Firstenergy Indictments

Floor Speech

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Ms. KAPTUR. Madam Speaker, I rise today to highlight significant developments in the ongoing commercial nuclear energy scandal in Ohio, the worst in U.S. history.

It involves FirstEnergy Corporation's conspiracy, wire fraud, and bribery of the highest level of Ohio public officials in return for a legislative bailout of its flagging nuclear plants.

Bribed public officials made sure that the company's debts were dumped on the public as they violated public safety time and again.

This past Friday, a Summit County, Ohio, grand jury returned the indictments against the former CEO of FirstEnergy, the former FirstEnergy senior vice president of external affairs, and the former chair of the Public Utilities Commission of Ohio, each for multiple felonies related to their alleged roles in the largest public corruption scandal in Ohio's history.

The indictments by the Summit County prosecutor and Ohio's Attorney General aim to bring these corrupt, unethical, and dangerous--yes, dangerous--individuals to justice.

Driven by greed and self-interest, FirstEnergy not only compromised the Ohio State legislature and its top leaders in other critical public institutions--they were responsible for severely mismanaging time and again the operations of inherently dangerous nuclear assets.

Madam Speaker, I include in the Record an article by Toledo Blade columnist Tom Henry dating back to 2003, following another dangerous incident at that plant, quoting nuclear Navy retired Admiral Joe Williams. [From the Toledo Blade, Sept. 22, 2003] Ex-Official at Besse Links Woes, Managers (By Tom Henry)

Retired U.S. Navy Vice Adm. Joe Williams, Jr., who guided Davis-Besse back to service after it was crippled more than 18 months in the mid-1980s, has told The Blade he offered in 2002 to come back and help guide the troubled nuclear plant back into service again.

But FirstEnergy Corp. declined, saying it would keep the project ``in-house,'' according to Mr. Williams.

Now 81 and a resident of an independent living facility in Kennett Square, Pa., near Wilmington, Del., Mr. Williams said he is as strong in his conviction about what needs to be done at Davis-Besse as he was when he was paid $1,500 a day to straighten things out with his no-nonsense approach--one which, as recently as a congressional hearing last fall, has been recalled with admiration by some former employees.

``When I left, I had a crew of the best plant engineers,'' Mr. Williams said while claiming that many of his efforts have been undone by a profit-over-safety mentality that some people feel has been the hallmark of the deregulation era of the 1990s.

``Like all plants, when they decided they wanted to make a cash cow out of [Davis-Besse], they neglected maintenance. If they would just learn that the only way you make money from a nuclear plant is by keeping it online. And the only way you keep it online is with safe production,'' he said.

Richard Wilkins, FirstEnergy spokesman, said he is not aware of any discussions to bring back the retired vice admiral in 2002.

The hiring of Mr. Williams often has been cited as one of the key moves Toledo Edison Co., now a FirstEnergy subsidiary, made in response to its June 9, 1985, incident at Davis-Besse, when a series of pumps and valves failed and caused a temporary loss of coolant water to the reactor core.

The Nuclear Regulatory Commission has described that incident and the near-rupture of Davis-Besse's reactor head, discovered in March, 2002, as two of the nation's biggest nuclear episodes since the Three Mile Island accident of 1979. The two near-mishaps have resulted in the two longest outages in the plant's history, both in excess of 560 days.

Although the issues are different, Mr. Williams said he sees similarities. He said an underlying problem for years at Davis-Besse has been a general reluctance of employees to come forth with problems they find. Part of the problem these days is a greater reliance on contractors, he said.

``They need to rectify that right now. They need to get a staff that's company people and can do their jobs. Go to the expense of hiring good people,'' Mr. Williams said.

Mr. Williams, a former commander of the U.S. Atlantic submarine fleet and the NATO submarine fleet, did just that in 1985. Shortly after he was brought in on June 18 of that year--a mere nine days after the near-accident occurred--he took the helm under the title of senior vice president in charge of nuclear operations and was given wide latitude in decisions. Among other things, Davis-Besse's manpower was expanded to 890 employees, up from 644. Salaries were boosted to attract talent. There was less reliance on contractors.

``They need to get back to what we were doing in 1987,'' Mr. Williams said. After leaving in the spring of that year, he garnered a rate of $2,000 a day as an expert witness in court cases involving nuclear plants. Discussions about his coming back to Davis-Besse in 2002 never got serious enough for a fee to be discussed, he said.

But he told The Blade he was absolutely serious about returning. ``I'm capable of coming out there and getting that [facility] back online,'' he said.

