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necessary to support enforcement action when a licensee willfully violates NRC regulations, 0I's efforts help to ensure the integrity of licensees' programs so that the agency can rely on the licensees to carry out their responsibilities. Further, there is a direct connection between the respect of the public for the NRC's investigatory efforts and their belief in the integrity of the agency's regulatory process. A strong, competent and independent 0I helps to ensure that people believe the agency is truly interested in uncovering wrongdoing and in enforcing its regulations. This in turn leads to enhanced trust in the NRC to protect the public health and safety. Efforts to make the office more independent and to protect the integrity of 0I's investigations can only help to ensure that 01 can

continue to perform this vital function.

Before the Office of Investigations was created, the NRC's investigations of wrongdoing issues did not have much credibility, either with the public or with the Department of Justice. Investigations often were performed by inspectors who were not trained investigators, who did not know what questions to ask, and who did not know about techniques for gathering and protecting documents. As a result, reports were not competent or complete. There was at least one case in which a draft of an investigation report was shown to the attorney for the entity being investigated. In addition, there was a perception on the part of some that the staff was not objective about wrongdoing issues because investigations got in the way of licensing plants. The NRC staff is required in our licensing process to take a position on whether a particular license should issue. By the hearing

stage in the process, the staff usually has worked out its problems with

the applicant and in the hearing advocates issuance of the license. This creates the appearance that the staff is on the "side" of the license applicant. Often those on the other side of the issue are skeptical that the staff can objectively resolve allegations, especially those involving wrongdoing rather than some specific hardware problem. Given this less than competent performance and a perception of sponsorship by the staff, both the Department of Justice and the public concluded that the NRC was

not serious about uncovering wrongdoing.

In order to obtain credibility, the Commission decided to establish an Office of Investigations which would be independent of the NRC staff, which would report to the Commission directly, and which would be composed of trained, professional investigators. Because of the staff's poor past performance, the Commission felt that a Commission level office was essential to establishing trust in the investigative function. 0I has been effective in doing just that. Our relations with the Department of Justice have improved immensely largely because 01 investigations are performed in a competent and professional manner. In fact, we have had several letters from the U.S. Attorney General commenting on the high quality of 0I's work and thanking us for their assistance. And, public trust in the investigative function has been enhanced by 0I's performance, and by the

perception that 0I is independent of the NRC's staff.

There are some within the NRC, however, who are not sympathetic to arguments that OI's function and independence are important to the NRC's

regulatory process. As a result, there have been efforts to "rein in" 0I.

There have been efforts, so far rejected by the Commission, to have 01 report to the Executive Director for Operations (EDO) rather than to the Commission. OI's authority to investigate has been circumscribed by the establishment of thresholds for investigation and by the establishment of an Investigations Referral Board which screens cases before they are referred to OI. Also, 0I has not been provided with the resources necessary to effectively carry out its responsibilities. Many allegations

go uninvestigated simply for lack of manpower.

Therefore, I support efforts to protect the independence of OI. H.R. 2126 goes a long way toward ensuring 0I's independence and authority. However, I have several comments you may want to consider. First, the duties of OI

are defined in part as:

... to investigate allegations that licensees, permittees,
applicants, contractors and vendors of the Commission have
failed to comply with laws, regulations, guidelines or
procedures related to protecting the health and safety of

the public from radiological hazards, ...

This description is broad enough to include purely negligent failures to comply with requirements. OI's function has in the past been to investigate those cases where there is a reasonable basis for believing that there has been wrongdoing - ie., 01 investigates cases where

violations are knowing or are done with careless disregard of the

requirements. In my view, 0I's authority should continue to be limited to cases of wrongdoing. The scope of 0I's authority should, however, be very clearly and carefully spelled out so as to prevent attempts to circumbscribe it. Section 3 also contains a list of qualifications for the Director of 0I which includes "knowledge of nuclear power technology." This requirement many unnecessarily limit the candidates for the position. In addition, there is language in the bill which would effectively remove supervision of the office from the Commission. In my view, it is important that the Commission itself retain the authority to set priorities for the office and to focus OI's efforts in areas most important to the Commission's safety responsibilities. I would note that I provided to Senator Glenn draft language to establish a statutory Office of

Investigations which I would be happy to share with you.


In conclusion, I support the concepts embodied in H.R. 2126. An Inspector General for the NRC would enhance the agency's credibility by providing an independent watchdog. I also support legislation to protect the independence of OI. However, I believe that some changes to the bill may

help to accomplish those goals more effectively.

Mr. GEJDENson. Thank you, sir. My neighbor, Mr. Carr. Mr. CARR. No comment, sir. Mr. GEJDENSON. Mr. Roberts. Mr. Roberts. The Chairman's statement reflects my views. Thank you. Mr. GEJDENSON. Let me ask a few questions to Mr. Asselstine. Let me go through the licensing process just for a moment. The staff does the initial review of an application; is that correct? Mr. AsselstiNE. That is correct, Mr. Chairman. Mr. GEJDENSON. And at the actual hearing, much like a number of regulatory agencies, the staff ends up making its own recommendations? Mr. ASSELSTINE. That is right. Mr. GEJDENSON. What happens if the staff has argued against an application being approved. Does it go to the full Commission? Mr. ASSELSTINE. If the staff argues against an application being approved during the course of a hearing, a formal hearing will be held by a licensing board and the licensing board will make a written decision based upon the record it compiles. That decision then can be appealed, first to an Appeal Board that does an appellate review of the decision, and ultimately it can be reviewed by the Commission itself. Mr. GEJDENSON. But if the staff finds in its decision, in favor of the utility, and it appears before the Commission, then it is basically #. staff arguing for the utility and the utility arguing for the utility. Mr. AsselstiNE. That is correct. In fact, the way the process normally works, the NRC staff conducts an informal review of the license application before you ever get to the point of the hearing process. And in most all instances, the staff identifies its concerns with the application and usually obtains a commitment by the applicant to satisfy the staff's concerns. So, as a practical matter, when the hearing process gets started and the public gets involved in the process, you have the NRC staff supporting the application. Their concerns have then been satisfied at that point and the staff, as an active participant in the hearing process, generally supporting the applicant right down the line. In fact, the NRC staff participates as a full participant not only in the technical issues but also on procedural matters. For example, whether members of the public should be admitted as parties to the proceeding at all; whether they have identified valid issues that warrant granting a hearing, those kinds of procedural issues. The staff actually becomes an active participant in the process, again often as an advocate for the applicant's position. Mr. GEJDENson. Who presents the opposition? What happens? We are used to a court proceeding of some sort, where there is an individual and then there is an advocate for either side. And I understand the difference in regulatory procedures, but is there a prosecutor in this process, once we have gotten to this stage? Mr. AsselstiNE. Well, at that point the other side is represented by individual members of the public who have a concern about the application and who have identified issues that they wish to litigate in the hearing. So it is generally members of §e public who

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