that meeting was Mr. Joe l 10 I Temple. i 11 Item g. on page 2 indicates there was talk about i 12 l the threat of litigation due to delays in Joe's letter has i 13 to be removed at the end of the negotiation. r-l 14 I In light of that knowledge of Mr. Temple's / participation in that meeting, and the reference there to 15 1 18 l the threat of litigation by Dow, do you think it's 17 reascnable to conclude that Mr. Temple hadn't considered I 18 threats of litigation between Consumers and Dow when he 19 reached the Midland Divisien position following the Court 20 of Appeals remand in July, 1976? i 21 A Well, you're asking me to conclude frem -- i 22 MR. PC C R: Excuse me. Before you answer, I'm 22 gcing to object. If I unders ,-d tha: me.orandum, it l i refers to seme alleged threat Of litigatien, but ne: b-1 c Consumers against Ocw, but maybe the 0-her way. 4 F f s a C**:** 7C*2C*:1 CK rC7

• .1, f:C.

4 030 - - m i.x m W A S HI N GTC N, 2.0 20001 l202) 347 3700

28 i 1 l MR. OIE_ STEAD : Right, it's by Dow against 2 Consumers, in that particular memorandum, f 3 MR. PO'"TER : And is your question to Mr. Orc fice, though, is he correct in his earlier statement 4 l 5 that since Joe Temple didn't have Consumers' threat of 6 litigation against Dow before him at the time he made the 7 decision, still a correct decision? Is that what you asked 8 him? i 9 MR. OLMSTEAD: What I was asking him is, if it's in the mind of one of his executive officers of the Dow 10 11 Corporation to the point where he is considering litigation 12 against Consumers Power Cc=pany, and obviously I would 13 } assume seeking legal advice in regard to it, is it reasonable 14 to conclude, using a reasonable > man standard, I'm not i asking him to speak for Joe Temple - we'll ask Mr. Temple 15 i 16 j later - that he would not have considered the threat of 17 countersuit by Consu=crs Power Cc=pany. 18 l MR. POTTER: I'm going to, for the record, just 19 object, because really you're putting a reasonable-man 20 standard, but you're asking Mr. Oreffice to testify as to 21 whether Mr. Temple =ight have really censidered that. And I l = l th'at's the net effect of what you estion is, whether i 23 l ycu put it that way er not. And I Object, because Mr. 24 -l Oreffice certainly is not, and wculd be the fir t Oc say, an 25 exne_. on what goes en in M.r. Te=nle's mind. Scc. f f f; Q)} &::- 3rde :! 0::c::::1, 44.4 NCRTN CA Pir. L 5?#EET W ASHIN GF,N. 2.0 20001 (202J 347 3700

29 i I With that in the record, rather than taking any 2 l more time, go ahead. / 3 ! THI: WI:"ESS : Well, I think that if -- 4 BY MR. OLMSTFAD: 5 Q Let me put it this way: 6 Had you been in that meeting and made a threat i 7 of litigation to Consumers Power Company, would you, before 8 you had gone to such a meeting, have considered the 9 l threat of litigation against you, a countersuit by Consumers l l 10 - Power Company? l 11 l A Well, I think you're taking the whole thing 12 completely out of context. You're talking about a 13 litigation-- I don't know what they're talking about here. c You're =aking me read s'emething which might be a litigation 14 T 15I for $10 million. i 16 The question before, and what we were talking 1 17 about, is a very specific threat of $600 ::illion litigation 1 la by Censumers Power, which I had to contend with in making 19 a decisien, which Mr. Temple, to my cest knowledge, didn't 20 knew abcut at the time he made his original recc=mendation. I 21 I don ' t know if we ' re tal'<inc about -- what i we're talking abcut here. Cer ainly, if anybcdy knew anytnr.g re: ore those days that there was any-hing ine a a 3 i 24 560C million pessibility, I didn't knew any-hing ateur it. 25 And to my knculedge Mr. Te.7 1e di ^ '* know anything arcut Ox c5: - 3:d:-:l cR:rc::::1. -=cmemms,=m e 4 i O, T h W A S HINGTO N. 2.0. 20001 449 UJL <mo mmco

30 1 I it. 2 Q What is the amount of the liability of Cow under 3 the contract? Assuming the contract is reasonable performed, how much money is Dow Chemical Company talking about? 5 A That is a question that cannot be answered that i 6 l Way, because in the first place to the best of my knowledge 7 the amount of liability continues to change. It's been a 8 changing thing. What it was in 1976 is considerably 9 different from what it is in 1979. i 10 Q Well, I 1.nderstand that. But hcw - are you 11 talking ab,ut spending S10 million, or several hundred 12 mi. lion dollars, or - i 13 i A This plant started out where the whole plant -(- 14 was going to cost $250 millim. So you have to put 15 yourself - you know, it's very easy to look back today, 16 with all the vision we have in 1979, to figure out what 17 things might have been. But the fact is, this has been a i 18 l changing and moving thing. 19 Now, you shewed me a piece of paper. I don't 20 know what the hell it means. The delays in Joa's letter l 21 has to be. ." I don't even know what this means. 22 I den't know if they're talking abcut litigation 4 l cf tr.e whole contract, if they're talking abcut a little 22 i 24 i piece Of it. l 25 I knew that in cur mind, as I stated before, '. ee c=l = % cn ai, D== c ::. em m. x mm W AS MTNG9 N. 04. 20001 a [1(f (202J 347 3700

31 e i l we were trying to settle the contract - this letter also -- 1 2 since you have introduced it, I insist on giving you -- i .e 3 you made me read this - this letter also c'.early indicates i a desire to negotiate and not to litigate - clearly 4 i 5 indicates that this is what was being tried at the time. t Now, also there was a suggestion on a specific 6 i f point, which I don't know what it's about, of a litigation. 7 i. a, But the whole approach was to try to settle this in an 9 amicable fashien. And up to the time of this meeting on September 24, that's the way I had hoped things would go. 10 i 11 Q When did Dow originally expect to be drawing i 12 ! steam from the Midland nuclear plant? I i 13 A I believe the original date was 1976. I may l be off by a year or so. 14 l Q so would it be fair to say that Dow was not 15 i 16 happy about the delay? l l' A No, but there had been a new -- i I 18 : Q No, it wouldn't be fair to say that? 19 A Yes, it would be fair to say that. It would be 20 very "*i- *o say that we were very unhappy about all the i l 21 delays.

i Q

Since you-testi=cny in 1977 have ycu had an accasien te meet with P.r. Aymond of Consumers Pcwer en I 2" { this T.atter? 25 A No, I have net, i f 5:: ?:N::d S:rc :::4. $n# ,I end MCR*M O A Pf*C L, STMEg* W A S HINGTO N. O 0. 10001 (2C2) 347 2700

32 1 Q Have you - A Excuse me. You said since 1977? 2 l 3 ! Q Since your testimony. That was February, 1977. l A To make sure, when did Mr. Selby become chief 4 5 executive of Consumers Power? I believe that was shortly s' after that. At that time I did talk to Mr. Aymond -- I 7 think that's the only time -- on the telephonc. But I 8 talked to him at the time of the change in uneir management. 9 ' But I had no substantial discussion with him. i 10 ' O Have you had the occasion to discuss the Dow-11 Consumers contract wit?1 other Consumers Power of ficials since 12 ! that time? 13 A At the time Mr. Selby became chief executive -- I I / 14 again, I think it was shortly after that'-- we talked in 15 great generalities on the telephone. From everything I 16 unferstood from our people, he was known to be a reasonable l i man, and I talked to him over the phone to say, hey, can 17 18 l we get this contract settled to the satisfaction of both 19 parties? We both agreed that se would name our very best 20 people to a negotiating te'am, and really +27 to hammer out l l 21 a new agreement that was satisfactory to both pa_Mies. j i 22 And that's what happened. ~J O And that was early 1977? 24 A I would have to know when he became chief

5 executive.

