The NRC’s Office of Investigations (OI) recently published its Office of Investigations Annual Report FY 2021 summarizing its activities during the past fiscal year. Overall, OI saw a drop in caseload, likely due—at least in part—to the COVID-19 pandemic and more workers working from home. Even so, the trend of increasing investigations of materials licensees continued, and this is likely to be a continuing area of focus for the NRC.
In fact, and as discussed below, OI's report highlights its work on a materials license investigation that led to a recent indictment of an individual for making false statements in an NRC application and obstructing NRC proceedings, among other alleged offenses. Along with the continuing focus on materials licensees, OI’s caseload may increase if the COVID-19 pandemic continues to recede and employees return to on-site work.
According to the annual report, OI's total case inventory decreased in FY 2021 by 16% from 155 cases in FY 2020 to 120 cases. This continues an almost 38% reduction in total cases compared to 2017, when the total inventory was 209 cases. OI opened 65 new cases in 2021, a 28% decrease from the number opened in 2020. The NRC also closed 69 investigations and 27 assists to staff, reducing its overall caseload by a net of 31 cases. Notwithstanding these downward trends, the annual report shows a continued increase in new materials license investigations, continuing an upward trend seen over the past three years. It also shows a slight increase in investigations involving allegations of discrimination. Although discrimination investigations remain near a five-year low, they may increase as more licensees bring employees back on site now that COVID-19 is beginning to ebb.
The breakdown of the 65 cases opened in FY 2021 is as follows:
- 6 involved suspected material false statements (a 66% decrease from FY 2020)
- 21 involved potential violations of other NRC regulatory requirements (a 4.5% decrease)
- 27 were assists to staff (a 32.5% decrease)
- 11 addressed allegations of discrimination (a 10% increase)
For reactor licensees, the OI report shows a significant downward trend in the number of cases opened, as OI opened 28 fewer cases than in FY 2020, a 44% decrease. Reactor investigations and reactor-related assistance to staff fell by 15 cases (a 42% decrease) and 13 cases (a 46% decrease), respectively. For material licensees, the number of cases opened increased slightly from FY 2020 to 29 cases (a 12% increase). Materials license investigations also increased to 17 cases (a 21% increase), but materials-related assists to staff stayed the same. The increase in materials license investigations continues a general upward trend seen over the past five years.
While new discrimination investigations (i.e., potential violation of NRC employee protection provisions) increased slightly since FY 2020, the number of these investigations is still low and in line with the downward trend seen since FY 2017. However, as more licensees bring employees back to the site, the number of discrimination investigations may increase.
OI’s annual report also highlighted several investigations involving deliberate misconduct:
- OI substantiated deliberate misconduct by a Security Training Superintendent at a power reactor who intentionally failed to implement a firearm testing and maintenance program and provided incomplete and inaccurate information that caused the licensee to be in violation of NRC requirements. The results of this investigation remain under regulatory review.
- OI substantiated three instances of deliberate misconduct at a single power reactor. These involved: (1) a former Level III Nondestructive Examination Proctor falsifying a general magnetic particle examination after losing several pages of a Level II Examinee’s exam; (2) a former Senior Nuclear Equipment Operator, working in an oversight position, deliberately abandoning assigned tour duties and oversight and training while training a new operator; and (3) a Senior Reactor Operator providing a critical digital asset access key to an unauthorized person. These violations were all categorized as Severity Level (SL) III violations and the NRC proposed a $150,000 civil penalty to the licensee.
- OI substantiated deliberate misconduct by two former Instrument and Control Technicians at a power reactor who deliberately falsified a work order package after they worked on the wrong pump, causing the unit to trip, and failed to report their mistake. In addition, their Supervisor engaged in deliberate misconduct by not immediately notifying the main control room of the error, as required by station procedures. The NRC issued a Notice of Violation (SL III) to the licensee and proposed a $150,000 civil penalty, as well as proposed violations to some of the personnel involved.
- OI substantiated deliberate misconduct by a former Senior Security Supervisor at a power reactor when the Supervisor willfully failed to follow procedures to adjust the acceptance criteria for a turnstile hand-geometry-unit without initiating a condition report. The Supervisor lowered the threshold without having documentation to support the action. The results of this investigation remain under regulatory review.
In addition, OI substantiated deliberate misconduct by a materials licensee that engaged in licensed activities in West Virginia (a non-Agreement State) without filing for reciprocity. OI also established that the owner of the company refused to deliver a radiographic camera to the Pennsylvania Department of Environmental Protection for secure storage after Pennsylvania modified the company’s license to de-authorize the possession and use of the camera. The results of this investigation remain under regulatory review.
Separate from the regulatory sanctions for this materials licensee investigation, a federal grand jury returned an indictment in November 2021 for this violation. The indictment charges an individual with violations of the Atomic Energy Act, making false statements to the NRC, obstructing NRC proceedings, and committing bank fraud. The indictment alleges that the individual set up his own company hoping to poach his employer’s business performing nondestructive testing. To do so, he obtained an NRC materials license by allegedly submitting false information about training and qualifications. He then obtained a radiographic camera by allegedly forging the Radiation Safety Officer’s signature. He also allegedly had employees use the camera without recording the transfer of radioactive materials as required by law. This case is pending, and trial is tentatively scheduled for July.
Finally, new OI Director Tracy Higgs, who was appointed in November 2021, noted in her director's message several developments that “will advance us for many exciting years to come in areas such as technology, innovation, investing in our culture, and playing a key role in the agency becoming more risk-informed.” Director Higgs noted in particular that OI transformed its case management system (CMS) to allow OI to become completely paperless. Changes to the CMS will also allow real-time reporting on investigation status and tracking of reports. OI also “modernized” its SharePoint site to improve collaboration with other staff offices. Going forward, OI also will be part of an NRC effort to develop an integrated CMS to include OI, the Office of Enforcement, Allegations Program, and the Office of General Counsel that will allow them to seamlessly share information. Left unclear is how OI will leverage this technology to become more risk-informed, but OI's commitment to joining this principle of good regulation is welcome.
Morgan Lewis counsels reactor and materials licensees and their contractors about OI investigations and will continue to closely follow developments in this area.