PANEL FROM THE U.S. NUCLEAR REGULATORY COMMISSION CONSISTING OF EUGENE T. PAWLIK, DIRECTOR, OFFICE OF INVESTIGATIONS, REGION III; AND JOHN R. SINCLAIR, OPERATIONS OFFICER, OFFICE OF INVESTIGATIONS

Mr. PAWLIK. Good afternoon. My name is Eugene T. Pawlik. I am currently the Field Office Director for the Nuclear Regulatory Commission's Office of Investigations Field Office located in a suburb of Chicago, Illinois.

I have been in that position since December 1982. Prior to my joining the NRC's Office of Investigations, I was a Special Agent for approximately 12 years with the Department of Justice's Drug Enforcement Administration. Almost 8 of those 12 years were spent in Detroit, working on narcotic investigations, while the remainder of my time with DEA was spent right here in Washington, D.C., where I was assigned as an instructor to DEA's Office of Training.

I also hold both a bachelor's and a master's degree in police administration from Michigan State University.

The focus of my testimony today will be on my role in supervising the activities of one of my investigators as he investigated an allegation that certain officials from Detroit Edison Company's Fermi II Nuclear Power Station may have provided false and misleading information to the NRC in mid-1985.

As a Field Office Director, I am responsible for performing a variety of tasks and supervising the investigative activities of my staff is one of the most important ones. Inherent in that supervisory role is the need for me to constantly be sensitized to matters that, once identified, could be of immediate importance to public health and safety.

I also need to ensure that both OI senior management and NRC regional management are kept abreast of matters that, while not necessarily of an immediate public health and safety concern, are still important to the NRC. Perhaps my most important task, however, occurs when an investigation is completed and the investigator's case report hits my desk for review.

In reviewing the report, I must ensure that it is an accurate, unbiased rendition of the facts. In order to be sure that those standards are met, I personally review all physical and testimonial evidence to ensure that no evidence was inappropriately utilized or no statement was taken out of context.

I also have the case investigator personally explain the case to me in order to make sure that I understand what was done, how the investigative conclusions were reached, and whether the investigator's conclusions can stand up to a challenge.

Only when all these review factors are satisfactorily met will I sign a case report certifying that my review has been completed. I take the act of reviewing a report and signing it after that review very seriously, because my signature on that report reflects on both my professional competence and personal integrity.

After reviewing the case report of the investigation I am about to discuss, I signed that case report without any hesitation. On July 22, 1985, the NRC Region III Administrator officially requested the Office of Investigations investigate, as a top priority matter, wheth

er senior Detroit Edison officials from the Fermi II powerplant may have made a series of material false statements to the NRC. It was reported that on July 2, 1985, a control room reactor operator at the Fermi facility failed to follow procedures in operating the reactor. As a result, the reactor went critical, prematurely. Information about this premature criticality was alleged to have been willfully withheld from the NRC by certain senior Detroit Edison Company officials and was not made known to the NRC until July 15, the day that the utility physically received its signed full power operating license, and 5 days after the 5-member NRC Commission voted unanimously to issue that full power license.

Our investigation began almost immediately, and determined that the following sequence of events transpired. Shortly after midnight on July 2, 1985, a control room operator failed to follow instructions and pulled a series of control rods out of sequence. The result of that out-of-sequence rod pull caused the reactor to experience a premature criticality, which meant that a sustained chain reaction was achieved much earlier than anticipated.

When that occurred, a reactor engineer-one of the other utility employees in that control room-wrote into his official engineering log that the reactor "went critical." A control room shift supervisor was sufficiently concerned about what had happened that he called his supervisor at home, in the middle of the night, in order to advise him about what had occurred.

During that conversation and contrary to feedback he was getting from various people in the control room, the control room shift supervisor said that the reactor did not go critical. Later on, during the shift, the control room shift supervisor prepared a report of the event and indicated that the reactor did not go critical.

He also advised the reactor engineer who had prepared the log entry mentioned earlier that the log entry was in error and, as a result of his suggestion, the original log entry was changed by the reactor engineer to now read that the reactor "may have gone critical."

The following morning, the assistant plant manager was briefed on the previous night's events, and he assigned the matter to the reactor engineering section at the plant to study all available data and determine if the reactor had in fact gone critical.

The following day, July 3, 1985, the reactor engineering section met with the assistant plant manager and a Detroit Edison Company nuclear consultant to advise them that based upon their analysis of computer models, a review of all available data, and their detailed knowledge of how the reactor core was located, it was their conclusion that the reactor went critical prematurely. The nuclear consultant also agreed with this analysis.

Notwithstanding this information, the assistant plant manager reiterated the original position that the plant had not been declared critical and that reactor engineering needed to study the event further and get back to him. This was also done, in spite of advice to the contrary from a nuclear consultant with years of experience in the nuclear power field who, during that meeting, stated-and I quote:

In my opinion you were critical, just from my experience of looking at the charts, but as a minimum you better come right over and talk to the resident inspector and make him aware of what happened.

