incident seriously (Exhibits: 16, pgs. 26-30; 16A, page 24; 17, pgs. 16-17).

On July 8-12, 1985, NRC Resident Inspector PARKER and his assistant Craig JONES were present on the Fermi 2 site, and either he or JONES were present at the DECO staff meetings. Those meetings were chaired by LENART, OVERBECK, or PRESTON, who made no attempt to notify NRC of the reactor criticality findings during those meetings or at any other time on those dates (Exhibit 9, pgs. 1-2).

On July 10, 1985, the Commission convened to hear testimony regarding the operability status of Fermi 2 and to vote on a full power license. The Commission heard NRC Deputy Regional Administrator, Bert DAVIS, complement DECO on the few significant operator errors. LENART and Dr. JENS had knowledge of the operator rod pull error of July 2 and of the circumstances surrounding the criticality issue. LENART had attended the meeting of July 3, when LESSOR and DECO reactor engineering advised that the reactor had gone critical. He was also advised by OVERBECK of the final criticality finding of July 5, 1985; however, he did not make the Commission or the staff aware of the fact, arguing that it was not a 10 CFR reportable incident, therefore, DECO was under no obligation to raise the issue before the Commission (Exhibits: 15, pgs. 12-20; 20, pgs. 8-13).

On July 15, 1985, the day DECO received the Fermi 2 full power license, OVERBECK informed the NRC SRI (BYRON) of the reactor engineering findings regarding reactor premature criticality on July 2, 1985. BYRON stated that he was advised of the rod pull incident by PARKER, but that he was unaware of the reactor criticality. When asked if he thought the NRC was adequately briefed as to reactor criticality, OVERBECK stated:

"At the time I thought they were, particularly initially. I
can fault myself for not providing them updated information
that I knew. In retrospect now, clearly there weren't, in my
opinion, and still even today, there are not legal requirements
for reportability. And in my opinion, we did make an effort to
inform the resident inspector. What we fell short in was, in
my opinion, following up later to make sure that they shared the
same degree of concern that we thought we had for it (Exhibit 16,
pgs. 31-39)."

On September 10, 1985, during an interview with 01, Darrell G. EISENHUT, Director, Division of Licensing, stated that had he been aware of the July 2, 1985, operator error which resulted in premature criticality at Fermi 2, he would not have signed the full power license until a thorough investigation of the matter was concluded. During interviews with Region III Administrator, James G. KEPPLER, and his Deputy Administrator, A. Bert DAVIS, they indicated that knowledge of a premature criticality at Fermi 2 would have prompted them to recommend that the Commission vote be postponed pending an investigation. KEPPLER stated the Region III staff is sensitized to premature criticalities and he views that type of incident as a significant indicator of the licensee's ability to safely operate a nuclear facility (Exhibits 24, 25, 26).

512

Willfulness/Intent

David ANIOL

ANIOL, control room Shift Supervisor, did not document the rod pull error in his personal log, and also did not notify the Senior Reactor Operator of the incident for entry on the Reactor Operator's Log; therefore, the incident is not documented on any official operations log (Exhibits 4, 7, 8).

ANIOL persuaded the Reactor Engineer to amend the entry on his log to make his statement of criticality less definitive (Exhibits 3, 4).

ANIOL prepared a DER at the Operations Supervisor's direction and noted that "reactor was not critical," but did not report the Reactor Engineer's dissenting opinion on that document (Exhibits 4, 13).

Contrary to other testimony, ANIOL states that he discussed reactor criticality with the STA and SOA, who agreed with his position of non-criticality (Exhibits: 2, 4, 5, 6).

Eugene PRESTON

PRESTON, Operations Supervisor, was advised by ANIOL of the Reactor Engineer's differing professional opinion regarding reactor criticality, however, he approved the DER, which did not address that point (Exhibits 4, 9, 9A).

PRESTON and OVERBECK participated in the July 3, 1985, Operations/reactor engineering meeting, heard evidence pro and con toward the criticality issue, and advised the NRC Resident Inspector of the corporate position; however, he did not advise that reactor engineering and the nuclear consultant had already argued in favor of criticality (Exhibits 9, 9A, 16, 16A, 19).

Gregg OVERBECK

OVERBECK heard THORPE and LESSOR argue that criticality was achieved, though he disregarded their expertise in favor of his own limited experience, stating the reactor was not critical (Exhibits 14, 16, 16A, 17, 17A).

OVERBECK realized the element of criticality elevated the operator error to the threshold of reportability to the NRC, although not 10 CFR reportable. OVERBECK perceived the operator error as an event which could be sensitive to licensing (Exhibits 16, 16A, 19A).

OVERBECK became aware of a confirmed criticality on July 4, 1985, and made no attempt to advise NRC Resident Inspector PARKER of the new DECO position until July 15, 1985 (Exhibits 14, 16, 16A, 19).

Robert LENART

LENART knew of Reactor Engineer's dissension, heard LESSOR and THORPE support criticality, stated his gut feeling was that he agreed with LESSOR, however, he decided to advise the NRC of the Corporate position of no criticality (Exhibits 14, 15, 15A, 17, 17A).

