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IG Investigation Spurred by POGO Found Former NRC Commissioner Merrifield Violated Ethics Laws

After raising concerns more than two years ago, POGO has just received hundreds of pages of internal documents, which are a part of a Nuclear Regulatory Commission (NRC) Inspector General investigation, that outline how recently departed Commissioner Jeffrey Merrifield disregarded advice from the NRC’s General Counsel and voted on two matters that “could have potentially” financially benefited three companies—Shaw Group, Westinghouse, and General Electric—during the time he was directly involved in employment negotiations with those companies. The IG investigation found that in the two months before accepting a job created for him at the Shaw Group, Commissioner Merrifield voted both to approve China’s purchase of AP 1000 reactors (in which the Shaw Group had a financial interest) and to change criteria of emergency cooling systems that would directly benefit Westinghouse (of which the Shaw Group owned a 20 percent interest). The Washington Post has already picked up the story.

The IG investigation shows that months before he left his post, Commissioner Merrifield tore down the firewall, which he said he had set up in order to protect himself from potential conflicts of interest, and started making calls and visits to potential employers while he was still a voting Commissioner. The IG determined that Commissioner Merrifield participated in 27 final decisions (votes or opinions on policy proposals that can have binding action) that could have benefited nuclear power plant licensees or licensee contractors and “did not take effective measures to prevent a potential conflict of interest during the last 2 months of his term.” Instead, Commissioner Merrifield designed his own recusal process, which was described in the IG interviews with a former staffer as “weird” and with an industry VP as “odd.” This included verbally informing his staff of recusals but not sharing with them a list of the companies he was recusing himself from voting upon, because as the IG learned when interviewing one of Commissioner Merrifield’s staffers:

Merrifield did not want the details of his job search public. The potential for having to release written documentation under a Freedom of Information Act (FOIA) request was a major reason for not documenting his recusal from commission actions.

The documents also show that during the 2007 NRC Regulatory Information Conference (RIC) Commissioner Merrifield asked the CEO of a licensee why the CEO had not contacted him with a job offer, an action that then-Commission Chair Dale Klein found “possibly inappropriate.” The documents further show that because Commissioner Merrifield had not received any job offers, the Commissioner asked the CEO of Exelon, the largest nuclear utility, to call the Shaw Group and General Electric to recommend him as a future executive. The CEO complied with the request. Commissioner Merrifield later called Exelon’s CEO asking for advice on what he should ask for his salary package.

Despite these findings and referral from the IG’s office, POGO was shocked to learn that the U.S. Attorney’s Office in the Southern Division of Maryland declined criminal prosecution of Mr. Merrifield. The U.S. Code, 18 U.S.C. § 208 (a), prohibits an official from taking actions on matters related to an organization “with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest.”

Unfortunately, the failure of Mr. Merrifield not being held accountable is part of a larger trend. Data obtained from Transactional Records Access Clearinghouse shows that the U.S. Attorney’s Office in the Southern Maryland Division declined all 20 referrals for prosecution of 18 U.S.C. § 208 it received from 2004-2008.

Concerned that the Commission appears to be paralyzed in the face of this investigation, POGO is also calling on NRC Chair Gregory Jaczko to take several actions to fix the problems raised by the Merrifield case, including barring Mr. Merrifield from contact with the NRC for the maximum time allowable. POGO also asked Jaczko and the White House to refer the Merrifield case for civil penalties in violating 18 U.S.C. § 208.

As one nuclear industry lapdog leaves the Commission, another one is entering via the revolving door. POGO has sent letters to President Obama and to Vice President Biden asking that the White House withdraw its nomination of William Magwood to the NRC. POGO is concerned that Mr. Magwood does not have the independence from the industry sufficient to serve as a regulator of the nuclear power industry.

Update: check out this followup post for video of Biden sharing his confidence level in the regulatory capacity of the NRC.

By: Peter Stockton
Sr. Investigator, POGO

Peter Stockton, Sr. Investigator Peter Stockton is a senior investigator for the Project On Government Oversight. Peter's investigations include security and safety issues at the U.S. nuclear weapons complex and nuclear power plants.

By: Ingrid Drake
investigator, POGO

At the time of publication, Ingrid Drake was an investigator for the Project On Government Oversight.

Topics: Energy and Natural Resources

Related Content: Ethics, Nuclear Power, Presidential Transition, Revolving Door

Authors: Ingrid Drake, Peter Stockton

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