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Mr. GEJDENSON. If the proposed rule is made final, if a licensee determines that a premature criticality is not significant, then it could withhold this information from the NRC, could it not? Mr. SINCLAIR. Yes, Mr. Chairman. Mr. GEJDENson. Is the NRC's treatment of the Fermi case comparable to its treatment of the Three Mile Island? Mr. SINCLAIR. I have to think about that for a second. I am not certain that we are looking at the material false statement initially at Three Mile Island. I am not certain I can really make that comparison. Mr. GEJDENSON. Let me ask you this question, then. It seems my recollection is that part of the changes that are being described or being looked at possibly under this rule would change it—that if a utility gave a false statement orally, that wouldn't fall under the matorial false statement. It would have to be a written false statement. Is that correct? Mr. SINCLAIR. That rule is still—I am not certain that oral statements have been eliminated or they have changed that. Mr. PAwLIK. That is one of the things they are looking at; yes. Oral statements would not, under the presumption that that will increase the candor of the licensees to be free to talk to us. Mr. GEJDENson. So the proposal is that if in an oral statement, a licensee is incorrect, that he could then not be prosecuted under material false statement. Mr. PAwLIK. As defined by the NRC. Mr. GEJDENson. As defined by the NRC. So in order to be a liar in this new process, you would have to do the lying in writing. Mr. PAwlik. Or orally, under oath. Mr. GEJDENson. Or orally, under oath. Now, doesn't that degrade the relationship between the NRC and the utilities that has existed to date, in that up to now they were expected to tell the truth in all communications? Mr. PAwLIK. Without question, Mr. Chairman, that degrades it in my opinion. Mr. GEJDENson. Well, why in God's name do we want to change it so they could lie to us orally, and only if we swear them in and have it in writing, are they considered to be obliged to tell the truth? Mr. PAWLIK. I would suggest to you that it is probably based upon the same rationale that was used to wipe away the Fermi case by the ELD individual. Mr. GEJDENson. And that is, gee, we just want a good dialogue with these folks, and if they have to worry about telling the truth, they will be too cautious to talk to us? Mr. PAwLik. I have been told that orally is still in on the other Orle. Mr. GEJDENSON. Orally is still in? They are looking at dropping it. They propose dropping it. Is that correct? It was never proposed to be dropped? Would you like to come to the table? Mr. SINCLAIR. I would like to make a comment, Mr. Chairman. What the motivation is in changing it, other than some of the dialogue that we have heard within the NRC that we want to keep open and candid communications with licensees; that is one motive for possibly going in that direction. To me personally, it doesn't make any sense. We have in the criminal arena the false statements statute for criminal prosecution which has clear elements to it as to what constitutes a false statement. And there, there is no distinction made between whether somebody verbally lies to you or puts it in writing. This particular NRC version I don't have the answer for. Mr. GEJDENSON. Mr. Fortuna, do you want to come to the table and just clarify something. Mr. ForTUNA. Roger Fortuna, Deputy Director Office of Investigations. w Mr. GEJDENSON. Just before you sit down, we have to keep this consistent or somebody will think we gave you special privilege. [Witness sworn.]

STATEMENT OF ROGER FORTUNA, DEPUTY DIRECTOR, OFFICE OF INVESTIGATIONS, U.S NUCLEAR REGULATORY COMMISSION

Mr. ForTUNA. Let me give a couple of qualifications, so at least it sounds like I have a reasonable expertise to answer the question. Prior to coming to the NRC and having various management positions and various investigative functions with the NRC, former Federal Prosecutor, Maine Justice; former Assistant U.S. Attorney; former Assistant District Attorney in upstate New York. At this point I obviously don’t practice law, and am a criminal investigative supervisor. The status presently of their proposal is that both oral and written statements presented to the Nuclear Regulatory Commission can be actionable as material false statements. Mr. GEJDENSON. But the NRC proposed to exclude the oral? Mr. FORTUNA. This is the back end. That is where it is now, after give and take. As it presently stands, the way we discuss it in our office, the one bite rule is in effect. As you pointed out earlier, it is now up to the utility to determine what, in their judgment, is material and significant and safety-related—if they make a determination that it is not, but they can offer some sort of evidence that they made an evaluation. And under the NRC proposed rule, whether it is oral or written, they can't be held responsible or accountable for those kinds of statements. That is where it is today. It evolved into that situation for several reasons, and let me back off. As I recollect—and I think I am on track with this one initially—I know this part of my statement is 100-percent correct—the proposed rule, which by the way, the original rule exactly followed 18 U.S.C. 1001, the criminal sanction which says any individual who provides either orally or in writing, either formally or informally, a false statement, or omits to provide material information—either way—if you give it, it is a lie, or if you withhold it, and by withholding it you help yourself out, that is actionable.

Our agency, for whatever reason—that is not my area of policy— made a determination that our rule would be different, our civil rule. Under our rules, initially as provided, they were going to knock the oral out. Mr. GEJDENSON. Until the Justice Department complained. Mr. Fortuna. Yes. I think our office wrote some papers on it and had some impact. The Department of Justice came in and made some comments. So oral came back in, but the one-bite rule still applies. Mr. GEJDENSON. Let me thank all the witnesses. Gentlemen, do you have any final statements you want to make? It seems to me that when you look at the drugs issue, this issue, maybe we have gone through our little experiment at the NRC and deregulation, let the industry regulate itself, and that it may be now time to send a very strong message to the NRC that the reason they are there is to regulate an industry that possesses as much potential harm and danger to the citizens of this country as anything that we have out there. And if they don't want to do that, maybe we ought to get new Commissioners. But you folks and others who are working out there, trying to ensure the safety of the people of this country, ought to be getting the full support of the NRC and the Congress, and we hope to put some focus on that so you will. Again, we appreciate the presence of all of you here today and we thank you and we will be watching your careers to make sure that your movement heads in the right direction. Thank you very much. The hearing is adjourned. [Whereupon, at 4:35 o'clock p.m., the hearing was adjourned.]

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NUNZIO PALLADINQ 2hairman of the Commission
VICTOR GILINSKY Commissioner
THOMAS ROBERTS, Commissioner
JAMES ASSELSTINE, Commissioner
FREDERICK BERNTHAL, commissioner

STAFF AND PRESENTERS SEATED AT COMMISSION TABLE:

R. Eberly

D. Kubicki

J. Stang Jr.

. Wollmer

Case

Zerbel

Trubatch

Chilk

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