IG Found Former NRC Commissioner Merrifield Violated Ethics Laws

The Project On Government Oversight has obtained hundreds of pages of internal NRC documents from an NRC Inspector General investigation into then-Commissioner Jeffrey Merrifield. The documents outline, among other things, how he disregarded advice from NRC's General Counsel and voted on two matters that "could have potentially" financially benefitted 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 IG referred the case to the Department of Justice.

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 still a voting NRC Commissioner. The IG determined that Commissioner Merrifield participated in 27 final decisions that could have benefitted 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 a process in which he would verbally inform his staff of recusals but would not provide them with a list of the companies he was recusing himself from voting upon. 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 then-Commission Chair Dale Klein found "possibly inappropriate." The documents further show that because Commissioner Merrifield had not received any job offers, he 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 compensation package.

Despite these findings and the IG office's referral of the case to the Department of Justice, POGO was shocked to learn that the U.S. Attorney's Office in the Southern District 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."

"This is not an isolated case of one Commissioner trying to cash in on his years as a regulator; this investigation shows what happens when industry is too close to those who are tasked with regulating them," says POGO Senior Investigator Peter Stockton.

POGO is asking the White House to refer the Merrifield case for civil penalties in violating 18 U.S.C. § 208. 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.

Improper industry influence on the NRC does not end with Mr. Merrifield's departure, however. President Obama recently nominated William Magwood to fill an empty seat on 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.

"As one nuclear industry lapdog leaves the Commission, another one is entering via the revolving door," says POGO Investigator Ingrid Drake. POGO has sent letters to President Obama and Vice President Biden asking that the White House withdraw its nomination of Mr. Magwood.

POGO obtained the IG investigation and supporting documents as part of a Freedom of Information Act request in our ongoing investigation into Mr. Merrifield. At the time of Mr. Merrifield's departure from his NRC Commissioner post, POGO publicly questioned his role in championing several major policy initiatives which directly benefitted his future employer, the Shaw Group. POGO also brought this case to the attention of the Inspector General.