Exposing Corruption and Preventing Abuse of Power

President Obama Must Seek Resignation of NRC’s Magwood

Update: Due to Magwood’s repeated refusal to resign or recuse himself from NRC decisions, 34 environmental organizations and individuals are now asking the NRC to postpone certain votes until after his departure to ensure that final decisions are not tainted by any conflict of interest.

Yesterday, the Project On Government Oversight wrote to President Barack Obama asking that he seek Commissioner William Magwood’s immediate resignation from the Nuclear Regulatory Commission (NRC). Magwood has already accepted the position of Director-General at the Organisation for Economic Co-operation and Development’s Nuclear Energy Agency (NEA). The letter highlighted Magwood’s unacceptable conflict of interest created by his accepting that position while still holding his position as an NRC commissioner.

Magwood announced this past March that he will be departing the NRC to take the position at the NEA in September. However, he also announced that he intends to stay on the Commission for the duration of the summer until an undisclosed departure date in August. Since the NEA works to promote nuclear energy use around the globe, Magwood, as a future NEA employee, may not be able to vote impartially on safety decisions from now until the end of his term at the NRC.

In the letter, POGO explains that although the NEA’s membership is composed of governments and not private companies, those governments promote nuclear energy around the world. Additionally, several NEA member governments sponsor or even own U.S. nuclear licensees and applicants, and therefore have a vested economic interest in promoting nuclear energy in the United States.

POGO also mentioned in the letter that Magwood may have broken federal conflict of interest laws and regulations in this case. For example, 18 U.S.C. § 208 prohibits an executive branch employee from participating personally and substantially in a particular government matter that will affect the employee’s financial interest, including negotiations of prospective employment.

The NRC has also previously used federal laws regarding the impartiality of judges to evaluate the impartiality of its commissioners, requiring that a commissioner recuse himself from a decision when his impartiality is reasonably questionable. Magwood’s acceptance of the Director-General position at the NEA creates a potential bias towards the NEA’s interest in expanding the nuclear energy industry. He therefore might not be able to make an unbiased judgment if he’s faced with a decision that pits nuclear safety against increased costs to the nuclear energy industry, either in general or specifically to his new employer. Furthermore, even if Magwood were to recuse himself from any and all issues regarding the nuclear energy industry, that would obviously restrict him from effectively performing as an NRC commissioner. POGO argued that his only reasonable option is to resign from the NRC immediately.

POGO put Magwood’s personal conflict of interest into context by citing the example of the old Atomic Energy Commission, which attempted to serve the dual mission of promotion and regulation. The commission ended up being too lax on key safety issues, and was abolished in 1974. In the same way, Magwood is now essentially serving two masters: those who wish to regulate nuclear energy and those who wish to expand the industry. This situation has created a personal conflict of interest for him that threatens the safety of nuclear energy in the United States.

In the letter, POGO also reminded the President that this is not the first time POGO has questioned Magwood’s impartiality as an NRC Commissioner. Magwood founded Advanced Energy Strategies, which promotes the development of the nuclear industry, and he was the president of Secure Energy North America Corporation, a company that develops new ways to finance nuclear power in the United States. He is clearly deeply entrenched in the nuclear energy industry, and with the move to the NEA, he will be making a complete revolution through the revolving door.

The POGO letter follows a letter that two attorneys wrote to Magwood last month on behalf of 34 environmental organizations and individuals demanding his immediate resignation from the NRC and asking that he retroactively disqualify himself from any decision he has made since applying for the NEA position. The lawyers cited similar concerns as POGO, including the NEA’s pro-nuclear interests and Magwood’s questionable impartiality.

POGO has also learned that a motion has been filed by Beyond Nuclear and others asking the NRC to recuse Magwood from participating in the ongoing Fermi Nuclear Power Plant, Unit 3 licensing proceedings. According to the motion, the “proposed Fermi 3 is the prototype Economic Simplified Boiling Water Reactor (ESBWR) design in the global nuclear industry. Approval of the Fermi 3 COL is being watched in several countries where the General Electric-Hitachi ESBWR design is being considered. The OECD-NEA—the very agency which Commissioner Magwood will soon head—is promoting the design.”

Magwood has refused to resign or recuse himself in all calls for him to do so.

The President and the NRC should be taking steps to ensure that the public is protected as Magwood completes his revolution through the revolving door. Magwood should not be allowed continue on the NRC Commission and an ethics investigation should be opened immediately. The public deserves to know whether Magwood did the industry any favors during his job search or since he accepted the position, and to be protected from his doing so before he quits the NRC.