FirstEnergy agrees to $28 million fine, saying workers hid damage

By M.R. KROPKO, Associated Press Writer

CLEVELAND (AP) - The owner of a nuclear plant agreed to pay $28 million in fines, restitution and community service projects because the company says employees hid serious damage at the Davis-Besse plant, the U.S. Justice Department announced Friday.

Inspectors found an acid leak in 2002 that nearly ate through a 6-inch steel cap on the reactor vessel at the plant owned by FirstEnergy Corp. Officials said it was the most extensive corrosion ever seen at a U.S. nuclear reactor.

Company and Nuclear Regulatory Commission investigations concluded that the rust hole had been growing for at least four years and that Davis-Besse's managers had ignored the evidence because they were focused on profits rather than safety at the plant, which sits along the Lake Erie shore about 30 miles east of Toledo.

As part of the agreement, FirstEnergy acknowledged that the government can prove that nuclear plant employees "knowingly made false representations to the NRC in the course of attempting to persuade the NRC that Davis-Besse was safe to operate beyond Dec. 31, 2001," a Justice Department statement obtained by The Associated Press said.

Messages left at FirstEnergy seeking comment were not immediately returned.

U.S. Attorney Greg White began a criminal investigation of the plant in November 2003. Late Thursday, a federal grand jury indicted two former Davis-Besse employees and a contractor, charging them with hiding damage from federal regulators.

A fourth Davis-Besse employee, 60-year-old design engineer Prasoon Goyal of Toledo, also entered into an agreement with the government, the statement said. Details of that deal were not immediately available.

Last year, the NRC levied a record $5.45 million fine against FirstEnergy for failing to stop the leak. The corporation's FirstEnergy Nuclear Operating Co. operates Davis-Besse.

"By misleading the NRC about its prior safety inspections, FENOC failed to meet its regulatory obligations and violated the public's trust," Sue Ellen Wooldridge, an assistant U.S. attorney, said in the statement.

White was set to announce the agreement later Friday at a news conference in Cleveland.

Wooldridge said the agreement "involves a full admission of responsibility by FENOC and includes a financial penalty that reflects the revenue that FENOC realized by misleading the NRC and delaying required safety inspections at the Davis-Besse facility."

A federal grand jury Thursday indicted former engineering design manager David Geisen, former engineer Andrew Siemaszko and Rodney Cook, a 55-year-old consultant from Millington, Tenn., who was working for the Davis-Besse plant to help it handle regulatory issues.

Geisen, 45, of DePere, Wisc., and Siemaszko, 51, of Spring, Texas, are charged with five counts each of making false statements to the NRC. Cook was charged in four counts. Each count carries a prison term of up to five years upon conviction.

Messages were left Friday with Geisen and Siemaszko's attorneys. No attorney was listed for Cook. Messages were left at phone numbers listed under his name.

Siemaszko said last year that he was wrongly fired and that he had told supervisors the reactor needed to be cleaned. He said managers rejected his requests. He made those comments when he and Geisen were barred by the NRC from working in the nuclear industry for five years.

The leak discovery came months after an August 2001 NRC warning to nuclear plants nationwide that there could be cracks and likely leaks at reactors and that the plants should shut down for emergency inspections.

The indictment alleges that Geisen, Siemaszko and Cook were part of Davis-Besse's scheme to block those emergency inspections by falsely convincing federal regulators that the plant was safe.

According to indictment, all three men wrote letters and signed off on reports from the company to the NRC in 2001 that omitted important facts about the company's previous inspections of the plant, including the fact that leaks gave employees trouble accessing all the equipment that needed inspecting.

The three also are accused of omitting parts of a videotape that was sent to the NRC that were to show inspections of the reactor vessel head. Parts showing "substantial deposits of boric acid" were edited out, according to the indictment.

The three repeatedly traveled to Washington, D.C., to lobby NRC officials to delay the federal inspection, the indictment states. Geisen is accused of lying to regulators at one meeting about the company's poor inspection findings.

The trio also is accused of helping create false documents that showed the reactor lid had been totally cleaned and inspected in 1996, 1998 and 2000 when it wasn't.

The plant, which provide 70,160 megawatt hours of energy annually, was closed for two years. It returned to full power in 2004.

FirstEnergy spent $600 million making repairs and buying replacement power because of the shutdown.

(Copyright 2006 by The Associated Press. All Rights Reserved.)