I was verf shornly after. I don't know if it c-~: .7ece::].cNt: cit::.<, $nc. s - i n eed ** C R TM CAPtTh. STM EET W AS HI NGTO N. lll.C. 20001 (2C2) 3dh3700

1 33 i 1 early, late -- but it was sometime in that period of time. ~ 2 In fact, it could have been before the Chicago hearings, i 3 although I don't think so. 4 The one fact I remember is he had been chief 5 executive for a very short time. 6 O Did you have occasion to discuss with any i 7 I personnel involved in the Dow contract or in preparing 8 material for the Nuclear Regulatory proceedings regarding i 9 the Dow contract-the question of who would appear as 10 I witnesses on behalf of Dow Chemical Company. i 11 ! A You're u lkine about in 1976? I 12 Q Right, for these hearings. i l 13 i A Discuss it with Dow people? f 4 i Q Right, as to who the Dow people should be to l 15 i testify in the Nuclear Regulatory Cocnission hearings. i 16 l A Well, I testified in 1977, I think, to that i 17 ', effect. Yes, I did have some meetings with them. 18 MR. CHARNOFF: Excuse me. With Dow people? l 19 TEE WITNESS: Yes. 20 MR. CHA?JTOFF : Not with Cons =ers people? I, 21 m3r ;c NESS: With both. We11, no, I didn't have 22 l any aeetings with the Consumers people, althcugh I think. I 22 I I testified in 1977 shcut seme suggestions which were uade i i during the meeting of Sept e er 24 by Censumers pecple.

s l 444 036 a= w =%=~ = Dx and NCRTH CA PtTO L ST1t E ET W A S HI N GTO N. 3.0.

20001 (202) 347-37CC

8 34 I l 1 i BY MR. OLMSTEAD: 1 2 Q You testified, I believe, that you got an 1 3 impression that Consumers wanted an unknowledgeable witness? i 4 A That is correct. MR. CHARNOFF: Could I have that read back, 5 6 please? 7 (Whereupon, the reporter ::ead from the record, 8 as requested.) I 9 BY MR. OLMSTEAD: ~ 10 Q How did you obtain that impression? 11 ! A Well, I don't remember, obviously, that these i 12 ', were the exact words used. But I think there was a statement i 13 that the best witness to go for Dow might be somebody who 14 wasn't really that familiar with the whole thing. And I i 15 remember getting very upset about it. I i 16 Subsequent to that I had discussions with our 17 ! people, and I think you could probably say that I raised 18 some hell with our people to make sure that we sent the 19 =ost knowledgeable witness, which I thought was Mr. Temple, 20 because inasmuch as I'm concerned any time we are testifying i 21 to scmething, we want tc send the mest kncwledgeable witness.! a

2 So I wonder why I'm testifying.

I'm not the 1 most knowledgeable witness in this whole area. (Laughter.) 25 Q You were present when cemecne frc= Censumers c r:2.Te.:c.d =Rercuci,.On: s -i 2 44 037 _ _,_.a.., w a s MIN CTO N. D.C. 2000t i 12C22 347.J700 l

35 lI 1 r s.i.?ing Consumers Power expressed that desire? _swer at r. 1 2 7. Yes, I was. That was September 24 at the i 3 h meet 2g. 4 Q Did you check this out with any other Consumers 5 Power people, or follow up or it in any way, to see if that 6 was -- 7 A I personally did not. 8 Q Oka?. I 9 At page 2726 you testified that if the Consumers-i 10 ~ Dow contract did not come into being, that there was 11 uncertainty concerning whether Dow would continue to l operate units in Midland because of the competitive 12 '3 advantage that Dow might have in other areas of the 14 country, such as Louisiana or Texas. i \\s_- I 15 Has there been any intervening circumstance 18 which would change that testimony? i 17 ' A No. As a matter of fact, there have been maybe 18 circumstances to prove that point, because we have had a 19 continuing debate, as I'm sure you are awr.re, with State and 20 Federal air authorities, on whethcr we can continue to l 21 burn coal under our system. And we have stated verv l cle arly that if we don't get scme relief in July of this 22 22 year when the new amendments af the Clean Air Act go into 24 effect, we will be laying off scrething like 200 to 1000 l 25 v4and. people and shu :ing scme uni?.s .- r e c- ::.7e.:c-c[ S c c:* :t. J:::. 444 08 eed NCRTM OA P'TOL 57 EZT W A s pet M GTO N. 3.1 20001 t i2C2J 347-3700

36 \\ At the time the corporate review team determined l Q i l that Dow should continue to support Consumers on the 2 3 contract were you or any members of the Dow management, to your knowledge, anticipating that the revised contract nee otiations which were then ongoing would alleviate the 5 i problem that you testified you saw in the contract which 6 was a lack of a fixed te mination date? 7 1 A We definitely expected negotiations to improve + 8 several points in the contract which, under the circum-9 i i 10 stances of starting in 1982, and the current costs and so i 1 11 ! forth, were unbearable on the contract. l 12 - At the same time, Consumers Power wanted some t f j things on their side. And so we felt, yes, that there 13 l were severv points that could be negotiated. 14 l x 15 l Q so you reasonably expected that you would get 16 a termination date? i, 17 l A Yes, I would say that I -- well, you asked me i 13 when, when did I reasonably -- 19 Q Well, that's the next cuestion, when? after.ir. Aymond made the 20 A I certainly did, i i 2' statement he did in our =eeting. ( 22 Q Which was the same meeting when they made One 23 i threat? i 24 A Yes. 25 And you testified that it was he fixed ta =ina-tion date that was,Off.erad,byJir. Aymc,nd that was mcre c't: ~ :c:.' M:rc::as,1,/ce, add NCm?w OAP!TOL snge W A SHING*O N. :: C. 20001 /

37 i 1 I important, to your mind? i 2 A Well, Mr. Aymond made a very clear statement, i 3 ! and what I felt was a very honest statement, that he l I cons dered -- my interpretation of his statement, if I may, 4 5 although I don't remember the exact words, is that he was 6 saying it would be unreasonable to keep you tit J a i 7 contract if the plant were to not be started forever, i 1 8 ' essentially, and you have a deadline, and that's 1984, and 9 I consider it reasonable to let you out by a certain date. l 10 l And I must say, we keep saying 1984, and I i 11 ' don't remember if it was January 1 or December 31, 1984, at 12 this time. But it was -- and you know, I felt t'iat that was 13 an honest statement that he made on his belief. And, as / 14 l I say, his lawyer jumped up and said you can't do that. \\_ 15 And I had to ask why of our people later. 16 Q Okay. Now, that was an impcrtant piece of data 17 to you - 18 A~ Ch, yes. 19 Q -- the fact that the Chairman of Consumers would 20 see that as a reasonable te ination date. i i 21 A Yes. l 22 Q So in 11ght of that, and in light of the threat i 23 ; of litigation as you ca.e away from tha meeting, was you:- 24 general belief that you had improved matters, natters had

5 remained unchanged, or matters --

e, C'*:2* IZ2 C 2 Z:MT "1, lOC. 444 040 - ~ ".0. W A S HI N GTO N. 3 20001 (202) 3474700 1

38 1 A

• lou mean right after the September 24 meeting?

~' 2 1 Q Right. 3 A Ch, mixed emotions. But a definite feeling of 4 improvement on the termination date, and some feeling that 5 the differences could be negotiated. 7 d say -r well, I'd say mixed emotions. 6 7 Did Consumers make any other sug;estions concern-Q 8 ing revising the contract that Dow found to be to its l 9 advantage? In 1 bout that time frame. I don't want to go -- 'O I don't remember the specifics of that meeting. A Later en -- we had made several suggestions of the things } 12 which would alleviate our position, and they were being r '3 negotiated and discussed. i Q Did you view the suggestion on -he termination ~ 15 date M.r. Aymond made at that meeting to be a gesture to l gain Dow's support in the Nuclear Regulatory Commission '6 '7 proceeding? 's A I don't believe so. I really interpreted it as '9 an henest expr.ession of a man using a reasonable approach. l l 1 23 It sounded so reasonable to me that that's why I 'dered I t it just a reasonable businessman making a point. f 2 During the course of this time, leading up :: ~l 1 23 l the prepara:icn of ycur testimeny~, and al-4 ately your 24 cestimeny in 1977, did ycur atecrneys advise you cf the I need to :<eep the Nuclear Regula: cry Cr= mission advised of -e f j} ;*; Q t} } c-?:: 3e:'c-:! 0::w:~.1, 0:c. w NCstTM 0A 71TC 6 STDCE* W AsiglN GTC N. O 20C01 (2C2' 147 3700

39 I I ! changes in your testimony or the Dow position? + 2 ! A During what time? i 3 ' During the period of time from the September 24 Q meeting through your testimony in February of 1977. 4 MR. CPJu'UTOFF : Did his attorneys advise him of 5 6 what? t 7 MR. OR1 STEAD: The need to keep the Nuclear 8 Regulatory Concission advised of changes in your testimony ? I 9 ' or in the Dow position. 10 ! THE WITNESS: In my testimony? I had given no 11, testimony, as I recall. 12 BY MR. OLMSTEAD: l 13 Q While you were preparing it. r l 14 MR. POMER:- How could he change anything that i i 15 still hadn't been given? That aspect of the question I 16 certainly must be clear. He had no duty to alter testimony I 17 l that hadn't been given. 18 BY MR. OU1 STEAD: Q Were you ever given any advice concerning the 19 I 20 need of the Corporation, Dow Chemical Company, to keep the 21 Suelear Regulatory Ccmmission informed of changes in its

l positicn?

