The Commissioners

Recommendations:

the staff considered extending the rule to nuclear power plants under construction. It was determined by the staff that these plants need not be included in the rule since construction presents no immediate adverse effect on the public health and safety due to a radioactive release. Additionally, government and industry quality assurance programs at construction sites would be expected to minimize the potential latent effects of poor workmanship, due to non-fitness for duty, on operating plant safety.

That the Commission:

1.

2.

3.

Approve publication of the final rule as set forth in Enclosure "A", to amend 10 CFR 50.2 and 50.54 by requiring that licensees operating commercial power reactors licensed under 10 CFR 50.21(b) or 50.22 establish and implement adequate written procedures designed to provide reasonable assurance that all persons with Unescorted access to protected areas, While in those protected areas, are not (1) Under the influence of alcohol, (2) under the influence of any other drugs that could affect their faculties in any way contrary to safety, or (3) otherwise unfit for duty because of mental or physical impairments which could affect their performance in any way contrary to safety.

In order to satisfy the requirements of the Regulatory Flexibility Act, 5 U.S.C. 605(b), certify that this final rule will not have a significant economic impact on a substantial number of small entities. This certification is included in the enclosed Federal Register notice.

This rule contains information collection requirements
that were reviewed and approved by the Office of Manage-
ment and Budget.

That a public announcement will be issued (Enclosure "G").
A Regulatory Analysis is attached as Enclosure "B".

That the Chief Counsel for Advocacy of the Small Business
Administration will be informed of the certification and
the reasons for it as required by the Regulatory Flexi-
bility Act.

Recommend affirmation at an open meeting.

Commissioners' comments should be provided directly to the Office of the Secretary by c.o.b. Wednesday, August 31, 1983. Commission Staff Office comments, if any, should be submitted to the Commissioners NLT Wednesday, August 24, 1983, with an information copy to the Office of the Secretary. If the paper is of such a nature that it requires additional time for analytical review and comment, the Commissioners and the Secretariat should be apprised of when comments may be expected.

This paper is tentatively scheduled for affirmation at an Open Meeting during the Week of September 5, 1983. Please refer to the appropriate Weekly Commission Schedule, when published, for a specific date and time.

DISTRIBUTION:

Commissioners

OGC

OPE

OCA

ΟΙΑ

OPA

REGIONAL OFFICES

EDO

ELD

ACRS

ASLBP

ASLAP

SECY

SUBJECT:

Ben B. Hayes, Director
Office of Investigations

James A. Fitzgerald

Acting General Counsel

CONSULTATION ON REFERRAL TO THE DEPARTMENT OF
JUSTICE (Case No. 3-85-013)

OGC has reviewed your draft referral letter to DOJ provided to us by memorandum dated April 16, 1986. The referral is based on possible violations of 18 U.S.C. 1001 (material falsification) and 371 (conspiracy). We will discuss them in turn.

Violation of 18 U.S.C. 1001

Apparently, we misinterpreted your earlier letter when we concluded that you were proposing to make a referral based on a possible false statement by omission. Your cover memorandum to us clarifies that you intend to refer for an actual false statement.

We consider the proposed referral in light of the elements of the 1001 crime which we set forth in our March 5, 1986 memorandum:

1This is less clear in the text of the revised draft referral where you say that the notification "omitted certain information and overtly misrepresented the known facts". P. 2. This suggests that the notification was not false as far as it went but became false as the result of an omission. You also state in a summing-up paragraph that "it appears there was a concealment of at least part of the information necessary to make an informed agency decision". P. 3. In any event, we accept the

referral as you intend it and review it on that basis.

Contact:

Marjorie Nordlinger, OGC

x41493

LIMITED DISTRIBUTION

(1) the making of a statement:

The making of a statement appears to be providing the NRC inspector on July 3, 1986 with the DER No. NP-85-0334 which described the operator error and concluded that criticality did not occur.

(2) the falsity of such statement:

There appears to be no dispute that the statement, insofar as it concluded that criticality did not occur, was false.

(3) knowledge of the falsity of such statement:

Your point here is apparently that the reliable known information was such that they must have known it was critical. The original entry noted criticality and was changed with insufficient reason in your view. While it is not entirely clear that this was the case, your investigative report contains circumstantial evidence to support this view. On the other hand there is evidence that there was a basis for doubt on whether criticality occurred and the utility moved forward to investigate. It appears to us that had they corrected their evaluation of whether criticality had occurred, you would be hard pressed to maintain that a crime had occurred at the point of delivery of the notification, since NRC was apparently advised that there was some doubt about the criticality conclusion. Thus, it really does appear to us that an omission to provide further facts when they were known or a failure to correct continues to play a role in evaluating this referral. Nonetheless, we cannot say that you are wrong in your investigatory conclusion that Fermi officials knew at the time of the statement that it was false, if we have correctly understood your conclusion.

(4) relevance of such statement to the function of a
federal department or agency:

Although this information, as you acknowledge, was not required by rule to be reported, we believe the relevance of knowledge about a criticality to NRC's regulatory mission is beyond doubt.

2The Staff suggestion that the information provided to the NRC inspector was enough to have alerted him to the seriousness of the problem is a two-edged sword. While it supports the view that NRC did not respond sufficiently, it suggests strongly that the licensee must also have had a heightened awareness and that the doubts about criticality may not have been genuine.