With the concurrence of the Commission, the EDO, the Executive Director for Operations, established the IRB for a 6-month trial period in November 1986 as a management tool to ensure that the matters being referred by the NRC staff to OI for investigation and the priorities being established were appropriate. The IRB was comprised of senior representatives from five major NRC offices. It met every 2 weeks. The 6-month trial period for the IRB has now ended. The Commission is currently reviewing the matter and will provide the subcommittee with results of its review after we reach a decision.

The Commission is concerned that there have been allegations of inappropriate contact between licensees and NRC personnel. The Commission has long recognized that a prerequisite for public confidence in the NRC's regulatory decisions is integrity in its decision making process. To this end, the agency has long operated under ex parte and separation of function rules that are more stringent than those required by law and more restrictive than those adopted by most Federal Agencies.

Throughout the years, these rules have been scrupulously observed by the Commission and its staff. In fact, many have criticized the Commission rules, stating that the rules should be modified to allow greater communication between the NRC staff and the Commission, so that the Commission will have greater access to necessary technical expertise.

The Commission has proposed revisions to its regulations which will give it greater access to the NRC staff. The Commission's ex parte rules do not limit communications between the NRC staff under the EDO and licensees. While mindful of their roles as regulators, the staff must be able to freely communicate with the regulated to assure the Commission has the adequate information for decisionmaking and to be sure that licensees understand our requirements.

The subcommittee has asked the Commission to address three other topics: (1) Commissioner Roberts' involvement in the dissemination and destruction of documents regarding the Waterford Nuclear Powerplant; (2) the interaction between Steven White of TVA and Victor Stello, the Commission's Executive Director for Operations; and (3) the inspection and investigation of the Comanche Peak Nuclear Powerplant.

We cannot provide our views on those matters at this time. The U.S. Attorney for the District of Columbia is now examining issues concerning the provision of internal documents to the Waterford licensee and has asked the Commission not to investigate the matter at this time. During the pendency of the Department of Justice investigation, it would be inappropriate for us to comment on this matter.

With respect to the other two matters, the Commission is in the process of appointing an outside independent investigator to investigate those matters and produce a report for Commission consideration. Until these investigations have been completed, it would be premature to provide further comment on these matters.

Mr. Chairman, I would like to add just a few personal observations to your opening statement and those of some of your colleagues, if I may, before I conclude my oral statement.

We do not overlook problems in the NRC. We have not turned our back on problems in the NRC. We have not abdicated our authority. We are concerned with drug and alcohol abuse. We are fair but tough regulators. We do regulate at arms length. We believe in the public health and safety. That is what we are bound to uphold. We are committed to that.

We believe that the agency itself has a full commitment to public health and safety. We have a staff of competent professionals, many of whom have served many, many years in this agency, who have made sacrifices themselves to continue to serve our country. We have a staff, an agency, of competent, dedicated individuals.

Nuclear power is indeed a demanding technology. It requires discipline, formality, attention to detail, competence, cautious, careful operation. It is not just another way to make steam. Many of us have been involved in this for many years. We are respectful of nuclear power, very respectful of nuclear power. It can be of great benefit to the American people when it is handled properly. And it can cause harm if it is not handled properly.

We recognize that. We are very aware of our demanding responsibilities. NRC is composed of dedicated professional people. We have, I believe, in this agency a record of competent performance. Our inspectors are very capable.

Yes, they do sometimes disagree with each other, but we respect the varying views of our various inspectors. Those who have various views, that is healthy in my judgment. We listen to them carefully. The judgments we make do not always please everybody. We make the very best judgments we can, keeping in mind our responsibilities to the American people who are counting on us to make these hard, tough decisions.

We are making them, Mr. Chairman and members of the subcommittee, the very best we can. We reaffirm our commitment to public health and safety. We are in a very difficult position, and we know that. We accept the responsibility. We are going to do the best we can. We believe we are firm and fair regulators, and we continue to give our that pledge that we will do our best. Thank you, Mr. Chairman.

Mr. GEJDENSON. Thank you, sir.

[Prepared statement of Mr. Zech, Jr. follows:]

PREPARED TESTIMONY

SUBMITTED BY

UNITED STATES NUCLEAR REGULATORY COMMISSION

ΤΟ

SUBCOMMITTEE ON GENERAL OVERSIGHT AND INVESTIGATIONS

COMMITTEE ON INTERIOR AND INSULAR AFFAIRS

UNITED STATES HOUSE OF REPRESENTATIVES

CONCERNING

THE EFFECTIVENESS AND PERFORMANCE

OF THE OFFICE OF INSPECTOR AND AUDITOR AND THE

OFFICE OF INVESTIGATIONS

PRESENTED BY

LANDO W. ZECH, JR.

CHAIRMAN

SUBMITTED: JUNE 11, 1987

Mr. Chairman, Members of the Subcommittee, my fellow Commissioners and I are pleased to appear before you today to discuss the effectiveness and

performance of the Nuclear Regulatory Commission's Office of Inspector and Auditor (OIA) and Office of Investigations (01).

The Respective Roles and Effectiveness of OIA and OI

The Office of Inspector and Auditor has existed at the NRC since the agency commenced operations in 1975. It has two primary responsibilities: (1) to audit NRC operations to ensure that agency activities are conducted effectively, efficiently and with integrity; and (2) to investigate alleged wrongdoing by NRC employees and contractors. OIA is a Commission-level office and therefore the Office Director reports directly to the Commission. For the past twelve years, this office has competently performed these essential functions. OIA develops its own audit program, after receiving recommendations from the Commission and the Executive Director for Operations (EDO). It has the authority to set its own priorities, conduct its audits and investigations, and prepare its recommendations for presentation to the Commission.

Its

The Office of Investigations has entirely different responsibilities. mission is to investigate wrongdoing by licensees, their contractors, vendors or others in the regulated industry. Until about five years ago, the Commission had no special office charged with investigating wrongdoing on the part of licensees or others in the regulated industry. The responsibility for investigating such wrongdoing previously rested with our Office of Inspection

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and Enforcement. Some of our regional offices had a limited staff of

investigators to assist the safety inspectors in pursuing wrongdoing issues. When the evidence also indicated potential criminal wrongdoing on the part of licensees or others, it was referred to OIA, the NRC office then solely responsible for all criminal referrals. OIA made the determination whether the matter should be referred to the Department of Justice.

For a variety of reasons, the Commission decided that this approach to investigating licensee wrongdoing was inadequate. In 1982 it created OI, staffed by trained investigators. Its mission was to investigate wrongdoing by licensees or others in the regulated industry to assist the Commission in making licensing and enforcement decisions. If these investigations also indicated the possibility of criminal misconduct, OI would make appropriate referrals to the Department of Justice. It must be emphasized, however, that the primary purpose for establishing OI was to assist in staff determinations and Commission decisions, rather than to pursue criminal investigations.

Like OIA, OI is a Commission-level office. It develops investigatory strategy, obtains evidence through interviews with witnesses and review of documents, and drafts its reports and conclusions for presentation to the Commission or NRC office that requested the investigation. Priorities of OI investigations are now based on generic criteria tied to the potential safety significance of the alleged wrongdoing.

The Relationship between OI, OIA, and the NRC Staff