A Well, I knew there were hearings going cn, and 3 t 24 l that an r ciece of racer in -his ccmean cast, presen: Or 25 future, had to go to the hearings. Sc : assume that means I p ir l n -- r i C ::= J 2 Cal C rirM*.%', Jf C. 444 N C et W O A P'TC 6 STit E ET W A SHINGM M. 0.0 20001 L202) 3d 7-3700

40 t keeping them advised. 1 f 2 o Since the tine of your testimony, once prepared, 3 have you provided to Dow attorneys, Consumers attorneys, i l or other personnel for either company, materials indicating 4 i 5 any change in your position? 6 A None. t 7 0 Did anyone ever suggest to you that the NnC should not be provided with informatien concerning Dow's ongoing 8 t 9 review of the Midland Division recoc=endation? 10l A No, sir. As a matter of fact, I was advised of i i I 11 exactly the opposite, that anything we said and anything-l 12 we wrote should be provided. l* i 13 : 0 You were advised of that? r t 14 A I was advised that anything we wrote would go G' l 15 l to the NRC. 16 MR. OLMSTEAD: That's all the questions I have. 17 MR. CHARNOFF: Could we go off the record. 18 (Discussion off the record.) 19 CRCS S-E:GL'4INATION 20 SY MR. CHARNOFF: 21 0 Mr. Oreffice, I think we've established that du-ing the time frame of September, 1976 you attended only l the meeting of September 24, 1976 with Consumers Pcwer i 24 Cccpany present? 25 A That is cer ect, b b li 00 &::3ede=t =%e=cu. Dx and NCMTM O A pfTO L STmtg? WA$MiNGMM. O.4 20001 (202) 347 3700

j l 0 You did not attend the September 21 meeting with 1 Consumers Power Company? 2 1 A I don't believe so, 3 t t 4 Q Nor did you attend any other meetings with i Consumers Power Company during September and October of 5 i i 6 1976? 7 l A That is correct. Did you take any notes of the Septerter 24, li76 8 Q 9 meeting? 10. A I don't remerter now. If I did, they were turned i 11 ; over to our attorneys and to the hearing. So you would have I 12 them if I did. i l 13 i Q We don't have any that I'm aware of, p ,a 14 i A Then I must not have. / ./ 15 Q Okay. I 16 What, sir, was the purpose of that Septerber 24 i I 17 ' meeting with Consumers Power? 18 A It was - we had been having these negotiations 19 for cuite some time, no conclusions were being reached, and ! l 20 essentially it was to sit down and talk over the whole l 1 21 thing. 22 Q Was it in the centext of trying to resclve the l negotiations, or was it in the centext of trfing te

l understand -- was it in the centext of that task force's 15 assi n=ent; namely, to review Mr. Temple's er the Ocw i

i f l l[ tj Qff &:e-3e:'e::( cRepc::::1. Or:c e44 NORTH D PM L. S?14EE' W A S HI N GTC N. 3.0. 20001 ? (302) 347.3700

42 q! I Michigan's recommendations? 2 l A Ch, yes. Yes. 3 Q Do you know whether the meeting was called at the i 4 initiative of Consumers Power Company, or at the initiative 5 of Dow Chemical? 6 A I don't remember. 7 Q Was one of the purposes to get some Consumers 8 i Power Company input into the then ongoing Dow USA review 9 ! of Mr. Temple's and the Dow Michigan's recommendations? 10 A Well, obviously part of it was to find out what 11 their position wa., t 12 Q Their position with respect to what, sir? I i 13 A In general, on the whole situation of the l c (N-14 l contract. We'd been trying to renegotiate it for some time. l Q Anything else? 15 i 16 A Just on the whole nuclear power situation. 17 Uncertainty is the worst thing you can have, and we were 18 trying to determine just what the position was. 19 Q Just to refresh your recollection -- 20 MR. CHARNOFF: Bill Potter, do you have a copy i, 21 of Mr. Nute's notes of that meeting, September 24, 197e? 22 MR. PCTTCE: Yes. 1 MR. CHARNOFF: Could you shcw to Mr. Creffice 1 l j just a hrief paragraph which might refresh his recollection 24 25 as to what he had said at the opening of inc meeting? f f t\\ 04 cA::- 3:dera[ Repcet:u. Sc 4.44 N C ft 714 CAP WL. 5T1% E E* W A S HINGTO N. O.3 20001 1202) 1474 700 t

43 6 i i 1 (Document handed to the witness.) 2 MR. POTTER: Where do you want him to look? MR. CHARNOFF: Particularly under Roman II, 3 i i 4 ; where there is a caption of Mr. Oreffice's name, and one 5 single paragraph. 6 MR. POTTER: The record should reflect I have 1 7 tendered to the witness a copy of the 9-24-76 notes. f 51R. CHAPl10FF: That's marked as Midland Exhibit-- 8 + i 9 Intervenors Exhibit 27. t 10 .HE WITNESS: All right. l I 11 BY MR. CHAFliOFF: 12 Q Now, does that refresh your recollection that the l 13 l purpose of the meeting was to get some input, including I r eL 14 l Consumers Power Company input, in connection with the i ~ 15 review of the Michigan Division's recommendations and 16 positions? i 17 l A Yes. But I don't see where it says anything 18 different fron what I just told you. It says we need all 19 the input on the question of where we're going to get out 20 steam and power and different points in time, which means l

1 to me to do the whole thing, and the input into the Division

l review, yes.

4 i

3 l C

Okay. i 4 Jow, yce had assicned, with :1. Temple's

5 reccc=endation,

.- r p c :1 7 :c::1 cKerc :: 1, .icc, 4ht 046 -ce-- wasmnato. o.:. oooi 2C2) 347 3?co

44 i 1 ! MR. POTTER: Excuse me. Are you finished with 2 ! the reference now? l 3 MR. CHARNOFF: Yes. MR. POTTER: Okay. I think he's not certain of 4 that. He's reading the notes while you're asKing questions, 5 I 6 and I just want to make certain. i 7 MR. CHARNOFF: Yes. l 8 ' BY MR. CHARNOFF: 1 Q Well, briefly, that paragraph that summarizes 9 to, your opening statement, is essentially consistent with your recollection of what you were looking for in that 11 t 12 meeting? I [ 13 ' A Right. l r, t Q Now, if I could have you refer to -- if you n '4 %../ l have a copy, and if not I'll show you a ecpy of Mr. Temple's 15 16 letter to you, of September 8, 1976 and September 15, 1976, i 17 Board Exhibits 1 and 2. '8 Do you have a copy of those? ) 19 (Docu=ents handed to the witness.) I 20 Have you seen these dccuments? 2i MR. PCMER: 9 '5 is the date en the other one? 22 MR. CHA?2iCFF : That is correct.

