-- - __ -- '- · - __ t -- - -·· ·J · - t ' •- - - 'ft__ __ - - - - ------- 0 UNITED STATES DEPARTMENT OF JUS r1C FEDERAL BUREAU 0 INVESTIGATION Washington n c • 0 Fi 14 Office File ft 117-2564 11 7 -2 7 3 TOHIC -1 RGY AC'r1 09ST UCTI01 OF nJ ICE · Set rth re int rviews of individ als t overn n•nt agenc ies c f fo n rly a soc Corporation in onllo n sylvani · rw - - 'f • 1· • • various ·1ell as interview of CL ru on eof those individuals interviewe could provide any new information that might resolve the disappearance of nuclear material from rut- tC • • - -1- - - from either - - · '• -- ----·---- -·---- - ---·- - ---------- ·- - · · •· _ -· • 0 · FECERALBUR AU OF INVESTIG ATl I l C te tr11tt01Mie 24 79 ________ _ ' J ' - '-f t'i ··'£· X £¥ t' 4 -- · --- -- ---- ··- - -·····- ···--- ---- - ll'lwfft w Of' __ Cl' _ ---- -- - ---· 1Laq ___ _7 -----·' QOC4 - - -- - n •ash 1 n _wy n __1 l 7_- 2 __ ---- -7_c _ -- 1 L 1 J 1 7 __----- 8Y-- a T7'rt -- · CO f IC1tf I• ecofft ll1'd•t o 't · ··- O' CO Cl1i4t10 of' · •• 11 •• t 4 Of'0 1Y ef t Plre • '411•'I lo to yovt 1 9 C7J - - - · r -- - ···- i • ----· l - ·---·---- -- ·-- ' - 0 0 F£CERAL BUREAU OF INV£STIG ATlON ' l 2S 7t Ce•• u - _ ________ l • ' - ·Ml· _ __ 9_ _2_5_ _1_1 ____ ____ 5A __ _T'I_ r _ _ ____ 11__r _a_s_h_1_n_J _t_o_n 7 __ h_ _1 _ __ __011 •• t•1 _ ' r'n 117- 73 7 ------_ E i _ 1 · · ' £t lER A1 IUAEAU OF INV£Si1G ATIOH bic H b7c J l WI •nd o nucleir ••tar• s Corporat10R NUMEC ' · · · · ·- · Tork Ne c York ll' iie • N l J 7 - o 4 · biC I DY-- __ __OaH a cu _ __ 1 M o J I L7 9___ _jt -- _ f -- ·---·- -·_ - __ - t FEDERAL BUREAU OF INVESTIGATION - O•tt 1 1012011 tr1 c ' Oft-------- blc fc EVIT1' advis d tb•t h 04d nothing to o with tne operation of tbe h plant and he waa involved strictlz in• buainesa capacity Be aavised th•t tlle ra t in a bank in Pittsburgh Be advisee that be vaa Director of NUMECfor three to fow years in the early sixties lie advised th•t ne wa s only concerned with the business aspects of the operation Be aovised that he wa - Cnair an ut tue i loa C of Apollo Industriea and waa looking out for the bus1nesa intereata of Apollo Industries - ' ' •es 91 ' or _ • J •• • • • -T • • 1 · • e -w _ ' - c- r l L - - w'-r- - c k __ __ II' • ----' t i £' l _7 _ J-'4 ___ ___ l -O L a '2 4 1 · --II _ _ ' _ • b1c 1 DY ----'-SA _ ____ 011• O•C fltN ____ _ 1 o lO i _ · 34 l 7 9'---- -- · - - · rt W L·- _ '4 - ·---- 4- - -- a - - -- - •4 l _____ •1111a aa 1oznii ll srfifniiil ·------ - - · c_ • 0 FEDERAL BUREAUOf lNV£STIGATIOII 10 11 79 not ao naaciallJ unstable of aaterial for f1na nc1al ·· --1· '- ·- 10 2 7' ·r ln 1 -tlOfl ___ SA ltt _cont •nU Y7'0 ---------------- •• CIOCwrn4nt COftt•i it • n C Washinctoa ----------- a a caia ' • - - it ec__ tl_ to i»e '''''- ' 0 4• - ----- -O t• IIOt COftC hnlON Y - -- 111-273 •---------- ef M -·- 10 9 79 dlctat•'------------- It It 11« er1y QS· I --- ·----- ---- J _ · · - - ·T of t la -·- --·--- te y- - _- --- - __ _ e-1 '-- ·----------- r • ' - • f - · I ------------- 0 i · · WFO 117-273 2 t J - 0 - Ji at NUllECconcern n1 loasea became knon A roonetarJ penaltJ was loan was arra ed wi Mellon Bank the o A obtaiaias material interfere was never any coacera no material after the oas1dered it a procea• lo•• mpose on NUYEC and a $1 2 m1111oa her Pitt National Bank or DO foreign influence la knows erwise in any investigation of no diversion of nuclear or of DJ attempt to involvin1 that losa HI· 1 ·t · --· · 01 ·- ··• · · - - a ·· ··· _ _ __ ·· - - · -----· -·--- -- r i I C· o · ' 0 IIEDUAL IUIUU o - INVESTIGATION b7 c ft J I Nr Falk atated ba fen11rly a director of thlll 11s lear Kate rlal1 aid z a i pal'Dt Corpo ratioa NtlCIC aDd tha I1rael1 NuaK Iaotope1 and bdl ati n IIDt erpri•• Ltd ISOUD He u me ertain u to tha d te1 the coap mie1 Ida f l le• are in 1t orap and not wn fonaed md 1utad re dily an ilable Aa best he c ould nc all the coap111ie1 wra botClt up bv tha Atl amti c Uchfield C a y aoae tia aro md lfi7 er 11 a both ' ·· · · · · · · ' ·· Mr Falk ach'iNd that be bK 1 nvolved with the c oate ma whtm Or Sha pi ro ZalallD MDrdec 1 Shap1 ro c to hia and aabd if be 11Dulci be iatare1ud la ilffeati n in the coapc 1••· Iii 1Aid be km¥ DT Sbapiro while be Shapiro vu '°rkin at Weeth house ilectric Corporation and had a pat de 1 of n1peet for hi a M a result of his lnve1 t be u aade a clirector • no Mr Falk 1uted that ha had eothin to do vlth the operatl•• of tM t1'0 c o i e1 IIDd va1 aaable to fum11h my iafor atlon c oacera1q the accounUblllty baDdlin nc orcU na proce11tn1 or eecurity of ti- nut lear -tariala Ila ncallad a fire at fflMEC 1Nt c amot rec all wat if uythina 1a1 diaatroyed lelatlv• to the all•1•d diver11oea •f aacle ar erl al fraa the mlCC plmt Palk 1tated he wa 1 aware of t ba specul at lon c oac a min the 1 thrCN hart le l• s - pearl A 1D tM DeV1paper1 l tlal to tS Ha a te d • bu ae penonal lr nawl•cl •relative to tba cliverai a ad he c m mlthiar affirw eor day tM allea atlolla lie 1t ted that be per1onell7 doe• eot believe tliat a '1nn1oo took Wlllt _ I pl e b ·------- ··•· ·· I lo••• t 22 79 biC f• • -wro 111-213 _______ __ _____ Pitt1burlb Pa 1· - -« · · · 1 l 0-302 R V l-t-71 FEDERAL BUREAU OF INVESTIGATION ' 1 - wu te ewe idantity of tba interviewing agent and that the pu rpo1e of thi• interivev wu to discuas my knowledge he might have concerning tba alleged diversion of special nuclear material from tha Nuclear Materials Equipment Corportion NUMEC Apollo PA A110 present during POWEllS POWERSfurthe interview was POWERS'wife MARGARET nished the following information I I 1 0 c b to his indicated that he served on the Board of Directors of the mJMEC He believes his service was of short duration He did attend some Board meetings but described himself as an operating man with no technical background in nuclear power He described the West Penn Power Company as a company which generated power from the use of coal and hydro-electric plants · · · He recalled taking a trip to Tel Aviv Israel in October of 1965 The purpose of the trip was to find a chemical that could be used to extend the shelf life of the Israeli citrus crop He explained that the shelf life of the Israeli citrus fruit was very short and Israel was in need of some development to improve the shelf life of their citrus fruit He explained that eventually the shelf life fruit was extended He indicated that he of the citrus ' -- l nve1t 1 at •O Oft • •I• lQ 2S 79 __b i7_c --'- _J ______ • it • a u cont 11 •• r ot to 1M e11str1D 1eo o tliel• __ P _ H __1_1 z_ 1 z__ 4____ F •• It O te 10 29 79 CIIC1at - - w -- yo - qr i - _ - ' ' -- ' - ' ' C - • - • · · - --· ·--- w- • _ _ · __ _• • - ' - - ·· •• ____ ·- - I I i I • PH 117-174 2 made this trip to Israel with LEON BENJAMINROSEN and ZALMAN SHAPIRO POWERSalso indicated that his wife also accompanied him on the trip Two other wives also made the trip but he was unable to recall exactly who they were POWERSindicated that he left M1EC shortly after the trip He described himself as window dressing He explained that in his opinion he was given a position on the Board of Directors to add a sense of eX Oertise in the energy field Ltd The Israel n 'MEC Isotopes and Radiation ISORAD was unfamiliar to him POWERSwas unable infor- tion regarding his to recall any additional service ith rxrc Enterprises pertinent _ · Trf A · r -· FEDERAL BUREAU OF INVESTIGATION I• • • • 1 -· · - • t ll 8 79 b7C I ot tba idaatiti• of U tM inte rvt inqu ired it tbe A genta had UJY objectioas to tba intervi cm tape r- order Ha advised Agents pre terred tlle iDtervi not be racorded He t Ma asked it Aigaata objected to bi• takiD9 writtnota ot tlM i Atervi and be w a advi aed the re DO objectiCID te t hia Nr ROSD- interviewing He i-ecuately hi• recording Nr • • I o o • • • • · ·•· · ·•· advised Del oL the Agents RCISBlf advised na11are t b t a be waa loDIG'ly Director of a coapany llbicll produced nuclear fuel rod a known u Nuclear Materi l• iquipamit Corp Nt C C A saall subeidi ry of NOCBC- kDOal u ISORN Isotopa and Radiatica Enterprisa • Uaited flae nuclear tuel rod a produced by Nt aiC re sold to private ccapeni• to be used in ma clear ructora • · • · • • ROS8f- sked it he bad any kDowl edg e ot aaterials by NJMFC er ita aubsidia ry pr anywhere elH He at ated e r aurprue that tlM Federal 8u'eall into tlu a aa111tr a be felt it h ad 11 heal Ml•bed oat iD tM put He u icl Uaat iA ur da-ica r- ct iCID there ia a cert a in eec-mt urial loat iD ti reaction and any coapeny enoaQed iD the aana ac ture naclear fuels h a these loan He didn't feel this ret'lected aaytbi09 Nr ot Inv•tigat icm- - ROSIIN mcpr-aed inquiri Dg sinister No addition l inLoraatiaa prorided - • ' ' ' 'II • ••• • f I · _n °' conctw _ i ou -ci of •• It ia lfte •• 11 RClSD • 117-55 t• lllteteteG --- 1 1 '- 7H-f - ------ -----O• n caoc conUIM recom 11 It •ts co te 11 - not 10 N 0111 DutM 0 11 ae Nr ····----·--- of i - •• • oeaa e to _ _ c Fl 302 REV l·l-77 FEDERAL BUREAU OF INVESTIGATION 11 2 79 Oetl of tranlCl'lotlOft ______ _ E lRL P LANE former Director D1•1•1oa eo-1••1on AX t hi• reaidence He ra a given the of the Interviewinc Special Agent SA Federal identity Bureau of Investigation PBI WDC He raa told that he wa•beiDs interviewed in regard• to the losa of nuclear Pennsylvania in the fuel froa the NUllEC fac111ty 1Apollo late 1960'•• LA NB said that he raa willinc to be interviewed concerDinc the matter ot Security a ad Safeguard• Asaoc1ate Atomic hero LANE said that he waa interviewed at length in the past by representative• of the FBI concerning the incident He said that he had no additional information to furnish at this time LANE re alled that at the time he interviewed ZALMAN SHAPIRO in the late 1960's it was determined through conversation that he SHAPIRO was attempting to borrow money from a local bank possibly in Apollo Pennsylvania He believed that the individual in the banking business interest in tbe NUKECcompany and waa a bad a fina ncial close friend of SHAPIRO SHAPIROalso mentioned that he had to borrow money LANE said that he did not question SHAPIRO to any length regarding hi• financial condition• at that time He had no additional infonnation regard1 Dc the conversation pertaining to borrowing money and speculate• that this waa an attempt to obtain funds to pay the t1 De imposed by the AEC tor the loaa of the nuclear material LANE had no additional information to provide inasmuch as he has furnished complete detail• in the past to the FBI concerning his involvement with mnmc 10 19 '19 ln t l ation bi G on _________ Washington at 10 26 79 SA contains -tll• recommeftCSatlno collduslo ' it anct ita contents ••• not to De ctlatrlllutH outside your - ency WP'O117-273 l lle •-------- DY----------------------OateCllctatM----------- n 11 ctoc t D C of tri 1 111 - · -' F0-302 REV l- 77 ' FEDERAL BUREAU OF INVESTIGATION b7C 2 b7C 2 - dT1Nd that be baa Dfffl' •t UIMAW W SBAPIBIO baa had 110 COllllectio11 with HUKIC aad waa not 1 A f'OlTed 1D the earlier RUllBCinYeatiptlo11• Be adTiNd that be had prnioual beea i JlterYiewed by DOB'• Inapector General'• Office co11ceru1 D1 NUKECand had reviewed report• 011 l'fUlmC includinl u inventory difference report which be helped prepare He waa neTeT influenced 111 thla rep rd b7' 2_concern1 r - aprovide no further inforaatio11 • lnveul -tlon ·--·It a d its contents - - - -- no German toWD Maryland ------ '· 111-213 -11 ·-------- h1c J S A -i i y __ · l_l _S _7_9 ____ on __ dlct1ted 1_1 _8_ _7_9 _____ __ N-----·---o M M_ _ ·-NY--• ft - a e • not to 1M dlstr l lluted _ outside _ -- ··- i o• - ncy - ---- 13 - A i -· - r r- • • 5d _ - _ •• • J f _ _ _ _ _ __ •' __ _ - · - - ···· ·-·· ·---··--- ·-·--- _ ro-302 ·-------- ·· - _ --·- - - ·-· ' '£' l·l-77 FEOEFIAL BUREAU OF INVESTIGATION - 10 23 79 1 - Safeguards contacted O te of tr1111C1 1ot1011 _______ Bl EDWARD J H cirmJr1'eputy Director Atomic Energy Coanission a nd Security tor an appointment for interview Office of AEC waa BLOCHstated he has been retired about six year• and preferred to furnish bis information telephonically He advised many years enrichment - as follows He visited the NUMEC facility at Pen sylvar ia ago when it was just starting up making low fuels One of the proble s process losses were inevitable were buried materials ' was that Also 0 in a plant certain contar i1nated waste He recalls the investigation into but has no knowledge of any nuclear material diverted to any foreign power b C 'f JXJ · at Nl fEC He recalls hearing that - r SHAPIRO didbas no personal knowledge o this r ut · · a loss being He r et -fr SP Af IRO on knowled e of him bein He was unaware of mn rachaving been assessed not been approached by anyone of Mme a fine for loss and he has regarding the investigation b1C Jrp - t - •• u1 c o _ SA a - 1 9' 7 9 ____ ____ t 7e •YEO 117-27'J 10 19 i9 _ -· · · • l lOI lll V J-a-77J ' __ 1 • · - - J_ - _ FEDERAL BUREAUOF INVESTIGATION 1 p ' ·1· t · o -' _ '- -11 2 79 JUT B CRA J 1tAlf '1 tor t'ttee of tcterS eurlty Depa rt nt of Energy DOB Yashlnctoa D C WDC n a 1nter 1ewed Ire n a elven th ldentit7 of t 1 nter 1ewlng Special Agent l'ederal Bureaa or Investiptlon FBI Hen a told that Lil tnveatlptlo• la being conducted in rega rda to the loaa of nuclear fuel frc the NUl BC Comp nJ Apollo PennsylYt nla 1JI the late 1960'•· Vr CRAP lAM aa d that be n a willlns to be interviewed re1ardln1 the matter natloaal VJ- CHA PtlAN aald that he had bHn 1nterT1ewed in the past by representatives of the DOB Inspector General'• Office concerotnr the NUllECincident and at that time be made a statement which wu ma de· a pa rt of DOBrecord• Hr CHAPYA 'f advised that he baa no first bud knowledge of the NUVEClncideDt or the investi1atioa _9_ 7_9 ____ ' • 1 0 OIi - _l_0 1 __SA_ _w_a_a_b_in_gt _o_a--'- _D_ c_ ____ ft D 1 C 11 c atM 117-273 - I • W10 - - _ -- __ 1 0L 2 6 L 79 ----- - - 'l-d ' -- · - -1 -- · - ·-· -· J J ·- FEDERALBUREAUOF INVESTIGATION l • J - - ' - j UY w Seolrlt1 C I• 11 2 ff _____ Cletef f _ __ _ _ D •• f flee or rater·-·· of Bnera DOB Ya ahlactoat -- · D C WDC • - 1Aten1ned Be siNA U ldntlt os-· tbe utent t ac Special Arent l'ederal aeu o · taTenlpttoa 1'BI Be wu told that u laTeatlptlot1 la beiac coaducted la rep rda to tbe loa of aucleu- fuel fl'CII the Jll'UllECCoepa AJ Apollo PenA8JlnAlaL la the late 1960'•• 11 r CHAPIUXn 14 that be wu Yllliq to be 1Aten1ne4 reca rdilas the aattn u tloaal - - Dep rtaen IIP CH lPIWf aald that be bad bffll l ntenlnet 1a the pa at bJ reprea entat1Tes of the DOB In tor the JrtnCEC uctdent ud al Gesleral'• Office concerauc that tl ae be aade a statement wblcll aa de· a pan of DOB record a CHA PKll dTiaed that be baa DO first h ua4 of the HUlCBC1ncldeut or the inTestl1atloa llr Jmowledse -1· r · '- · r ·r • ' - 1 11 _1_0_ _1_1 __ _19 ____ Yuh nctoa D C • Y10 11T-27S ne __Sl__ ·' Tllll document a _ IU ' co wifta 1111• ecommeftd•tlons IIOI DO4111U- t outlklo ftOf _ uinc 1 110 1 of ll e 16 - -·- - - - - - _ 1 It II lllo oe ort• of l 1 -91 •' ' --' ·· · ·- ·- · i 10 _ It - ' i - -- · - · · ·-- I F0-302 EV 3-1 • 77 I I • · 3 · _J ' • FEDERAL BUREAU OF INVESTIGATION 1 S 1 W7 0 llonaber ·· ' n_ _11 13 79 IURTIX DOWD Aaaistut · Director X tn aal Security eh Office of Safec llll da and Secm-ity Depa rtaent of Bll• ff DOB towll lfarylud proYided the followiDC inforaatiOD '- -' · vru DOWDfirst becaae aware of the 1ftJVBC facility at Apollo Penna7ln nia 1D 1958 wben be waa uaiped to the Hew Tork Operation• Office for Seciu-ity toaic Bae 'l7 CoaniNio11 AEC Pen11a7ln nia waa re ioa ll by the b7C l DOWDstated that security wa a alway• a problem at NUMEC but that after security •iolationa re correction• ud deficiencies issued NUKECwould institute were corrected within 30 daya allowing the plant to · continue operations • However 11 0uldonly monitor lossea of material responsibility not ' - b7C '2 that la department DOWDindicated security classified material and that were considered a n accounting in hia domain In 1968 DOWDwa a aaaigned to Yuhingto11 IDC where he waa placed 111 the In rual Security Department'• Allen Control Section th became aware of SIIAPIRO'a inter1etion Investigation of thia waa turned over Bureau of Investi atlon PBI a nd DOWD D C DOB'• then the Energy Research nd DeTelopaent ERDA concern at the tl ae waa whether Administration SHAPIROshould retain his security clea ra ncea DOBconaiderecl SHAPIROa security risk nd subsequently interYlewed twice by DOB'• Director of Security a nd by a Departaent Legal Counael SHAPIRO'• cle r Dce• were not lifted bat he waa not allowed to re•iew classified doC1D11entarelatins to weapon• information ' DOID advised ' ' 1___ 1 _5 _T__ 9_·----•t i t ion on __ that SHAPIROwas alway• closely Germantown Maryland File m aoait 117-273 biC I Dy __ It - _ SA i ts c ont tl ______ - not to De clbtrlltvtH outlkle y_ - c Oat• 17 Clict atad-1 1 L 6 J t 7 9 _ ____ _ ' ' ' t ' ' ' ·l · ·' no - •1-213 sensitive 1 Jatoraation DOWDcould de no factual information regarding a possible diversion nor could be recall any attempt to inte re in any investigation by SHAPIRO or a nyone else • r • -··-··- d T l 1 i • J 18 • - ·- --- • •• • • ••••• --- - ·-- •U• • - --- ·t3-·-• • --•-•••••-·•·-·- --•·-· -_ _ ·-- ---- I J · ----- ·-· --- __ · J - -r - - - _ FECEAAL BUREAU OF INVESTIGATION a J4osE 1 10 23 71 ______ o _ _ EARLE UIGHTOWER former Assistant Director and Security AtOMio Policy and Plans Office ot Safeguards contacted the En1rg1 Conwnlssion AEC telepbonlcall1 1n erv1ew1nc Agent at the Washington Field Office of the Federal nureau of Investi ation FHI He stated he called in response to two telP phone calls t - ra 11IGHTOWER advisin1 that the FBI desired to talk to him · He furnished the following nformation 1 In the early 1960 ' s he was e ployed 1uri g the course of his work at enployees who visited lfEC - a as above and SHAPIP O u ervised Io never went to ru C but heard that it was a sloppy processing v -cre a lot I rcnenber quitJ L of suspicions lfU bit about from those operation the case he There he ·data cor cernin r•rr c was available only to the Assistnnt f eneral rana er level at AEC n C'• material accountabili J don was sloppy ' I ven tho trees and bushes surround inc m r fEC • uld be covered by a white residue indicating obvioua losses ot material I think it material mi ht have been lost in two ways $ · · I think it might have been intentionally diverted and losses wf re frequently 'written off ' Probably ' there was a lot l X re lost than sho•a in the losa data rer ortt -·· t - _ - _1 0 - 2 -2 - -7 9 ____ fasbingtoo ·__ s____________ D C ••ll'Q llI- 13 A_ _ _ _ · • c 1012211 'tf J I · wro 111-213 2 Also we had a number ot scientists leave the U S oi sabatical and go to Europe during the same time span N NUVEC inci tally weapons program then f'V - _ Sn APIRO had Zion 1st • fV had some contacts a cumber of coc tacts b1c lb I and he was a any of those was diverted He does not know specifically or actually that ac y material NUldEC to a oreifit'D power contacts · ' in the rom HIGHTOWERis en He would be willing to testify ' J •'· I - __ - ------- -- - -- -- - - n ·--- 1 - ·---- - - -- - -- - ri -- - _ - · - • FC 302 _ ' - I REV 3·1·77 FEDERAL BUREAU OF INVESTIGATION -'t t' P -t · D f I' - J cl j 11 13 79 Oat• o1 trantcrllltlon _______ _ Oil November 5 1979 THOMASISAACS DeputJ' of Safegua rde and Securit7 Department Director of Energy DOB Geraa ntown 11 rylLDd provided the informatio11 followinc Offlce '' with the NUKEC ISAACS stated that he had DO contact investigation until 197'7 when he wa e aaaigned aa Lead Action Officer to answer question• t forth b7 a headed by Representative DINGELL Congresaional Coanittee ISAACS advised that he a s·ststed 1D· the preparation of those answers without interference fro• a nyone and that those reaponsea a re a matter of record - ISAACS wu interviewed a yea r ago by DOB'• Inspector General's Office regarding NUllECand that too ia a matter of record • I ' ' • • ' • t ' visited ISAACS has never the NUMECfacility met RAPIRO nor has he ever · · • · 'y _ _ Ge rm ntOW'D Invest igat ion ofl_ 1 1 _l 54 7 9 ---at '' f lf r 'la Dd hie I _______ 11v_-'S A J Ou• C1ictatee1__ File e __ 21 • • r · - · • - •• 1_1_7_-_2_13 __ 1_1 '-6_ L -7_9 _____ Tnis Clocume t contains neltn• recommenC1ation1 nor conclu1lon1 of tne F81 It 11tne pr It and itl contenu are f'IOtto D• dlltrllluteCI outs Cle your ncy • ff0 __ - • _ -- ········ • - ·' ·- - - ·-- · - - - -- --------- -- - ---- -5'6idC a aea · i-i • «i ii ·- · __ · _ • _ - ··- ·- ·· ·-- · · - ··- · f ·- -------· ---- ---- - • • _ _ • • - · · - · · · · - - · f T J • ' · • - -• ' • ri_ L ·• • • • - -- - o INVE GATION FEDERALBUREAU ' l _ · · l 11 13 ff •• - OD lfoTember e • JOIDfa LABA RU Dtreeto• Aftatn Department of bera Office of International D C YDC provided the followtq DOB Yuhl nctoa 1 nforaatioa LABARRK stated that he bad no connection witb the RUKECiATeatlgatlo11 until 1977 whea be wu asked to prepare us rera to question• submitted by the DU CK LL Subeoaa1ttee of th• U S Bouse of RepresentatiTN LA BARRSprep red uswer• to those questions relatins to intelligence inforwatloa LABARRX recall• that the first set of queatloll 8 waa not acceptable