Mr. Chairman, my suggestion is simply that if you are the superior of somebody that is working for you, and you are responsible for the final product, and you do have a professional disagreement on the final product, it is one of your jobs, and you may make a mistake-and I think mistakes were made here-it is one of your jobs as his superior to register that disagreement.

Now, if this agency were to have a policy-and it does not, to my knowledge, that every inspector's report is not under supervision and that stands as the inspector carries it out-I suppose we could do that-then it clearly would be a violation of agency procedures. But as I understand this case, at the very least there was some in-line authority. I am not defending what the manager in this case did.

Mr. MILLER. That is not at issue. I don't think you need to defend them. What I am trying to determine is whether the Commission comprehends the severe threat that this problem on its face presents in terms of the credibility and the reliability of the inspection

process.

Now, the gentleman who testified before the Senate Committee and made his concerns known to Commissioner Asselstine was not a novice. As far as I know-and I certainly am prepared to stand corrected-other people had not been modifying his inspection reports on other facilities. There is a strong suggestion he was sent to this facility because he was a very good inspector and because this was a troubled facility. A determination was made that he should be brought to this site.

The gentleman brought in by Commissioner Asselstine to provide an independent analysis of this conflict is also not a novice. The inspector from OIA is senior staff, has many years with the Commission, and been involved with this kind of work most of his professional life.

So those facts suggest that something went terribly wrong here. It wasn't just personalities; nobody was out to gouge the utility or the process. The investigators have spent many years working within that exact process, apparently with relative success.

People weren't changing and putting their signatures on that investigator's work prior to this. Apparently no substantial modification of his work occurred to such an extent that he felt the integrity of the process that he had worked in for a decade was challenged.

So something is very different here. It is very, very troublesome. If the response of the Commission is that you boys all ought to be nicer to one another or you ought to take an attitude adjustment course, then we have got a serious problem. And that is what I am trying to determine, because the evidence suggests that there was a major breakdown.

As I said before, the fact that the breakdown revolved around a facility that in and of itself had a rather troubled career, compounds the problem.

Mr. BERNTHAL. Mr. Miller, there was a significant breakdown in process out in region IV. We did not deal with the legitimate concerns of inspectors in a way that was appropriate to this Agency, in a way that we should have, and that is clear because matters got to

the point where some of our inspectors felt they had to circumvent the system and come directly to a member of the Commission.

That should never happen. We should be able to deal with these things in a way that gives them confidence in our process. You have now, however, shifted the question to one of the proceeding where the agent of OIA, the inspector that went out to take a look at the whole process, was himself now challenged in the hearing before the Glenn Committee.

That then raises another serious question and that is whether indeed we have a difficulty within OIA itself where this particular individual felt that the report that he had rendered on that facility, on the Comanche Peak situation, had not been properly presented then to the Commission. So it is two separate questions.

Mr. MILLER. Yes, but they relate to the same procedure and whether there is in fact a free flow of information and, when there is conflict, whether it can be resolved without coercion of one of the parties.

What troubles me is this: during this process, it appears that each and every time decisions were made, they were made to drive the issuance of the report and to drive the report in such a fashion that serious issues about available information, the keeping of records, etc., would not be raised. Engineering determinations were made that would drive the issuance of the report. At no time did somebody say well, let's just hold it here for 1 minute and let's find out what is going on here.

Issuance of the report was a constant driving force even if the report had to be modified, even if the signatures had to be misused. What harkens back to me are the hearings we had a number of years ago in the NRC when they talked about the pressures that are on employees of the NRC and on the employees of these facilities to get investigations done because of the billions of dollars in time being consumed and the pressure that backs all the way up to the CEOs of the utilities.

What you see here is that when the process broke down, it was resolved each and every time by getting that report issued, even if you had to take these rather extraordinary steps that various superiors took. And that is very, very troublesome.

Some of us like to believe that we can build some modicum of confidence in this industry because it exists and we have got to deal with it. But the troublesome fact is that we constantly run up against these procedural snafus that really have the potential for major, major adverse ramifications in the conduct of an individual facility.

Mr. GEJDENSON. May I interrrupt for one second?

Let me invite folks in the back of the room to take these seats here around the bottom layer of the horseshoe. There are six or eight on that side. You don't have to stand. We will just break for a second.

Mr. MILLER. And you can ask questions if you want. [Laughter.] Mr. BERNTHAL. Mr. Miller, if I may just make one short comment. I share your concern. Anytime that our inspectors feel that they are under economic pressure-and they should never feel that way; it is not their job to worry about the economics of the power

plant-if indeed that is the case here, then that is something that we also have to address.

The one thing that was not happening in this particular case— now I am speaking about the Comanche Peak plant inspections and the way our region IV people dealt with the inspectors-normally one would have hoped and one would have wished that the inspectors would have had the confidence in the system to use what is a standard procedure in this Agency, was used in the case of Diablo Canyon, I think, rather effectively, and that is what we call the differing professional opinion procedure.

For whatever the reasons were out there, there was a breakdown of some kind and these inspectors did not even feel that they should or could avail themselves of that procedure. Again, I get to the point that I think there was a serious management breakdown. There is no question about that.

Mr. MILLER. Let me just respond to that, and then Mr. Asselstine.

I don't disagree with what you say. But a troublesome part of this testimony is the very strong suggestion that one part of this inspection team was committed to getting this inspection done and getting it signed off on and getting on to the next job. I am sure testimony on both sides will be received, and maybe we can shine some light on this from the transcripts. Strongly alluded to in the testimony before the Senate Committee is that one side-and in this case it happened to be those in a superior position-really had a headache here, and they really wanted to get rid of it.