3

• EE WIniESS:

What was ycur question? I SY "R. CIA?2iCFF : 24 ' 25 C Have ycu seen chese dccuments befcre? A44 047 css. wc=t 4x=. s-44d NCRW CA PTT O L SM E E* W A S MtM4TC N. 3.0. 20001 (202) 347 3700

l 45 I 1 A I have in front of me September 8. I saw that l l ene. As a matter of fact, that's what started the whole 2 i 3 review process, when Joe Temple brought this letter over. 4 He didn' t send it, he brought it in person. 5 (Document handed to the witness.) 6 ; And the September 15, in which he recommends 7 the ite=S for the corporate review, yes. I remenber seeing 8 that. 9 O And did you adopt, where he lists proposed items 10 for the Dow corporate review of the nuclear steam project, 11 and he lists seven items, did you adopt those seven items i 12 i and ask the corporate review group to look at those seven l l' 13 items? I f' l A I believe ve adopted.them exactly as recommended. C 14 15, I am -- I can't be 100 percent;sure that we didn't make 16 some minor changes to it, but I believe we adopted them as 17 written. i 18 ; Q Okay. 19 In examining item number 2, which is the review 1 i 20 of the legal aspects of past, present and future outicok, l 21 which I take it Mr. Temple was recc= mending be assigned to i 22 l M. Hanes, what did you have in mind in asking fer Mr. l Hanes to examine the future cutlook of the legal aspects? 22 24 A Well, ebviously when you have a major centract we Just wanted to knew what al the aspects were. Had i 1 - t l 1 9,' n ', ' c-t::. '.;:dez: : rm: 1, cc. L n t I e 44.4 *sCRTH O A PtTO L STR EC w a s MIN GTO N. l*,,0. 20CQ1 (2C2J 347.JM

46 1 ' Consumers breached the contract, what had they done, what 2 could we do, did we have seme outs, didn't we, to make a 3 decision. i 4 That's a very important part of the input. l 5 i Q And was one of these subsidiary cuestions that 6 if you terminated the contract you might be liable for 7 damages? i 8 A Certainly would be in my mind, although I don't 9 know if it came up specifically, yes. 10 Q But I think you used a term in talking to Mr. I 11 Olmstead earlier today, you were talking about the prudent i 12 l businessman would want to know the legal situation. So, i 13 + l among other things, acting as a prudent businessman, among i 14 I T' other things you would want to know is whether or not if 15 the contract were terminated or frustrated, whether Dew i 16 l might have some liability? i i 17 A obviously, I think you'd want to know can we 18 terminate it. because we have just cause, or don't we have, 19 or if we don't or if we do, what might be the legal 20 consequences. Yes. 2' Q So in that centext, you might want to knew 22 l vhether ycu'd be the subject of a pctential lawsuit, perhaps,by the Other party? A Chan's your conclusien. That's reasonable. -- I 0 It is reascnable, and a pruden: businessman would n r o c~~::.*::c~ 1 :.S::c~::~1, 2 :. menm :wri tr=cr-p g .u O 't

• ^8 km am 2- ~-- 2 coot 1202) 347-J70C i

47 1 want to know that, is that right? 2 A I think that's a reasonable assumption. 3 MR. P C T'" E R : Are we through with this exhibit 4 now? 5 MR. CHAFlIOFF : I think so. 6 BY MR. CHARNOFF: 7 Q In fact, Mr. Oreffice, Dew is often the subject a of -- even though you say it's not a litigious cerporation, 9 Ccw is often the subject of some litigation. Any ::w.jor to c w oratien is, isn't it? 11 A Especially in today's society. You lawyers have 12 to make a living. 13 Q There might even be seme legitimate reasons for 'r i f"- 14 the lawsuits. ~ is A Sometimes. 16 Q Isn't that right? 17 A Somet.5eS. la Q And scretimes I assume that your lawyers bring is litigation at the direction of the management rather than 1 20 of their own instigation, isn't that correct? i l i 21 A Ch, I'm sure, althcugh I don't knew of any l 1 liticaticn of the size cf this ene.. n Q So it's the si:e of -he litigati:n that was

4 really of great imnrassien Oc ycu in this particular

s instance, is that right?

444 0.50 "" 3'='". _=I="'=*=' "" , m,,. m WASHIMC M N. 3.0 20041

202J 347-3 ?co

48 1 A When Consumers, on Cegtember 24, brought it up, 2 yes, sir. S600 million captures =y attention. 3 Q That's a lot of money. 4 A Even = ore back then in '76. 5 0 It's worth somewhat less today, isn't it. 6 A Yes. 7 Q New, in the context of today's society where 8 lawyers like to do whatever it is they like to do, I take 9 it it is custcmary for managers of enterprises to take 10 such active litigatien or f act of potential litigation. into 11 account in making prudent business judg=ents, isn't that 12 correct? 13 A It doesn't happen very often but, yes. /~ (s '~'. i 14 Q But where it exists, that is, where you are told tt that there is potential litigation or where you suspect 16 there is potential litigation, as a prudent businessman 17 you would like to kncw about that, wouldn't you? 18 A Correct. 19 Q And then you would factor that into ycur prudent l l 2a business decisien making? l 1 21 A Yes. 1 Q Ccw, I take it, has often entered into a number cf centracts which appear - well, I shculdn't say eften --

4 but Scw has entered into centracts which secetimes appear

5 to te less f averable after their inceptica than at the time

+ (* / e a g w'~*:

• w CCal CNCCTtC1, s l'.

[ 444 4 C 8tTW CA #'TO L STREET

1. A S HI N GTO N. O.C.

20001 (202) 3dh37CC

49 I the centracts were entered into, isn't that right? 2 A That is correct. Less favorable on either side, w 3 Q Cn either side. And I assume that in evaluating 4 the nature of, or in evaluating the desirability of whether 5 continuing that contractual activity, one of the questions 6 is the extent to whicb you are legally obligated to carry 7 out that contract, isn't that 8 A My first approach has always been to sit dcwn 9 with the other partf and try to negotiate something that "3 is = ore equitable for both, despite the fact if it is more 11 unreasonable to us later than before, our approach is to i 12 sit down, and lay on the table why we think this contract 13 is to (f.erous for us and try to get a friendly settlement 0 r s_) 14 of scme type. \\. 15 0 And that's probably the reasonable and almost 16 standard practice for large enterprises. 17 A And that'J how I think 99 percent of these things 18 are solved. M3 Q All right. But ene of the elements of resolving 20 those is the awareness that there is scme litigatien 21 potential if reascnable people don't reach an tmicable 23 ! agreement, isn't that it? i I 23 A Well, ycu can't make a generali:aticn like that, j i l because in cost every case I knew cf -- cne was relief, fer 24 25 instance, en our pricing when the oil price increase ed 444 052

===== > =*==== L7

i n 6.a.a N C arTN uptTO L. STw m W A S HIM 4 7C N. 3.C. 2OCC1 42C2J 347 3700

50 1 '74 and we had seme escalations which were no lenger satis-2 factory. Our approach was always to try to get some relief, 3 but if there was no relief and no breach at all of the 4 other party, we'd live up to our contracts. And I think one of the main considerations -- 6 everybody keeps asking me ahout the breaking of this co.. ract. 7 We felt there was gced cause -- at least, I knew in my mind 8 the thing that I asked the lawyer is do we have goed cause 8 for demand.ing, if you will, an amendment to this contract. 10 We were looking more for an amendment of the 11 contract, in my mind. 12 O The thing that was impressive, then, at the '3 September 24 =eeting when Mz. Aymond mentioned the potential 14 of, litigation was really the amount of exposure that might 15 be involved? 16 A Well, plus the fact that we had -- up until that 7 day I had really felt that we could get the centract 18 amended, that we could find the way, because there were '9 sete things we needed, sc=c chings they needed. And I 1 20 felt at that meeting we were being told veu're c.oine. te be 1 21 sued fer $500 millien, and sert of take it or leave it. That's a big change. l i O Oid he do that in the centex: thac thac wculd t 24 he Censu=ers Only reccurse if, in fact, Ocw either c l repudiated or frustrated the centract? c :: ?c:e ci =Kercn:n, $cc .9 O-l 444

• e c eW OA P*TO t.