Mr. Williams said the reactor head would not have become so dilapidated if he had heard about the containment air filters getting clogged by rust every other day, a telltale sign of a problem that had gone on for nearly 18 months.

FirstEnergy claimed it did not make a connection between rusty filters and a problem inside the containment building. Such filters are normally changed once a month.

``I would have shut the plant down. That's criminal. No system engineer could have possibly, possibly supported [continued operation],'' Mr. Williams said.

``I'll tell you one thing: if my filters had those problems, I would have ripped the insulation off that head [and looked for corrosion],'' he added.

As it turned out, the corrosion--the worst in U.S. nuclear history--left a football-shaped cavity in the reactor head. All that was left in that spot was a liner that was less than three-eighths of an inch thick and not designed to hold back the reactor's enormous pressure.

Mr. Williams said he is familiar with a U.S. Department of Labor complaint filed by former Davis-Besse engineer Andrew Siemaszko, who has sought federal whistleblower protection on the grounds he was illegally fired by FirstEnergy in September, 2002. Mr. Siemaszko alleges his termination stems from his insistence on having expensive maintenance done on each of the plant's four reactor coolant pumps.

The Siemaszko case, dismissed in June and now on appeal, claims that FirstEnergy knowingly operated Davis-Besse for years with a severely rusted head. Among other things, the complaint states that scaffolding was removed one night during an outage in 2000 without Mr. Siemaszko's consent, abruptly ending his efforts to clean the head weeks before the job could be completed.

``I think the kid was right,'' Mr. Williams said, referring to Mr. Siemaszko. ``I don't know how many of them [in FirstEnergy] out there ought to be hung.''

Mr. Williams said he is interested in the outcome of an investigation into possible criminal activity being headed by the Nuclear Regulatory Commission's Office of Investigations. The results, which have not yet been made public, could be turned over to the U.S. Department of Justice for prosecution.

Certain FirstEnergy officials ``ought to go to jail,'' Mr. Williams said. ``There have been enough deliberate acts of management in terms of denial,'' he said.

Mr. Wilkins said FirstEnergy has addressed most of the concerns cited by the NRC, including problems with Davis- Besse's safety culture.

Recent surveys show employees weren't afraid to come forward but had been reluctant to do so because they felt management had for years stopped taking their concerns seriously, Mr. Wilkins said.

He said he can't comment on what would have occurred had Mr. Williams been in charge while the problems with the rusty air filters came to light.

``We noted in our root cause report that the air filters were one of several missed opportunities,'' Mr. Wilkins said, saying plant officials simply failed to recognize it as a symptom of a problem.

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Ms. KAPTUR. Admiral Williams strongly condemned the malfeasance and nuclear endangerment attendant to the top managers and corporate chieftains, and that kept on year after year after year.

As I have cautioned before, corporate nuclear culture influences safety culture. We need only look at the troubled history of multiple major nuclear safety violations and criminal conduct at FirstEnergy's Davis-Besse nuclear plant in our district for evidence of this relationship. It is a sad story for America.

One must ask whether and how the fines and penalties at FirstEnergy and its subsidiary, Energy Harbor, have had to pay to avoid criminal and civil trials.

How will America deter future misconduct by the commercial nuclear power energy companies? Federal regulators didn't do their job.

What is clear is that more justice must be achieved to make Ohio ratepayers and our communities safe and whole again.

A class action suit settled by FirstEnergy in August of last year netted payments to individual ratepayers--get ready--a mere $10 to $20.

Moreover, Ohio consumers continue to subsidize FirstEnergy's antiquated coal-fired power plants even outside Ohio under the portion of HB6 that passed the State legislature that has yet to be repealed.

Another casualty is the local school district in Oak Harbor, Ohio, where the Davis-Besse plant is located. It continues to suffer millions and millions of dollars of tax losses due to the incremental devaluation of the plant's public utility property values over the years.

I continue to urge the State legislature, State and Federal prosecutors, and State and Federal regulators to take bold action.

Let's right these wrongs, and let's assure Federal authorities achieve safe, clean, modern, and responsible nuclear energy production in Ohio and in this country. This slipshod, corrupt nuclear energy must never, ever, ever happen in America again.

Madam Speaker, I include in the Record an article from The Blade titled: ``Reactor Near to a Dismal Record.'' [From the Toledo Blade, Aug. 31, 2003] Reactor Near to a Dismal Record (By Tom Henry)

Still defending itself from allegations that it may have caused the nation's worst blackout, FirstEnergy Corp. is about to break the previous record for futility at Davis- Besse.

On Wednesday, Davis-Besse will have sat idle for 565 days, setting a plant record for consecutive days without producing electricity. The previous record was 564 consecutive days between June 9, 1985, and Christmas Day, 1986.

