United States Nuclear Regulatory Commission - Protecting People and the Environment

Information Notice No. 89-02: Criminal Prosecution of Licensee's Former President for Intentional Safety Violations

                                 UNITED STATES 
                         NUCLEAR REGULATORY COMMISSION 
                OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS
                            WASHINGTON, D.C.  20555 

                                January 9, 1989 


Information Notice No. 89-02:  CRIMINAL PROSECUTION OF LICENSEE'S FORMER
                                   PRESIDENT FOR INTENTIONAL SAFETY VIOLATIONS

Addressees:

All holders of a U.S. Nuclear Regulatory Commission specific license.

Purpose:

This information notice is issued to remind licensees and their employees of 
the penalties that could result from the intentional violation of regulatory 
requirements.  In particular, both the licensee and individual employees could
be subject to criminal prosecution by the U.S. Department of Justice as well 
as civil enforcement action by the NRC, if they intentionally violate 
regulatory requirements or commit any other type of regulatory-related 
wrongdoing.  The particular case described below involves wrongdoing by former 
licensee employees, including the former President, at a large irradiator.  
However, the principles involved apply to all NRC licensees.  It is expected 
that licensees will review this information notice, distribute it to 
management and staff involved with licensed activities, including responsible 
radiation safety staff, and consider actions, as appropriate, to avoid similar 
problems.  This information notice does not constitute any new NRC 
requirements, and no written response is required. 

Description of Circumstances:

Radiation Technology, Inc. (RTI) operates four irradiators, two in New Jersey, 
one in North Carolina and one in Arkansas.  Irradiators use highly radioactive 
material to sterilize a variety of products, including medical supplies, 
spices and certain food products.  During a 1984 inspection at RTI's Rockaway, 
NJ fa-cility, an NRC inspector determined that safety interlocks, designed to 
prevent entry to the irradiator cell while the radioactive material was 
unshielded, had been deliberately bypassed at the facility.  This action was 
apparently taken with the knowledge and approval of the former President, who 
was also the Radiation Safety Officer.  A subsequent inspection at the 
Rockaway facility in 1986 revealed additional examples of operation of the 
facility without the required safety interlocks in place.  

In addition, NRC investigators identified examples of the President and other 
company officials lying to NRC inspectors and investigators, as well as 
efforts to prevent NRC from learning about the violations of regulatory 
requirements; these efforts included holding a meeting to discuss what NRC
investigators would be told and then creating false documents.




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As a result of these findings, NRC suspended the license in June 1986; in 
addition, NRC's investigation findings were referred to the United States 
Department of Justice for prosecutorial review.  In August 1986, a condition 
for removal of the suspension and issuance of a renewed license by the NRC 
was that certain RTI individuals would be prohibited from being involved in 
licensed activities.

On March 18, 1988, the U.S. Grand Jury for the District of New Jersey returned
a multiple count indictment against RTI, the former President, and two former 
Operations Managers.  Seven counts were directed to the former President.

RTI pleaded guilty to two counts.  The former Operations Managers pleaded 
guilty to one count each.  The former President pleaded not guilty on all 
counts.  On June 28, 1988, a jury in the U.S. District Court of New Jersey 
found him guilty on six out of seven criminal counts against Title 18 and 
Title 42 of the U.S. Code, including conspiracy to defraud the United States, 
lying to NRC investigators, and intentionally violating the Atomic Energy 
Act.  As a result, on October 11, 1988, the former President was sentenced 
to serve two concurrent sentences of two years, and was assessed a $50,000 
fine.  Radiation Technology, Inc. was fined a total of $100,000.  The two 
former Operations Managers were each sentenced to three years probation and 
assessed fines of $10,000 and $2,500, respectively.

Discussion: 

Licensees are responsible for ensuring the safe performance of licensed activi-
ties in accordance with NRC regulations and the requirements of their licenses, 
and for providing complete and accurate information to NRC, relative to all 
licensed activities.  In cases that involve the possession and use of large 
quantities of radioactivity, full compliance is critical, because the sources 
of radiation involved are capable of delivering life-threatening exposures.  
The operation of a large irradiator without safety interlocks, designed to 
prevent entry into the cell while the sources are exposed, compromises the 
safety of the operators and other employees.  In addition, it is important 
to note that NRC will not accept administrative procedures as a substitute 
for the required engineered safety interlocks for irradiator operations.

The NRC expects licensee employees to be completely candid and cooperative 
with NRC personnel during the licensing and inspection process.  The regu-
latory process functions on the premise that licensees will, at all times, 
provide accurate information to NRC in a timely manner.  Violations of NRC 
requirements caused by intentional acts or efforts to impede the regulatory 
process may subject wrongdoers to criminal prosecution.  As evidenced by the 
case described in this information notice, criminal sanctions may include a 
fine and/or imprisonment.

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No written response is required by this information notice.  If you have any 
questions about this matter, please call the technical contact listed below 
or the appropriate NRC regional office.




                                        Richard E. Cunningham, Director
                                        Division of Industrial and
                                          Medical Nuclear Safety, NMSS


Technical Contact:  Jack R. Metzger, NMSS
                    (301) 492-3424

Attachment:  List of Recently Issued NRC Information Notices

.                                                            Attachment 
                                                            IN 89-02
                                                            January 9, 1989
                                                            Page 1 of 1

                             LIST OF RECENTLY ISSUED
                             NRC INFORMATION NOTICES
_____________________________________________________________________________
Information                                  Date of 
Notice No._____Subject_______________________Issuance_______Issued to________

88-23,         Potential for Gas Binding     1/5/89         All holders of OLs
Supp. 1        of High-Pressure Safety                      or CPs for PWRs.
               Injection Pumps During a
               Loss-of-Coolant Accident

89-01          Valve Body Erosion            1/4/89         All holders of OLs
                                                            or CPs for nuclear
                                                            power reactors.

88-46,         Licensee Report of Defective  12/30/88       All holders of OLs
Supp. 2        Refurbished Circuit Breakers                 or CPs for nuclear
                                                            power reactors.

88-101         Shipment of Contaminated      12/28/88       All holders of OLs
               Equipment between Nuclear                    or CPs for nuclear
               Power Stations                               power reactors.

88-100         Memorandum of Understanding   12/23/88       All major nuclear
               between NRC and OSHA                         materials licensees
               Relating to NRC-licensed                     and utilities 
               Facilities (53 FR 43950,                     holding CPs and 
               October 31, 1988)                            OLs. 

88-99          Detection and Monitoring      12/20/88       All holders of OLs
               of Sudden and/or Rapidly                     or CPs for PWRs.
               Increasing Primary-to-
               Secondary Leakage

88-98          Electrical Relay Degradation  12/19/88       All holders of OLs
               Caused by Oxidation of                       or CPs for nuclear
               Contact Surfaces                             power reactors.

88-97          Potentially Substandard       12/16/88       All holders of OLs
               Valve Replacement Parts                      or CPs for nuclear
                                                            power reactors.

88-96          Electrical Shock Fatalities   12/14/88       All holders of OLs
               at Nuclear Power Plants                      or CPs for nuclear
                                                            power reactors.

88-95          Inadequate Procurement        12/8/88        All holders of OLs
               Requirements Imposed by                      or CPs for nuclear
               Licensees on Vendors                         power reactors.
_____________________________________________________________________________
OL = Operating License
CP = Construction Permit 
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