ST1e EI? W A S MI N GTC N. O.* 20001 I2C2) 347-J7CC

al 'I l I A No, I think it was done in the centext that we I tried to negotiate sc=e contract changes, we were getting 3 newhere, and if you don't live up to the contract, he said, 4 we're going to sue you for S600 =illion. 5 That's the kind of thing I felt 0 0 I think you testified -- I think Mr. Olmstead 7 referred to 2692 -- that there were no threats, if I a reme=ber, by Censc=ers Power Cc=pany with regard to losses U prior to September, 1976, is that correct? 10 A To =y kncwledge there were none. Yes. There Il =ight have been, but not to my knowledge. 12 Q Do you know whether prior to September 1976 '3 Dew or any of its elements, like Dew Michigan, had ever i told Cons =ers Power Cc=pany that it was recc==ending to ~. 15 the parent bcdy that it review the contract to determine 16 whether or not it was continuing to be in the interest of 17 Dcw Chemical to carry it out? 18 A I knew they were talking with Const=ers abcut 19 making substantial changes in the centract. O Your questien is, did they te._ Censumers they were asking for a corporate review? 22 0 Yes, that's right. I 1. Not te :.r kncwledc.e. 1 2* C So it had never a=ctnced cc tha: level cf c ccccern, is that right? ~ c-r n g, c:.*eres::/ =Kecci::~1, cc. Ih w ** C R 'M CAP L $*REZ? WA$MIPEG M M. 0.0 2000t (102J 347 3700

-o.,. l i 1 A There was cencern, but, no, that's right. There 2 was an escalation of concern after a lanc. c.eriod of time 3 with the negotiatiens not gcing in the right direction. Q Yes, I'm not icoking to you to finger ceint it, 3 but as I understand it, there was a meeting on Septerter 13 6 between Daw and Censumers Pcwer Cc=pany where Dew people 7 told Censumers that there was the Ocw Michigan rece==endation and a decisien by the beard to carry out that recc==endation, 8 9 that is to have a corporate.re'riew of the contract. And to that is an escalation of concern, perhaps a logical one, 11 but nonetheless an escalation of concern, isn't that right? 12 A I would agree with that, yes. 13 Q And it was only after that event occurred that 14 there was a threat or statement of litigation by Consumers ~- 15 with the potential of $600 million of damages being raised, 16 is that right? 17 A That is correct, to my kncwledge, yes. 18 Q New, t"ere was sc=e reference in your discussion 19 with Mr. Olmstead of Ocw's considering suing Censu=ers Pcwer i 20 Cc=pany. 21 Reccgni:ing what you said be#~=

• cut your 22 general disecsition in trying cc rescive these matters, 23

cen_ cverted matters, whenever you ceuld, when de jeu recall l this censideraticn by Ocw cf the feasibilicy er desirabilicy 24 i

S cr undesirability of suing Censumers Pcwer Cc=pany?

Did it r m c-=.

=c= c := n cs. s c 444 99s odd asc A Tid 1A p fTO 4. STWEET lj y

W A S Mt MGTC N. O.C 200C1 (202) 347.J700

53 i l 1 follow the statement by Consumers Pcver company en Septe:-ber: 2 21 or 24 that it might sue, or did it precede that period 3 in ti.r.e? 4 A To the best ou my recollection, it follcwed it. 5 0 I see, s A At least in my part of the discussions. But 7 let me tell you, at the same time, as we started the S review, as we started the legal proceedings, it's possible 1 that when we said legal proceedings the subject also came 10 up, lo we have any -- you k Ow, I think it's one of the 11 thintys that we asked them to 1cok at, do we have any legal 1: recourse? So it's possible that I heard something, but 13 ( ' 14 I don't believe so. I bulieve it was after. V 15 Q But it ws's possibly in.ask force item number 16 2, as eccething to be looked at. A Well, they were to icok at the whole legal 18 implications. i 19 Q Now, Mr. Hanes testified this torning on i

o depositien that folleving his meeting on September 21 with sece Censumers lawyers where a discussien ca -a

p about Mr. Temele being a witness, and whe-her there cught :

be 1 j a witness presented by Ocw whc was unaware cf Mr. le= '.e's

2 1

4 }

pcsitien, and that he teck the pcsi.icn that Ocw would have

s to put fe: sa-d a fully kncwledgeable witness, kncwledgeable 444 0 5 6 da-5='==i =s==,,=,m &=

! ;,o g ~ ~... .... cm. m _, i ap j.. i2em m.2-ee

54 i of Mr. Temple's position, and so on, and he said he then t met with you prior to the meeting on September 24. 2 3 Do you recall that? A If Mr. Hanes said he met with me, he's probably 4 5 I know in those days I met with him, scmetimes with right. Mr. Nute or Mr. Temple, to get a briefing on what was going 6 And that possibly is where I first heard of this. 7 on. 8 It could have been September 24 when I first 9 i heard about it. Q How many times did you hear about it? 'O 11 A I don't know. { Q. Mr. Hanes testified that you took the position 12 consistent with his, that Dow ought to put forth the most 13 _ (" l' / knowledgeable person, sss 15 A A very violent position. 16 Q As a matter of fact, you said earlier today you '7 raised hell with your people? 18 A Yer. ~ 'O Q Was that -- l 20 A It could have been at Mr. Hanes' meeting. I 21 thought, frankly, it was after the 24th. But it could have 22 been the 22nd. 1 1 2 Why would you have raisec all wich your people? 22 i i Was there scme possibility thac some of your people were 24 -c ~~ sugges ng unat ="ta ':de::( :Secit:- Tcc. - i 4 444 MC 8t *M CA PtTC L STME W AJ MI N GTC N. 3.0 20001 202J 347 4700

55 1 A No, they weren't suggesting that. Well, when I 2 raised hell I became, I remember, very excited about any-( 3 body making a suggestion that Dow should not put its most 4 kncwledgeable witness up. 5 Q Okay. Whether it be Consumers people saying that 6 ! or your own people saying that. 7 A Well, my own people were obviously just a conduit., 8 But you always Echead the messenger. And I think when I 9 say raised hell, I was really beheading the messenger by la saying to hell with it, I took a very streng stand, that it ue will at any hearing put the most knowledgeable witness 12 on, whatever the subject. 13 Q Did Mr. Hanes tell you that at a meeting on t PN 14 September 21 that scme of the Dow people at that meeting v) 15 had at least scme reservation about putting Mr. Temple on, 16 because of the prior statements he had made, or prior 17 public positions he had taken? 18 A I don't remember that, as of new, if he did say 19 scmething like.that. 29 Q If they had told you that, would that have i i 21 caused you to raise hell with them? l 3

i A

I'd raise a little =cre hell, yes. l 0 I see. Sc there's levels cf hell that ycu ra se? I 24 ! All right. t

5 Ncw, Mr. Eanes also testified -lat it :. 3 nc:

444 058 c = m =, t + = c es = n a a N.

1. A S MIN GTC N. 3.C 1CCC1

(1 (202) 347-J700

56 his recollection that the question of a Dew witness, 2 knowledgeable or otherwise, was raised at all at the I 3 Septed er 24 meeting. So new I would like to ask you to I focus as hard as you can -- and I reccgnize we're a couple 4 5 of years away frem your testi=cny, which was then months 6 away, is it at all possible that your recollection of that 7 issue came up only in a meeting with Mr. Hanes, Mr. Nute 8 or semebcdy else, or that it necessarily came up in the 9 September 24 meeting? i 10 ' A In February of 1977 I seemed to have a very l 11 clear recollection that it came up at the 24 September 12 meeting, and I have had nothing since to change my mind. i 13 Q Allright. So your statement here this morning I / 14 that it came up on the 24th meeting with Consumers is really based upon your re-reading your testimony of 15 16 February 1977. 17 A There is no new recollection. 18 0 Okay. 19 Now, let's go back -- and I recognize that I 20 difficulty, it really is -- your testimeny which appears l. 21 on page 2703 of the t anscript talks alcut a suggestien - I' : icching at the bettes parag aph cf that page, sir, i 20 lines 13 and 19, where ycu said that if there was ne l 24 statement that there cught te he a fabriested pcsition,

5 but the suggestion was made we shculd supply maybe a wi ness c~*:

• : -:t S.ercit:~1, Sc s

4 4 Oqg m =em ameu sncz? ... _ _. m_ ' 2c2) 3.47 3703

57 { who wasn't the most knowledgeable witness that Cow had, I ...a suggestion which led me to doing the review, led me 2 ( to question this, because I said as much as I'm cencerned 3 Joe *emple is the most knowledgeable man that we have on 4 5 the subject." S Now, I recognize that even February, 1977, while 7 it's pretty far back from now, it was also roughly six 8 months after the September meeting that you had with Mr. 9 Hanes and your people had with Consumers Power. 10 Are you absolutely certain that in fact that suggestica was made at the September 24 meeting, or rather 11 1 12 ' what you were recollecting was your discussion with Mr. 13 Hanes orier to the meeting? r. 14 A You're asking me if I'm absolutely certain in 15 May of 1979. I was pretty damned certain in February of 16 1977, yes. 17 Q Well, who made the suggestion at the September 18 24 meeting? 1 19 A I do not remerier. Ic C You weren't asked that in February, 1977, but 21 Jince you were given to a -- what ycu might say a vicient er ar =' ~ s raising hell type reacticn to thac k.ind of an

2 i issue, let me t:f to put you back into ycur frame of i

24 reference in Sepcerier. 25 Can you picture Mr. Aynend discussing who the c: .; re:i %:c-:cs, $cc n m - *cn. C2,,rCc srwerT W A S HIN(1TC N. C.C. 20001 444 060