In fact, however, the assistant plant manager, in his sworn testimony, described this discussion that took place after the July 3 meeting. He stated, and I quote:

Because there was the discussion at the end of our meeting on the 3rd, well, we've got to go tell the NRC resident inspector. What are we going to tell him? Are we going to tell him it's critical or not critical?

The decision was made to tell him that the reactor was not critical, but that we still had controversy between our reactor engineering people and our operators, and that we are going to go back and do some more evaluation. That is exactly what he was told. That's exactly what he was told.

Except he, the NRC resident inspector, was never told all of the information available.

During his initial interview by the OI investigator, the NRC resident inspector testified that he was only told the plant may have gone critical and that the utility was looking into it and would get back to him. He was never advised of the specific nature of the dissenting opinions on criticality held by both the nuclear consultant and the Reactor Engineering Section.

Also on July 3, 1985, while the Detroit Edison Company managers were trying to determine what to tell the NRC about the July 2 event, and how to carefully craft what information they would discuss with the NRC resident inspector, a decision was made to brief a very senior Detroit Edison Company official, the Vice President of Nuclear Operations.

The briefing of the Vice President for Nuclear Operations was conducted by the plant manager himself, and in his sworn testimony he characterized the reason that the vice president needed to be briefed as follows:

There were differences of opinion in that meeting, and that I wanted him to be aware of that fact. And I basically told him because, you know, I thought it would be, from a PR standpoint, a sensitive issue, and told him what the game plan was.

On Independence Day, July 4, 1985, a representative of the Reactor Engineering Section contacted the assistant plant manager by phone at home and advised him that Reactor Engineering had done another analysis and again concluded that the reactor had gone critical on the morning of July 2.

The assistant plant manager stated that he tried to contact the NRC resident inspector by phone late in the day on July 5, but was unable to reach him.

On the morning of July 6, the assistant plant manager announced at a staff meeting: "Hey, we went critical and we really look bad on this one. This is a significant violation of procedure not following the pull sheet, and we got to pay attention.'

The assistant plant manager initially stated, during the Office of Investigation's interview, that he thought the NRC resident inspector was present at that staff meeting, but he later changed his mind about the NRC inspector's presence.

From July 8-12, both the NRC resident inspector and his assistant were present at the Fermi II facility and participants in a variety of Detroit Edison Company staff meetings. During that time, no attempt was ever made by any DEC officials to notify them of the

utility's findings that the plant did in fact experience a premature criticality on July 2.

On July 10, 1985, the Commission met to consider the readiness of the plant for a fullpower license. Representatives of the utility did not inform the Commission that the plant had gone critical prematurely, in spite of the fact that at least one of the utility's senior management representatives at that meeting knew full well what had happened on July 2. Based upon the information presented at that meeting, the Commission voted 5-0 to issue Fermi II a fullpower license.

On July 15, 1985, the day that the utility physically received the full-power license, and 10 days after the utility had determined that there had been a premature criticality, the assistant plant manager told the NRC's senior resident inspector of their finding that a premature criticality had occurred on July 2.

In a subsequent interview we conducted with the NRC's Acting Director of the Office of Nuclear Reactor Regulation, he stated that, had he been aware of the operator error which resulted in a premature criticality, he would not have signed the full power license until a thorough investigation of the matter was concluded. The NRC Region III Administrator and his Deputy Region Administrator both indicated that knowledge of the premature criticality would have prompted them to recommend that the Commission vote be postponed pending an investigation, and the Region III Administrator stated that he viewed a premature criticality as a significant indicator of the licensee's ability to safely operate a nuclear plant.

On November 7, 1985, after my review of the investigation was completed, the signed case report was forwarded to the Office of Investigation's headquarters in Bethesda, Maryland.

In concluding my prepared testimony today, I would like to leave you with my analysis of the information I have just presented. First, I believe that beginning on July 3, 1985, up until July 15, 1985, when the NRC was finally notified, various Detroit Edison Company officials affiliated with the Fermi II Nuclear Power Plant either selectively or completely withheld significant pieces of information from the NRC resident inspector at the site, which precluded him from learning that a premature criticality had occurred on July 2d.

Second, despite having a clear opportunity to set the record straight during the full-power license Commission meeting on July 10, 1985, certain Detroit Edison Company officials in attendance at that meeting failed to bring up the premature criticality event, even when it was obvious that the NRC, in describing what it perceived was Detroit Edison Company's excellent control room performance, was totally unaware of the July 2 event.

Third, the utility's coincidental notification of the premature criticality to the NRC resident inspector on the day that they had their full-power license signed and in their hands was at best suspicious, and at worst deceptive.

And finally, it is my opinion, based upon the facts of this case as I know them, that certain Detroit Edison Company officials purposely withheld from the NRC information about that premature criticality because those corporate officers felt that if that informa

tion were known, it would have put the issuance of their full-power license in jeopardy. By doing this, these officials were guilty of willfully committing a material false statement by both omission and commission.

I believed this when I signed the report in 1985 and, notwithstanding an NRC staff analysis to the contrary, I still firmly believe it today.

This, Mr. Chairman, concludes my prepared testimony.

[Prepared statement of Mr. Pawlik follows:]