to the DtHORLL bcc-itt and that they were Ndone a nd reaubaltted • About one yea r a go LABARU Ta a interviewed by DOB'• Inapector General'• Office regarding prepa ratioD of thoM a nswer• LABARRX stated he ha a no other infonu tloa regardinc the poaaible diversion of nuclear material froa the NUllECfac111ty b l • • lnfflti9atl0fl 11 8 79 ________ et Washinctoa 11 8 79 -----Det9Glcut•----------- T'llla ooc11ment 'Otl t alM Ml1 er · ·· W'10 117-273 •-------- J1 s · D C · · -- ·- -• rec--4atl0ftl • - - fllcttiauted - outs devour '° °111loftl l'ICY of the II la the ot' ef ' - t_M • • · II te _ i -·· ·· - - • • - - - _ _ --_ 'f - · - - - _ - · - - __ - • • - · q'' - - l ' FEDERAL BUREAUOF INVESTIGATION fkst - vember e 1979 Office of Current por ng aahbgtoa D C 'IDC proyided btormatloa p tlle he wa a asked to prepare bJ the DINGll'LL Subcommittee U S House of RepreaentatiYH Approximatel a year later h• was interviewed by DOB'• Ina tor C neral'• Office re1ardbs the preparation of those annera on• presented annera possible diversion ad no information of nuclear regarding troa material the · Mt l EC ·i- · -1_ · ln 11 atiOII OIi - SA 11 8 71 11 W'asbingtog D C 1 1 '--- _ ___ o __ _0 ••1c1 t Tl it ooc tftt It ano IU • lO 111-213 contel Mil eco et _ COftdullO of 1'81 11 is 11 ro- y contents 01 to Olltti tM o tlNM _ -w 23 11 8 79 ir• -• of 111e I_ IOMIM le _ - - V - - I '0-302 REV 3· • · 77 FEDERAL BUREAU OF INVESTIGATION 1 cat• _ tll'tlOft 10 23 19 JCIIII DDIRAXDT Act ills Chief Re80Q l C• Xuaceaea-t t•lepbcae iuwta 2S2-1ll1 ud fonieJ' bec11tift Officer• IAtenstional Seem-it Afflll 9 Uait- 1 Statu DeJ l tJlftt · of EAera DO• Ya abinctoa D C 'fDC w a i ltft'Yiftlied recudilas ht bowled a• of SltU'IBO Ad the MmaC coarpuy Apollo PennsylTS Ai f DlllLlRD'f a id that be - a ill1t1ally aployed at oos ill Pebru l Y 19'7S u the b- utift Officer Intenatioaal S Curity Affai 'w Be held the po•itiOG uatil 979 whereill be becuae Actins Chief Rea uree lfa nagement - th at be ha a DO d ll' t Wl p Ay SIUPIJIO his aa80C1ate• or JaIJmARDT dTiNd concernins the NUXEC bi• repr9sentativ••• b I · b lt _ _i File b7c J _____ · · Tn11 c2ocum ent contains netU•• recomm- tiona no coneluslo it •nc2 •ts co n t ents••• not t o tM 2lstrlbutee1 outside your • enc t of tlle Oat• c21c atM _ l 0 _ 1 9 7 9 __ ___ Itta t Ill' of Ille F91 anC1 __ 24' Jf 'fl 111- 111 - ·- a __ t o your -nc 'Y c'L _ · '' F0-302 REV 3·1·77 FEDERAL BUREAU OF INVESTIGATION · - 1 i 1 11 13 79 Cate of tran1UIDtlOft _______ _ J •- Qa'Jionaber 5 19'79 RALPHSCHOLL Chief Kuclear Satec aa rda Operation• Ad SuperTiaor of Pbyaical Scince Depart at of Bzleru DOB Ger11 DtoW11 ll ryland pro•ided the following intoraatioa SCHULLadYiaed that he baa bad DO connect1oa with ZAIMAHM SHAPIRO NUIIEC or any 1nveat1gat10II regardi Dg the poaaible di•eraioa of nuclear fuel at NUllECother tba Jl beinc interviewed one year a coby the DOR Inspector General's Office regarding HUIUSC - SCHULLcould furnish no addition l info 'lllatioa · · · · · - · ' --- 1n• 1 t ion on __ 1 1 aS '79'--- ____ t Germantown Maryland hiC '' a11__ S Ac T document It •na Its contenu conu1n1 ne1ti • ------0 te recom n4at10ft1 a e not to be dlllriDuteCI now conclualone out11C10 your of the 1'81 It la me pro- y 25 f II• WPO 117-213 CllctatN_ 1 1 6 _ _1_9 _______ _ of tlW 1'81 al'ICI 11 la necl to -i · 1'- _ -- · - · i _ - -· t· · J j FEDERAL BUREAU OF INVESTIGATION 1 O t• of trantu ot 11 ' J 79 ion ______ · - i ALFREDD ARBIRD retired Lieutenant 0 neral currently assicned a a the Director ot tbe Department of nt of Ener17 DOB Long Range Defense D0D 049part Resource Planning Group at the Pentagon was advised of tbe identity of the interYiewins Agent as well a• the purpose ot interTiew General STARBIRDstated that from 1955 to 196 he was assigned as the Director of Military Application Test and Production of Atomic for Research Development Weapons assigned to the Atomic Energy Commiaaioa AEC as a Military General Officer General STARBIRDstated that the next contact witb tbe former AEC occurred in mid-1975 when he entered on duty as a civilian in the capacity of Assistant Administrator or rational Security attached to the Energy Research and Development Administration General STARDIRDwas responsible tor tour divisions at this time including tbe Director of Military Appli j ion on Weapons and Director ot Safeguards and Security General STARBIRDrecalled that in 1978 a newspaper article was printed involving NUMEC It was at this time that General STARBIRD in the capacity of his employment cognizant of the investigation concerninc became entirely n MEC in order to answer both internal and external inquiries In order to obtain a broader background on NUMEC STARBIRD stated tbat be revinr ed the initial AEC investigative report the Joint Co1T1Dission on Atomic Energy letters the Departsecurity investigation regarding RAPIRO ment of Justice and a Government Accounting Office GAO re-port General STARBIRDstated that in thi• revie be concerned b1maelf primarily with the safeguard• and procedure• utilized at th L uclear plant• durtn« the late 1950's and early 1960'•· CN General STARBIRDrecalled that the 1966 1nvest1«ation by AEC revealed that there •as no evidence of any diversion of nuclear materials at NUMEC although the re-port did not rule 11 • • ' o _ 10- 3 1 - 7_9____ 11 Ar 1ngton Vtrg1ala b cJ i 1• •Wl'O 117 273 _ • • • I ' ' ' ' WFO 117-273 -i bA s L 1 • - l ' I • • I out the possibility In his review of the report he notedthat a thorough investigation was conducted by the AEC with the findings tearn sent to SU l EC and he concurred I t • • General STARBIRD stated that in 1977 he testified before a Subccmrnittee of the House Comr erce questions relatinr to Coi lrilittee and answered several Ntr iEC General TARBIRDadvised that his knowledge ot NlI' ECand SHA PIROcar ie entirely fro reports letters fur ished by subordinates acct peers and io orrnation e stated that at no tine did he have tirst hand knowledge of the Nl'HEC investi ation f x • • _ _ · · · ' ' l C l02 AIEV 77 · · · • · • I• f ' FEDERAL BUREAUOF INVESTIGATION - 11 13 79 1 b7C Oet• of trantc rti uon _______ _ Jfo•eaber s 1919 D1•1•1oa of Affair• Departaeat of EDera DOS Gerll lltcnna K rJlud pro•ided tbe followi as hforaattoa OIi I11ternat1oaa1 had onl7 one contact wit the NUKECf eilit7 in Pennaylvani whee iJI 198 7 or 1961 he escorted a Swed1ah visitor through the NUJmC plant SBJ PIBO hia one and onl7 and waa introduced to II 01117 knew JIii LOtii a meetinc with SHAPIBO former Atoaic Enera C oaa salon AEC eaploJN who waa employed at NUl EC - no other contact interviewed by DOB'a Inspector NtTMEC approximately one year ago beinc with n7KBC other than General coacernins ' ' · · - n-i -tton DY--- ll___ S_ 7_9 ____ on __ _G_e_rma n __ t_o_wn_ • _lla __ ry_l_an_d __ b7C I SA It •na ltl contents ______ - Gt to De alstrlDutea outllloe your - cy 28 oat• e11ctatN __ ie _uo __ 1_1_7_-_2_7_3 __ 7_9_____ l_l_ _S_ _ - _ - - ·---·--- - -- ·- · • - ·- ·- · -- -- · - · FEDERALBUREAUOF INVESTIGATION 1 - j r- J ll 2 19 tr- _______ C t• I · · Jr _ I Chief of bseaament BN Dcla D1T1aloa of Defeo Intelll1ence aad fol'ller IAtelllgence bal7st Office of Iaternat1on l 8ecu'lt7 Affa1 '9s U 8 I 4tpartae11 of Eneru DOB Wuhinctoa D c YDC htHTift'ed Ken a ci YeD the ldentlt7 of the iJltenlerias Speci l Agent SA Pederal kinau of InTeatlptloD 1'BI woo UPCBURCB wu to14 that hen a bei Ds 1aterTlft ed regardi Ds the loa of 1u1cleu fuel al the HUlmC faclllt7 Apollo Penn971Ta nla lD the late 1960'•• UPCBIJRal 8 14 that he wu rillln1 to be lnterrlewed UPCHURCHsaid the mnmc lnTeatiptlo11 -- · i tloft - -- ··- - ··· - that he h d DO 1 DTOlTement wit or it• aoeel -- ·--- ---oocu-ftt contA4 It __ It - • IU cont 11 •• to N •1t1rt1DUtN o tll4e - cOftd _ ef tfte - --- -- - ·· --- D C 1 SA Tftll - ·- ···· 10 11 79 _ ____ _ __________________ Waahinctoa __ · - · · 1 o 1e · C t• It la tfte -' yow 10 28 79 1_ _ ___ __ u- • ef - - W10 111-2'73 ·-------- · _ II t o - 1 · · ___ _ our - ci 1 - · l · i · F0-302 ' '· · ' ' • R 'I l ·l-77 r ' - ' ' FEDERAL BUREAU OF INVESTIGATION 1 b1 C Oateof ra •Kr•D11o 10 23 19 l or an appointment to e w advised of the official identity ot - gent and the reason for the intervi w rre stated telephonically - he preferred to fu sh and advised as foilows bis fl information Ile is aware of UMEC but has aever J en nor r iet tr SHAPIRO formerly of NlJHEC l V to the plant He recalls the i stigat1on of nuclear material loss NUMEC EP Di '' ot the c s of possible from tir ie I was the Acting Administrator of Governnent which collected data on nuclear unaccounted tor or 'Ut F' as we called it ' 'fQ At the material · t -- · ·· · · ·· · · •A _ -- '•'•'·' - - · · • · · The 'ft 7 data was classi ie 1 and a decision w i s to be r iaf'°' hat the data should be unclassified aod Made u' l ic ' - loss • I • • er iployees lS Detore this was done however he and ot ERDA ooly reviewed all availahle tUF reports ' ' I Of these N'tT EC had perhaps twice as b as other plan g doioh similar conversions recorded For example is the average processing loss ot fEC would have shown losses of perhaps 2$ There were a whole series ot allegations and investigations that fEC had released nuclear material he only 'Id to sol ' ewhere '' These were r iade by others reviewed the results and did no new investigation -' Based on the review -U C I drew the conclusion _ as nsiilt of the old data on MUP' at that no diversion took place The unexplained losses could have occurred at fEC gf their prccessio1t tecboiq11e which ma1 bav ' 10 20 79 ashington ·- e1i • - ---------•' b1C J J • • • SA -------- 11• t - - - ---- - ·-- -- - - n c 1t'FO 11 ' ·'• •--------- c ateo 10 22 79 ------ l ' _ · ·· r- ffO 117- 3 ' J I- A • t caused t e material to be run through the NU1CICfacilitiea two or even three times and in so 2ieJ n1 some would in the pipes ' hang up become lost abroad 1don't fJ think any material moved was diverted NUlfEC handled the material sloppily I concluded have the right rules for trol ' pl no basis for prosecution ' Asked at this in the investigatioy he knowledge of tbis JJI I ' • ' ' · · ' • - AEC there didn't waa point if he had any involvement stated I have no first hand Also he was not approached MEC or the United States Government the NUMECinvestigation by anyone from either about interceding in He has no idea how Mr SHAPIRO paid any fines levied but the rules at the time were that the processor paid for the value of any material lost during production His business telephone is 457-0868 j t · FEDERAL BUREAU OF INVESTIGATION 11 5 79 1 EDWARD B G R retired Major General Joint Chiefs of Staff JCS representative to the Comprehensive Test Ban Talks curren ly assigned at tbe Pentagon was advised of the identity ot t J_ interviewin Agent as well as the purpose of interview General GILLER advised that from 1964 to 1961 he was assigned as ·the Deputy Chief of Staff tor Research and Technology Air Staff U S Air Force USAF - In 1967 General GILLER was assigned to the Atomic Ener y Cormnission AEC in the capacity of Director of til i tary Application 'fanufacturing and Development of Nuclear w apons which by law requires thAt a military officer a sume this position In 1972 G neral GILLER retired but remained with AF C an Assi tant r eneral anager or Sational Security l 4 •• • • I t t t General GILLF R stated that all his AL A SHAI'I tO and t · - EC is based on records heresay information pertaining with knowledge of reporll• arid hand knowledgP r no first General GILLER rnade the following to the f-n ECinvestigation observations I R stated that he could not positively attest that SHAPIRO did not divert the materials although in h opinioa the probabilit7 th version is small eneral GILLF R elt that the material disappeared in e nuclear oaterial conversion process He additionally stated that he felt that t_ h Nl fEC plant was sloppily run •1th poor management ' fl t the fJi General GILLER advised that he was never approached by anyone to intercede in the Government's investigation on behalf of SHAPIRO He additionally stated that he did not know from what source SHAPIRO received Money to pay the penalty imposed OD fEC tor the loss r •• ' __ l0_ _31_ _7_9 ____ Oy __ Virginia b7c I SA _ T '•I loc -e Arl in ton --------O• O t• '••tl let rec mme 0A t 1on o c onch•t •o i f tne · 'fFO 117-273 t• o tatect__ l 1 L lL 7 0 _____ - ra tt 11t • o ooe JC' rl _ • - · - C J02 c IU V 3· 1 · 77 FEDERAL BUREAU OF INVESTIG TION j 1 10 17 79 HARVEYEU °' • '• LYON was advised of the i entities of the n e Mr LYOM as well as the purpose of interview advised that subsequent to his retireoent from the ravy in 1975 he assumed the position of Director of the Office of Safeguards a nd Security for the Energy Research and Development Administration ERDA which title he held until 1978 Mr LYONexplained that it was his responsibility and that of his staff to probe the losses of nuclear Pf1erials at various nuclear faciliti s around the co•ntry - Mr LYON stated that at no ti e did he ever know that all his knowledge of NU fEC and SHAPIRO originated in the various reports of the Atomic Energy Conmission AEC which agency had initially probed • r LYON stated that the nuclear material losses at fEC a loss of materials the reports although fEC had sustained bad been stolen never reflected that these materials of fEC accounted Additionally subsequent investigation for r 10st of the sing naterials with 65 kilo ra rns unaccounted tor l f J ZALltAN SHAPIRO and indicated tlr LYON stated that he C Ile attributed the or us n canagement on the part any criminal intent o of Additionally Mr LYON stated that to his knowledge SHAPIRO obtained the r oney to pay for the loss of the materials through a baak lonn He stated that in his review of fEC reports he was never approached by any individual on behalf of SHAPIRO requesting that he LYON intercede in the United States Government investi atioa fr LYON stated that he has already een queried various House Col 'l'littees on his knowledge of the N1JYEC matter He reiterated that all his knowledge ot SHAPIRO an c waa obtai _ned through _AE_ C invest _igative report_s-'°Gl--l'rl --by · - · · ' • b7c Jlo 10 16 79 - ' -- -- ' - - - _ - • WFO 117-273 - · -- --- --- ---10 17 79 · - ·-- -- - · t• eo ur 1 e cy I ' • - I t • t - J• • · 11 • t • - •••• · I J Q-J02 REV l ·l•77 -· -' ·- ·· ·-· - - ' · ·• 'It ' • FEDERAL BUREAU OF INVESTIGATION 1 _b1c 1to Agents 10 23 79 LES TAYLOR waa advised of the ident es o aa well aa the purpose of interviewt Mr TAYLOR advised that prior to his retirement from the Depar nent of Energy DOE in 1977 he held the position of Assistant Direct er for Security Affairs Division of Safeguards and Security U ' that prior to 1968 at which Mr TAYLORrecalled time he was assigned to the Internal Security Branch of the Atomic Energy Cormnission AEC a team of investigators for to Pennsylvania to conduct an audit of the NUMEC AEC traveled loss Yr TAYLORstated that the conclusion reached by this was that the nuclear materials had not team of investigators Kr TAYLORadvisedr l at he did not actively been diverted participate in this iovestigation f l that he had never met snAPIRO Mr TAYLORsta ed and his knowledge of the 11 fEC loss is based rictly on investigative reports and hearsay infor mation ' · • • · r that he has never been r TAYLORstated by anyone to intercede in the Government's approached of SHAPIRO and he advised that investigation on behalf the did not know from what source SHAPIROhad obtained r oney t0 pay for the loss he - wro 111-213 --- -- ____ ___·- __ _ _ I · 0 J - J -·--- FEDERALIUAEAU OF INVESTIGATION 1 WSE 7ederal 10 4 7• o ••• ·-· '--------- • a former Special Bureau ot Investi1atioa FBI Agent SA of the lllllllllllllildvised that the affair• concernina alleg ot nuclear material from the i'UMEC facility at Apollo Pennsylvania occurred such a long time ago a d that th facts in his - own mind are now confused tated that he was eager to cooperate but that n a airnesa he could not relate factual material concerning the diversion at this late date the - --- ·--· - -- --- • · 1 -- ·· lfhe1t -ia 0 _ 1 0 li 7 9 ____ Wash in ston ___ SA I WFO117-273 x u· F0 -302 Rf·v 11-27-70 - - c· o FICUAL IUIUU JNVISTICAT ICN 9 13 79 b7c Jf I --- -67c adviMd th at ha did not be of of my attaipt ti e 7um 1ls taa uacutin Brmch of tha t l itad St At at Cov-e1rwnt to prevnt eT uq ie IJla1 i n'Ve1tiption illt• thll all•pd cUYer11oa of mxlear aatari al1 at NtM C or to vithhDld my inf• tan Cft C a niinc thi• 11at t a r fna ay hurd and has n bcdy • iJrnatipti'n • • •-•d __ 9_ l_l __ _79 ___ i S 7c J SA ··-------' ar jo c - 1 • ' • T • - 11 ' - • ' ·- ·- ' • ' • • '• 'do• •• • •• le bo O d tr Ow•ect 0 1 de COl l lw1 10 't ' ' oge of 1fril• cs 97-1 ro 111- 3 · · · · --------- 9 ll 79 _____ 'l '0• 1 Pittsrur 9 3°6 · ij· · o' ' • I I 0 d - •I 'oo d_ · fOW '- - 2- • ' T FEDERAL BUREAU OF INVESTIGATIUN l O te 10 2 79 o f Vl Kt1 1110ft _______ JOHN P AJCEA RNE Con iasioner United State• N w Regulatory Col Eliasioa TRC 1717 n Street W sh waa interviewed by Special Ar ent SA regard1nr the inveatigattoa of tbe l EC cor ipa ny _ -iucleu _ b1c 1 iofoniation Depart ent AltEARNEhereafter provided in response to qJ stions of Justice DOJ fle advised nor _can - 1 recall ever - the folloYinc set out by the that he has never oet ZALHA r HAPtRO visiting the co rpany He does not have any factual knowlectr e or as to ny ctiversion of nuclear ue tron lb lo _ -t ' ' l C to 3 to re 1 over nrien t bt l'f b in orr ation b 5 ci o IJ 1 a l lb u - b 1 1iii the only note a t c V$ i·iouq re• 0 s inv stibation w initi ted was 1n orM i t on f as and brief lnP s since l l- Th only in vol verient AlIF AR rF has had ref A rcHnr diversion ot nuclear fuel has bf en with the mr mc c0Mpa11y o tic e he was a pecial Assi atant to Energy Secretary r ·a SClilJ SHI mEn at which t ir e he reviewed in fornat ion ror 1 En DA which is the Fnerr -y esenrch Developr ent Administration and repared reports for r on resanan J JC-f Dt rrELL uid his colleagues In essence he was i s1tion to review report and refore has becor e fairly knowled eable on the subject cntter ' a · AHL R lf advised that he h s never been approached by any representative at - t 'l'ECor by an official of the - -·- c l 10 lG 79 Qy __ _ SA le t• o c eteCI __ cc X'l Ch WFO 117- 73 10 19 79____ ___ - ____ _ _ • I ffO 117-273 w ---- 2 D investigation 1 t ed St t •• GoYernmen t to in terc on SHAPIRO'• behalf in t f ' i- overnml t - Finally AHEARN advised that he has no idea from what source SHAPIROreceived tbe t'lOney to pay the penalty imposed on UUl ECtor the losa of the nuclear material Tbe only knowledge be baa on this is what he ha• leaned frOIII reparta from the Depa rtr 1ent of Juatice J -· - •• - • r • · · • - - - - --·---- - - f FO-J02 r REV -1-77 ·-r FEDERAL BUREAU OF INVESTIGATION - l • b7C I 11 14 71 Oat• K111R P Dl aomm •1-t Dll'eCtor oft_ _ ______ of 8Lfecu rd e• heleullllplstor7 0 1aioa DC 1911 Ea atera A Si1Te r Sprtq 1lar7lud Roca lff office pboN 42T-40ff• n a 1 aten1 S at bl• place of eaploJllftt NCU'd hs aa7 · bowledce be 11 7 haTe of a loaa of auelear f ael tram AUUC COrporatloa'a o P91ul ay1YU1a plant la tbe 19e0'•• dentlfled hiaaelt by diaplaJ of ap c1a1 Aceat credent1 1 er wbi YOlat rilJ fvlliabed tlle followias 1 atonaatioa · DO pollo Penaa71•aa1a'• NUICBC fac111t7 ha a ne•er vi 81ted there ha a neYer illYeatipted the - tter r ha a any knowledp of SKAPIJK '• or M11CBC'• tinaneea '' ' Apnc7'a possible ' • t · BURMBTr ha a h d a eeeea to Def•n DI YATCR reports and becaae a loaa tbrough th1• publication Intellicence of tu JJ About 011• year ago Secretary UDALLaaked for a aaapabot 1A tille of aecarit1 precaatioaa at ti JC JiOC plut la tu lNO'•· Tile tiaal ooaclU8ioe troa till• approxiaate one year atlld1 la tut a diTeraloa of tae1 1 a DOt 0 11 poaaible troa u1 aaJor facility la tbe V a la tM 1960'• lM tal woucl not h bNa detected by tbe tbea curreat NCUritJ - atla eff BUBlCITf cr pla1sed tut physical 8eCUl it7 precautioaa ha e beea 1' '9 t17 baneed ai nce thea bo er bee UN of illhereat ec01Ultills probl1 Jl the proceeaiDs of n11cl fuel acco11J1tlq for the aaterial itaelf 1• still a probl- i J ' - info 'll tioa lnv- ti9lll BURJU'M'could proYide 1a0 pc ait1Te f1rn to thia iJJTeatigat1oa 11 2 79 ion on ________ at Sil'Nr b1C I Cy __ SA __ _______ Spriq Ma rylud haad no Fl •-------- ll 9 79 O t• 1lctat•-- _ _ · 't• • • • ·•• •a · ••• 11T-2fl ______ · r · · ·- - ·· _ J F0-302 IIUV l-1·77 J · ' • ' ' FEDERAL BUREAU OF INVESTIGATION 1 O te of traMQ 10 23 79 olJ'tlOft _______ _ nterviewinc Agent at the Federal Bureau of previous contact made the He furnished - following This his did read Ile has only ade by Ur SHAPIRO As or large It ot report 350 published the FBI heard rur lOrs about -rn1fEC's losses could have been Nt' MEC a measurement they but 1977 contacts were error investigation is lnv9'1 1 on on_ l'-'0 __2c 2 o _7 9 ---·t Washington DY_--'-SA_ August any foreign He is a ware that there is an ongoing be willing to testify phone rac in the R1'F data mna c and would His business about data was in connection with Atomic Facilities