58 'l witness ought to be? Would that have been in his province 1 2 ! or his area of discussion? I / 3 A Possibly. But I just .I just don't 4 remember as of now. 5 Q You can't remember who mignt have made that 6 suggestion? 7 A It's very possible Mr. Aymond might have. 8 Q Is it possible that Mr. -- who else was at that 9 meeting? Is it possible that it might have been another 10 person at that meeting? 11 A Mr. Ay=ond took the lead, as I recall, from the 12 group. Who was their lawyer? He did seme talking. 13 Q There was a Bacon and a Falahee there, n. ,A 14 A I think Falahee - either Bacon or Falahee did 1 15 quite a bit - a fair amount of talking, as I remember. 16 Q Could I ask you to refer again, then, to Exhibit 17 27, which were Mr. Nute's notes of the September 24 meeting? 18 (Document handed to the witness. ) 19 A Yes. 20 Q ' lave you seen these notes before today, sir? I 21 A I believe I must have seen them at the time they ^2 were w-itren then, in '76. I believe so. I can't be 23 ! entirely sure. I i

t C

Io you recall any recollection that -hese actes

5 were reascnahly cc==rehensive and captu ed the significant r

c::- :erc:1.:Rerc :cs, Lac. l .,e n/ = acam =um starry 444 U$ ;g mee.r= ~. :.c. 2cooi 1202) 347 3700

59 l points made at the meeting? 1 2 A No, I frankly don't remember it. / 3 O Do you recall any reaction that it lacked or i I 4 l omitted any significant points of the meeting? 5 A Maybe I ought to make sure you understand. I i I 6 probably didn't read these notes very carefully. I had i 7 in my Job a mountain of papers. In fact, I spent all my i 8 time -- l i 9 ! Q I'm sure you did. 10 l A That was about the time I issued an instruction I 11 that I didn't read anything over two pages long, which i 12 ' still exists in the Company, unless somebody asked me 13 please. i 14 ! Unless Mr. Nute asked me please to read it s I 15 carefully, four pages, I probably didn't. read it that 16 carefully. i 17 0 Was your directive to limit everybody to two 18 pages, was that after Mr. Nute gave you a 4-page document? 19 A No, no, that was after I kept getting 50 and 20 60 page reports. I l 21 Q I sec. t De vou recall whether Mr. Nute asked you c 22 i i l

i read all fcu pages?

24 l A I don't remenier his doing so, nc. Which i 25 ! dcesn't mean he didn't do it. I just don't reme-S er.

• ere.:{.:Rerc-::.1, $cc F f 4

.m 4.44 4C Rm OArt*Ca. STR EE* W A S HIN G*O N. 34 20001 ^ [ (202} 347 37CC O, c/ m

63 1 Q I don't know whether you're a quick reader or 2 not, and I don't like to a.sk you to read all four pages f 3 very quicki - but could I ask you to scan those four pages 4 to determine whether there's any discussion in here -- 5 A Boy, this is the worst copy I've ever seen. Does 6 anybcdy have a decent copy that I can read? Q Sure. Is this any clearer than yours? 8 (Document handed to the witness.) 9 A Yes, this looks a little easier. 10 Q Now, what I'm asking you to look for, if you can, I sir, is any reference at all to a discussion in that 3, meeting of the identify of the witness to be presented by i I3 m Dow. f~._ 14 (Witness reviewing document.) 15 A What was the question again? 18 Q Is there any indication in that set of meeting 17 notes of a discussion of the identity or character of the 18 witness that Dow should present? 19 A No, I don't see any. Well, on the witness I i I U don't see any. But I see there was a suggestien that we i I l l shculdn't volunteer the date. 22 l 0 That gces to the cuestion cf -- 1 22 I A Terminatien date. i i 2# C - termina:icn date. But there's ncthing in

• C there suggesting who -he witness should be er shculd net be,

-- i n

p c: 72:2~ 1 derm::~1. snc .44 % cam w m snar? t} li i _U U[ 2 q e e A W A S HI N G TO N. O..O. 20041 J <2c22 2.r-aroo

61 1 is that correct? 2 A That is correct. / 3 But there's also something here which reminds j 4 me of something that says, "Still think Mr. Cherry may 5 show." There was a great feeling that this hearing would a be a very fast one without Mr. Cherry, and -- 7 Q I think that's something that most attorneys a would probably agree to, including Mr. Cherry. 9 (Laughter.) 10 In scanning these notes, did you have the impressicn that they were reasonably comprehensive of the 11 12 meeting? i A I guess so. Mr. Nute is present, I can't tell 13 n you that he doesn't take goed notes. 14 15 Yes. 16 Q Now, in light of the fact -- and I really do 17 understand the difficulty that one has in recollecting 18 avents and statements made semetime ago -- in light of the 19 fact that Mr. ' danes has testified that he hr.d no i 20 recollecticn of the witness' character er identity being 1 21 discussed at the =ecting, and in light of the fact that I'm speaking of the 9-2 4 meeting -- and in light cf che

3 fact that Mr. Nute's nctes of 3-24 do not refer te _;ac

4 matter, and'in light of.ne fact that Mr. Nute's actes cf

s Septe=her 21 de refer to that =atter, and in light cf the

&:: ']e:'e-:!, Eerciters, $nc 444 064 -a-W A S HI N GTO N. 0.0 20001 8202) 3474700

62 1 fact that Mr. Hanes said he had discussed this matter 'uith 2 you after September 21 but before September 24, and even / 3 recogni::ing the testimony you gave at page 2703, do you 4 have any doubt at all that the statement or the concern with regard to the nature of the witness was necessarily 6 made at that meeting, or the discussion you recall was really a discussion made or had by you with Mr. Hanes? 7 8 A I'm a reasonable man. Obviously you planted the t 9 seed of a doubt in my mind by all of these other statements, 10 by showing me these minutes which may or may not have 11 shown it. So all I can tell you is, to the best of my 12 ability on Februa y 1977 I was very sure it was done at 13 that. Today I can't be sure.semebody told =b that. m 14 Yes, you have planted a reasonable seed of 15 doubt by giving me this other input, whether I heard it 16 on the 22nd or the 24th. Q You' referred.to the new contract in your 17 18 discussion with Mr. Olmstead. I would take it that under 19 t'.at new contract you are relying upon 1.he Midland nuclear l 20 plant providing you with steam and electricity, is that I t 21 correct? l A Yes. Mostly steam. The electrical contrsc: 23 is Shor* te C. 24 want to volunteer sc=ething else. My lawyers S say you never volunteer. But -- a 4 g %W= AS" YOS $5 UA*

• II'"-

e n e r* 4.44 4CRTM " A FM L. STMEET W A 1MI M QT O N. 3.0 20001 '202) 347-J700

63 l 0 Just for the draft, t 2 A I'll say that at this time, in the last two 3 ! years, we have more confidence that it will be built at 4 the price and timing than I did two years ago. I think 5 progress has been good in the two years. 6 Q Thank you. 7 Just one final matter. You were advised, you i 8 sa'd, that anything written with regard to the Dow-Consumers 9 arrangements would go to the NRC and, therefore, in that 10 context you assumed that in effect any new developments i were being reported to the NRC'. 11 i 12 A Yes. j i 1 13 ! Q Who gave you that advice? l 14 l A I believe it must have been Mr. Nute. It could (L i l have been Mr. Hanes. I'm pretty sure that it was one of 15 i 16 l our lawyers. 17 [ Q And it was in the context -- 1 18 A It could have even been Joe Temple. l 19 l Q And it was in the context, wasn't it, that 20 anything you write is subject to discovery and - 21 A And they also asked me to provide any nctes or 22 other things that I might have, frcm handwritten notes or i 22 l any papers I had in my files, l 24 ME. CH A?l!O FF : Thank you. I believe I'm 25 finished. 4 F 1 o C*t?! ' Jt: Cal CKCC7tC ', .f.)* tin 444 No m me cartT h stat e A ff QQ w a s MI N <m3 N. O.C. 20001 (1cza s47 21oc

