United States Nuclear Regulatory Commission - Protecting People and the Environment

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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