Nuke plant owners agree to $28M fine

A federal grand jury has indicted two former employees and a contractor.
CLEVELAND (AP) -- The owners of a nuclear plant where an acid leak nearly ate through the reactor vessel's 6-inch-thick steel cap agreed Friday to pay a record $28 million in fines, restitution and community service projects to avoid federal charges.
FirstEnergy Corp. acknowledged that workers at its Davis-Besse plant covered up the damage, which investigators found in 2002. Officials said it was the most extensive corrosion ever seen at a U.S. nuclear reactor.
Company and Nuclear Regulatory Commission investigations concluded that the rust hole had been growing for at least four years and that Davis-Besse's managers had ignored the evidence because they were focused on profits rather than safety at the plant 30 miles east of Toledo.
Indictments
Late Thursday, a federal grand jury indicted two former Davis-Besse employees and a contractor, charging them with hiding damage from federal regulators. The indictment includes an accusation that they edited out of an inspection videotape shots showing "substantial deposits of boric acid" on the reactor vessel.
U.S. Attorney Greg White, who began an investigation in 2003, said the company was being punished even though it avoided charges.
"Corporations don't go to prison. Corporations don't do time. They pay penalties," White said.
David M. Uhlman, chief of the Justice Department's Environmental Crimes Section, said the penalty was unprecedented in the industry.
The fine represents a fraction of FirstEnergy's annual income of $878 million.
U.S. Rep. Dennis Kucinich, a Democrat who has been critical of Davis-Besse, said the fine was "a slap on the wrist."
"The indictment of midlevel staffers, fines and admission of fault are simply not enough. Those at the highest level of FirstEnergy must be held accountable for these criminal acts," Kucinich said.
White said the government could prosecute FirstEnergy if the company violates the agreement, which includes safety standards and prohibits the nation's fourth-largest investor-owned utility from passing along the fine to its 4.4 million customers in New Jersey, Ohio and Pennsylvania.
Fines
FirstEnergy agreed to pay $23 million in fines and $5 million in other spending, including reimbursements to the government, Habitat for Humanity work and university research into energy efficiency.
Last year, the NRC levied a record $5.45 million fine against FirstEnergy for failing to stop the leak.
The company said in a statement that it accepts full responsibility for the "failure to accurately communicate with the NRC."
The plant was closed for two years but returned to full power in 2004. Akron-based FirstEnergy spent $600 million making repairs and buying replacement power because of the shutdown.
Prompted NRC changes
The Davis-Besse case has changed the way the NRC regulates the nuclear industry, the agency's deputy executive director Martin Virgilio said Friday.
In 2004, the NRC increased inspection routines and instilled a more "questioning attitude" among inspectors. The agency also beefed up training and required inspectors to keep more detailed records of its discussions with plant operators.
"We didn't see any cases where anybody did anything wrong. And so there was no need to discipline at the NRC," Virgilio said.
The agency acted properly by sending inspectors and asking Davis-Besse questions, he said.
"We expected them, and we expect all of our licensees, to be candid and truthful and provide us with complete and candid information, and in this case they didn't," Virgilio said.
Workers named
Thursday's indictment alleges that former engineering design manager David Geisen, 45, of De Pere, Wis., former engineer Andrew Siemaszko, 51, of Spring, Texas, and consultant Rodney Cook, 55, of Millington, Tenn., were part of a scheme to block NRC-ordered emergency inspections by falsely convincing federal regulators that the plant was safe.
Another Davis-Besse employee, design engineer Prasoon Goyal, 60, of Toledo, has entered into an agreement with the government, prosecutors said. Details were not immediately available, and a message was left at Goyal's home.
A woman who answered the phone at Geisen's home said he was innocent and referred calls to his lawyer, Richard A. Hibey, in Washington, D.C. Hibey said Geisen rejected a plea offer from the government last year because he did nothing wrong.
"The allegation in the indictment that Mr. Geisen was involved in a 'scheme' to mislead the NRC and to hide significant safety issues in order to keep Davis-Besse open for an additional month and a half is unsupported by facts and contradicts logic," Hibey said in an e-mailed statement.
Cook referred calls to his attorney, who denied the charges.
"He looks forward to being vindicated at trial," said attorney John Conroy.
Messages were left for Siemaszko's attorney. There was no home listing in his name in Texas. Siemaszko has said that he was wrongly fired and that his managers had rejected his calls for the reactor to be cleaned.
The indictment asserts that other FirstEnergy employees provided false information to regulators, but it does not name them or indicate whether further charges are pending.