64 1 MR. PCT *ER: I just have a couple questions. 2 BY MR. POTTER: 3 Q Mr. Oreffice, I'm going to show you again the memorandum which was apparently directed to you from 4 5 Joseph Temple on Septerier 8, 1976, and I'm going to ask 6 you: 7 Is it a fair statement that whatever the recem-8 mendatien of Joesph Temple, the general manager of the 9 Michigan Division and as head of the negotiating team, 10 whatever recc=mendation he was making to Cow USA for the 11 corporate review was centained within that memorandum? 12 A Yes, it was contained within this memorandum. 13 Yes, it was. -f% i 14 O So, to the extent that scmeone might have 15, attempted to characterize Mr. Temple's recccmendation at 16 scme point as a reccmmendation that we walk away from the 17 contract, whatever reccreendation Mr. Temple made 10 18 centained within that memorandum, is that correct? i 19 A It sure is, yes. i i i 20 Q New, if you'11 take a Icek at issue nurier 2, i 2: locking again at the Septerter 15, 1976 memcrandum to you frem Mr. Temole, which is kind of really jusc 1 ccver 22 l letter with the seven issues cutlined -here, is -hac I

s cor~ec:?

s A

Yes. $::- 5 dec[ c.Serc :: 1. $cc 444 4 C 4m ll;.a P'TC L ST14 EI* W A S HI NGTQ N. 'l3.4ll. 20001 '202) 347-3700

65 I 1 i l Q And those are recommended by Mr. Temple and c i 2 you approved them, is that correct? i 3 i A That is correct. And I think they're approved 4 i exactly as recommended. i 5 I Q Now, would you agree with me that issue number 1 6 2 states: 7 " Review of the legal aspects, past, present i 8 and future, outlook by Jim Hanes" and there's an i 9 F asterisk there, and it goes on and says, I l 10 ' "...particularly the 1975 decision to renegotiate the existing contract to reduce our 12 dependence upon Consumers for steam and power to 13 an absolute minimum, rather than pursue a claim (..' 14 j of breach of contract." i 15 Does that appear in there? l 16 A That's what it says. l 17 MR. CHARNOFF: Excuse me. Is not the asterisk 18 next to the word "past" rather than -- 19 MR. PO CER: Yes, that's where the asterisk i I 20 appears. i 21 BY MR. 2CMER: 22 O Now, one final cuestion, and it's along the '3 line of the examination that was being ccnducted by :'.r. Charnoff: -c Do you recall during the ce_ crate review -- I'm M r i ? ^ c-*: 7::::t cn:c:t:11 Sc:. 4 068 444 M C a m CA PTTC L S*WEET W A $ Mi M GTC N, 3.0. 20001 s201) 347 370C

66 talki7g now -- I mean when the presentation was being 1 made on September 27 to the Cow USA board, whether Mr. 2 in 3 Hanes made any statement to you about whether or not, 4 turn, he had heard of a sts.tement from somebody else as to the type of Cow witness that was to be used? 5 6 MR. CHARNOFF: Could I have that question read 7 back? (Whereupon, the reporter read frca the record, 8 9 as requested.) 10 THE Wr" NESS : I don't remember for sure that 11 Mr. Hanes made the statement, but when I previously 12 testified that I raised some he13 that I made a statement, 13 I know I did at that meeting, because I wanted to make A 'f sure that the whole management corenittee of Dow USA heard v 14 i 15 that, that we were going to supply the most knowledgeable 16 witness we had. 17 BY MR. PCT'"ER: 18 Q Would I be correct, then, id you did make a 19 statement like that at the September 27, 1976 meeting, that 20 somewhere during the presentation somebody on that review l l l 21 team said something to you to the effect that they hac heard that a less than knowledgeable witness was being 23 requested?

4 MR. CHA?liCFT :

2xcuse me. That somebcdy at tha 25 neeting said it, or prior to the meeting said it? 444 069 c, C f * ]CCAs WCCs*CZ, f:$ 444 N C 8t TH OA Pt Mt. ST14 C ET W A S HI N GTC N. 3.f 20000 (202) 3A 7-JTOC

67 1 MR. PO'I"IER : Yes, at that meeting. i 2 l THE WITNESS: No, I certainly believe that it 3 was part of the review, and probably Mr. Hanes was the one i 4 ! that said it, but I don't remember it. 5 l BY MR. POTTER: 6 ; Q The only thing that I'm suggesting, Mr. Oreffice, 7 ! is: Is it possible that the first time that you heard the 8 i Dow employee's statement that they had, in turn, heard i 9 that a Consumers Power Company's attorney had requested l 10 a less than knowledgeable witness, is it possible that the first time you heard that statement was at the Sep' ember 11 12 ! 27 meeting? 13 MR. CHAR'iOFF: I've got an objection as to the 14 i characterization of that, because I think Mr. Hanes' g_ I testimony was - and I think even Mr. Oreffice's testimony t 15 16 was - that it was a suggestion or a statement made in the 17 context of kind of a rambling discussion, as distinguished 18 frca a request that Dow put on a non-knowledgeable witness. i 19 MR. POTTER: Well, the record will speak for i itself. l 20 l 21 MR. CHAR:iOFF: I just note an objection to the l term " request." .I i 23 '"HE 'C'"NES S : Is it possible that the first l time ! hea-d it was - 24

5 3Y MR. PC'"TE R:

l 444 010 ace- ?ce d a<==== D= 444 NORTH O A PITO I. STMEET f W A S MINGTO N. Q.C. 20001 ] ucm we

63 Q That the first time you heard of a Consumers 1 4 Power Company request relating to the character of the 2 Dew witness, is it possible that the first time you heard 3 that request was at the September 27 =eeting, rather than 5 at the September 24 =eeti'.ig? 6 MR. CHARNOFF: Same objection to the word 7 " request." 8 l THE WITNESS: I guess anything is possible 2-1/2 years later, between this question whether it's 9 10 September 22 or 24 or 27, 1976, you are all putting a seed 11 of a doubt in my mind. 12 When I was fresher on this, I thought for sure 13 l it was September 24th_ when I first heard about it. p A I 14 BY MR. POTTER: 15 Q One last question: 16 At any ti=e, Mr. Oreffice, prior to the -- I won't even put a date on it - at any time did any Dcw 17 lawyer or any Dow employee cece to you and suggest that 18 Dew put on a less than kncwledgeable witness? 19 1 20 A Absolutely net. I think that it was put in l 1 21 terms to me that such a thing had been suggested by l i 2: Censumers, and none of cur pecple thcught that it was a 22 gced idea. 24 MR. PCCTER: I have no iuruher cuesuicns. 25 MR. CLMSTEAC: I have nc furuher questicns, cse:- %'e :l c%:c-i, Dnc h w NCRW 04 pm t, start?

1. AsHINGTCN. 3.C.

20001 '202) Jd7 37CC

69 1 SY MR. CHAPlIOFF : 2 0 When it was put to you that there was a Consumers Power Company representative who suggested the possibility 3 of a witness not fully knowledgeable of Mr. Temple's 4 positien, was it told to you in the context of that there 5 6 was some concern because Mr. Temple had taken some public positions before, or was it simply told to you nakedly? 7 8 Do you remember? 9 1 A I think the context was this is going to be a quick hearing, Cherry's not even going to show up, you 10 really shouldn't send somebody that knows too much and 11 12 prolong the thing. And that's the kind of context I 13 remember it in. +

u..

14 I don't remember specifically anything being said about Mr." Temple not being the witness. I =cre 15 16 re= ember it being the witness doesn't know too much, he 17 can't answer too much. 18 Q Incidentally, would Mr. Klemparens -- who was 19 Mr. Klemparens? 20 A He's changed about three jobs since, so ycu're j 21 asking who he was then? 2: O Right. 23 A He was head of Pricing, Ccw USA. ? ricing and 24 scme cther marketing functions.

5 1 O

And what was his task? I.ccice that in the c~l:: 9ede:::[ c@:re*: 1, $nc 444 N C le *H CA PtTO L. STMEET .f W ASHINGTC N. 3.4" 20001 (202J 3474700

70 1 September 15 :.amorandum frem Mr. Temple to you he 2 recommended that Al Kle=parens be the team leader for this 3 corporate DOW USA review, corcorate review. 4 A Right. 5 Q Was he named the team leader? 6 A Yes. 7 Q By you? a, A Yes. His specialty, obviously, was the econcmic 9 aspects. 10 O Was it his function as team leader to beccme 11 knowledgeable as to the Dow position with respect to the 12 Dow-Consumers arrangements? i 13. MR. POTTER: I'm nod sure what you mean by i. (q 14 Dow-Consumers arrangements. 15 MR. CHAPSOFF: Let me state it again. I'm 16 sorry. BY MR. N'IOFF: 17 ) 1 18 Q As team leader - I'm not sure whether it was 19 team leader er project review leader or what, but I l 20 understand we're talking about the grcup assigned by you i l

1 at Mr. Temple's suggestien to have a Ocw CSA review cf --

2 using M. Temple's language in his Septerter 3 r.e=0

2 a

~:cw, USA review of the Ccw Michigan, er at leas-Mr.