They found that an independent auditor sent to this site because of past problems-with the facility, not with the process-was now raising all of those problems again. And that isn't just differing opinion resolution; that is an attitude with respect to what the mission of the office is.

I think that raises very serious concerns. It may turn out not to be true, but on the face of the sworn testimony of senior career people within the Agency, that starts to come forth. It certainly causes me concern; I think it should cause the Commission con

cern.

Mr. BERNTHAL. There is a serious question of appearance at least here, and all I can say is that the various investigations, not only of the incident out there, but of the way in which that incident was investigated by our Office of Inspector and Auditor, as you know, are being looked at in at least a couple of places right now, and we will simply have to wait and see how that comes out and see what the judgment is.

Mr. MILLER. Commissioner Asselstine.

Mr. ASSELSTINE. Mr. Miller, I think that at the heart of the problem in region IV that is identified by this report are problems in attitudes by some of the people in that region and problems in the way that that region has been managed, and problems in their understanding and views on the importance of quality assurance in the construction of nuclear powerplants.

I think that much is crystal clear from the investigation that has been done thus far. If you read the transcripts, some of those transcripts are just devastating in their description of how region IV is

operating. And that is something that the Commission doesn't have to wait to address.

Now, as a practical matter, we have already taken authority for Comanche Peak away from region IV and given it to a special office, headed by someone I think all of the Commission has confidence is going to do a fair and objective and effective job in trying to address the issues at Comanche Peak. But that doesn't solve the problem for all of the other plants that fall under region IV's jurisdiction.

Mr. MILLER. Which would be how many?

Mr. ASSELSTINE. It is one of the smaller regions. I think there are probably eight or nine plants.

And that is the issue that I think the Commission really has to address. We have held at least one management meeting to discuss it. The NRC staff here at headquarters has done a review of the information that has been developed thus far, and the Commission has received some fairly frank and candid comments from our senior staff people about the longstanding weaknesses in that region and in the people who staff that region, at least some of those people.

I think it is high time that the Commission faced up to the problem in region IV, its management, its attitudes and its effectiveness, and got it fixed once and for all. I agree entirely with your earlier comments that people in that region and the plants in that region absolutely require a strong and effective NRC presence that the public can have confidence in. That is essential to the effective operation and the good relations of those utilities themselves.

That is an issue that the Commission has to address. Now, we are looking at some alternatives to deal with the problem. I am hopeful that by the end of this month that we will get the staff's advice and the Commission will make some hard decisions, but in my own view, the fundamental problem is the people in the management of that region, and it is going to take some fairly strong action to straighten things out, and it is high time that we took that action.

Mr. MILLER. I hope that those steps are taken. If I was one of the owners of one of the facilities in this region, I would be outraged because I'd assume that this breakdown in procedure obviously now forestalls the consideration of the application originally made quite some time ago to load fuel in this facility. The use of this facility is put off. So it is causing a great deal of consternation about the credibility of the Commission not just here in the Congress and perhaps among our constituents, but also, I assume, within the industry. It sounds to me like you are causing a hell of a lot of cost to the particular consumers who are the potential beneficiaries of that facility.

Mr. ASSELSTINE. Mr. Miller, I think at least in that particular case, the company itself acknowledges that there are some fundamental questions about their own quality assurance performance over the years. Hearings still have to be held on the quality assurance situation for the plant.

I know the company is going through a fairly extensive reexamination of the plant to try and understand what they have and what the condition of it really is. So as a practical matter, I am not

sure at this point we are delaying things, but one thing I think you can say, if we had done our inspection job more effectively years ago, we might have found these problems early on before the plant was essentially complete.

Mr. MILLER. I think that is the history of this Commission and of this industry. If you really look at the costs both in terms of public support and in terms of dollars, all of the shortcuts and all of the attempts to short-circuit the process have turned out to be far more expensive than the envisioned savings that a few people thought they might get by getting an inspector to lay off on a problem or not to report a problem.

Having spent most of my public career shepherding Diablo Canyon through that process, what we have found time and again is that when either the Commission or the contractors and the parties responsible for the facility made very, very shortsighted decisions thinking to solve problems one way or another and solve them sooner, those decisions turned out to be very, very expensive decisions.

It is a tragic lesson, but what we are talking about is a facility that has been over a decade in this process. That is really outrageous when you consider the cost of carrying that facility for that decade.

But until there is confidence put in this procedure, I suspect that that is really what the future holds for anybody starting construction on a facility. This procedure leaves itself open to attack and leaves itself open to a whole series of questions that are absolutely fundamental if we are going to have nuclear power participate in our society.

You are right. I think the more rigorous the process, the more confidence we have in the process, the less likely we are to have a lot of unnecessary expense. But I don't believe that is the process in this region. I would certainly hope that the attitude displayed in this testimony does not spill over into other regions.

Thank you, Mr. Chairman.

Mr. GEJDENSON. Let me just finish up on one issue here.

Is this essentially true, that Mr. Mulley and Inspector Shannon Phillips testified that in one case the region issued a report of a major inspection without including several violations cited in the draft report? That two NRC managers, Mr. Westerman and Mr. Johnson, used the signature page from a draft report without informing the inspectors?

Is that correct, Chairman Zech?

Mr. ZECH. Mr. Chairman, I just simply don't know at this moment if that is correct or not. I would have to call on somebody else.

Mr. GEJDENSON. Mr. Asselstine, do you know if that is true?

Mr. ASSELSTINE. Mr. Chairman, that is my recollection of the provision in the report.

Mr. GEJDENSON. Apparently that has been testified to some time ago. Has the Commission taken action on these two individuals?

Mr. ZECH. Mr. Chairman, this whole situation is being investigated. When all of this came to our attention during that Senate hearing, as I mentioned earlier, the Commission decided to reinvesti