Uranium plants' woes concealed, groups say Safety troubles came as government-owned firm was set to go public

Regulation

September 16, 1998|By Marcia Myers | Marcia Myers,SUN STAFF

Two national consumer groups yesterday accused the Nuclear Regulatory Commission of concealing significant safety problems at a government-owned, Bethesda-based uranium producer in July, just as the company was about to issue its first public stock offering.

Public Citizen and the Union of Concerned Scientists, consumer groups that focus on nuclear issues, both released internal NRC reports that identify numerous safety violations at two uranium facilities in Kentucky and Ohio by United States Enrichment Corp., formed by the government in 1993 to take over uranium enrichment from the Energy Department.

The violations were noted during a nine-month period ended in June; the government sold the company, renamed USEC Inc., through an initial public offering July 23.

Both organizations are calling for investigations by the Securities and Exchange Commission and the Department of Justice.

A Justice Department official declined to comment, saying the agency would review the allegations and respond in writing. Calls to officials at the SEC were not immediately returned.

A letter sent yesterday to the NRC by Ralph Nader, the head of Public Citizen, summed up the accusations.

"In addition to endangering the health and safety of workers and the public, the NRC facilitated the defrauding of investors," he wrote. "The NRC appears to have violated its own regulations in order to maintain the facade that USEC was properly operating its facilities."

The NRC yesterday denied those claims. Beth Hayden, an NRC spokeswoman, said that although she had not reviewed the specific records at issue, those types of records are publicly released as a general rule. In addition, she said, the agency in July publicly fined the Portsmouth, Ohio, plant $55,000 for safety violations. The other plant is in Paducah, Ky.

"If we were so worried about stock options, we would not have put out a press release that said we were fining them," she said.

Officials at USEC did not return phone calls.

But the nuclear watchdog groups contended that in the months before the public offering, little information was publicly disclosed revealing the violations.

At a public meeting in Rockville among NRC officials to discuss performance issues at those and other plants in late July, no mention was made, according to both groups.

However, the Union of Concerned Scientists recently received an anonymous packet containing what it described as more than 100 pages of internal NRC letters, memos and e-mail concerning safety problems at the two facilities. Some of those were reviewed yesterday by The Sun.

In addition, Public Citizen in July obtained documents that had been filed inadvertently in the NRC reading room and which have since been removed.

The two plants are the lone U.S. facilities that produce enriched uranium to fuel commercial nuclear power plants.

Among the violations cited in the documents: failure to adhere to safety requirements, improperly trained staff, failed systems, unintended emissions, poor maintenance, and more than 100 reports noting "events" and lack of attention to detail in safety evaluations.

Those details should have been provided to both the public, which is vulnerable to the release of potentially toxic gases from the plants, and investors who could experience a sharp downturn in stock prices, said David Lochbaum, of the Union of Concerned Scientists. "Their prospectus said they had a good, clean safety record," Lochbaum said. "Investors didn't have an informed decision." Last month, USEC said it would cut 10 percent of the work force -- or 500 jobs -- at the plants.

USEC shares, which were $14.25 at the IPO, closed yesterday at $15.875, down 18.75 cents, on the New York Stock Exchange.

Pub Date: 9/16/98

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