4 Temple's cwn cenclusiens, that under ccday's cendiciens --

5 ref erring to Septerier 3 - the nuci tar project will be s

- r

• • %M C$*

UCA$ $ SMsYL C0. y h m NCMTN OAP L. ST1t EI? W A S HI N G TC N. 2.C. 20001 42c21 147 3700

71 1 most likely disadvantageous to Dow and to the Midland 2 plant. 3 He was asked to make that review, wasn't he, 4 the review of the Ccw Michigan? 5 A Mr. Klomparens? e Q Yes. 7 A He was the team leader, but I think in this a context the team leader -- he was really part of the econcmic thing, and the team leader was somebody to get 9 ! I everybody together so that they could come up with a 10 i 11 conclusion. 12 i There were seme people very senior to Mr. 13 Klomparens in that group. ~ 14 ; O But in sordoing he was asked, in effect, to become kncwledgeable about the Ccw -- 15 16 A In general, but you could not expect a man who 17 had not been involved with this to beceme knowledgeable 18 of'every detail. That's why we had seme other people 19 running each part of it. 1 I

o Q

Okay. Would it be unreascnable for, say, an i I outside lawyer like myself or !ir. ?ctter, who recccnized that a gentleman like fir. Kle=parens was asked Oc becc=e team leader of this review, te ass =e that M. K1c=parens

4 would ' eceme kncwledgeable of the Ocw-Cens=ers arrangements

s and the Ccw intent with regard ec the Midland project?

444 074 a..:s s ag e am 444 4CRW CAMTC L. STREET M AS HI N GTO *4 3.0 200o1 ( i2o2J 247 c.7oo

72 I MR. POTTER: I'm going to have to object. In 2 cl1 fairness, there's no way Mr. Oreffice can form a 1 judgment as to whether an outside lawyer should draw frca 4 a document appointing semebcdy as head of a commission or 5 a review team inside of Dow. 6 You could rephrase it, but -- 7 MR. CHAMIOFF: I'11 accept that. 8 BY MR. CHARNOFF: 9 Q Would you, Mr. Oreffice, in reviewing documents i to ; such as Board Exhibits 1 and 2, under which you see the 11 assignment of Mr. Klemparens to make this review, would you i 12 assume that either before the review or as a consecuence 13 I of the review that the team leader would become knowledgeable m 14 of the studies conducted by each of the seven task forces, and of the results of those studies? 15 + 16 A Ch, I would hope that whoever is the leader 17 would find out about each of the things, because he's going 18 to have to put it all together. 19 But, again, I don't think he'd beceme kncwledge-20 able of all the details. I dcn't think there's ani wa/ l 21 anybcdy can do that. 22 0 Ee might net becc=e the nest kncwledgeable 23 persen, but he wculd beccme kncwledgeahle as ce che nature 24 cf these task force studies and cesults Of these, se chac 25 he cculd sum these up and present an inic=ed cpinion Oc you 444 07b CCf * $dCCCI O)\\dOWCA, /[ i F f a c0 4d4 4 C m *w CA P'TC t. ST1R E C Af AS Mt NGTC N. lll.a 10001 (302) 3474100

73 1 and to your board, isn't that right? l i 2 l A Yes, although some were presented by some of I 3 the task force -- 4 ' Q Well, they might ask the sub task force members 5 to make some specific presentations, but you would assume i 6 ) uhat this chairman or task force leader would become 7 { knowledgeable and informed, so that he could give you an 8 i informed opinion, isn't that right? i 9 l A Yes, but not necessarily deeply so. What I i to I i tried to say in the very beginning, he was not the boss i 11 { of these other people. He was more of a coordinator of 12 this whole effort. I 13 i Q But he would become more deeply involved than, O 14 j say, you would, as the recipient of the report, would he not? I 15 ! A Without a doubt. Absolutely. 16 MR. CHARNOET : I have no other questions. 17 BY MR. PO"""ER: 18 Q Just one further, Mr. Oreffice: 19 Regarding again Mr. Klomparens' role, basically il f 'O he was the member of the review team that was to conduct l' 21 the investigatien as to the ecencaic aspects, is that right? U A Well, it's clearly stated nere that he was, I among other -hings, te de the impact, the ecenceic imract. U Q And he was to be the administracive head Of :ne 25 cuher members cf the ceam? ll* d5 % 0 SOMsY$ I 44d N C ft TW CA PTTC L ITN EU W A S HIN G *C N. 2.0 20001 (2C2) 347.J70Q

74 j 1 l A Right. i i 2 Q And he was not to be spending a lot of time 3 i trying to conduct his own review of his area while he was i f 4 trying to conduct a review of everybody else's area as well, i 5 is.that true? He relied upon the other team members to do their own reviews? 6 i 7 i A Without a doubt. We had, I repeat, some very i l 8 senior people doing that. 9 I Q And at the actual presentation before the Dow 10 ! USA board most, if not all, of the panel menbers in fact i l 11 = made their own presentations, did they not? i f A That's right. As I say, we had some very senior 12 13 ! people on this, including a member of the Board of Directors i r%~ l of th'e Dow Chemical Company, who was not part of Dow USA. 14 We tried to pull the best people. 15 ' 1 16 : What I liked about the recommendation that Joe 17 l Temple made was that he really was getting the best men for i i 18 each part of the review that we had around. 19 BY MR. C'-IARNOFF : 20 Q Why did he suggest to you that-Mr. Klomparens he I i 21 the team leader, do you know? Cr why did you agree with that selection? A Well, I agreed with it because : thought he was -- .l again, 2-1/2 years ago : thought he was a fine man to do it.

s He probably had the time available frcm his regular duties.

5:: 9 dad rRe:c::ns. Occ 444 NCRTW OA PC 6 STM E E* W A S MIN GTC N. O..~ 2000t (202) 3474 700

75 1 That's part of it. And I thought he was a good T.an to do 2 < ~.. 3 -When you look at who else was on this team and 4 their time availability, and ability to put all of it 5 together, there's probably only one other guy who could 6 have done it. And it was a matter of selecting one. I 7 Q And you did value his judgment as well as the 8 judgments of each of these members? 9 A Obviously. 10 Q And so did the Dow USA board, I take it? 11 A All of these would be people who had the highest 12, esteem of the Cow USA board. i t 13 MR. CHAFlIOFF : Thank you, m i ~ 14 MR. OIldSTEAD: I assume, Mr. Oreffice, that 15 ' you've been advised that there may be a possibility of 16 your having to appear and testify in July? 1 17 MR. OREFFICE: I have heard that. I don't know 18 when in July, because I'm going to be out of the country. 19 MR. CHARiOFF: Washington is lovely in July. I 20 MR. CREFFICE: I hate that place. l il

1 (Whereupon, at 12:30 p.m.,

the taking of the depositi n was concluded.) 23 24 25 444 078 5: - ?cde.;:I. ?cyc::::1, One. 444 MC ft% CA PTO L $?1tEZT We s MIM C*C N. Of 20001 L 2C2) 3d7-3700

.Q .4 i 0 l l 1l CERTIFICATE OF NOTARY PUBLIC i 2l I, Mfd #ff. MA/ m a notary public, do 3 4l hereby certify that the witness whose testimony appears 54 herein, appeared before m'e and was duly sworn by me. /hJ fn. b < 1 " w 7 ! I Notary public in and 1or the 8l th<AWJ Ands

Shrua0, 9

>!r commission expires 10 11l N R. muc2 EmL*y Public. Midland County, Michigm My Commission D-l-es Aepst 3,1950

• (r 12 13:

1 14 CERTIFICATE OF COURT REPORTER 15 l 16j I, William E. Landon Court Reporter do j i l 17! hereby certify that the testimony contained herein is a true l I' 18 record o f the testimony given by said witness, and I further 19 certify that I am neither attorney nor counsel for, related 20 to or employed by any of the parties to the action i n which 'l this statement is taken: and, further, that I am not a k l 22 relative or an employee of any attorrey or counsel employec 23 by the parties hereto, cr financially interes:cd in the 24l action. Ice - Fc: rst Re::cr ers, !ne. p m kt l / i l Court Reporter i i}}