Ile never met Mr SHAPIRO nor went to and publish data concerning Nt fEC This ras EG which has been furnished unusually information b7c J I '----------O• DIC 11' 1e WFO 117-273 t• o c 11eo_ a Jl Q l 2 2 7 9 _____ _ - FEDERAL BUREAU OF INVESTIGATION l ' · r_·r T - _ J DDOJI D trectac Of floa 11 1l 7t OaN of traMOllltl-------- Rlleleer sa1'ety C lw1 w a of IPW 11w safeguarda - -t ••••• 7'15 '• Ao Sil _ - lDta t area • DIC • ln7 •llh1a tall DeC 1GX • Specl•l Atyaat SA ldmat11'lec1 b1 self Is' d1apJ- cndeat1•1• wtd cJl aJ antvilJ' tm Snf'w at1 Sprt- b1C I m LtM me Buta1a ta1epbaDa 421 toll m s baa beat • apl oyee of the cwfc BDer9J' Inicm ABC aa4 wi ff 1 ch S Du a a1q t NJW-7 DOA thlll aoo w to DIC i • 1 1a 1975 macn DIIOC vitla nae• ri aiud tha lo d ta w a we of naelMZ' f- 1 loea nar acqQilinad with auy principal• er aaloyeia• of BIid naNZ offic lly aan of• 1Dt o a lou antil Y' 1911 - 19T7• vbm ha began reading lntelltgwe aw ri ea fraa Da1'w rnteJ l tge - qm r y DVJ • which rwp irted dving thia thR • poaihl e _ di veraicn of mx lear 78 DDCU 1 X1 8ft 1a ca a l riding SA · a •• - X' X 1 b7C I 19'7S oiDP 1s a us OD t • 1IJIC m er to •tw J' tha diffa ·•• beb •• eec-urltr - w• at 1lpO lo JlaKS a U 19'0' • _ aoi'8n1 s accaritp _ a Apollo aad s1et J • pl ta la ta J at e 1'1'r a flla at aady 1'U 1cag ad CIM1lllt iw ad ti 9bot t aa U - brac•u• of tbe Snher viaz tne•w la both tha aecurity aD4 aceom•t Ing tw ft all narlur acf 1 i t iea la the 1960'• aayw 4 haw nol• naclur r J dm'iJlg that psiriode PW t wtaly mJt0 S sta1 aa 111C1'8t1• pbysJ a1 II aziq »j •• 7 haft beaa QP3 adad U Dl' oleiy thaft of ba1 --i• be cXt r sly cli Hkalt u tld e poht f J ia aca-1 Dllnllg tba period of tl a -Yi OOB 9- tD for c rltical tel1 the we n- lft1t vbo -r O • or n Ual h7C b7c SA - • l' T III _ _ It anel i ts cent-ti 1tinnea •taaay Pr tba •t a1y Ina •• Ct ta • ecomnw cqtlonl n« ccMluaoN yo CIISUIIIUlecl -tskM ' f'CY o f t M 1'91 It t 1M oro 41 -c to y• · · _ - - · - ·-· - • f I • • · • -- - --- -- ---- - ·- - -·-- • • • l -cYI -· ··· - - ·-- -···- - - - part a B 8 c ri tJ cal Cl Ent a tM said that ha had Mal lo an of zmclear tmJ the 1960'• tha DO cze d azrratUDtic n to hia daring that pc-iode Ba t'arthar st at ad sc mething to tha effect it t iae • e rsw aade an bale rt apprai Ml cl the ai tllAUell implying that _bs J' bad JDilde a gc cd a s raiaal tha mattar '1 lb J _o ' b 1 Lo _i'Xs _a J • MRaS baa mattar DO first s I was ne er Gori% I a 1t offi ciu tQ int erc9de and ha• nc xncwladc w r f fo ° af the aP51C oac had any into at igatica# band lax wledge s ' • er • t- 42 l'C l02 ' R£ I l-1-77 FEDERAL BUREAU OF INVESTIGATION 1 b7c I Cite of traMQlptlo t 11 14 19 ______ _ b BIOBDTA ERIC80lf Chief Pb7alcal S CU-it7 BraDell D1rla1oa of Safeparda Jlfuclear Replatory Colla1N1oa KBC 7915 Za sten AYenue S11Ter SpriJlc K rylud telepbone 42'7-4194 wa a 1 Jate Tie 9d at hla place of eaplo -ent Ntpl dlq UJ lmowlecfc'e he _ h Te of poaalble d1Yenlon of lost nucleMl from Apollo NtJlOC la tbe lHO'a Special Al'etlt idelat1f1ed biaNlf bJ diaplaJ of el edentlala after IC80R Y01111lt r11J pr1'Yided the followina illforaatloa '--f wbr · a a a Colonel troa tbe 0 8 Air ERIQK H retired a Syat USU 011 Octob41r 31 19ft where he ha lyat 1th the Office of the Sec et rJ of DefeA N He weat to work for the old Atoaic Enera 1aa1oa AEC uid later the 1'uclea r Regulator Coww1nioa when it waa formed Poree · · ' ' · ID late 19 5 or early 1978 the NRC ud Depa rtaent of Energy DOB were asked by outeoing Senior eoa 1 ioner ANDERSto do a report oa cUl l 'eat aaferuard• at nuclear plant• erau• aafe • a a they existed 111 the 1960'•· ERICSON pa rtlcipated in some of thia atudJ thia period wa a the first tiae be becaae aware ud duriq of the question of lolfuel troa NUICBC Corporation Apollo PennsylY Dla plant 0a oae occu oa ERICSOlf saw what appeared to be written bliDd aeaor ndua trca General STARBIRD'• office at DOB which accordiDc to ERIC801f'a -or first -Dtioaed the po-ibil t of SRAPIBO aiaappropr1at1nc - Th• 1N110randm1 wu fuel ud di Yert iD« it cla aa1f1ed secret and t waa geraain to ERicsaf'• portioa of the study ERICSOlf copied it ud kept it ill hia file9 for a tiae Sometime later ERICSOKaw an article la the Yuhincto11 Sta r bJ J'OBJf PI Phonetic which had much of the saae 1Dfonaatlo11 u the - rand al Soaetlae after the article ap ill the Stu KRICSOWdestroyed hi a copy of the - randma a ha stilJ - ID 19 1 7 or 1 BRICSOWwaa aaked bJ aeu er• of NRC's Office of InTestigation• uad Audit OIA to iYe a depaaitioa reprdinc knowled1e be had of the question of h• 11 5 79 lnv•1t i t lon on ________ S11Yer Sprln H ____________ 1 -J SA _______ ffO 117-273 Uarylud Fiie •-------- ll_ _ 9_ _'T9 _____ Oate 01cta1ec1 __ _ · TIIII oocument conut 9 nett ecom -datlno nclwloiw It ancs IU contenu ••• not t o oe Oistrltlutecl outside your 1 ncy of tM 11'81 It • tM proo-ty 43 of tlafld _ I • _ to _ • - - i ' -• '· L - • ffO 117-273 T F T 2 loss at Apollo rul EC ERICOONthink• OIA 'a report waa compiled a nd presented approximately a year ago nd Federal Bureau of Investigation FBI obtaill suggea h• a copy' ' Because ERICSON was not associated with nuclear matters whatsoever before he retired from the Air Poree in 1975 he has never met ZALUANSHAPIRO nor toured the Apollo facility He has never been involved in the investigation of missing fuel at Apollo has never knowingly met any employee of NU IEC has no first hand knowledge of the matter and could offer no further information ' ··· __ - 44 l 0-302 __ ___ _AEV l•l •17 E· ' · FEDERAL BUREAU OF INVESTIGATION 1 if 1 biC I 1012e 19 VICTOR GILINSl Y Coanissioner United States Nuclear Regulatory Coanisaioa NRC 1717 B Street N W jiiliashia ton C waa interviewed by Special Agent SA egarding the investigation ot NUVEC GI t provided the following respor · to question• provided by the Department ot Justice He advised that he has never met ZAIJ AN SRA PIRO to visit the NUMEC however he has had the opportunity facility in either 1975 or 1976 He visited the facility in to the U S 'iRC to inspect and the capacity of Connissioner at the facility Thia inspection was look at safeguards conducted with the idea of improving various fa5 1• of that facility as well as others around the country - GILINSKY has no f a ctunl rsion of n first 0 hand knowledge fo 1 he has no information Sr AP IRO may have h of or ' By virtue of being a Commissioner rrtLI SJCT advised that he has conducted inspections and has looked His into various facilities dealing •1th nuclear material role involving the NUliEC facility concerning t fiversioa of nuclear fuel has been only as Comr n1ssioner 'f GILINSKY advised that he has never been approached by any representative of NUUECor by any other official of this Government to cede in the Government'• investigation on SHAPIRO'• behalt J advised that he has no idea GILINSXY finally what source SHAPIROreceived the money to pay the alty imposed oa NtruEC tor the loss of nuclear Material frOIII - • Dy T '1' aoc1 l'T'ler t co a n t anc 1 u onte u - ' __ ue ' rec omrn 10 1 to De c 1 1tr1D t•c 1 a uu e ftOf' I Ot - --_ - -- - - - - - - conch ont of i a - c - - - tf e •• · n 11 tne -5 -- orooartY of t - - -· -- -- -- - a cy -- - - - -- - · § _ F0-302 ···- EV 3·1·77 FEDERAL BUREA' tVf STIGATION - StJ t1ET -1 b1c I 10 26 79 Cate of tran1e1 ot lon _______ _ PAtJL P GOLDBERG Assist nt to Conn1ss1oner VICTOR GILINSrr United States Nuclea r Regulatory Co11111isaion ' 'RC 1717 B Street N w was interviewed by Special Agent regarding the investigation of NUHEC i GOLDBERGhereafter provided the following responsesJl o questions submitted by the Department of Just ice l - · He advised that he has never met to visit nor has he Jifer had the opportunity facility JI SHAPIRO the NUllEC - ZALMAS He further advised thnt he has no factual inforr ation or knowledge of any diversion of nuclear fuel from st fEC to a foreign government The only knowledge be has regarding is what he has read in official reports and this question what he has received in the various briefings he has attended _¢ A GOLDBERG does 4 x YXi investigation He has never had any direct concerning the diversion involvement of nuclear in any fuel GOLDBERGhas never been approached by any representative of NUta C or by any other official of this Government to intercede in the Government's investigation SHAPIRO's behalf -· on GOLDBERGfinally advised that be has no idea from wbat source SHAPIRO received the money to pay the penalty imposed on NUMEC for tbe loaa of nuclear material GOLDB reiterated tbe fact that he baa no regarding the allegations first hand knowledge or information against Nt'MEC The only intonnation he has is from what he has obtained from briefings and various reports provided to the Commission F i le• · ' - - • ' DY __ S cA __ 1 -4h Cate c iu tat lfl Q 117-273 _ 1 0 L 2 4 _7 _9 __ ____ _ · 0-lOZ · -1v 3 ·1· 77 -- FEDERAL BUREAU OF INVESTIGATION 1 ' r J • i - 10 29 79 Oita of tra IC711'CIOft _____ _ LD Vil GOSSICK ec i 1 ector tor Operat1011a luclear Rerulatory Commlssioa NRC 7735 Old G« rcetowa Road Betheeda llarylud interviewied oa October 25 1979 GOSSICKwaa informed bJ 1Aten1ew1a1 Ace11t that the Department of Juatice had 1natruete4 the Federal B lreau of Investigation l'BI to inveaticat• allecation• that tbe NUlfEC Corporation ot Apollo PennsYJ iania and the head of NUIIEC hi th• t HAPIRO - i h Ye diYerted nuc u terial Yiolatio11 of U S Federal law l 'titisSICE was info a e waa beiDI interviewed c cern I UlY lmowled«• he may have regardin1 thia matter wa• - GOSSICXadvised that he ia a retired United State• Air Poree Major Gene 'al and 1• a former Coan Dder of the Air Force Systems Cormna ndbased at Andre•• Air Foree Base near Washington D C WDC GOSSICK advised that be began employment with the Atomic Energy Co1m11ss1on AEC the predecessor to the NRC in 197311 following · his retirement fro the Cnited States Air Poree GOSSICK explained that bia first direct involvement in the 1 nfECmatter occurred in approximately June 1977 At the time GOSSICK was occupying the position of Executive Director for Operations and was instructed to represent the NRC in this matter by giving teati mony before tbe Subcommittee on Energy and Envirolll'Oent of the Coartittee on Interior and Insular Affairs of House of Representative• which chaired at the time by Representative MORRISUDALL GOSSICX explained that the D na1tt waa attemptin1 to resolve the NUMEC matter specifically a nd in general to study alleratiooa of inadequate safeguard• in the doaestic nuclear industry GOSSICX testified before tbi• Coalllittee on July 29 1977 and the results can be found in Hou•• of Representatives publication 95-23 entitled Allegation• Concerning Lax Security in Oomeatic Nuclear Industry GOSSICX adYiaed that he also teatified before the SubCOC IDitt on Energy Ad Power of the Coalllittee on Interatate and P'oreip Coamerce The results of his testimony c ll be found in House publication 95-66 ·· · Regardin1 bia testimony on July 29 1977 C-OSSICXadviaecl tAat be waa QF1 1e1aed fep eing leas ln est t O an __ b1c fI SA 1_0_1_2_5_ _7_9 ____ than _w_a_s_h_i_n_g_t_o_n_ _D_ _c_ _____ ile WFO 117-273 ______ O te SiCUIM_l 0 2 6 7 9 _____ _ · · ¢ 1 T ET - - ··· - -- - T ' - - 7 - • -· - --- --·-- -- - - · ' · -- · -- - • - ·- - ---- - ·-- ·- - 1 - · - • - - r -· ' ffO 111-273 2 candid with the Committee in that he answered a particular question regarding any existing evidence of diversion bT rolfEC by saying the NRC had no evidence GOSSICE advised that in retrospect his response was poorly worded and should have been tbat there was no conclusive evidence'' of a diversion of nuclear fuels by NUMEC GOSSICK defended his mistake by coting that the Coamiission of tbe NRC was without a quorum and as such GOSSICK was acting head of NRC until a new Because of this he was Chairman of NRC could he selected required to testify without having been properly briefed GOSSICK advised because of the oo the NUMECmatter subsequent furor over his testir'10DY a joint investigation was conducted by the Office of the Inspector General and in a Office of General Counsel of NRC which resulted report which has both a classified and unclassified version GOSSICK advised that the report concluded that GOSSICK' s stat er ients before the conni ttee were ''incomplete and not intentionally misleading to questioning stated that rr0ssICK in response T to the best of his knowledge he ha never rr et ZAL A i0SSICK further advised he has nevet' ' tOP DECAISHAPIRO isited the fl n c facility in Apollo J' ennsylvtlnia GOSSICK advised of any diversion governr ient that be has no direct factual of nuclear fuel from - fEC to in ri0SSICK advised that he was never involved aoy 1nvesti at1on concerning diversion of nuclear fuels GOSSICK opined that r eneral Accounting Office GAO may have conducted an investigation into this matter but GOSSICK was never interviewed r OSSICK advised that at no time was he ever approached by a representative of iEC or by an official in the Governnent's of the U S overnment to intercede investigation on SHAPIRO's behalf · · jX b ' · b' J - - - · I · ·' - r - - - ----- - - - - - ·-·- -···- --·-·- - - · - -- _ · - _· · 'J t¥' i --- _ ' · ' --------------·- -- ·-· -· -_ - - _- --- -_-_ _0 wsc WPO117-273 3 information Kr GOSSICE could offer no further L tl - pertinent T T ir 02 lll V l·l• 77 FECER_ L BUREAU OF INVESTIGATION T f 1 - M J If HENDRIX Ch il m Dof the 0 1tad State• Nuclea r Reculatory Coa liaaioD NRC 1717 B Stl 'eet w Yaah D waa 1nterriewed by S ial Agent SA erardin1 the inveatication of the NU liECeonpany HXXDRII provided the followinc respona•• to the queatioAa provided b1 the Depa rtDent of Juatice b7c J infor 1iation a fore verument HXNDRI doe• not have SHAPIRO aay have b _ eox X b - - t E X211DRIE doe• not have any factual of llY dive sion l H DfDRI3b anever D approached by any representatiTe cf or by JI official of the United State• Governaent to int• • ill the Government'• OD 82UPillO'• behalf inve•t11atica b Q b_ 7illally be advised that he ha a 110 idea where S'lUPI r ceived the men- to pay the penalty i llpoaed on xmac for th• lou cf nucl nr -t eriu • • IWf O on _ 1 Jllo lw e 11 ___ la ab 1 rt 00 ' DIC J 1 J ------0 1• Tlll1 c IOCU -1 COf'IUIM -- -0_ _ - concwofW of IM •'- u0 1 l J l J 1 7 z9 ____ c l•C' Jlt_l_ 11 11 DfO- i so • I --i- - • of 1'91 - j ·- - II to i ou • •• • - cy _ __ _ or J0 2 A V l 1 - 77 r FEDERAL BURE AU OF INVESTIGATION - · · • · • • -Mn I 1 l'lt · 0 t• ot 1 1 • o o ______ _ RODtRT T KE EDY Corr issionf r l'nited tate1' Ret ulator r CoPT1issiC 1Dcmc 1717 H Street w 'DC was inte Vicwed hy peclal Agent SA lllllllllllllllrer ardin the investi atioo ot the rti 'fr C company uclear b1C I KDnlEDY hereafter provided th followinf responses to questions provided by the I epart ent ot Justice OOJ cr r -rn1 advised SHAPino nor can he recall that be ha s never rlct ZALlfA ever visitin the m u c facility knowled e or Ile does not have any factual infortlation as to diversion ot nuclear fuel frOr 1 rt HU C to a forei n overonent The only 1ntonna tioa he can recall on tbis subject catter is from what he has read in the nunerous brietic s and reports Ile can not recall which reporMstated elaborate any further on it this nor coulct he KE r rr DYhas never been involved in any other tr at ion concert i the diversion of nuclear fuel He was inte Viewed at one tice regarding the accuracy of testimony of then Executive Director LEF r oss1cx The interview was not specifically on the Matter of diverRion per se but rather covered a wide scope of various sub 1ect ma tters invest JCE NNEDT has never been approached • a representative of NU £EC or by a ny official of the United States Governcent to intercede in the r overnment's investihation on SUAPIRO's behalf •b•r• JCENNEDTfinally advised that he bas no idea SUAPIBO rece1ved the eone1 to pay the peoa tJ Washington b1c J1 ________ It 1no u co tenu 1101 10 M Olnri teo outaioe _ • ICY · · - - - · -- n c ile • 1fl O 111-273 011•a cu1ea_ 1 0 i 1 8 J _7_9 _____ _ -- r- -- -- ·--- ------- i· --- - '- --- - ···---·---· - 1-- · '- · · ·- · • • J--- - - --------- - --- -------------······-0 • -- · · · ·_ t · · · _ - wro 111-213 2 posed oa NU'HEC tor the lo3s ot the nuclear - -· 52 rr'f# i r r -ti v · fiiK IJt ffl fitJ JZB fMf te1- ltDffitiDm9 Il · - - • 1• '1- s -J - I A R t C I i 'i 9 I t i £ f'1 Joi 1K i'1 f liili 1 ii hi il J J I If H ii 'ar ti 1 li £ I fj- r Ii ' f • at 1 E 3 H ·1 i i r '1 11 j Hj r · 1 04 i i If l r u IJ t r • it i i i1 f l· · · it le ir f f Ii f - -1 i -1ii I ff i • r - ij f 1b J C i'Er i - ' · · i i a · f · i· ' r tfiJI i f i IL I · lg -- r tiil Pl I • C i i 1 · ·· _ • j • I · • 'i fl Li ' '' · · - WPO 117-2n i i• sar reu now DOit haTi llig Jllade a11 oC lcaa - ¥ lo ICMBC1 Nr cac9 thay bad decidecl t o nci4 i - I -t tar W tee EM a tqd c 1a tae pabl ie • tmy C'CUl d thm lo icall ' go beck a3II CCDdQct a imiiartigat ica • tha 1a ' ' ' 1 ' 1 I De'NIZ' SBI J'l X oat• the ipcllo f ity mK sl s• oe mJM IC• oa tililS' heard fraa LJjCIA in tl e tT s reg a d Dg haltiDl i ill stigatic a ud ha a no f bmd ca 196 9 the lcaa nuclaa -1 at tha pollo facility YUibd nr · ' ' ' · · · · ' - - 'f ____ Aa an L MA '-rSCR aen MlCZI Cr O o t •Wll ODlGLB' a Off iC'8 C11 capitol Bill W acc w lat ad a 'fQlrwi nc -2a file ca 1 1s aatt ar and ca CDe occas ic a t cl d lQffSCII •S VlJC ha bNa an 1a tlllle s 1 ca • msar li1JID hM a fair 1mc Wl altbqgh i be -a na b aal ---· - a• - -4 1QZ MPCIPllAbe Mar Mr• --r a t5-lii - - - -- l '• 4 · _ - ·• •• - -•• • · - - --- -- -------- -·--- ·--------- - --------- - FEDERAL BUREAUOF INVESTIGATION ·· · - · - · •' I t · · · • - a 4 # ' • • GIIORGSW L1een•1 Wiaell D1•1a1oa KBC 1915 Za atera lTnu• E u - 11 14 ft Olte ----------- CO Ole • Pllya eal lecvlt• Wllelft ' a c atat01 7 Cc 1•1 oa S11TU Sprlac Su-Jlu4• telepboa• 421-4011 • 1DterT1ewed at bl• plac of he m 1 ba - of tbe employment rep rdtas aaJ Jmo ledc• lo•• of nuclear fuel dvt s the 1960'• troa-Corpont oa•a J - e 1Apollo ht Mlf P9D ASJlnA1a pla at si clal Ac'M bf displ J of credntlala after wti TOluatarllJ fU lll abed the followhc lafona tloa deatlfl _ work 11 to Ofht ••Alr F rce B N la I Va rcb of 1979 IIC CORXI B flrat becaae aware of nucle r aater1al •1••1 Jls troa M1J10C'•Apollo plaat It c to bl• attent1oa becauae of a phone call IIC COULS tock late o•• workiD s daJ wbn eo oae elae co1114 be reached to hADclle th• call After thl• pboae call MC co could DOt r-mber who called lt cw to •c CXJltJCI a'• atteDtloa that XRC t171 J1c to write a Nt of rec alattot o co•er future lAcldenta avcll u IUOC Dvlq thla period tbere a Joiat wru41a be as authored l r TBOllP'Iu4 llr IIC OOIKLLof BD•rnReaearcla u4 0 Telopmeat Adlllalatntloa ERDA and General STil BI11D'a · aectloa of the Millt r7 Applleatlotl• Braaeh of BR D IIC a RJJ S thla ka the to the B8C bowe•er asked to brief aeabera ud a DC C C-1u1oaera I memorandum aaJ bye beea addrea he l• DOt aan IIC a RXLB - -- -·--- · of RBC oa tbe statu of tbe aeaomdall preNAt IIC CORXLSr•wb--an Ill' ·· · --- ROWDD wbo tbea cthc Chalnaaa becau• toraar Chalnaaa ANDERihad left tbe O iti 1aloa to becic•• Jab ••ador to forT 7 Cc rn utoner l BJ04RDT aleo pNt11e1at at lie I -- l J ZJ · ·• __ __ _- - UC CORXLS retired froa tb• t7D1ted Stat Au USJ 1 la 1974 aad jol aed the 014 toato En•ra eo-1 1oa UC ththe WBC b Juu 197'1 lfC COR n B had ·- - _ -· • r' - For KBC - - 1 f- a t- 4 ' •a S -9 - • 8l1yer S prtas llanlu4 JJ1o l _____ DO 111-an _ _ _ t _ t -- Jll 9 _ 7 Lt _ __ _ • - f' wro 111-213 l of the situation the day before but that there waa a question oft• si diversion of nuclear tuel f Apollo mnmc c CORELE think• that prior _ l to this brief sion rnbers felt that the r question of a diversio speculation however after this brie ng they felt there was some possibility of the diversion having actually happened HC CORKLB also briefed the Conmission members on the Division of Safeguards' new added measures put into effect since the 1960'a to gu rd against losses Cb cai1 xh b c x @ l '' ' ' ' • ' MCCORKLE explained that the method for 7' accounting tor nucle r fuel was to calculate the amount that came in the 9-l X untof material that of ciaterial came out after processing and determine whether or not a loss had occurred Decause the nuclear material changed forms several times during proces sing a actually nominal loss is expected It was obvious after ev6nts · which occurred in the 1960 ' s that a better accounting system wovld have to be developed This is a question which NRC is still trying to resolve However physical sater un J have been greatly upgraded nce the 1960's to prevent ctual theft ot materials Because MC CORJCLEwas in the Air Poree in the he never met ZALllAN SHAPIRO MC CORXLE did · visit the Apollo plant in mid 1977 when he wa a inspecting physical security systems however the Apollo pla nt wa a then run by BABCOCK and 1'ILCOX MCCORKLEadded he hu no factual knowledge of the incident involving fuel loss under SHAPIRO baa no knowledge of SHAPIRO's finances nd could not provide any positive first band information this loss regarding 1960 ' s lfC OORKLEwas interviewed by URC's Office of Inspection