The cost of the current outage is more than $500 million, and is starting to approach the $642 million price tag that it cost to build the plant in 1977.

The 1985-86 shutdown occurred after a series of pumps and valves failed, causing a loss of coolant water to the reactor core of the plant. In circumstances that sound strikingly similar to the current shutdown, the Nuclear Regulatory Commission referred to the 1985 accident as the worst since Three Mile Island in 1979. It resulted in an extensive investigation into the operation and management of the plant, 30 miles east of Toledo near Oak Harbor.

Although then-operator Toledo Edison Co. restarted the plant on Dec. 22, 1986, the reactor ``tripped'' and shut down after several hours without producing electricity. Three days later, operators restarted the plant on Christmas Day, 1986, and achieved enough power so that electricity could be produced, ending the consecutive-day shutdown streak at 564 days.

However, Davis-Besse continued to struggle with shutdowns on and off into early January, 1987.

The current shutdown began February 16, 2002, as a normal refueling and maintenance outage. NRC staff wanted FirstEnergy to move up the refueling from its scheduled date in March, 2002, to late fall 2001 so that a check could be conducted on control rod nozzles for cracks like those found at a South Carolina plant with a similar pressurized water design.

But FirstEnergy balked and the NRC decided to allow FirstEnergy to keep the plant in operation until February 16--only about a month earlier than the originally scheduled outage.

After Davis-Beese was shut down, plant officials found that boric acid had leaked through flanges atop the reactor head and ate a half-foot hole in the carbon steel of the reactor head.

Only a layer of stainless steel three-eighths of an inch thick prevented the pressure of radioactive steam inside the reactor from leaking into the containment building. The NRC called the corrosion the worst it had ever seen and launched an investigation into what went wrong.

FirstEnergy originally announced plans to return the plant to service in April, 2002, but that date has repeatedly been pushed back in response to the discovery of other problems and NRC scrutiny--such as concerns about the safety culture among management and employees at the plant.

There is a sense of deja vu for some NRC and Davis-Besse officials when it comes to the two extended shutdowns and the issues of plant management and regulatory oversight:

During both outages, the workplace environment has been questioned. ``What was really necessary was a change in attitude, a change in management style,'' Joe Williams, Jr., Toledo Edison Co.'s senior vice president of nuclear operations, was quoted as saying about the 1985 incident in the fall of 1986. ``A lot of the problems went back to Day One.''

The deep cavity found in Davis-Besse's reactor head has been likewise attributed by the NRC to a lack of questioning attitude on behalf of FirstEnergy management and its workforce.

Although FirstEnergy has replaced the reactor head with an unused head from a Michigan plant, the NRC has become so concerned about the company's attention to detail that it has subjected the plant to only its second formal ``safety culture'' review. The only other site to have undergone such a review is the Millstone nuclear plant in Connecticut, where NRC officials have said they believe workers were harassed and intimidated if they tried to report problems.

FirstEnergy is to make a lengthy presentation about its progress September 18 at the NRC's Midwest regional office in Lisle, Ill. The agency will take FirstEnergy's presentation under consideration, then hold at least one more meeting on the topic to give the company feedback before restart, Jan Strasma, NRC spokesman, said.

During both outages, the NRC has had its own credibility questioned by members of Congress and other high-powered officials in Washington.

U.S. Rep. Marcy Kaptur (D., Toledo), after hearing about the reactor head corrosion 18 months ago, questioned the capability of the NRC, an agency she accused of being weak and ineffective with its handling of Davis-Besse's 1985 incident. Although Miss Kaptur called for Davis-Besse to be shut permanently in 2002, she has not been as outspoken in recent months as has U.S. Rep. Dennis Kucinich (D., Cleveland).

Earlier this year, Congressman Kucinich petitioned the NRC to revoke FirstEnergy's operating license at Davis-Besse. More recently, in response to finger-pointing alleging FirstEnergy may have responsibility for the nation's worst blackout, he petitioned the Public Utilities Commission of Ohio to revoke the utility's right to do business in Ohio.

A long paper trail of records reviewed by The Blade shows others have shared their skepticism about Davis-Besse.

A report prepared for the U.S. House Subcommittee on Energy Conservation and Power just days after the June 9, 1985, event suggested that the coolant-water episode at Davis-Besse should not have surprised the NRC. The report said 48 problems concerning Davis-Besse's auxiliary feed-water system had been reported by Toledo Edison since July, 1979. The plant unexpectedly shut down 40 times between 1980 and 1985-- at least half of those times because of hardware problems and at least nine times because of human error.

