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Information Notice No. 89-18: Criminal Prosecution of Wrongdoing Committed by Suppliers of Nuclear Products or Services
UNITED STATES NUCLEAR REGULATORY COMMISSION OFFICE OF NUCLEAR REACTOR REGULATION WASHINGTON, D.C. 20555 February 22, 1989 Information Notice No. 89-18: CRIMINAL PROSECUTION OF WRONGDOING COMMITTED BY SUPPLIERS OF NUCLEAR PRODUCTS OR SERVICES Addressees: All holders of operating licenses or construction permits for nuclear power reactors. Purpose: This information notice is being provided to inform licensees of the results of criminal prosecution of cases of wrongdoing the NRC referred to the U.S. Department of Justice. The information notice also reminds licensees and their suppliers of the penalties that could result from the intentional violation of regulatory requirements. In particular, both the supplier as a company and indi-vidual employees could be subject to criminal prosecution by the U.S. Department of Justice if they intentionally violate regulatory requirements or commit any other type of regulatory-related wrongdoing. It is expected that recipients will review this information notice and consider actions, as appropriate, to avoid similar problems. However, suggestions contained in this information notice do not constitute NRC requirements; therefore, no specific action or written response is required. Description of Circumstances: During 1982 and 1983, Tube-Line Corporation sold substantial quantities of steel products to nuclear power plants. The products were represented as being made of nuclear-grade steel, but they were actually of low quality commercial-grade steel. The actual quality of these products was discovered during an evaluation of the physical properties of a sample while some of the products were being used to fabricate a modification for the Oconee nuclear power plant. Further investi-gations disclosed that three Tube-Line Corporation officials had represented the products as being of nuclear-grade steel and had falsified or consented to falsify the required certifications. During September and October 1988, Tube-Line Corpo-ration and the three officials pled guilty to charges of conspiracy (a violation of 18 USC 371) and mail fraud (a violation of 18 USC 1341). In response to these guilty pleas, the corporation was fined. Additionally, the corporation president, Mr. Joseph Romanelli, was fined, sentenced to 5 years' probation, and also ordered to perform community service. The other two corporate officials, Mr. Ealan Wingate and Mr. Vernon Anderson, were each fined, sentenced to a community treatment center and to 3 years' probation, and ordered to perform community service. 8902150513 . IN 89-18 February 22, 1989 Page 2 of 2 Power Inspection, Incorporated (PI), performed eddy-current testing (ECT) services on safety-related equipment at the Palisades and Beaver Valley Unit 1 nuclear power plants during 1984. In September 1985, the NRC received an allegation that PI had falsified a calibration certification for the ECT equipment. A subsequent NRC inspection substantiated the allegation. In October 1988, both PI and its president pled guilty to making a false state- ment to the NRC (a violation of 18 USC 1001). In response to these guilty pleas, the corporation was fined and required to make monetary restitution to Duquesne Light Company. The corporation president, Mr. Krishna Kumar, was also fined, ordered to make monetary restitution to Duquesne Light Company, and sentenced to 3 years' probation. Discussion: All personnel involved in NRC-regulated activities (including suppliers and vendors) have a responsibility to comply with NRC regulatory requirements. The NRC expects and demands compliance with its regulatory requirements. As noted in the two situations discussed, the NRC will seek criminal prosecution of wrongdoers if there is intentional or willful violation of its regulatory requirements. The NRC expects all personnel involved in NRC-regulated activities, including supplier employees, to be completely candid and cooperative with NRC personnel during the licensing and inspection process. The regulatory process functions on the premise that suppliers will, at all times, provide accurate information to the NRC and its licensees 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 cases described in this information notice, criminal sanctions may include a fine and/or imprisonment. Addressees may wish to distribute copies of this information notice to their employees and suppliers. No specific action or written response is required by this information notice. If you have any questions about this matter, please contact the technical contact listed below or the Regional Administrator of the appropriate regional office. Charles E. Rossi, Director Division of Operational Events Assessment Office of Nuclear Reactor Regulation Technical Contact: Edward T. Baker, NRR (301) 492-0959 Attachment: List of Recently Issued NRC Information Notices . Attachment IN 89-18 February 22, 1989 Page 1 of 1 LIST OF RECENTLY ISSUED NRC INFORMATION NOTICES _____________________________________________________________________________ Information Date of Notice No._____Subject_______________________Issuance_______Issued to________ 89-17 Contamination and Degra- 2/22/89 All holders of OLs dation of Safety-Related or CPs for nuclear Battery Cells power reactors. 89-16 Excessive Voltage Drop 2/16/89 All holders of OLs in dc Systems or CPs for nuclear power reactors. 89-15 Second Reactor Coolant Pump 2/16/89 All holders of OLs Shaft Failure at Crystal or CPs for nuclear River power reactors. 89-14 Inadequate Dedication 2/16/89 All holders of OLs Process for Commercial or CPs for nuclear Grade Components Which power reactors. Could Lead to Common Mode Failure of a Safety System 89-13 Alternative Waste Management 2/8/89 All holders of NRC Procedures in Case of Denial specific licenses. of Access to Low-Level Waste Disposal Sites 89-12 Dose Calibrator Quality 2/9/89 All NRC medical Control licensees. 89-11 Failure of DC Motor-Operated 2/2/89 All holders of OLs Valves to Develop Rated or CPs for nuclear Torque Because of Improper power reactors. Cable Sizing 89-10 Undetected Installation 1/27/89 All holders of OLs Errors In Main Steam Line or CPs for BWRs. Pipe Tunnel Differential Temperature-Sensing Elements at Boiling Water Reactors. 89-09 Credit for Control Rods 1/26/89 All holders of OLs Without Scram Capability or CPs for test and in the Calculation of the research reactors. Shutdown Margin _____________________________________________________________________________ OL = Operating License CP = Construction Permit ..
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