a nd Audit approximately 9 - 12 months previously and gave them a deposition basically as ia stated abovec ' ' • ' - ·· ' · ' · r • • · 56 - - - - t 11'0· lOZ R V 3 ·1•77 f - · ' '' 'J • '• FEDERAL BUREAU OF INVESTIGATIO 1 biC Clllte of t a _lotlolt 11 7 79 ______ _ I b7c l 2 Office of Policy Evaluation Nuclear Regulatory NRC 1717 B Street N W Washington D C WDC interview d in ormed that the Department of Justice instructed t • Federal BuJoeau of · Inve•t1pt1011 P'BI v v NL A to conduct Testi tioa iato the alle -d d1••r•io11 ot b 1 A TJ S J 'f nuclear fue the NUXBC Corporation ud i MORDECAI SHAPIRO President dur na t e 4 O's ZALMAN bas bic ori1inally with the Atomic Enerl'J eo 1aaion CA BC prior to joinins the baa - a total of twenty n• 1ea r• with the Gonnment advised that hia first contact with the mrKEC aatter occurred in 1968 when he joined the reculatory st Prior this he had been associated w th working • first contact with NUlCE waa capacity o writinc regulations recarding control nuclear materials and lea relating to material• unaccounted for VUF be visited ennsylva nia as part of a aix to t elve man inspection teaa During these inspection tours the teaa would conduct u inventory of material• and question NUllEC man about their accou ntin1 procedures the NU1'EC facility at Apollo Pea naylYa aia YU deTOi o idequate pbyaical safeguard• to 1 aSU'e proper h Jldlias of tb -t•rlal In connection Yit the•• iAspectioa tour9 S1UJ I1t0 on two or thr occaaion• and in all caaea it waa at the beginnin1 of the tour of the mnmc plant Tbeae r• introductory tins- in which all• • bera of the inspection teU1 were 1Acl11ded that tbe principle contact of the SJ 'OUP wit e 'a a aacer Pirat Naae tJulmowa KR MUDC'• Kuelea r Material Manacer J ucl8 Lufill ·- - b7C factaal n 1 1 onon_ 1_0 L 30_ '-79 ____ t Yaahi ll tOD It C b1c 1 Dy __ _ SA It and IU c ontenu ------0 te t Clt to N dlarlD ltM outlMM i _ - dlCUtM 11 1 79 ' ----- --- - -- · wro 111-213 - r-· ' 2 _ c1c - a foreign government on no occasion act SHAPI b vX6 b1C 4 A Y did he o Jiiilir t b has never been involved in any investiga on concern ng diversion of nuclear fuel of NUltEC nor wa a he ever approached by a representative or the U S Government to intercede in the U S IA Government's investigation on SRAPIRO's behalf V that he does not know from what source SHAPIRO received the money to pay the penalty imposed on NUlfECby the Atomic rgy Commission for the 1 loss of the nuclear aterial _ · ' ' • ' ' · · • ' • - -7 - sa • • • • • • • • • 'P' • • · • ••• • • • -•• • • r ••• - ·- -- · · · 11'0-302 RIV ---- I l -1-77 FEDERAL BUREAU OF INVESTIGATION 1 10 12 79 O t•o• tr•fttcriet•OO'------- bic I to n orme at t e edera Bureau of Invest11atton FBI is conducting an investigation into that a company identified aa NUMECin Apcllo allegations CAI SHAPIRO may Pennsylvania and owned by liliimN b'i b haTe d1Terted nuclear fuel ROWDEN waa informed 'J that becauee of hi• employmen e Nucle J Regulatory the Atomic Energy Comnisaion MRC and ita predecessor Corrmission EC he waa being interviewed concerninc this matter 'f- J -ROWDEN advised that he cormnenced employment with tbe AEC in February 1958 as a Staff Attorney remaining with the AEC and subsequently the NRC until his resig-nation in June 1977 ROWDEN held a variety of legal a nd administrative positions during his nineteen years including membership on the NRC Commission from January 1975 to June 1977 and Chairmanship of the NRC from April 1976 to June 1977 L ROWDEN' s first tact •1th the SU IEC r atter in the m1d-60's hen allegations were made that J head of NIDfEC ay have diverted nuclear fuel At the ti me ROWDEN was the Assistant General u Administration and Litigation ROWDCN advised that in this capacity he was responsible for furnishing lfa nagee ent legal advice to the Division of uclear Uaterials and Division of lnpsection which at the time was conducting the investigation for AEC of the allegations against Nl iEC recalled that be instructed all the investigators at ROWDEN warn anyone 1nterT1ewed in tbia the ti me to specifically case of their basic Constitutional rights prior to interview were not to take any written and that the investigators statements from the interviewee ROWDEN explained that be took this posture because in a previous unrelated case AEC had gone too far in their interviews without investigators and a a a result eventual prosecution furnishing these rights by the Department of Justice was compromised ROWDEN recalled having a telephone conversation with JACK NEWlfAN a 1'DC attorney who waa representing N'Ul ECat the time ROWDEN noted that NEWM ANwa• critical of ROW lEN's poeition occurred · · ·l·L ··x V • L U fiP - --- 7__ on_ l 0 1 0 9____ ln 'fft t on o c b7 Washington t ______ T · _ ntc Ofttaiftt t t 111conteftU •• not to • - • • ·• ••l •H • ' • • • •• · • ecofflffl-CM1t10ft1 N •mr1111wtMo t- - ' · - I conc1 110 yowr no ot tM nc •• ' • 0 11 11'9' tt 11 UM O-'Y 5q • f _ • 'Y • • •• • •- l i le cs ct•t••-1 o LJ 1 1 1 1 lll9 -___ _ of f_ · - ' lcM • --- 117-273 lQ to you -- - cy · - • • • I wro 117-273 ---- ' --rer a 'din clair in ho ever T urnishinc rir hts a nd takin no written statements that this was not a crimina tter ROWDE advised that he remained steadfast 1 ROWDEN then stated that in the mid 1960's be met in the tobether with a number of senior AEC officials office of HOWARD BROWN who was at the tu e Assistant General anager of the AEC Tbe group met with aenior of HUlfEC to obtain their view of what mana e ent official• happened to the nuclea r fuel• ROWDEN noted that he suspects this was the purpose of the meeting but his recollection on this point is not clear ROWDEN advised that he never visited the S'UllEC facility in Apo l Pennsylvania and recalls never having met SHAPIRO • ' ' ' I ' ' ' Rega rding any factual kl iowledge of ny diversion ROWDE l of nuclear fuel from NUMECto a foreign i overnment said he had no direct factual knowledge that this took place • ROWDE lexplained that the first full and complete briefing 1976 • he received regarding this matter waa in February The briefing came about as a result of a request by WILL M A 'IDERS A r RS who was Chairman of the ffiC at the time and the other cor T lisSion members were concerned at the ti e because there were a nW lber of newspaper articles concerning possible diversion of nuclear fuels Also at the t1Me an AEC employee JAlffiS CONRAN was making broad-scale as well a specific all tions of diversion ot nuclear fuel to the fiddle East ' _fl ' _ _ lbt X Q lJ i o b £ 7 a l bJ X 'I ROWDEN concluded that at no time was he ever approached bJ a representative of NUlfECor by any official ot NUMECto intercede in the sovernment•s investi ation of NOKECOD SHAPIRO'• behalf Laatly ROWDEN advised he had no idea as to the source o f the money SRAI IROused to pay by the AEC for the loss of the penalty imposed o C the nuclear mater1al -J' ···-- ----- --- · - ' C l02 ' ' _ _ - -•· · •••• ' FEDERAL IUAEAU OF INVESTIGATION -1 - nr -· · 4 -t • I i y- · J 1 Date of tran1e1l11ti t 11 7 79 ______ _ bic i l b 1 'i b wa a informed the Department of Justice instructed the Federal Bureau of Inveati ti' D 1'BI to conduct ion i nto the alleged dive aioa ofr bf the RUlmC Corporation ILJld ita r-J nuclear fue President durinc t e 1 O'a ZA1JlAN UORDECAISHAPIRO bas advised that ILAJ information be obtained regarding t e matter derived from reports from other within NRC U S Government a cencie• or other divisions - knowledge ive n a foreign government ·· 'i' advised that on no occasion did he observe an contact SHAPIRO have had with · • b XiX b - that he did not have any factual of nucl ar fuel from NJJVECto llllllllllllllladvised - · mmissioa 1717 interviewed n s beco e C biC · -that he haa never involved ion concernin1 diversion of nuclear fuel nor wa• he ever approached by a representative of NUMECor tbe U S GovermNat to intercede in the U S on SBAPIRO'a behalf Govera ment'a investigation -concluded that be doe• not bow froa wbat source S ived tbe money to pay the penalty imposed on NUKBCby tbe Atomic EDer17 Comliaalon tor the loss of the nuclear material n-1--11o11 on_ 1 -0 ' 3 -0 - _7 __ 9____ t Waabinrtoo q C ir uo 111-213 b1c ' __ S A •1cta1M_ i11i 1 fu111 L 71 IL-- -----0 te I · • Tilll 11 - c0ft1ain1 _ _ ooc ts u _ r«Qm _ to III OIIIUl9utM __ - nor conctinioN _ aeanc7 ol uw II la u• IIF-1Y 61 of If• l'tll • _ te _ - cli't rrf r -·r • -- • - I -i - ' -·- -- - • ·--- --- ---- • -- - - · - -· - -- ' • ·- ·· 0 i · -- -- ____ - FECEJUL BUR AU F INV STIGAT1' · -b7i' _ f 1 ·- - -·· ·- -· tr _ _ _ __9 _2_1 _7_ __ _ laca of employment aa advised of the identity of the interv ew n9 ha wu being interviewee regarding any intomticn he had concerning t liie possible theft o f special nuclear material from the Numec Plant stated that he understood the purpose of the interv ev an ncUc t•d that he had no objection to being interviewed regarding thia matter Be thereafter furnished the following informations 7 11 no personal now edge of any sad that he had absolutely illegal or unethical activity at the Numec Corporation and t at the only information he had resarding the possible theft or diversion of nuclear material was what he had t rary public accounts in the newspapers he for ner Atomic Energy Commission conducted an investigation regarding the missing material and to the best of his knowledge he recalled t at the company a cooperated in all ways with the AEC investigation aaid that he did not see ar y inhibition on the part o e company to cooperate except for the nor rial complaints out of the attempts the cost of the investigation and the •t tc find the missing material · that hi1 private opinion waa that it wou e ex re me y ifficult for s cial nuclear material to have been stolen from t • Numec Plant in that a diversion such as that would require a deliberate removal Be said the chances of this occurring wera from t • plant virtually nil unless a legitimate purchase order had been ___ entered and set out and said that although this is a possibility he does net know t at for a fact I 7'7 4 • -- --1 • __ J 1e ------Cet• S A '• - • ·- - · -·--- ·- ·- --- XX ll 7-3S WFO 117-273 -1c1 _ 9Ll 2 01 L ' '------ - - ·- ···· • - -·- • ·-· '- 'I •• • _ - - · - ---- - ··-- -- p ----- -· - ' _ · -·--· ··--- - - ··----- -- -· - - -· - · - - ' '· -_ - C - I 1D tOt 117-365 WFO117-273 -- ·___ ·- __ · _ - _-_ i - - C· --- -- -- - -- - ·__ - - _ --- ·--- ··· 2 he has alway• felt tha the best way to obta n spec uc ear material illegally wcul4 be a legitimate order through a dummy company He explaine4 that in this manner employees inside of the company woul4 be unaware of what was occurring and that possibly only someone the the highest level of management would know what waa happening He said that a legitimate order through a dummy company would allow the company records to be clear and free of any juggling of account numbers He said that diversion of material from a plant internally would require too much collusion and that there would be too many perso and hence the risk of exposure would be greater added that if this is what has occurred at Numec he wou have imagined that by now someone would have talked or have let slip accidentally the fact that a theft had occurred h7 L · that normally any order for nuclear material th om a company already known to the there would be no suspicion personnel at Numec and therefore He said that to the beat of regarding that company's order• hi• recollection there were small order• from companies who were unknown to the Numec people but that orders from companies such as these required a l icense number from the Atomic Energy Commission on the order He said that there were other safeguards involved also but that being in the Research and Development area he did not get that involved in the•• type of transaction• 1110 -that the only complaint that he were had against on was that their operations very •sloppy• Be said that he had voiced this complaint many time• during his employment at Numec He explained that he felt that the production lo ss•• were higher than they should have been for that type of an operation He then indicated - that as to where the material might have gone he had absolutely no idea He ••id that whether it •went down a sewer or what -- --vaa anybody'• guess but that he had no knowledge of any deliberate diversion or theft of the material -- - 1 · - - · i 63 - -- ----- ·-- ' '------ ·- --- -·- --- ·-- --- ·- _ __- --- - - ' · - - ·-- ---- _ - -· _ · -· ·--- · J _ l - · - - - · - - -t- -·- ' · - a - 117-365 Wl'O 3 117-273 C ae said that he has heard of this since through f newspaper stories but that he considers this evidence and said that he had no personal knowledge - -- -- · -- - -· ·- - -- -- -·· ---- · - - --t '• • - I -· ---- - -- - -- - ·- - · I_ - ' · - ' ' • LL on - rov mber 17 1978 Jan•1 ' 17 1979 The results hereto • - -- _ __ - • I c T3y me orandt U I dated January 19 1979 1 the Knoxville Office of the Federal 3ureau of Investigation F I f 1rnis 1 ed t e re ults of int rviews of CIVJU s L ttac e 1 • - • -' 'X e 117-173 · - December of those 19 1978 interviews and are • r - • FEDERAL B t R E l Ot' 1 VE3Tit 1• n pt7 l'k-JN R1• - s Knoxville • January TIO T nn ssec 19 1979 CHARLES L KELLER l t This f IP tT' orandurn r ev' als th results of intervi w of Mr C T1 P 'ESL K LLF R llssistant 1 naner for anufacturina and Sup Ort U S Department of F neroy - Oak Ri 1 ce · Op rations Oak Ri lcrP T nness e by a Special ant of the FDI Mr KEtLrR was interview' d on Nove ber 17 1978 nec mber 19 1973 and January 17 1979 and this r Orandu re rP-sents a svnnnsis of the three int rvi ws In th interest of clari y the r sults of int rvi w of Mr KF LLCRwill be divi cd into t r e ar as Th first a description of the arran ents under which privat industry could possess nt·ich cJ · iraniuM d urinn thf' 19 SOs th S conc a bucJcqround u Trary and th ire in fcrn a tion rP c-y rd ina t ur ec I ' ' • • • ' 4 • I • f I ' I - · · · -- P' S 3 s l t r r'-ff'ZTS tP T -' Ptr CH P I V 7 1''C rr l'5 RY 'f'•UT ' F 'n i c ' '·5'-tfif T 11 -1• Fir t of all a co any would have to a t a lic nse from ZC to av oh v sical custody of th nat rial To oet a lic n e th v would hav to Cl o rove financial r ource suffici ntly iar to COV r th value Ot th auantity of at ri l th y t 1isr ed o ha C in th ir eustacy at any tirr 2 prov that they w r technicall v capable of han linq t at rial safely a r d 3 conlc r r' vide 3afeouards or th- - aterial to th• P i 1t r- cifi0 c h the cc Hc 1 v i C ' qott n a lici tsc th cc panv coulf th n t r into s v ral tyo s o arran a ts to c tain a i i 7hey coul 5i a l s aqr n with th' i C wh r h · t 'le C woulc r rovil II che -1 na t ri el for which th y w - i1 n 1c-iallv liab l e and hysically a countc bl The co r v n i th qov rr t a f nse char e h as on the val b th aterial or hich t y w r resno sibl and iain f 111 •a c or a 11 · r- 3 t rial lest Loss s w re to be r 1 fo s s -cu a s kno - 'r an a ph· sical inv1 n t- ry was r auir' ci a l a t ar r •1a 11 v with pc1yr n for any loss s establish d s a result t r o ---- ------------ ----- ----- ------- --- -·--- _____________ Jla_ _ J_ _ Thi rlocu nt contains n' i t r co ticns nor cor clu ions cf t B It is t p o rty ft F r an is lo n t yo •Jr aq nC '• It and its con n s ar r C' to b distrib - ' outsid yo r ac ncy 66 - -- --- t - ·- o •• -- I I • ' - · • • - -· I CHARLESL ICELLER Und r the license lease arranq Ment Mat rials could from one licens to anoth r with or without transt r of leas responsibility back to th qovernr ent Thus Company A could 1 noss s aterial under his leas for which he 2 possess Material had res onsibility back to the aovernment from Company B but not the qov rnnent Company A could hold material und r Cl and 2 at th saM time or 3 Company A could receiv mat rial from CoMrany B with transfer of full was approvEd responsibility to the aovernMent if the transaction by the qovernMent In 2 Company B would reMain resronsibl to the aov rnM nt in 3 Conpany B would b r liev of responsibilitv CoMinqlin of materials identifiable to diffP rent lease accounts was not permitted without aqre nent betwP en the lease s and that aqreem nt approved by th government be shipp d - ' · I ------ --- The second manner in which a conpany could poss ss material was uncer a station account sin th first case a license was a prereauisit If the company ent red a contract eith r directly with th AEC or with on of its cost type contractors and such contract required the use of enriched uranium th latter would b orovided as aov rnment furnished and physically material with the co nany beina financiaily responsible for the material but would not be required to and could be allowed som aqreed pay use charaes on aterial upon level of losses before payr ient for losses became eff ctive • The individual contracts forbad cominalina with another contrac ' or with leased aterial unless specifically aareed U On by the parties concerned The contracts qenerally called for · return of material and payment for loss s within som sp cific time frame after completion of deliveries of product under the contract · As work for the aov rnMent and its contractors increas in the private facilities the problems related to seare ation of material by contracts the red tape relative to a provals for cominalina beca e onerous to all concerned so a new arranqement called the Suooly areenent was c veloped for providinq material for use on aovern ent contracts he Suprly Aqre ent the lease aqreement in any resp cts A licens parall lcd was required the co any was reauired to pay use charaes but these were offset throuah the issuance of credit vouchers in amounts aareed upon under ach contract _ the co pany was financially resoonsible for losses thouah credit vouchers could be issued to offset such costs in vhole or in part 2 C 7 Ttn0 IDrT • '· CHARLESL JCELLER The Supply Aqre ment permitted cominglin of materials tro• various aovernment contracts but not with mat rials held under a lease aareement or under a station account unless agreement was reached amonq the appropriate parties It should be noted that durin the time period under virqin and discussion a company could owr source materials depleted uranium and mixin or comin lina with any of the above accounts f or enrich d uraniun could be done only with parties prior approval of concerned Ourina the 1960s scrap mat rial qenerat d at various Atomic r n roy Com ission AEC locations was bid out to private or reco ery of nuclear material from the scrap industry procral 1 was starte by the AFC ne• i1 York onerations The oriqinal office and was turned ov r to th Oak Ridqe op rations office in 1960 In une of 1962 AEC Oak Ridqe ooerations office took over th res onsibility of nuclear material accountability This resoonsibility was handled by the Oak Ridae operations offic from 1962 until 0anuary 1 1968 at Col ' fflission which time it was turned over to th Nuclear Requlatory ' One of the functions of nuclear mat rial accouritability was audit operations cc tried to make sure that th various describ d abov w re kgot pro r What could happen accounts from a lease arranq rnent was that a co oany could shif t aterial to station arran gnent but prior AEC a proval was required This was to insur that a co pany did not nove a shortaae fron an account wh re they had to pay for th loss to an account where they did not have to pay for any losses ccountinq for the nuclear naterial contain d in rocedur' in that there was scrap was a very difficult always di ferencP s i th a ount that a shicper indicated that he was sen in an in th a ount that a rec iver indicated that h' had ac tuallv r c ivP d Mr KFLL ERindicat d that ther was an intricate oroc edur' of w i hin samnlin and analvsis of the various at rials to cone up with a statistical amount of aterial that shoulc be on hand but that anolication of in the early 1960s was not followed to the these proc' dures maximun extent --• f ' 3 68 ·- '-• t - 1 ' t - - __ _ • • '• · A CHARLESL XELLF III NUMEC The first survey ot the uMec facilities by Oak covered the period roN June 1 1962 until Ridc re oc rations June 30 1963 and a report was issued in Octob r of 1963 n on sit@ survev was conducted in Tuly or Auc rust of 1962 The last surveu covered th period Octob r 1 1966 to 30 1967 and a r port was issued in February of September 1968 In the case of Numec when a physical inv ntory was conducted there was difficulty r concilinQ' the physical inventor with what the books indicated should have be n on hand Mr K LI ER said that bll cause Numec haci a poor system books it was rlifficult to trace the nuclear material throuqh the systeM and that the AtoMic Eneray Comr ission could not do a aood iob of certifyina the inv ntori s This situation of ti me and reached a culmination went on for some c riod when Nestinahous souaht to clos out a contract Westinahouse Astro Nucl ar Lab Purchase nrder 59 Pl2674 which involv ci material provicec undP r the second ty of leasinc r arran Ment It was deterr in d that fiftytwo kilograms of enriched uranium were missina of ' Thereaft r the