In April, 1987, former U.S. Sen. John Glenn (D., Ohio) introduced a bill that ultimately led to the creation of the NRC's Office of Inspector General. Senator Glenn said at the time that the NRC is ``supposed to be a watchdog, not a lapdog.''

Earlier this year, that same Office of Inspector General accused the NRC of putting profits ahead of safety when it allowed Davis-Besse to wait until February, 2002, to shut down for refueling and the safety inspection for control rod cracks.

Former NRC Chairman Richard Meserve vehemently denied that charge.

George Mulley, the inspector general's senior level assistant for investigative operations, told The Blade that a follow-up probe into the NRC's oversight performance at Davis-Besse will likely be released this month.

Part of the criticism the NRC received following its 1985- 86 probe of Davis-Besse stemmed from its decision to back off from a proposed $900,000 fine against Toledo Edison.

The agency originally said it would impose the penalty because of a ``long history of ineffective and inadequate attention and direction in the operation and maintenance of the Davis-Besse facility.''

But in 1987, the NRC cut the fine amount to $450,000. The agency explained that it had changed its mind because it was impressed by Toledo Edison's aggressiveness toward establishing ``a long-range, in-depth corrective action program to address the problems that existed at Davis- Besse.''

No fine has been issued in connection with the current problems at Davis-Besse. A decision on any civil penalty depends on whether the NRC's Office of Investigations believes there is evidence of criminal wrongdoing to turn over to the Justice Department for prosecution.

``The criminal process would take precedence over the civil process,'' Mr. Strasma said.

Although the two extended outages appear to have some parallels in terms of oversight, the country's mood toward nuclear power at the time they each began was likely very different.

Early last year, in the weeks before the reactor head corrosion was discovered at Davis-Besse, the nuclear industry had the best reason for optimism since before the Three Mile Island accident.

After 23 years of doldrums, nuclear energy was embraced by the White House as a solution to energy problems. Congress in 2002 eventually eliminated one of the nuclear industry's most nagging obstacles to expansion when it designated Nevada's Yucca Mountain as a burial site for spent reactor fuel.

Contrast that with how most people felt about nuclear power when Toledo Edison restarted Davis-Besse in December, 1986. Several months earlier, on April 26, 1986, the world's worst nuclear accident had occurred at the Chernobyl nuclear complex near Kiev, Ukraine. Thousands died, either immediately from the blast or from radiation-related sicknesses in the following years.

As Davis-Besse moved closer to restart, Toledo Edison's Joe Williams, Jr., sought to allay fears. On Sept. 7, 1986, the retired U.S. Navy vice admiral devoted nearly an entire page in The Blade to a 2,000-word letter in which he explained what happened at Davis-Besse, Three Mile Island, and Chernobyl.

``A Chernobyl simply cannot happen here for a variety of reasons,'' Mr. Williams wrote, citing the containment at U.S. nuclear plants among those reasons.

The hiring of Mr. Williams has been seen as one of the key moves Toledo Edison made in response to Davis-Besse's 1985 shutdown.

A former commander of the U.S. Atlantic submarine fleet and the NATO submarine fleet, he was brought in on June 18, 1985, nine days after the shutdown began. He took the helm under the title of senior vice president in charge of nuclear operations, and was given wide latitude in decisions.

Davis-Besse's manpower was expanded to 890 employees in 1986, up from 644 in 1985. There was less reliance on contractors.

Compare that with the current workforce at Davis-Besse, which totals 725 full-time employees in a deregulated, more competitive market. FirstEnergy spokesman Richard Wilkins acknowledges there are far fewer employees today and that the trend has been to bring in more contractors to do specialized work.

Lew Myers, chief operating officer of FirstEnergy's nuclear subsidiary, has told the NRC that he has put a renewed emphasis on training.

Yet employees fear burnout: Some have privately complained about working in excess of 72 hours a week throughout much of the 18-month outage.

A number of key positions, including some in Davis-Besse's engineering department, have been filled by employees from FirstEnergy's Perry nuclear plant near Cleveland and the Beaver Valley nuclear station at Shippingport, Pa.

Howard Whitcomb, a Toledo lawyer and former NRC resident inspector in South Carolina who worked under Mr. Williams at Davis-Besse after the 1985 incident, has said he believes many of the workplace issues that exist at Davis-Besse today would not have been tolerated under the former vice admiral's reign.

``You've had a few really close calls at Davis-Besse,'' said Jim Riccio, Greenpeace nuclear policy analyst in Washington, citing the two extended outages and a 1998 tornado which narrowly missed the plant.

``I'm wondering when luck is going to run out.''

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