LENART perceived operator error/premature criticality as a public relations issue; therefore, he advised Dr. JENS of the incident so as to be prepared for press and intervenor questions (Exhibits 15, 15A, 20).

LENART was aware of criticality on July 5, 1985, but did not inquire from subordinates if in fact NRC was notified of new position regarding criticality (Exhibits 15, 15A).

LENART attended the Commission hearing on July 10, 1985, heard NRC testimony regarding operator errors at Fermi 2, and made no attempt to advise the Commission of the July 2 operator error, which he knew resulted in premature criticality (Exhibits 15, 15A).

Dr. Wayne JENS

JENS was advised of the rod pull error and the public relations sensitivity of the incident by LENART on July 3, 1985. JENS directed the Director of Nuclear Engineering, COLBERT, to settle the controversy of criticality. JENS stated that COLBERT did not report back. COLBERT stated that by July 5, when he found out that criticality was achieved, that information was common knowledge to JENS (Exhibits 15, 20, 23).

Dr. JENS attended the Commission hearing on July 10, and like LENART, he made no effort to advise the Commission of the July 2, operator error/criticality (Exhibit 20).

Agent's Conclusion

Based upon the evidence developed through this investigation, it is the opinion of the reporting investigator that from July 5-15, 1985, DECO's Fermi 2 management knowingly withheld information from NRC; specifically, that a premature criticality resulting from an operator error had occurred, which they perceived had the NRC known, would have adversely impacted DECO's receipt of the Fermi 2 full power license.

could

have)

As requested, I have prepared an analysis of the above report to determine if
there is a basis to support regulatory action in view of the conclusion "that
Fermi 2 management knowingly withheld information from NRC; specifically,
that a premature criticality resulting from an operator error had occurred,
which they perceived had the NRC known, would have adversely impacted
DECO's receipt of the Fermi 2 full power license."

I.

The NRC was not informed until July 15, 1985, that the licensee had deter-
mined that the Fermi 2 reactor did go critical on July 2, 1985, as a result of
a rod pull error. However, I have concluded that material information was
not withheld from the Commission in that the NRC resident inspector was
aware of significant information such that a reasonable agency expert would
have proceeded to inquire further on the matter and that, given the informa-
tion provided, whether or not the plant actually went critical did not make a
difference to the technical significance of the matter or the need for an NRC
evaluation.

Even if the information not provided to the Commission, i.e., the licensee's
view of criticality, was material, I cannot conclude on the basis of the infor-
mation developed by OI that the information was knowingly withheld. In sum,
while the licensee could have come forward following their July 5th determi-
nation that the plant had gone critical and had opportunities to do so both
before, at, and after the Commission meeting and though its failure to pro-
vide information to the staff may demonstrate some lack of candor, the failure
to do so is not a material false statement under the Commission's full disclo-
sure standard. Accordingly, there is an insufficient basis to take enforce-
ment action for failure to provide information to the staff. With regard to the
failure to correct Mr. Davis' statement at the Commission meeting, his state-
ment was ambiguous. Without further evidence, I cannot conclude that either
Dr. Jens or Mr. Lenart knew that incorrect information was provided the
Commission. My analysis supporting this conclusion follows.

As a starting point in the analysis, the evidence in the exhibits was summarized. The summary which is attached was prepared because in my view the. report_did not necessarily reflect the evidence in the exhibits. I purposely did not attempt to agree or disagree with each statement in the OI Report. The summary and the exhibits, rather than the Ol Report served as the basis for the analysis.

Before beginning the analysis of the exhibits it should be noted that a failure to provide the Commission information concerning the rod pull error or its criticality determination is not a violation of any specific reporting requirement found in the Commission's regulations or the license for Fermi 2. Thus, the basic question at issue is whether the licensee's failure to provide information to the NRC and to correct Mr. Davis at the July 10 Commission meeting is a violation of the full disclosure requirement established in the Commission's Vepco decision. Virginia Electric and Power Co., (North Anna Power Station, Units 1 and 2), CLI-76-22, 4 NRC 480 (1976).

The Vepco decision addressed an applicant's obligation to provide information to the Commission in the absence of a specific reporting requirement. Commission in that decision recognized that no set of specific regulations can be expected to cover all possible circumstances. Vepco, at 489. The Commission stated, "If the information is material to the licensing decision, it must be passed on to the Commission." Id. Omissions as well as affirmative statements are reachable. Id. "Whether or not enforcement consequences for less obvious or central omissions should await clarifying regulations, silence regarding issues of major importance to licensing decisions is readily under the statutory phrase "material false statement" Id. (emphasis added).

An omission must be material. "Determination of materiality requires careful, common sense judgement of the context in which information appears and the stage of the licensing process involved." Vepco, at 491. "Materiality depends upon whether information has a natural tendency or capability to influence a reasonable agency expert." Id.

The proper standard for judging the materiality of a technical issue is the impact on the technical expert. "A statement that seems immaterial to a layman may be of considerable safety significance to an expert and the converse may also be true." Vepco at 487. The Commission has also stated "There is no obvious boundary between material information and trivia ... a careful attention to context along with a healthy dose of common sense will resolve most problems." Id.