situation b came conf usinq in that numC c indicat d that the T laterial was probably located in various filt rs but that when P- F Cch ck d the filtC rs th y could not account for th loss of th material NumC c th n clai med that th' atC rial was buriC d in various du ns in th could form of waste but wh n th du n was exhi r d th raterial not be account a for r KELLE said that in this tyo of a situation you finally reach an end point b yond which you qo so that you can only say that th aterial is qone cannot and you are not able to p r ove wh re it w nt first i' wll i • I Num--c's nlant was a dirty op rationw in that their procedures for handlin u r anium were very slopoy and th ateria was spr ad all ovC r th facility Mr KELLER said that faciliti s in very illoaical places and Nu c Companv plac d that in ccollo P nnsyl v ania th y took ovll r an old st l fabrication buildina and tried to ooify it to a uranium r cover operation He said t hat he would describ u ec's overall operation as hand to o uth - and that thev were alwavs short of cash He r call d t hat t h y wC re very hunqry for work and that thev would bid on jobs whether they could take the or not 4 69 ' 'I-- f _ · • · ··· ·-'···-· ·· r '- CHARLESL CE'LLER - -l ·- _ - 1 t •f T - With reaard to th plant at 11 Pensvlvania Mr JraLLF R said that the emolove s w r fo er steel worker• and that th olant was basicaliv very dirty He said that he could see very well that a maier r art of th toss was probabl just due to the sloppy ooerations He add d that this in no way reflected on the Numec manaaement becaust he recalled that h was in the plant several years after ORO had the and that the plant responsibility for the Apollo operation was still dirty ' · • · · · ' -- · His qut f elina is that Numec Drobably lost a major part of the material throuah mishandlin and sloppy operations He said that h could not swear to this if h were asked where was but that his opinion was that he just did the material not feel that they were s mart enouqh to divert the material Additionally to divert the enrich d uranium it would have to have been taken out of the plant and Nurnec had a quard force who were familiar with the procedures for special nuclear r aterial Hr KELLE felt that securina a qreat deal of collusio n would have been required to re ov fifty kiloqra ms of enriched uranium It would also ba difficult to anoth r co pany with forged to ship this anount of aterial documents becaus this woul d reauire collusion with someone in another plant whi h would be ev n more difficult Mr l ELLER said that he r aliz that one of th thinqs that bothers a lot of p rsons is that Numec had dealings with foreian countries but he is of the opinion that they were just tryinq to keeo th ir heads abov water and would take work where they could aet it of the problem Mr KFLLER said that a major portion lost through had to do with Measurinq the amount of material plant operations On July 21 1965 he attended a rneetinq at Numec to discuss this probler A copy of r KELLER'S notes of this me tinq is attached to this me oran um Mr XRLLER also Made available copies of his notes of me tin s held at AEC headquarters reaardina this atter on Auqust 5 1965 and uaust 9 1965 and further a meeting with Numec personnel on ugust 10 1965 another meetinq at 5 · 70 t · i t' CHARLESL KELLER headquarters on October 29 1965 Copi s of these notes are attached to this Memorandum Mr KELLElt advised that aa in · most of the discussions durina this time frame was how to set proper accountability procedur s for the nuclear material •I • I ' •• ·t 1 a • • Mr KELLF Radvised that on the balance Numec w s not much worse than soMe o f the other c nies in terms ot loss and accountina oroc dur s at that time He said that durinq that ti e period proc ures and polici s reqardinq had not b en established and at initially an inventori s inventory was conducted once a year and that it was very difficult a Marqin for error when an audit was conducted to establish only one time a year t I t • • Startina in June or 0uly o throuah 0une of wh re a aovernMent inso ctor 1969 there was a proaram initiated was located at each olant rr anaered by NuM · Nuclear Fuel· Services and United Nuclear Inc Thes inso ctors found that in rany ca es where naterial was soilled· the spillaqe was mooped u and the a ount of Material lost was nev r entered on records Thev also found a lar e difference in th t rms of what the shipoer of scrap said was in t e scrap and what the receiver of this sa e material indicated that he aot • The Atomic Eneray Cor riission then set up an obs rver physically on hand whenever mat rial received was process d up to a point where th amount ot uranium in the Material could be Measured The Ar C observers were able to reduce the difference in the amount the shiop r stated h sent and th a Mount th receiver stated that he received frorn ten p rcent own to two percent He said in any cases this was caused Me ly by employee error but that these differ nces when entered OD accountina books could add up to siernificant sums of urani and that possibly some of the a ount of material lost by Sur c could have been a · teqitimate accountinq loss of this type - ------· the term •mat rial unaccounted Mr KELLER then explained for• MUF He said that when a survey is run · samples are taken from the nuclear Material on hand anr that durinq the course of hundreds of sa les b ina taken th re always xists the possibility of rror each tine a measurement is Mace H9 said th- diff' r ncll betw en a physical inventory and book inventory over a period of tiMe will fluctuat around a rnean 6 D '·t 71 - -··· --- - -- --··- h T ·· - · · · · __ __ - - · ' - -- ·-- - -- - · - - · c· CH RLES L • ' KF Lf r R averaoe This i ference oth rwise known as HUF nenerally will show a continual sliaht loss which is to b eY o cted Individuallv this sli ht loss is not measurable but· ov r a period of tiM it builrls up to a si nificant nu ber Mr XF LLF R said that MUF should be a small percentaoe of the inventory plus rec- ipts in and that this a mount beqinnina should be aenerallv less than one percent I e cited as an example one plant which has been run ov r a nurnb r of years of one p rc nt f owever has a MUF of a roxi T1ately four tenths a one or two pP rc- nt MUF over an amount of ten thousand kilogram larae number becomes a fairly Mr KF LLF R said another problem is that laYT n who are unfa iliar with nuclear Material feel that every sin le Material can be accounted for and that this qram of nuclear si Tlply is not so Ile said that as an example it would b' like makina a caY evou can only scrape the howl so much but leav a SMall amount of Material in your that you will still mixin bowl and that if you baked a larqe nunber of cak s over a lon o riod of time you would wind up losing measurable amounts of flour and other materials Mr KFLLr indicat d that durina a surv' y on Sgptember Nu c's ov rall UP was 6 01 p rcenti which was an exce dincly hiqh fiaure but that it should b reMe bered in this busin ss at that that the other coMoani s involved same p rion of time had hioh fiaures also His notes for 30 1966 indicated the followinq fiqur s reaarding epte ber nuclear Material 14 1964 NOTES RE t U l C l RVFY ' Facility Process aterial losses srPTE BER Numec inventory figures 1966 30 AEC udit figures 2360941 2226931 2402426 2222688 5983 5707 5983 5707 P took Numec 's figur' s v_ ' v--·- 7 72 t C ··· ' ' ·' CHARLESL ltELLE t U 0235 76 596 4 4500 32466 25237 u 4 29480 2Pl09 370073 18394 67541 1931 67541 26103 U23S 39702 37072 41369 38518 u 0 0 0 235 0 0 0 0 0 14 46 Lease t iaterial u23s J Losses - 0 U23S u qreement Supply Losses ' U235 AEC inventory showed gain 1667 TOTALS Numee u Inventory Losses MUF •All 0 235 2830123 2292112 I u 73524 0 235 7638 0 0 235 76 596 44506 fiqur s 2813868 2279600 in 7rams of material · - ·- - -- - -- - ------- - figures - 1_______ __ • 'f _ · ·'' - 'r 73 ·' AEC had to accept Nu ec's 4696 28 022 8 '' · AEC - · ·· ·-- · ·· ·· _· ·-· ···-·· - -- ·-· - - · - - - - - -r--- -- ·- • f • • - I I • I I t 1 CHARLESL KELLER - Mr KELLER sunmed up by sayinq that a siqnificant amount of material was mis s ing at Numec but that th re was no way that he could say that it was stolen or purpos ly diverted He said that in his dP alinq with the principals at UMec nd the other individuals r sponsible for th accountin procP dures he never suspected any of them of beinq dishon st nor did then or now that the material was he ever have the feelino deliberat ly stolen 'fie said essentially th probl M in a nutshell is that the aterial was not there that th books said should have been there but there is absolutely no way to say how or where it went P is ooinion is that sloppy plant and improper sa plino probably operations lack of records however that if was the reason for the loss He indicated he was rlanning to steal nuclear material he would use exactly this kind of an operation i e sloppy handlinq and accounting procedures • ' ' '• · · -· - 74 · • · • • t • • ' ' • •' • • • • • • I '• • I• - - ____ _____ - -- ···- ---- - -· -- ------ I A BRF VIATIONSU E'O - C' JCnolls Atomic Power Laboratory LE Limit LRL Livermore Radiation 3M Minnesota Mining and Manufacturing of F rror or Low Enriched Nev Brunswick Nuclear - Price '- · Laboratory Company Laboratory Fuel Services Water House Supply Agreement Space Nuclear Propulsion Westhinghous Astro Westin hous Electric Office Nuclear Laboratory Corporation -----·--- 75 --- - - I • 4 ·- '- ' Visits 7-21-65 at NUMECThru 7-20 midnight weighed 43 drums out of 192 4-12 shift 7-20 weighed 10 Average approx 8 shift 1 of 2 scales out of order and requires new parts Take couple of weeks to get repaired Net weights generally in agreement with Shipper A few outside the L E 's Someof WANL tares arrived at poor1y e g w o lids and tape ' - Weighingby Accountability personnel Only one on off-shifts and he is often required to do other things · · · _ Plan to start processing three dissolution after approx 100 drums are net weighed• t Plan to make test run on carbonate treat ment 7-21 ' lf ' ' - 7-21-65 Meeting with NUM EC HowardBrown O'Amico George Nomkin HQs S A Weber Pepkowitz ewman Schwartz Shapiro NUMEC Schoeder Yates SNPO-C Klein SNPO HQs Keller O Oscar Gray NUMEC Klein outlined purpose of eeting and desire to get detailed review of facts -1 without decision being rendered today Desire to walk through storage facili t George - Su maryof material under contract in question · U-235 Value x 10·3 Net Del as UF6 1087 kgs 93 S ' 12 181 4 Returns Heels •8 93 93 Prod prio7 6 o Rec Scrap Sample 144 3 Various Various Past 4 30 84 0 Total Rets 994 4 11055 1 ·varies 94 0 ave 43 475 7 Inv 6-30-65 Net Unacct 1 4 650 6 Includes 728 filters@ est 48 gnns u17'3ter f 651 U-235 - - r - - - • -- • - - - - - - - Kgs 235 1012 1 · 712 S 133 1 72 8 919 1 40 7 Tf ' • I ' - ' • • • • • - -- • • - - · Shapfro - Questfot ' emains on content of filters J assay Feels more there than ab ve indicates Another area we inventoried that will result in retur of material on which they have paid_loss charges This materfal that has buried and processed as lab waste ' I J • Jax amount downdrain fs 4 kgs U-235 yr max ' alt ' ITTJAE ork per their survey of losses __ -- 26 kgs HElJ processed during period they had WANL order Includes the 1000 kgs on WANL order 3 Kemwipes hr technechian at ave 1 gr U per wipe These had been buried up to approx 1 year ago Have stopped burial 17 088 lb waste buried $125 000 mat rial recovered at approx lQi enriched from L E Mat 27 00019 waste on hand - ave enr est @ 80-90S U-235 or approx $1 5X 106 value of material on straight ratio basis This buried material has not been inventoried neither has the burnables Combustibles in their U mine after the filters NUMEC has paid over 5 X 106 to AECfor 1os s J Did not make knownto our Survey Group- a ti me of recent inventory out of embarrassment Approx 120 Kgs of L E material recovered from burning combustibles for $125 000 Re 48 gr filter nurrter this is average of numbers that ranged from 25 to 100 Filters checked a NBLas part of program approx 1 year ago showed averages of approx 100 grs filter These filters were thougttto be representative of time WANL work was going on Latest data supporting 48 gr number are more recent generation Filters recovered at NBLranged from 41 to 169 grs filter on 2nd batch of 6 2 8 to 46 grs per filter on 1st 6 checks at NBL Re'r1orkingfilters on current basis at moment Whatwas assay of material recovered at NBL Wasassay measured or assumed Doug thinks assay values were measured at NBL I pointed out that the 2 U mines have materials related to all contracts do Mf C- n Q_t just WANL order • Weber - 751 enriched receipts FY 1960 455 kgs 61 612 kgs 62 1105 kgs 63 1435 kgs 64 375 kgs -niio f ' '' - 1 · · · · - · · · j • • 1 i ' • · · · c - 3 - · C ' Active Contracts15 kgs Inv Current Scrap KAPLB W Navy fuel 300 kgs in proces s 1- $ 1 5 X 106 declared losses related to 751 enriched -l L scra that is identifiable was processed in June· 1965 Stopped burial of combustibles in early 1964 Last true product deliveries contract made in late 63 under WANL Dougraised question of whether NUMEC will enter 2nd mine on their records NUMEC indicates that they will but what numberwill be bought A real question as to howmuchof their declared losses have been paid for Navy losses 8 kgs KAFt approx 25 kgs WEC equiv 93% Have arrangements with KAPLand Westinghouse to pay off the above losses by withholding part o payments due on current order order from recovery 228 kgs U returned against WANL Dougraised question of sampling ash from 270 filters asked since 4-30-65 to get the U-235 assay Can process approx 500 drums combustibles year Current generation almost that much Klein - SNPOhas closed out several similar contracts to WANL 3M NFS and higher% of material accounted for Nomkin - raised question of non-compliance with contract isofar as mixing and blending interprets this as not applying to filters as being impractical ilil- L M H--H- J LJJ o ro s s mi xi ng duri ng p roe es s i ng order for Navy KAPLoriginally subsequently transferred to B ' il PWRcore II Seed 2 1400 kgs U 93 with Bettis are the major co racts on hand that will genera scrap upp y gree ent Scrap recovered and returned 60 days after last product delivered If stopped all bidding and pulled back outstanding bids would still have to default on contracts in house and or delay building program for next 6 month to get at cleaning up scrap for WANL Plant booked for next 6 months NUMEC pay losses 8 3 kgs plus degradation on material returned to date • PWR - ' ' I ' • 78 J-_ i -- ·· f Brown -· Suggests f od of grace to es tab 1hh - sf er physfca 1 inventory provisionally 8-5-65 Headquarters Re NUMEC Brown- Info paper read by Conrnission Need to prepare memogiving conclusions 1 Material not there 2 Timeschedule not good 3 what happened to material 4 longer we wait worse situation-considering how current we've been we may be on defensive Then give alternates of solution Rameyconcerned about NUMEC bei ng put out of business Alterna ti ves 1 Wait 30 to 40 days and get better filter inventory 2 Do 1 plus mining of buried 3 Accept NUMEC proposal 4 Go ahead with what is i n Info Paper • Discussed my sending letter to Shapiro saying no material under S A• until they set up internal controls Question as to whether Car mission wants staff recorranendation You think CorTmissionerswill want only alternates presented without staff recorm endatio Brownwill try to get another paper to Corrrnissionson Monday8-9 • Based on Ccmpliance survey - Only 328 drums pails etc can be truly account for An undetermined number were buried in Aug 1963 Drumsvary 5 gal pails 35 gal drums 55 gal Allegedly buried in layers in trenches 20' deep Buried material includes non-burnables and press sludge - 176 drums of sludge in the 328 4 1 1368 88 grams U-235 estimated in 328 drums Have 100 drums sluge plus 400 drums non-burnables above ground U content of sludge 01 to li of wt of approx 400 lb drum Assay S - 30 estimated approx 10 • 8-9-65 Headouarters Metwith Co missioners G M Brown Dick Vinceguerra Re NUMEC Seaborg seer is in favor of billing for S650 000 and then letting NUMEC return material to S A other material as they recover Transfer residues WANL Are concerned about missing material and see need to review procedures · T S ' · · •• I ' • • ' ' · · 79 - -------- · ------ 1 -J r' G - __ · ··'-'' - -- - --- · - · ·· • ' - 5- Concern about AECimage nationally and internationally if our nucle r inater1al control procedures can• t detennine when as muchas 60 k gs of HE U lost No one willing to state an actual diversion has taken place but we are in no position to show that it hasn't 8-10-65 - Duane Sewell f i Technically NUMEC excellent _particular1 · · ·- · -Pu-238 Administratively a nightmare and have ct off doing business $150 000 of Pu- Toss NUMEC alleges in dry boxes These to be sent to LRl 8 kg U-235 loss on Pluto work Maybe due to analytical errors etc but Sewell doubts Returned price of electronic equipment that shouldn't have been contaminated but was with U-235 LRLhas tried to close out contract on Pu-238 for over a year Been several exchanges of letters that have been conflicting Cost estimates have vari e by factors of 5 to 10 8-10-65 Meeting 1 J NU ·1EC Seaborg Ramey Tape Bloch Brown Hennessey plus staff - Gray and Shapiro I Seaborg - Extreme concern about missing material No decision on action Shapiro - 1st production experience on material 1st large contract for mater Didn't go as well as expected from lab work Job drug out longer than expectt Cameto attention during processing that loss than expected so undertook investigation Shapiro described process for making uc • 2 High amount of recycle which tied up scrap recovery facility Couldn't keep up with scrap as normally done lot of cleaning up due to fact people were told to be cautious Shapiro told by NUMEC production H Spersonnel that paper kirr wipes etc not worth recovering After learning losses running high he asked that burial be stopped Then told 1 gr kimdipe 3 kir wipes hr per S opr shift 1 5 kgs U per year from all work -per their check of Raffinate Maximum raffinatc Did check with single channel analyzer and by fluorescence methods Material sa ples routinely and have been since start of operatioQs f _J to hold tank fA' l ren raffinate goes to 2nd hold tank for second check liiQ C SQ Claims production peopl do matert al balance on an area basis at that time but not on process step basis Tr· • ' 1 --· II l - · 'B J Mltl riai - c» - • °balance ch •d in recovery area ' J -· --- 1'1 s r 1 Whendetermined waste had lot of U - stopped burial April 4 and burned After that 17 000 lbs burned Over 500 drums Recovered $111 000 of material average lei U-235 Claim the material recovered was primarily fromlow enriched vs high enriched before Discrepancy between 328 drums and 905 drums brougttto Shapiro attention Alleges 350 drums bought plus 550 drums for purchased chemicals 900 included WANLmaterial and Navy fuel Can't specify No related to WANLonly due to lac records NUMEC responsible for recovery Says they've started Seaborg - Whyshouldn't we bill you for loss and you pay with either recovery material and or money Pay use charges in interim Shapi-ro - To pay or be billed would place them in precarious position on bala 1 • sheet Again sad story of poor personnel in nuclear material control Shapiro claims they have been honest in their dealings Only 2 lots out of 100 of WANL were agreed upon as to content due to analytical '' problems Did balance out to 44 gram difference • ' ' ' · · · • '1 I Shapiro sayi g we have received more material as result of analytical errors · V -- Dragged in scrap problem i e l J 7 0l 11 5068 kgs 75%handled past 5 years per Shapiro Are pulling drums-openedone trench last week and started recovery on Monday Based on monitoring believe it contains considerable material - '1 Corrmissioners asked for recovery schedule Going to select material by eye to gE material Air count off scrubber controls burning i Ramey- can AECand NUMECwork up samp1i ng procedure Shapiro says rea 1 i 558 kgs HEU recovered on scrap recovery past year and returned 6000 kgs L E U 1 3 of 858 on scrap rec contract - Rest from in-house Tape pressed for schedule for rec·overy $100 000 estimate recovery cost by NUMEC NUMEC does not want to show laboratory now Don't have enough dollars fn escrow cover the $650 000 plus what they've been accruing in losses Do go all out means cutting off all businss and put companyin financial jeopardy •' · I 1 l _1f 81 - 7• ' lbarrels buried is estimated from f barrel purchased plus I from Chemicals purchases -nd r RCT Seaborg proposes selling the material to them at this timela h ba1 they recover Shapiro is to submit proposal stating what they'll do fn next year and how • they'll settle at that time 10-29-65 Headquarters Re NUMEC Geor ge - 1963 pit of approx 1400 lb of combustibles processed Approximately 30 grams U-235 recovered@ approx 201 enriched Estimate there'll be about 15 000 lb of combustibles