Ohio atomic plant firm reaches $28m settlement

CLEVELAND -- Admitting that its employees covered up serious damage at a nuclear power plant, the facility's owner has agreed to pay $28 million in fines, restitution, and community service projects, the US Justice Department announced yesterday.

Inspectors found an acid leak in 2002 that nearly ate through a 6-inch steel cap on the reactor vessel at the Davis-Besse plant owned by FirstEnergy Corp. Officials said it was the most extensive corrosion ever seen at a US 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" as they tried to convince the commission the plant was safe to operate beyond 2001, the Justice Department said in a statement.

FirstEnergy issued a statement saying prosecutors agreed not to pursue criminal charges against the company in exchange for $23 million in fines and $5 million in other spending, including reimbursements to the government, Habitat for Humanity work, and university research into energy efficiency.

The company said it accepts full responsibility for the ''failure to accurately communicate with the NRC."

''We have learned much from this experience," said Gary R. Leidich, president of the company's nuclear operations.

US Attorney Greg White, who began a criminal investigation of the plant in November 2003, said at a news conference that the government can prosecute FirstEnergy if the company breaks the terms of the agreement, which includes safety standards and prohibits the nation's fourth-largest investor-owned utility from passing along the fine to its 4.4 million customers in New Jersey, Ohio, and Pennsylvania.

Late Thursday, a federal grand jury indicted two former Davis-Besse employees and a contractor, charging them with hiding damage from federal regulators.

Last year, the NRC levied a record $5.45 million fine against FirstEnergy for failing to stop the leak.

The plant was closed for two years but returned to full power in 2004. FirstEnergy, based in Akron, spent $600 million making repairs and buying replacement power because of the shutdown.

The indictment alleges that former engineering design manager David Geisen, 45, of DePere, Wis., former engineer Andrew Siemaszko, 51, of Spring, Texas, and consultant Rodney Cook, 55, of Millington, Tenn., were part of a scheme to block NRC-ordered emergency inspections by falsely persuading federal regulators that the plant was safe.

According to the indictment, the defendants helped fake documents that falsely claimed the reactor lid had been totally cleaned and inspected in 1996, 1998, and 2000.

They also are accused of writing letters and signing off on reports to the NRC that omitted important facts about previous inspections, including that employees had trouble accessing some equipment because of leaks.

The three also are accused of altering an inspection videotape sent to the NRC. Parts of the tape showing ''substantial deposits of boric acid" on the reactor vessel were edited out, according to the indictment.

Siemaszko has said he was wrongly fired and that his managers had rejected his calls for the reactor to be cleaned.

Another Davis-Besse employee, 60-year-old design engineer Prasoon Goyal of Toledo, has entered into an agreement with the government, the statement said. Details were not available late yesterday.

The indictment asserts that other FirstEnergy employees provided false information to regulators.