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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