fromthe pit • Approx 8 kgs @ 5 5% from 62 pit • Meeting with NU MEC Brown Klein George Kimball Nomkin Reisch Kreigsman Abbadessa Joe Smith Walker Campbell Gray advised Klein ready to pay based on April 30 inventory and don't want anotl · inventory now Brownhard-nosed on taking another inventory · George says Abbadessa willing to bi ll for 1 1 X 106 but mayback off • I as WANLcontract action then have 2nd act ion to transfer residual invent · C to S A and give credits Transfer to S A to be adjusted based on upcomfog inventory · B rown- _Bill on basis o April 30 Hold S A over their head - i e • no agreem that we wi11 put under S A Gray New an - NUMEC joined meeting · Brown- 1st interest where is the material i e 52 kgs of 93 1Si E forts to da '1 have failed to dtsclose major portion of this ma -te rial Gray - Hopeful that large amount still show up in pits Thoughno real data sup Thinks there' 11 be a or UF after 8 yea rs of opera ti on in materi a 1 1n cracks E Weber trying to put together history of all materia 1 handled to date Thinks SS can be accounted for in some manner•• 75%would remain on UF Brown- Weneed to moveahead promptly with another physical inventory Team under McDowellto start 11-1-65 Take 5 to 6 weeks resident and non-resident ti o I Ten men approx one week then 3 men for added week Klein - Inventory will define quantity of material and 2nd provide basis for bill Brown- C mission has directed re dere-d a bill 1'Jt- Homkin- Re bill Obligation of 1 1 X 106 under WANL b Cov rs erfal un· · account ed for • 1 •e •• lost • material apparently present plus material that may be there -· · · · - ' ·· · j i ' rr -T - 82 • -- · - --- - r• • • • • - · · · - I i - a- w st • • Abbadessa • No alternative but to bill under contract Suggested bH ling for 1 1 X 106 w paymentof $65 000 withfn 30 days- Adjustmen· approximately 60 days of bill to reflect results of physical fnventor y and transfef to S A In event inventory transferred totals more· as result of morebeing recovered the AECpay for added material and place under S A If show up less recovery NUMEC pays for as a loss GrayAlternate to above re new inventory Explain billing on basis of w o prejudice to what happened to material · Not pleading inability to pay Wouldhurt to pay $1 1 X 106 but could do -------- Closed meeting---AEC Abbadessa - Alternate to 1st proposal would be to bill for $1 1 X 106 and agree to bring back any material recovered and returned within a specific time e g 180 days Under this arrangement the inventory would be for safeguards purposes only Brown - Inventory Mondayregardles s Safeguards or transfer to S A 1st Alt the $650 000 2nd Alt Bill for $1 1 X tu ' Inventory for safeguards ·Modify contract to permit return of recovered material during specified period Abbadessa - If pay for 1naterial we still hold title ' Alt 1 1 Contract a endment a Bill $1 1 X 106 b Pay $65 000 30 days 2 NewInventory 3 Transfer to S A the inventory amount 4 Adjustment - as recovery Gray - 1 1 would present so problem in 1 lump Pay up to S650 000 imnediately Liquidate the rest over one year Alt 2 acceptable Abbadessa 1 Bill per contract approx 1 1 2 Prov de cash payment 500 000 - $650 000 in 30 days 83 ·---'k · -- - - · ' - - t ·r t P •• 4 I ' J'' rj J oJrJ t• ' 1 flji 3 Pay si interest r • - 9 - J t on unpaid balance after 30 days Full payment in 12 me 4 Give credit for return of material during 12 months S Titlt remains w AEC Conduct inventory for Safeguards pruposes only c - ' t' i ·' - ' rt · '' ' I ' ' - 84 - - - · •-' -- · · _ -· _ •- _ - • •• I• • '•• · · • ' · 'l• · J · o INVESTIGATION IUUAU _ o __ 1 1_2_2 1_1_ __ - • • · J - - 11-f' y - · 1 · ' r -- - --------o· --------- FlDUAl · _·-- D r r ' ·- - - iI - Ji • _ Mr CHARLESA lELLER Assistant anaqer tor Manufaeturinq and Sucp rt U s Department of inergy Oak Ridge Operations ade available a copy of a letter he had sent to E -lRY MEYERS Rous• Interior Committee A • '' t o I · - 11 --- --- - Oak Ridge Tennessee 1 17 79 JOC 117-365 W nrtwe•---------- _______________ a ·--------- s o -----O•'• t1ib locVffleM ceftto '' ''' reco ne • • co 1011 ••• 11ot •• vlel ---- -- -- - 5 1 17 79 '' -' '----------- 'i 4 ' k ·-- -··· It - - _ Bs - - - ·----- ---- --- -- --·-· - - ·--···-· - - -- I'# co11CT111lo 1 •' die FIi I Is the 1ert of 11 hlle ' 21• 11CJ• • - Oecerr ber 14 1978 Mr Henry Heye HouseInterior Conmittee Room1327 Longworth81dg Washington D C 20515 1 1 - Dear Henry h In accordance with your request I w111try to describe the arrangements under which private industry cculd possess enriched uranium during the 1960' s First of all a companywould have to get a license from AECto have physical custody of the material To get a license they would have to 1 prove financial resource sufficiently large to cover the value of the quantity of r ater1althey wished to have 1n their custody at any time 2 prove that they were technically capable of handling the material safely and 3 could provide safeguards for the material ta the extent specified by he AEC Having gotten a license the company could then enter into st eral types of arransements to obtain aterial Theycould sign a lease a9r ent with the AECwherebythe AECwould provide them material for which they were financially able and physfcally accountable The co pany paid the governrnen a fee use charge based on the value of the material for which thy were responstble and paid full value for any materfal lost Losses were o be paid for as soon as nown and a phys1c 1 inventory was required at least annually with paymentfor any losses establ i shed as a result thereof 1 - t 'A -- ij Underthe license lease arran er ien t inaterials could be shipped from one licensee to another with er - ithout transfer of lease responsibility back to the goven1ment Thus eo oany A could 1 possess material under his lease for which he had respons1bflity back to the govern Tl nt 2 B for whfch he had a ffnancfal and property possess r aterial from Cor ipany responsibflfty to Co anyB but not the government CClr 'pany A could hold A could rnaterfal under 1 and 2 at the same time or 3 Corr pany -iit' - -7 I' t ' I ' ' · 86 '· - · ' • • - • • ' • ' ' ' · lI I r Hr Henry Meyers 2 ¥PS ET· 4' ' r Dlced er 14 1978 · receive material fromCompany8 w1th ransfer of full respons1b111ty to the gove nt 1f the transaction 'as approved by the govemnent In 2 CompanyB would remain responsible to the 9ovemment 1n 3 of materials CompanyB would be relfeved of respons1bflfty Com1ng11ng identifiable to d1fferP nt lease accounts was not pennftted without agreement between the leasees and that agreenent approved by the government The second manner tn which I companycould possess material was under a station account As fn the fii-st case I license was a prerequisite If the companyentered a contract either directly with the AECor with one of its cost ty9e contractors and such contract required the use of enriched uranium the latter would be provided as governmentfurnished materfal with the companybefng financially and physically responsible for the material but would not be required to pay use charges on material ind could be allowed somea reed upon level of losses before paymentfor losses becameeffective The individual contracts forbade comingling with another contract or with leased material unless specifically agreed upon by the parties concerned The contracts generally called for return of material and payr entfor losses within some specific time frame after completion of deliveries of product under the contract • · As work for the govemmentand 1ts cont ractors f ncreased fn the private facilities the problems related to segregation of material by contracts the red tape relative to approvals for comingling becameonerous to all concerned so a new arranger ent called the Supply Agreerr ntwas developed for providing material for use on govemmentcontracts The Supply Agreer entparalleled the lease agreer ient in manyrespects A license was required the companywas reQu1red to pay use charges but these were offset through _the issuance of credit vouchers in arr unts agreed upon under each contract the companywas financially responsible for losses thcugh credit vouchers could be issued to offset such costs in whole or 1n part The Supply Agreementpennitted comingling of materials from various goverrrnent contracts but not with materials held under a lease agreer ient or under• station account unless agreement was reached amongthe appropriate parties • I It should be noted that during the time period under dfscussfon a comi any could own source materials virgin and depleted uranium and mixing or comingling with any of the above accounts for enriched uranium could be done only with prior approval of concerned parties of the Special Nuclear Materials Lease Agreementand Agreenientsfor C-Op1es Supply of Enriched Uraniumfor Conversion and Fabrication are enclosed -r ' 87 I l - • • -- I • · C C ·- Jp Sf' Ml HenryMeyers - December14 1978 As on can discern fr Offlthe fof f 9o1ng heperfonnance of a nuclear materials audit was a complexmatter in order to detennine that all materials were properly 1dent1f1ed by type of agreement coverfng the11 and particularly to see that losses were properly assigned The problem was the same at all private facilities The situation was brought to a head at NUMEC whenWestinghousesought to close out WANL Purchase Order 59-NP-12674which involved material provided under the second of the above types of arrangements At that point rrni EC was faced with the alternate of retun1fng a considerable amount of enr1chE duran1l n or pay1ng the governmentfor the material The rest of that story 1s fam111arto you t hope that the above will be of help to you fn understanding the mechan1s sof enriched uranium supply to private industry luring the 1960's If you have any further questions please feet free to call Sincerely o · r r · Ir 1 ll• rlG • Charles A Keller Assistant Manager for Manufacturing and Support t1S CAK Enclosures As noted above - - I · j -- - - _ --- 1 ' l -·1' - •• w aa -_ -- ·- ----- · d - _ - _ _ _ I --·-- • --------· -- - · -' -- · - - - ·--- -- -- - - - - · o FEDEi AL IUIUU INVESTIGATION 1 22 79 o _______ -- · ··- _ • _ - x · - f _- t J r r J SEC Mr CHARLES A ELLER Assistant Manager tor Manufacturinq and Support u S O partm nt of Energy Oak Ridg I Operation• m de available notes taken troll his personal diary pertaining to the NUMEO s11rveya ' 'l ' ' - 1 1 • I • - --- - 1 · _ '• · ----- - __ i w ___1_1 _1_7 7_1 ___ •• Oak idc Je Tennessee 1 - • JO 117-365 c_ 1 ----D•te • ctetN_ 11 1_7 _7_8 ____ -13_ _ I' • - • • ' a es taken from Charles A Kel ·s Diary t 1'rA s 6-20-62 - Lea Keller c- -NYOO has authorized pro Ps fll£'- - payment to Nur £Cto tune of $30 - 35 000 J r as of yesterday • Wants Contracts Legal and Finance contacted they have any questions to follow up ' 0 0 to see i ' ' Files are a mess Not filed too well CheckSec Div to see i f we'll have truck in NYArea around July 1 Not a single contract has been completely closed 7-18-62 - Oblinger - NUMEC Re scrap to referee sent GAT-7composites 8 9 are low in U7 grams diff between NBL NUMEC Wouldhave to recomposite - - 129-NBL 122-NUMEC- Will refereeon 7 only• · 9-14-62 - Forscher Nerva Fuel - contract material UF6 - 645 kgs UF6 Re need for feasibility report Told him we would follow NYpattern also that I would prefer holdi ng shipment until OKis given on report 9-24-62- Fred White - ca11ed re Nerva job at NUMEC - advised him that 11 cyls of hex were shipped last Friday to NUMEC Wehave O K'd their processing to uo2 based on feasibility reports to NYOO but are holding up on O K of further processing until they give us a feasibility report which t hey will have in draft for review by our people whowill be at the plant 9-26-62 10-3-62 - Forscher Re feasibility report on ERVA fuel Report 140 Advised hfm that would be sending an O K today on this as well as the normal material - r J ·r-J - 2-10-63 - Forscher - NUMEC - _ -- - - Called about 10 p m and advised they had small fire in SS vault about 2 p m 2-9 Persl outside of vault heard a pop like large i- firecracker in vault Upon_9peniC10 90 · _· rlnn ' - - -- -- -- - - _·- - • • • - 2 - t ' ' ' ' ' of small explosions resent ling small firecrackers Persl put on face masks and using meta11ex powderput out fire uc2 powder for Astro producing UCz Cause traced to In process of under NASA work uc2 fines not meeting specs are collected and stored approx 1-1 2 kgs U Mix w aq Al N03 2 to control rate of oxidation Bottle caps not screwed on tight so that CH 4 fanned can vent Have polyeth bottle been handling this way for long time w o trouble Think some one tight cap and a bottle blew up 18 bottles in vault 2 apparaently broke As soon as uc2 exposed to air it ignited - small firecracker like explosions Heat charred somepolyeth bottles located above bottle that exploded u3o8 and below t D il so that when attempt was made to move in all 5 bottles containing 8 8 kgs bottles broke spilling contents · · · FE U involved All station material Currently washing downand cleaning up area No radiation hazard No disruptions to other plant operations Did not require fire assistance fr001outside Fire out and clean up started within 2 hrs Somepersl entered in regular street clothes which were picked up for decontamation Forscher wants to knowwhat reports are requited Told him I would -- check and advise Story on Pu contamination due to leaking package Approx two and one-half years ago NUMEC got contract from NYOto dev technique for decontaminting and recovering precious metals NUfo£C asked for v s J- - l v - samples and NYOO sent them 14 crates of material 91 --c _ - 3 - ·i ' ' - · _ of which NUMEC opened two Process developed indicated cost of $150 000 to recover the materials NYOO turned decision contract was complete but NYOleft crates of material w NUMEC Recently · ·· NUHEC asked NYOO to take stuff off their hands since needed space N -- safd ship to BNLby cormiercfal truck NUMEC asked ff couriers needed NYOO said no and advised that material was packaged in accord w ICC regs •• but asked NUMEC to put steel bands around boxes which was done Shipment rehandled several times between NUMEC and Jersey City - · ·· · where leak was discovered Left NUMEC 1 4 and arrived B L1 14 Check of leaking package revealed 15 gal carboy contained fn fnterral box surrounded by other box Carboy had ceramic stopper taped fn but not wired Outer box marked to show upright position but · -· · - · · · · · · · ···· - had heavy bracing at top that might have been mistaken for bottom Thfnk someoneup ended in handling and solution leaked NUMEC had never been advised that Pu solutions were in shipment Traced back to being a strip solution from Englehard who had decontaminated some Pu from Hanford No one has pointed finger at NUMEC on this They hadn't opened package so looks like original shppper did a poor job of packaging Question in my mind as to why NYOO didn't specify exclusive use truck Forscher said after incident it was learned several millions of dollars of precious metal was in shipment 2-11-63 Smith Heacker L Keller Marshall Range Are any bio assays being run Wasthis in vault with steel racks Is there any forced ventilation in area did anything get airb ' into neighboring plant area - Ma hall will advise Doug6 c u-ge I will advise Woodruff ·Range will alert PI after I talk to Woodruff 92 · ·-· - - Cf · · · · - - - - - · · ·- 4- 1 I 2- 11-63 - fo rs che r - fl 'u I' • 7c l r- No public press releases l J t '- E ''u f£ ' At tfme of fire dumbwai oor to 2nd floor open so smokewent to 2nd floor where further sucked out by ventilator Roof around ventilator 2 snow on roof Checked outside bldg no contamination All persl having urine analysis not knownstill ventilator - read 600 cts min 100 sq ••• Total area to be decontam1nted checking Will have to clean vault roof around hallway upstairs lab area Scrub water from bottle storage area ran 1 gr U 1 2-11-63- RCArmstrong deal Sapirie wants me to ta1l Milt Klein in Finger's office on NUMEC 2-11-63 - George Kleg DODand Dick Smith Advised him of fire NUMEC Copy to George and Nelson Send TT 2-11-63 Forscher - Called me at home- NUMEC shut downall U operation 4 p m today Figure this is best way to keep from tracking stuff they get decontamination done Thinks they'll around until be able to resume about 4 p m 2-12 In checking got some reading of 1000 - 1200 cts min In vault they have shelving downto 50 cts noww 300 - 500 on walls whfch they plan to paint 1st 8 liter of scrub water from floor ran 8 gr liter w 8 liters 2nd washing had 3 gr liter Urine samples have been sent off for analysis and r ts no r·· ' pSt expected for several day NUMEC has held meeting to review procedures to see what might be done to prevent reoccurence of this type incident - ·-$' ' - No plan to dissolve up UC 93 - Y · - - -· -- • --'-- 7 · - - · · I 6· • • L ' j •• - Mp s't6 1r -· • • 5 • A t • scrap promptly in 350 gr U batches and to re r sufficient as soon a hey g to make a run ap prox 5 Kgs Forscher says they'll makeI run at least once per week under present operating levels Asked Forscher to prepare a report on the incident and give us a rundownon changes in procedures which they plan Forscher advised that Navy people from Schenectady and PNROO plan to NUMEC Friday for a nuclear safety review on handling of Navy core mat Brodsky Reaves and Scott were names that he mentioned as coming Forscher thought we might want someof our people to be there Told him I appreciated notice and that I thought we'd want copy of any repc they made NUMEC checked shoes on all persl leaving plant today and none exceeded · · cts min 2-12-63 - George Kleg - · · • ' c • • • Read me a note that he had wrftten on the NUMEC M few minor correc Also advised him of latest info from NUMEC -··· 3-11-63 - Bob Ohlinger - NUMEC Re 31-0 and 2SJ Switched to Lea n ' 1 3-11 - ChuckRosen - NUMEC Invoice 8-61 • Have no record of being paid ' ave rec' cancelled check Werequested payment of$27 768 against $32 275 bid 3-14-63- Forscher- Re fire loss Quantity est 500 Astronuclear job 1231 and Bettis job assigned equally to the two Haven't recovered yet as Is in a mixture of Metal X powder Fred will be here next week Tuesday or Wed to discuss various programs All urine analyses were O K on persl involved in the fire ---- - - - -- -- -· 94 - c ' 5- I I 3-21-63 • Forscher Re heels credit 1n hex cyls Washington has puif 1 P Df on no credit on AECmateria 1 Wouldlike to send in proposal that they could send back heels and pay us for cleaning Told him to go ahead and send in Objects to the withholding of full paymentuntil all material is out of the plant Hold 51 of value of material or not to exeeed 501 of contract price - - Suggested approach through AIF Discussed proposed supply contract Cleaning inside of shippirg containers Need to clarify res onsibilit Interested · in the status of 2nd draft of holding contract • - •• t c• • ' t ' ' ' · ' · Need to provide procedures used to analyze returned material • Desire for partial payments as material is returned • 5-8-63 - Forscher Bettis wants complete fe asibility report under provis i ons of contract they are writing with NUMEC Fred doesn't want to do Advised Fred that we woul d make results of our surveys and feasibility reports avai lable to other interested offices Also noted that AECPR permits use of license approval to cover contract work Save Forscher reference to revised AECPR which allows latitude on H S provisions i e - · makes reference to requirements for licensing as being binding 5-9-63 - Beltram - NUMEC ·'A· -- Dissolving of batch they were going to start · · _ ·- - tomorrow Nowfind different alloy and character of scrap Check SC 06 SC 11 '' - ' ' Problem on giving 7 day notices to start another lot 40£ 2 day job Lot 40-C U-Zr sub assys cut sections some have Ti metal spacers some 95 ·-' • t • - 6 t 1nstr lTlentedwhich means added Cu A12o3 graphi e -· 0 - Westinghouse Ches Told Beltram we'd examine need for advance notice on processing - to see if this could be made the exception rather than the rule 5-13-63 - Forscher- - · ' '' · · · · · · · · ·- 5-13-63 Kushner- PNRO contract with Bettis Suggested that they use provisions Re NUMEC of article Se of standard lease agreement to cover 6-7-63 - W B Knight - Bettis Purchasing May18 ltr - from NUMEC- Feasibility Report 42 - Bettis want$ copy of report on individual reports ' ' · 96 · - - · _ - - r_ · - - ·' ·-- --- · · · ' ---- - ··· I I - - 7- 7-18-63 - Fred Forscher Re 7401 changes on health and safety Explained o te tfon t e from here on out we'll be concerned only in respect to our ORO - contracts NUMEC unhappy about dispersion of responsibility to manys Fred wanted to knowwhere to complain I suggested ·rrerrmel also that Fred might want to get AIF to register jections Advised Fred that while DougGerb gehas said he is only interested in the security of the material behind this is a feeling that he needs essentially all the info in a feasibility report to detennine that security is adequate Bob Fasulo - PNRO 9-3-63 _ Going to be forced to get depleted metal Navy funded order Wants