CORPORATE CRIME REPORTER

Since When Do Nuclear Companies Get Deferred Prosecution Agreements? Since Now
20 Corporate Crime Reporter 5(1), January 20, 2006

And now nuclear corporations get deferred prosecution agreements.


For lying to the government.


About critical safety problems at a nuclear power facility.


In the deferred prosecution agreement made public today, FirstEnergy Nuclear Operating Company admits that its employees, acting on its behalf, knowingly made false representations to the Nuclear Regulatory Commission (NRC) in the course of attempting to persuade the NRC that its northern Ohio Davis-Besse Nuclear Power Station was safe to operate beyond December 31, 2001.


Prasoon Goyal, a design engineer, also entered into a deferred prosecution agreement with the government.


Two former employees and one former contractor of the company were charged in a five-count indictment for allegedly preparing and providing false statements to the NRC.


David Geisen, Andrew Siemaszko, and Rodney Cook allegedly falsely represented to the NRC that past inspections of the plant were adequate to assure safe operation until February or March of 2002.


Under the agreement, the company will pay $28 million in penalties, restitution, and community service projects.


In a statement David M. Uhlmann, chief of the Justice Department’s environmental crimes section, said that the agreement represented “a single fundamental proposition – companies that operate nuclear power plants have a solemn obligation to be truthful in all of their dealings with the Nuclear Regulatory Commission.”


“FirstEnergy violated that solemn duty at the Davis Besse plant and, in the process, the company breached the public trust,” Uhlmann said. “Where issues of nuclear safety are involved, there is no room for shading the truth or hiding the facts. Nuclear power plants owe a duty of candor not only to government officials but to the public at large.”


In the agreement, the First Energy admitted that if the company had been indicted, federal prosecutors would have been able to prove that the company made false statements to the NRC so that the Davis Besse plant could continue operating until its next scheduled outage, rather than shutting down earlier for a critical safety inspection.


Uhlmann said that the company that has entered into the deferred prosecution agreement “is not the same company that lied and misled regulators in 2001.”


“The company, along with the NRC and the entire nuclear industry, has done the kind of critical self-analysis that is essential to safe and effective nuclear power,” Uhlmann said. “Based on our investigation, we have determined that the corporate culture at the company is a very different one today than it was four years ago, and we are confident that the misconduct of the past will not be repeated.”


But Congressman Dennis Kucinich (D-Ohio) was critical of the agreement.


“I commend the work of United States Attorney Greg White, but the buck does not stop with a couple of mid-level managers and a consultant,” Kucinich said. “Those at the top levels of First Energy must also be held accountable. From day one, FirstEnergy executives have been more interested in protecting their bottom line then protecting public safety.”


“Let’s be clear – the near fatal incident at the Davis Besse Nuclear Power Plant is not the fault of a ‘few bad apples’ but, the failure of an entire company and those responsible for running it. These indictments serve only to reinforce my call to revoke First Energy’s license to run a nuclear power plant. Even with these indictments, the root problem remains. First Energy has cultivated a culture of corner-cutting and reckless endangerment of public safety instead of a culture of safety. No one is above the law. I will continue to pursue this issue until all of those responsible for this near fatal disaster are held responsible and brought to justice.”


Originally intended for juvenile delinquents, deferred prosecution agreements are increasingly being used to shield large corporations from criminal liability. (See “Crime Without Conviction – Report Details Special Deals with Major Corporations,” 20 Corporate Crime Reporter 1(1), December 28, 2005.)


For corporations, they were originally intended for corporations and large entities like accounting firms, banks and brokerage firms – where a fraud conviction could mean the death penalty.


But now they are being used to settle almost all forms of corporate crime cases, from lying, to bribery, to fraud.

 

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