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NRC Fines Maker of Fire Retardant in Nuclear Plants for False Tests

October 3, 1996

WASHINGTON (AP) _ A producer of fire retarding material in scores of nuclear power plants faces a $900,000 fine from the Nuclear Regulatory Commission over alleged falsification of safety test results.

The company disputes the charges and says it will not pay.

The NRC levied the civil penalty _ the second largest ever by the agency _ against Thermal Science Inc., of St. Louis, the maker of Thermo-Lag, an insulating material that has been a focus of controversy for several years.

The material, which is supposed to suppress flames, especially around electrical systems, is still used in 46 plants across the country, although the NRC requires special precautions, including continuous monitoring.

The NRC accused Thermal Science of having misled the agency about test results on Thermo-Lag. It said the company tested the material itself, but claimed it had been tested by an independent testing laboratory as required by federal regulations.

The company said through its attorney that it will challenge the fine, seek a formal hearing and, if necessary, take the case to the federal courts.

``We’re going to decline to pay it,″ said Gordon Ankney, the attorney. He accused the NRC of being vindictive after losing a criminal action in court. ``They’ve had their day in court, they’ve had their best shot and a jury decided this is hogwash,″ said Ankney in a telephone interview.

In August 1995, a federal jury acquitted Rubin Feldman, president of Thermal Science, and his company of criminal charges of fraud and lying about the material. The prosecution in the trial charged that Feldman had deceived the NRC about Thermo-Lag’s performance.

Feldman insisted during the trial that tests on Thermo-Lag were conducted properly.

The NRC action Wednesday involves only civil penalties and cites as justification comments made during the 1995 trial as opposed to information provided the agency previously.

In a letter to Thermo-Lag, the NRC said the company repeatedly misrepresented the circumstances surrounding safety performance tests on the material and provided test reports and documents ``knowing that they contained inaccurate and-or incomplete information.″

Citing nine separate violations, the NRC said the company’s actions were so serious that staff recommended a maximum civil penalty of $100,000 for each violation.

``These violations were further aggravated because they were committed in the context of an ongoing NRC investigation,″ wrote James Lieberman, director of the NRC’s Office of Enforcement. He said that by providing insufficiently tested material to reactor operators, the company compromised nuclear plant safety.

In the 1995 court case, prosecutors said the company hired Industrial Testing Laboratories Inc., but only used the lab’s stationery to record test results, and had the lab’s president sign the reports even though he did not know what was in them.

Four months earlier, Industrial Testing Laboratories and its president, Allan Siegel, pleaded guilty in federal court to five counts of aiding and abetting false statements in connection with the Thermo-Lag tests. The lab was fined $150,000.

The NRC began investigating the safety of Thermo-Lag in 1991 after questions were raised about its reliability. The material has been used in nuclear plants since the early 1980s.

NRC spokeswoman Mindy Landau said the agency continues to believe that the material ``provides an adequate level of fire protection″ as long as certain precautions are taken. These include a requirement for 24-hour monitoring and use of automatic fire detection and sprinkler systems, she said.

But Paul Gunter of Nuclear Information and Resource Service, an anti-nuclear group, questioned why the material was not being replaced. ``The NRC should have ordered the material removed years ago. The fact that they’ve fined the vendor doesn’t resolve the issue,″ he said.

The only NRC fine that has exceeded the one against Thermal Science is a $1.25 million fine in 1988 against the operators of the Peach Bottom power plant in Pennsylvania when reactor operators were caught sleeping on duty.

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