to know if we could furnish metal Told him we could do Wouldassume Re agreement NUMEC and Cheswick on processing scrap • • t ltr • NUMEC indicated agreement on method of processing Cheswick says no agreement 5-30-64 - Charlie Luke- NUMEC NUMEC wants to modify the Y-12 foam glass container and get acceptance w o test Want to use 18 gallon drum ICC Spec 17H What spec drum did Y-12 use NUMEC will use full drum height approx 32 inside length Plan to uses• Sched 40 pipe 18-1 2 long with pipe cap ends Luke would like opinion as to likelihood of this cutting thru the foam Y-12recognized this problem in regard to buttons NUMEC plans to use for ADU Grosswt of pipe loaded is 42# Luke worried ' about pressure build up fn a fire that would cause ADUto break 1-Qi _- 'I 97 down fN0- _ _ · r- - 8 - J _J nr Luke wants to knowhowcompressive strength data s l° pu d and howit can be interpreted Will a 2• x 2• x 6• high piece stand 4001 load Luke worried about closure on even the Y-12 drum Is planning to suggest an angle iron X in top to hold foam in place and inner container X would bolt to drum sides asked ea to follow thru 5-19-64- HaycockFinance and accountabili ty as we do leased materials Mixed under Chicago 2 symbols 1 AECmaterial 1 for leased plus - supply - latter report to OR Wewouldn't survey but furnish ·'· the material info 7-14-64 - TomMorton NUMEC Re services at NFS Wants us to witness operation for them or review records Suggested the use of Ledouxand Co to perform this type service • ' 1 8-10-64 Fred ForscherDiscussed problems related to 190 22Hand 408 Asked that he look int c - their claims and that we discuss further He agreed to do 8-13-64 Fred Forscher Wants to hold up discussing questionable lots until visit Agreed on 8-24 -- - 9-10-64 Fred Forscher- Re 42L and 42N Haven't overshipped on S but have overshipped on - - quantity Feefs they should be permitted to do 1 can do o as · material 2 could do under supply agreement 3 thinks station and lease material s h u d c o e 98 - Jt · r J t 1-S r ' · · · ·- - _ · · · ·· · · · · · i - - ·- · '' · -·-' ' ' - ·-- - · -· '· -' '•' · ¢ -· - · ' _· ' ·· · · · · ' - 9 - 11-12-64 - Shapiro - NUMEC Re visit of Stimpson on Monday Don't feel TomMorton has proper background for long tenn Thinking of putting Les Weber - 1n as Accountability Rep with Falsco doing the f book work as in past Fl-a scoout with flu until next week Wouldlike to delay Stimpson's visit for about 3 weeks Until Falsco gets back and Les Weberget familiar with set up Marshall agrees to delay until week of 12 7 or 12 14 - 11-30-64 Michael Male NUMEC Re 11 23 64 on testing containers Question re release from responsibility waiver under 2 under Alternate A Worried about gov't taki ng title ·-'• '• ' · ' _ - - ·- Got Zachry on call ' and not getting paid Agreed to a revision of the wording to reflect that waiver applies only so long as gov't doesn't take over J o patent c ' v 3-31-65 Dick Yates - WANL P 0 on NUMEC 9L62 for 400 Kgs later increased t 4 vt -6 kgs of product NUMEC due to technical difficulties ' created a lot of scrap requiring 1086 kgs U to be furnished 100%financial resp Inventory use charge 4-3 4% beginning 90 days after delivery of last of product 10 30 64 date of last shipment WANL rec'd 762 kgs U as product Also returned 70 kgs of material -- recovered scrap to AECand this accepted 253 kgs U still · outstandin I book balance P O says all scrap to be recovered within 180 days after final delivery Apr 28 1965 is the crucial date To be returned as u3o8• NUMEC says they can·meet the Apr 28 date and wants to transfer materia 1 to Supply agreement 99 II c'JI - Tr'f • c rf fsed JV 4-' -10- Yates that we could tJ take material und f pptce t C v tf #'- · - o d cided in best interest to gov' t to do I pointed out that they should consider this avenue carefully since ft appeared c _that NUHEC could get a windfall by delaying payment of losses J IJ Expected losses MUFa approx 35 Kgs at moment Told Yates I _- I __ Y thought a good physical inventory should be made before material put under Supply Agreement in order to determine what losses have occu to date Transfer Book Inventory and then adjust to physical with pay on difference to prevent any windfall - 4-5-65 Haycock Re close out of WA NL order with NUMEC Gave him info on NUMEC holdings of enriched U Gave him some of my views as previously expressed to Yates last week ·· · -· · · · ' • · · • - ·· • • • t 4-5-65 Haycock Re NUMEC survey told him last week in M y · - · 4-6-675 DougGeorge Re NUMEC survey George wants to send some people to participate to ass us and also provide first -· hand knowledge Suggesting Lovett and Solem Told him this would give us no pain · Suggested that t'eug's people try to get NYOto shift their Pu survey if we go up end of April 4-12-65 Gutman NUMEC Havecouple more drums to be be tested for low assay Originally agreed to test 4 drums for shipping Tested 2 drums that didn't -'k quite comeup to desires Wouldlike to send in 2 more and have tested week of May2 Ship in a week ahead of time Do sametests as previously · '• ·· · · · - ' T _ -·- --- - ··- · ' · r- - - C - 11 ' 4-15-65 Walt Scheib ReNUMEC - WANL job -- and shift of residual Agreement Hqs has agreed to let them go S-A route Will transfer what is determined on hand at time of survey Will pay for losses to WANL Still trying to find moneyon p back scatter gages OKto do talking but don't spend S's until we get 4-20-65 Jim Lovett Re mixing study funding in FY66 Are they going to be footing it all or are we going to support on a sharing basis Told him this wa' something they need to work out with Bard nsince we have not been funding under development funds but as separate activity with Prod Div just making a total available He will check out with Barar 4-20-65 Thielke- Oiscussed situation re WANL and their apparent desire to put resident inspector at Y-12 Pointed out we do not buy resident idea Also pointe needless junkets Normseems well aware of problem Said they wouldn't go along with resident unless we concur Trying to get visits under I control but having internal problems Agreed O K for me to talk to Scheib 4-22-65 Hibbs- WANL yesterday wants to have weekly Tuesday meeting to review program in lieu of all the visits we are now getting Wehave agreed to this to see how it works out First meeting next Tuesday ' · ··· '·'····· Advised him of my discuss i on with Thielke and plan to discuss with Scheib• - -V 1G1 __ J - •'- ---- -- - -- r ----- • • -· - ' r-- · - r- · ·- --- ·· - - - - · ' - 12 - T 6-10-65 Dick Yates SNPO-Csomewhatunhappy about recent award of scrap contract to NUHEC WANL Scrap due to fact they were having collection proble w NUMEC Wanted to knowif we could hold up award Told him we had no basis for such actions - Someonewould have to get NUMEC on disqualified bidders list and this might be extremely difficult particularly since recently awarded opr co tract for a10 facility 6-16-65 Haycock WANL-NUMEC contract Interested in getting feport out 6-25-65 Scheib - RE NUMEC - WANL Contract ' Sending a bill based on our survey numbers Will modify bill if we change our position on amount of material in fi 1ters 6-28 65 Kimball - SNPO-C-NUMECWANL situation Re shipment of scrap on latest contract Hqs CMMM indicating continuous surveillance shou cJ f-1 ' J ' ir r be effected Bill is S765 000 on old WANL contract '- Y -I'' ' Klein has switched position so that transfer to Supply Agreement ' can be made before bi 11 is settled Kimball raised question of splitting into filters f t J ' · #' Z and other - the latter being uncontroversial material Marshall - we proposed increasing filter v 't- transfers of material to 48 grams based on recovery data ·· 'ur letter to effect that filters content for 35 grams NUMEC Les Weber answering -t o'-c c '1 i Q c r v contain all losses 102 --' ' r ' I • · ---·-· -l _ ' ' ·· - 13 - ps rffT 7-6-65 Haycock NUMEC-WANL and NUMEC - OROscrap 'K 8111 ta NtR-IEVu day for approx $750 000 - Discussed witnessing of scrap Told him we could probably do w1th help and having my people work up a plan Wewould follow only thru dissolution and sampling which Haycockagrees is enough Including sampling of residues Haycockasked my views on submittal of WANL invoice - Told him not matter of my concern but that I thoughtif a billing is in order they • · should submit This could bankrupt NUMEC per Shapiro so getting Bloch on board as there may be political 7-6-65 DougGeorge - Re NUME-WANL deal ' cJ '1f t ' ' ' - cl ' I G • ' ' ' cS ' ' -' - pressure Milt Klein has discussed billing with Bloch Bloch has said not to send until HowardBrownhas reviewed Doug has discussed with --- Brownwho has been asked by Bloch to review and prepare info paper to Conmissioners Looks like it will comebefore the Corrmission Advised Dougof info on plans to process scrap and our thought on how to cover 7-8-65- HendersonNUMEC unpaid invoices of $53 748 33 plus $172 62 interest over 30 day delinquent days over for 14 invoices - range from J to 95 due Value varies $22 50 to $31 392 75 7-9-65-DougGeorge Bloch not sympathetic to a book inventory only on NUMEC Can't ignore physical inventory that we've taken ' · · ' ' Bloch raised question of covering the scrap material moving in for processing Thinks should be done D - t I _ • ' ' I J I DougGeorge proposing 1 Sal1'4 11ngfilters on rando p basis and recover at Y-12 to get data 2 Riffling and sampling ash ' - of filtel 'S already asked 3 Doing Alpha scan 7-12-65 DougGeorge Meeting tomorrowSNPO Counsel Controller etc •• to review staff on NUMEC lots of corrmentsre inventory Supply agreement etc 7-14-65 DougGeorge Hilt Klein's office would like me to be at NUMEC on 7-21-65 7-22-65 DougGeorge Very little done after I left NUMEC to NUMEC drafted in HQs Confirming agreements Letter going from WANL ' ' ' It • • t made by Shapiro • 1 Write me augmenting 7-2 letter to me from Les Weber ' ' I stating precisely what added inventory exists that should be I ' ' included in inventory i e 2 including mine 2 In above letter or separate letter probably to me a proposal for verifying U content in Mine 2 - 3 Confirm in writing probably SNPOHQagreeing to 8 3 Kgs loss and to pay for a1so to pay degradation charge on material returned to date Total approx 145 000 Will not pay degradation charges on material still in plant Will probably keep status quo on material in plant and not transfer to Supply Agreement - 1- 'f 7-23-65 Jo ore I - Jim Genty acting for HowardBrownasked that we develop answer- 1 Are we withholding any payments to NUMEC 1 2 Do we have any outstanding clalll1$• 3 r4 s· · ' a Amountnot in dispute more than 30 days ld b Anountin dispute · Whathas been past experience on NUMEC handling gov't furn 1shed SNM4 2-14-63 Memofrom Vinceguerra establish policy on full financial responsibility prior to that what loss factors did we allow 7-26-65- lea Keller Discussed 7-13-65 letter from Weber to me with Forscher on 7-24 lea stated we would like letter from NUMEC addressed to questions raised in our 4 1 64 letter Forscher to talk to Gray and may let matters stand per our 4 1 64 letter Forscher feels NUMEC being given cheated by not being credit for upgrading even though in conflict with contract tenns and conditions Have gotten bugs pretty well worked out on processing NERVA dust Rate low 2 kgs U 24 hr day - hope to get to 5 or 6 kgs U day within next 4 days Residue wil 1 run abC1Jt 2%of U charged Product from furnace so1uble in acidified water Riffle split samples -10 drums as special lot Samples to NBl today Still only 86 out of 192 drums gross weighed inner contents through 7-25 n - _ ' - ' 10s _ ' -- ------- -- --- -· i · ·-· · ··- · _ · ' -16 - 7-28-65 RCArmstrong ' - --·- - · '- ' • - ' I • r• • Briefed hfm on NUMEC sf t uatfon both WANL and scrap 7-30-65 -Doug George Re NUMEC Letter to Corm1issionenrote to me has change - - eliminate next last para in transmittal re reply from NUMEC Another para fo11ows las t para • Just as this memowas being completed we learned that ORhad requested letter from NUMEC That letter nowbeing studied Wewill advise Corrm of results of of our analysis and will i ndicate possible alternate courses of action Wantsus to prepare answer to Shapiro letter Klein Nomkinand George• ' and discuss with HQ j' Wants us to look at proposed steps outlin d in memofrom Brownto Corrmissioners 8-2-65 DougGeorge Letter went to Corrmissionerson Friday on NUMEC at least got to Bloch ---- JCAEhas concern on where did material get to i e safeguards end of business Not just interested in gettilg $ eed to knowwhat happened to materi a1 George understands that JCAEstaff isn't going to intervene on behalf of NUMEC Take best action we can to protect the gov't without being too vindictive · · · · 106 ···- - - _ -- ---- -·--··-··- · P --- · -- ··-- -· ·-- ·- - r _ I - 17 • ··· · ·tr ' · · · · · · 8-3-65 Haycock Meetingthis afternoon of staff of NUMEC Re h mmy p·roposed letter to Shapiro Position reached at meeting this afternoon by Later call- How a rd Brown 1 Letter to NUMEC detailing background and our position of reasonableness Question material being there Going to submit bill for - WANL Will pennit trans fer of remaining material to Supply Agreement- 11 based on physical inventory Brownfeels bill should be submitted since Gray has indicated they are solvent · ' Transfer would not include buried material Base on 48 grams filter 8-6-65 Haycock · · Page 2 of letter from NUMEC bottom next to last para re 17 000 lb waste Material recovered hasn't shownup on inventory report 8-6-65 George Ral'Tleywants shipments from NUMEC to foreign countries • 8- 11-65 Haycock 't 0 - ' J Gl o ' s-t' r In view of statements by Shapiro that OROSurvey Teamindicated control SNM atNUMEC was greatly improvedand that we were happy vs 'tr Al ¢ u- my statement that we were not satisfied HQswants statements from at close of Survey Statements our personnel as to what they told NUMEC · - -- are to be to best recollection ' - •• 8-11-65 DougGeorge - ' J •• ' _ I Hy position on transfer to Supply Agreementand fact that position taken early Inventory - - 1 _ Yesterday Shapiro indicated ORwould take on Book --- - · - - - - -- 107 · - 18 - Told him we never indi cated we'd take but would consider ' · · ' ' Gray to Klein to Brownto Doug- Noone brought up buried fl '- 1' _ inventory on survey because someone• from Oak Ridge told them nOt to report Tllft ' Ofd we ever te 11 them th ts 7 To whomhave we made shipments on S A when an' lsa r- _J 8-25-65 - Les Weber - NUMEC Re accountability survey report Wouldlike to have detailed discussion with our peopl e on what is needed Told himrurproblem in great part due to fact you can't follow materi al from one job to another internally - 943-65 - Marshall NUMEC not likely to open pit dug in 1961 since think that not economic worth while Digging of 1963 pit required removal of 30' of overburde at least 40' deep to botto m of drums The 63 pit has at least 2 active springs This pit has a lot of WANL residues About one-half done on hand picking the 62 pit Trying to better deter mi ne what was buried in 63 Thi nks 10-20 kgs may have been buried i n carbon filters that buried shouldn't have been These used in connection with plasma spraying operation NUMEC has good set of records established w internal control documents that are being used r fechanism nowexists Manualabout so written To be complete Jan 1 1966 9-13-65 HowardBrown Re alleged state ment by Marshall to Shapiro to effect that no need to do further recovery of buried material 9-14-65 Haycock Weber Farrar Johnston Fullam Gunderson Reed McAlduff Marshall · · ··' · • '• I pointed out we'd not been contacted by field I ·' r - s FT · · · · · - · • · -· 1Lc Haycockreferred to rl 19 - identify who 1n field has raised question HQSfeels S-R differences important in control of - Th feel we are trying to eliminate S-R difference Haycockrecognizes that we are trying to get resolution of S-R differences rather than eliminating Dougcan't read it this way Mental block I pointed out we make adjustments of S-R differences for 10 grams or even less on U or U-235 - Haycockthinks we are blackmailing shippers whenwe bill for small differences Farrar say Campbell doesn't want to change from what we are doing Receiver put on records 496 units and put 4 units in a variance acct along with approrpriate dollars I raised quest i on of where we receive more than shipper shows Haycocl · ·· ·· · · · • · • says that we would not permit shipper to correct Havevariance accounts i n 01 02 and 03 only Under present procedures our Finance can not ignore receivers data 9-21-65 McAlduff L Keller Reed Marshall Re request from LINC Lou Swallow for O K to shift contract residues to S A -- Hae and Lea told Swallowwe are reluctant to do on BPIObasis i e • • a book inventory -- He countered with proposal to pay for losses as best can be determined I pointed out bind we are in with NUMEC and that if we pennit UNC to shift to S A NUMEC will cry foul unless we are careful To transfer to Supply Agreementneed to · ln -- - - -· - ' ' • -· - - l I ---- 109 -·-- r · · •_ ·- - • 4• • ·----- - -- --- --------· --· - -- -- I · • - 20 • ' 1 Identify material as to origin i e contracts and relate to BPID Be suspicious if quantity ' equal · -' Hust sample and determine actual U and U-235 content of material to be transferred to best their ability and to our satisfaction • 3 Contract administra t or of contract from which material is transferred will have to be notified of quantity transferred so that he can bill for losses and or degradation - 4 Material transferred to S A must be remarked to tie to an accountability number under S A and internal control between this acct and other internal accts under S A • ' 9-27-65 DougGeorge Sharpiro met with Brownand Trerm1el9-24 Shapiro agreed toq en the 63 pit Nothing will be done on billing on WANL order until we get more da from 63 pit 9-29-65 Outten - Insp Div - Re NUMEC - Gave him memorandum of info as I knowit relative to WANL order Appri sed him of 20 kgs on Bettis order Suggested he contact Klein George and HowardBrownfor latest dope previous correspondence etc 10-6-65 Haycock Re putting sar e one at NU MECto witness excavation of buried material Started digging Monday Have hit watl ' at 2 gpmfrom face of pit ped dfj ing to get a shovel on job rt ·t · O'Amicoto be notified when shovel arrived · · · Stop- I pointed out that this appears to be a contract matter and suggested that perhaps WANL could cover Pointed Cf1 hances of our people being J ···- - - • · - 21 - - · ' claimed as accessory to the fact before duriI dispute on howmaterial was handled i e ere fs a · because we failed to suggest any changes in procedure or action we considered questionable to our doing inventory of facility noted that this might be prejudi l at later date I also Pointed out we believe that once they have recovered material that complete physical inventory is necessary to be sure they haven't robbed Peter to pay Paul Raised question of subsequent witnessing of processing and need for t '- ' 'a -v or- '·' · ' ' ' schedule to carry straight through other than as fill Agreed that they will try to get interest there too in to cover since there is an 10-7-65 Haycock Brownwant's overall loss figure on NUMEC comparedwith AEC ' operations if possible If they don't find 52 kgs in pit what do we do safeguargards wise lQ-26-65 He1i ardBrown Meeting Friday with NUMEC fish or cut bait Gennantown11 a m Brown's office 11-1-65 DougGeorge Discussed need to set up accountability for WANL residues at NUMEC in such a fashion as to prevent any windfa11s to NUMEC and control of shifting material to other accountability etc 12-7-65 Elkildsonon which safety problem exists Shipment to NUMEC basic problem of who is responsible in transit Navy order Part of Reed in on deal since hi been talking to Brodsky · · 111 - -- - ··· • •• • •·· -- r -- __ _ _ _ - - 22 12-17-65 DougGeorge · Questionedhim concerning statement on Page 7 of Survey' · ·· - f trip report concerning cylinder of UF6 that was returned for foreign customer and we rejected although material had not been touched Told him I recalled no such incident story mayhave gottn started •l Doug at a loss as to how such Suggested I check McCluenand Jasny to see if they ever rememberhim making any such statement 12-7-65 DougGeorge Rebol doesn't rememberany case of UF6 being returned and not accepted even though not opened I suggested that Rebol take steps to alert our foreign representatives to scotch the story if they hear it 2-9-66 Haycock Armstrong Marshall Re info for HowardBrown• 1 List of industrial e g companies holding material and what they do full fab intermediate processor 2 List f shipments over seas 3 Volumeof material handled by processors - total and by year 3-21-66 DougGeorge NUMEC situation - 2 teams visited two weeks ago - 1 of Sec Insp 1 of Nu Matl Control and DIA Interviewed past and present employees and to look at overs s shipments This per JCAEdesires • I 1 interviewed manyof current employees including 2 non NUMEC employees previous Later visited and interviewed 8 or 10 more previous employees Couldn't conclude that any diversions took place but all agreed operations were sloppy Could detennine nothing on foreign shipments _ fromfflords D th lt would 1--· t - indicate skull duggery 112 0 rJil _ _ _J _ · - ' - ·- _ _ · _ - ··' · _ - _ - _ r - -- _' - - · · --i ·-- - · - 23 Our next regularly scheduled full fledged survey 1s scheduled for Sept 66 Dougthinks we need to do sooner mainly to see whether th are taking action on reconrnendations Dougsuggests June Reconnendations of last report have been given fnfonnally to Nlf'EC - v · Doug fsn't sure whether they'll be sent fonnally but believes that actio 1s befng taken Ed raised question as to who is reponsible to see that recorrmendations are followed up on surveys of mixed fac·ilities Dougwants us to follow them the sameway as if we had done the last NUMEC survey Records on privately ownedmaterial - Douginterested in our vfews Staff paper recently revised to extent requirement for fonns used for leased material to pri vately ownedmaterial even though some data are not needed• 3-24-66 DougGeorge Re overseas shipments - UF6 we retain analytical data and spectrographic plates Hold the sample for umpire 60 to 90 days 5-9-66 Cal Solem - Controller's office Re visit by Lovijoy who said he had rumor that NUMEC wanted -· to transfer material from a NYcontract to S A Value $202 848• 5-25-66 Dick Yates Bid opening 800 kgs 235 for NERVA plus 4 options taking up to 1600 kgs Question of any restrictions on NUMEC Told him that we have to get O K from HQsfor financial limi ts under S A Suggested he let us know if NUMEC is successful bidder so we could get a limit from HQS Bid opening 6-3-66 6-9-66 DougGeorge Campbell has fi nally talked to Doug e NUMEC situation _ confusion exists Gave Dougt he backgrouli J ---- S ---· ------ O u s some i · · ----- ----- -- - - F' - 24 - - @· Dougsees in same light as we do and will try to get Campbell to rescind last para of his 5-23 meno 6-27-66 Vlnceguerra George Sap rf e Armstrong ' arsha lh J r _ t J T JCAEinterested in what AECis going to do to prevent diversion of material under ·private ownership to unauthorized uses financial responsibility Wantmore than and criminal penalties Getting new look at control using industry representratives making survey study on group Be an ad hoc co1T1T1ittee 7-5-66 SamMcDowell Re fire at NUMEC in 1963 - Read him excepts from my diary notes of Feb March 1963 concerning the incident Told him we had no one on the scene investigation had financial responsibility since NUMEC and there was no danger to public 7-29-66 Jim Lovett NUMEC Re close out statements Raised question of credit for upgrading Told him we'd fought this battle before and answer was no Personally I saw point of credit for upgrading since for every downgrading there was upgrading Wegot this recognized in contracts after we took over but couldn't do anything about early NYOcontracts Told him he was free to again raise question but I doubted anything would be gained 8-15-66 Staff Meeting - Division of Contracts have held up processing of NUMEC extension for 3 years 9-1-66 McDowell Re NUMEC survey Weekof Oct 8 is O K with everyone Bill Gilbert • Cal Solemwill be available to assist Sammay also be available part 1- r of the week 1 ·1 1 T GAOmaybe here week of 9-12 to go over work papers 0 lpre ious NUMEC Asked Ed Marshall to follow up with Mcocr11 on details of timing Tete __ ·- - - ··- - -- ----· ···- -· ---- -- I - 25 - -7-66 George f ' M T Stewart C E Kranz · · icott Ed Angle wi11 be here 9-12 to go over NUMEC work papers Supposed to go to NUMEC with two fran HQSon 9-19 This gang will probably go to NFSat Erwinat some later date - Dougthinks may be in October 9-7-66 Jim Lovett Have 700 kgs 3%U from Westinghouse job private lease Dissolver meas Wantto add 100 kgs of 6 - lOS scrap into it for processing like to transfer - Would 1231 material to this material Station to lease Told him that I would see no objection to transfer of 1231 from station lease if done on basis of dissolver solution measurementsand if WANL agreeable • t ' ' 9-7-66 Dick Yates Discussed the NUMEC proposal on 1231 material being blended with lease ' I • • Lovett had talked to Yates yesterday Did askedLovett to put proposal wr1ting to WANL Told Dick that if WANL and SNPOagree to the proposal that they should specify the sa pling procedure and whether duplicates are to be taken and analyzed I have not done anything on this since I feel it is a WANL-SNPO problem 10-20 66 0ougGeorge - GAO Kelley raised question about way we do invento1 Preparation of stds - Told him we are working on this 10-26-66 Dean Crowther· -GAO Re NUMEC Want to visit re inventory and controls be along 10-27-66 Dean Crowther TomStewart - GAO TomStewart will r¢ s T Discussed the background-0n nuclear mat mgmt problems at NUMEC ·' GAOplans to issue statement of facts to JCA£with copies to AEC on 11-l and have a close out meeting w N on i 11-10• I I - 26 - I pointed out situation not improving and only way I thought it could be resolved quickly was to stop flows of material but that this would · probably bankruptCo GAOpersonnel noted same deficiencies 1n NUHEC inventory as we did · I pointed out that any action would have to be overall basis with full AECHQSbacking I noted problem of long stand 11-10-66 George - GAOmeeting with NUMEC on 11-18 to present statement of facts on NUMEC There's possibility that an ORrepresentative might be to attend 11-14-66 Ray Sullivan - NUMEC samples 48 received from NBL On 1st priority can't get answers by Decerrber1 Will take 160 man hours of overtime to get by that date Earliest 12 15 without overtime Take 40-50 hour Estimate 10 man hours s·ample Have only 3 pee overtime to do by 12-9 that can d o 11-14-66 Ralph Jones In DougGeorge's absence told him about problem ' w samples at GAT He will advise Doug• 11-15-66 Dick Yates - SNPO-C Re return of material at lower assay than furnished Should it be cut o when there is a U balance rather than U-235 balance Read him clauses o· • the Supply Agreementcovering blending Art 5 Told him I thought one rrwJStlook at contract provisions re blending contractor should be held to a U balance Generally I feel that th In NUMEC case however we have a special situation Pointed out 2 ways to handle on U-235 originally Let NUMEC ship back against 1231 based furnished with charges for degradation cut off 11-22-66 per Yates for a11 services degradation and loss - -r - - to ass f gn i This would complicate hardling of to • _ ·--·· ' ___- __ 1 e what jJ · -· ' ·· - - 2 7 - _ _ The first o -···awovew ile perhaps arguable b · wyers is probably best operationally and would get AECmost $s 11-15-66 Ralph Jones T Re overtime on NUMEC samples Dec 15 date crit1ca'ffor report getting out If we can live with Dec 9 and st111 get report out O K If wen anything to O K overtime Dougwill provide 11-17-66 Lovett • Apologized for letter on filters Wants to transfer some enriched U from S A to Station for CPFF16 6 kgs u3o8 93 15 Contract w ANL PUand U Carbide development job Told him I saw no reason whywe coul transfer and to submit a transfer document 11-29-66 George Kimball and Dick Yates -NUMEC Nov 23 date ' · · ' · S239 000 check'to Westinghouse 2 scrap shipments 1 on 11-17 and l on 11-23 #77 11-3 178 11-4 #79 11 17 #80 on 11 23 · • · · · Wouldlike assay and analysis ASAP Explained problem on other samples for inventory 11-30-66 Anderson Been told would have 6 added samples for NBLby GAT Take about 60 more overtime hours Roddentalked to Bates who told hirr to send to Portsmouth Advised AndyI was unaware of this Will raise overtime to 100 - 120 hours Advised Roy of SNPOrequest for data on NUMEC returns against WANL con· 12-1-66 Yates - order they cameout 68 kgs over on U and 67 kgs under on U-2 On WANL - - Collected slightly over saoa ooo 12-1-66 RoyAnderson - Re added 6 samples Bates has said to Sullivan that not to be done on overtime basis · · · -- · - r ·- • • T' ' • - ·'I · • - -· · a 1 - i · _ - 28 - 12-7-66 John Vinceguerra - · f y M - Re NU -£C - meeting with J 'A ue n on billing for use charges Told him Gundersonbest man to answer these questions He asked me to have Gunderson call him back right away Asked Carl to do 12-9-66 Dean Crowther Told him we had no quarrel with facts Re statement of facts on NUHEC that might be helpful in discussion Ed Marshall had made some colTITlents 1-10-67 Vinceguerra NUMEC has problem with PWand want report scaner if possible would move d3te ahead as much as we can by resulting earlier Agreed 1 receipt of data from NUMEC • 1-13-67 DougGeorge Re where we stood on NUMEC survey Advised him we'dqua-iedthem on ' · - added info Dougwill be glad to come downarid review• George Kimball called Doug Nov 30 report reflected 11 kgs under 1231 per OR NUMEC indicates they are holding on their books until they get receivers O K on shipment a loss 16 kgs U and 2 7 kgs 235 against 123 NUMEC has declared to WANL 1-16-67 DougGeorge Interested in costs incurred at GAT Y-12 and NBLon analytical work on special PWRwafers 1-17-67 Dean Crowther- GAO- HQS- Discussed status of NUMEC report GAO report got same NUMEC haggle as ours 11-18-67 Oscar Gray - NUMEC Re the data they sent in on sample analysis data Told him I had not completed review of our analysis of their letter when I do 11B He wants me to c ' - 2 9 - -rk · - 1-20-67 DougGeorge ' I lhtnk we should send TT to NUMtt'J kf wbether data sent by Lovett fs the PI as of 9-30-66 and that their books will be adjusted and that the 12 31 66 report will also reflect · Also how about corrections Lookat prior rec e and f Say •unless inventory was found fn error• 1-20-67 Les Weber Raised question of statement of inventory as of 9-30-66 - Wed HomeWed night Go up Mondaj 12-20-67 Vinceguerra - HQSTuesday NUMEC night 1-20-67 Jim Lovett Sent TWXconfirming that data on wor sheet are their figures 1-23-67 DougGeorge We're supposed to meet with GAOtomorrowbut fs delayed to 9 30 a m on Thursday - so I go to Washington from Apollo Dougtaking 8 10 NWfrom Pittsburg to Washington 1-30-67 RCA-Vinceguerra wants para or 2 for white paper to cover the inspection rights under the base Winkles to work with McAlduff 2-2-67 George Sending us letter on next NUMECsurvey saying it's our baby but that they'll help - -- Asked him to check with Vince regarding howto treat NFSsurvey report 1 e • like NUMEC and by whom particularly since GAOlooked at NFS 2-20-67 Jim Lovett Re survey scheduled for April 1 but maywant to delay until 4-15 and · · ·' - complete PWR looks like ·4-15 - 4-20 would be completion Wouldlike 'c r W S Xr i· · - 30 - to schedule April 29 and 30 Told him I would have no problem o t1onally but there might be polit probletnS Suggested that Shapiro might best talk to Vinceguerraabout dofng thfs Jim talked to George who thought idea not too bad Agreed I would discuss wi th Dougand call back 2-20-67 DougGeorge Re NUMEC inventory shifts Dougwants something to go to Vince from Shapiro before he talked to Vince I talked him into touching base with - Vince on how he'd like to see this played · · · • · - 2-27-67 DougGeorge SANhas had contract with NUM Con Pu for Sefor Reactor Have approx• - 3 5 kgs Pu in combustibles that NUMECcan't process Doug has witnes would like to switch alpha scan which has -10% - 401 L E SANand NUMEC to a lease acct Unaccounted for of approx 1 072 kgs on job which NUMEC will have to settle for Are sendi ng us copies of correspondence for review before we make up our mind 3-6-67 Jim Venne Re Pu at NUMEC from S job Trying different effort - going to check on having recovered at Isochem or Dowbefore putting under lease agreement 4-12-67 Lovett Questioned whether we've received their letter on inventory Told him we had and were planning to meet with him and Les Weber on Monday 4-21-67 DougGeorge Another draft of GAOreport bei ng mailed to us alteration letter - NUMEC on Tuesday Appendix 3 is principal Want to put ffnal bless nn ''20 J • • - - - ' '' •·· -- _t he GAOreport s _ ·· ·· t • • - - • · - - 4 _ - 31 - _j ' CheckAppendix 3 and changes in body resultfng therefrom fMtJ f Doughas no real problems with draft 1800 kgs l 4-25-67 RCAnnstrong Marshall Henderson Re NUM ve ry --- I 60S 1080 Kgs u 11 15S III 1 SS ± lS 10 8 30S 540 5 4 270 Kgs U 35S 590 11 8 270 Kgs u 30S 540 10 8 1800 21 5 4 54 55 Kgs U SS - 10 8 ' - 4-28-67 Les Weber- NUMEC They are going ahead with inventory regardless of fact that we aren't t Wasn'tsure just what is to be discussed at HQsnext week _Told him I'rr not sure either other than an effort wil 1 be made to detenni ne when NU M will have reduced the l of their inventory carried as scrap of details of Shapiro - Vince discussion I was not awar Noted that as a guide under original proposed categorization we expected inventory good to approx · · '• 2S their latest proposal was approx ± 6%our compromisewas approx ± JS Based on this info one could say that we want their mater to point where inventory could be detennined to approx - 2 - 31 5-22-67 Hansen-PNRO Re Bettis order on PWRwafers Have 760 Kgs U as scrap Wonderedif we would take under S A agreement Told him we aren't interested There's a year time limit in Bettis order for recovery of scrap Told him this was better check than we had in S A 5-23-67 Leo Oubinski Re resident inspectors Wants to have his field people check with inspectors when they visit Wants to assure that our people are free to talk to Leo's people NUME C 4-24-67 found high U in waste tank - recovered 1400 grams U-235 NUMEC thinks they lost 2 JOdown river at time N tJni _ Recoveredmateri a 1 ran 6Si U-235 121 I · '· 3 -- · -··-- · -· -- · ·---- - '· - ' Si · - grams · -- - ---- - - ' j ' - _ - 32 - •' Knewmaterial came in within 4 or 5 hours slug Tank was emptied Wasn't a seepage but a IXE TMfJ S Inspector found from anal al info on effluents approx t week after 1t happened 6-1-67 Ralph Jones Talked to Geo Murphy Murphywants AECto do inventory and pressing for a date His approach is samples taken by NUMEC are their's and therefc no good 7-5-67 Zal Shapiro NUMEC - Re resident inspector job Concernedabout proprietary info aspects I suggested they send us statement on more disclosure that they'll 1ike signed Raised question of liabil i ty in accident Told him our man covered unde Gov't Employeesbenefits In case of damagecaused by our people they NUMEC could resort to Federal Tort claims Act Concernedabout what manwould do and whether he was involved in H S aspects and safeguards but would be used for any other purposes where applicable 7-5-67 Jack Newman- NUMEC Re non-disclosure agreement Plan to TT to us 7-7-67 Jack Newman- NUMEC Inquired about TWX Advised him of status · Donshould talk to Shapiro on Monday Shapiro - Ewin Becker will be poi of contact 7-7-67 Zal Shapiro Re agreement NUMEC proposal on inspectors ' • • • 't - Wouldlike to visit ORto discuss UF6mfg Determine economics tech ' problems Wouldlike to makeweek 17th begi nnin or e · Jc 121 · - r 11 P 7' · -- - 33 - t ' · · · Shapiro Lew Bechtold A-R Chuck Showalter - Les Weber or • · rt sr · HomerLowenberg Is there a problem on Showalter 7-25-67 Jack Newman• NUMEC Interested in getting UF4 as starting material for S0H16catalyst Told him we aren't selling and have no published price Have furnished to cormtercfal processor s as part of allocation set aside for 000 use Suggested that perhaps t hey should start with Trermel if they want to get Advised him that while we do have material available now it might not be good to bank on ft for long tenn - Wewould want to pull out fro available material that amount required for internal use over some period of time and I don't knowwhat this might leave as available • TomStewart Dan Stanton Roger Sperry 8-1-67 Discussed Be reviewed background and future requirements Cost picture completion dis posal of scrap future use of scrap and future scrap generation Discussed B-10 operations NUMEC doing good job technically 8-15-67Crowson ---- Discussed NUMEC inventory Weshould be independent verifiers Wants to get as good an inventory as possible - Crowsonindicated to NUMEC t hat he would be willing to help sampl e grit also to pick up tab on R Oon process to recover wheelabrator material No deal to recover If we were to recover it would be at full cost Did agree to try to work out sampling method for grit salf1 1eda barrel Shapiro claimed he put samples in container and rolled for several hours took 6 samples and none agreed - _ F- ' _ _ J5 · - ' _ - · · f ' •• • • • - • -· _ -- _ · 123 ' ' ·---- ----- - -·· - - -- ·- - - - - r r- ' - - - 34 - y io S f T 8-30-67 Jfm Lovett -NUMEC lacy wants to leave noonf iday Be replaced noon Wednesday by 2 people - would lose 2-1 2 days since plan to work Sat On L E have a lot of sa T1 les@fraction of gram Wants to keep book in whole grams Can this be done TT from McAlduffreference 9-22-67 Si Smiley NUMEC Spokewith Joe Barkman- want a drumof oxide made from chips • Reece quoted price of $1 03 lb Smiley will send letter 10-567 Jim Lovett HaveTT from UNCsaying that we have people up there Questioned wheth we could do some inspection on NUMEC material up there Told him that have problem covering even with added people 10-11-67 Lovett Advised him of what we were doing re monitoring NUMEC material being processed at UNC Weare following and will continue to do so if we g somebacking from PNRO 10-23-67 Jim Lovett Havedeal going with Bettis on PWRscrap Shooting for 2 28 68 for otht than wheelabrator grit Bettis proposing to transfer wheelabrator grit to S A and give NUMEC one year use charge credit starting 4-25-68 Approx 58 kgs less kg days for other material not recovered by 2 28 68 Told him I'm not enthusiastic about doing but agreed to think about 10-23-67 Marshall Kenna- Re taking wheelabrator grit under S A at NUME Quantity of material pretty well know based on sampling and analysis • · tfon wi h EC - • • f I- · • 6•I ' ' ' •-• • • 3 r • • 2 su S · I see p• r t rn of possible windfall to r urauerwhat Bettis 1s proposing since there is no co lusion for recovery under S A• - - · ' Get year free ·time plus t heljl only pay 4-3 4 or 6S thereafter and not c1oan1t111n9ta clean up rip FT TIie approx 58 kgs fs In apprfl'i 6 r-materfa1 - Material at SI alpha scanned only Someof material probably should be discarded as unrecoverable Bill an Ed think anything 51 10-25-67 Lou Hansen - Discussed NUMEC proposal on PWRwheelabrator grit Lou doesn't go with one year use charge credit on material Told him - concern is that there 's no wi ndfall to NUMEC Lou said NUMEC said they had a process last surrmerbut now say they don· I pointed out that under S A there's no pressure to recover and furthe r comp licates scrap problem and safeguard aspect Gave Lou data developed during survey - Total U 53 4 kgs Total Bulk 5324 kgs SS U in 3028 kg bulk or 6 8 kg u ave• 221 U SS U in 2296 kg bulk or 46 6 kg U ave 21 U 20 composite samples taken 8 of which from SS material should pay for material in bulk of SS U and that Told Lou I though NUMEC we might then permit rest of material to go under S A Also told him I personally would not give them any use charge credits covering material Anythi we do would be ased on sample data for NBL Noted first isotopic data indicated possible degradati on of assay which didn't surprise Lou Seems to me NUMEC should also pay for any degradation of material as part of -• - settlement with Bettis • Hansen leaves up to us what we accept or don't accept under S A a 125 - _ · • • • • · · ·· r -' - · · - - · • a - • · • 1tn c r · - - 'r' ·-· · r I ' ' • - - - r • ' - 36 - 10-25-67 Lovett · 1 · J7 f Re wheelabrator grit dvisei im jt'was considering transfer of material containing 5% U to S A based on NBLdata leaving the• to make their peace with Bettis on ss material and any degradation losses Lovett said he was thinking of write-off of ls material and would reexamine in light of my 5% Told him there may be a middle ground for agreement Pointed out I didn't want S A to becomedumpingground for unrecoverab· material 10-26-67 Hansen Re shift of scrap from PWRto · S A Is sending me memoreceived from Bettis on what they propose doing and • • • 11 wants our corranents • 11-15-67 Les Weber NUMEC Re PWR material to transfer to S A Pointed out to him that I would consider transferring that we can measure based on analytical data including material 2% U wheelabrat grit with the provision that there be a deadline date for processing low grade material I pointed out I do not wish S A to becomea dumping ground for residues that aren't going to be processed promptly Agreed that we could probably work out something on transfer of unproces material that might be at UNCas of 4-25-68 based on data available from processing up to that tim e 1-4-68 Lovett Re Les Weber's letter of end of Novemberon wheelabrator grit - told him we were inclined to go along with proposal and I would 31 126 l o tfn let T j ' ' L I - - i- --· - · ' · - 31 - -r not yet ans t-J Apollo inventory Marchor April Do we want to send some one to • I observe Raised question of analytical costs 1 D El lH b ck'a n 12• cyls of depleted U 1-15-68 Les Weber NUMEC e Nov 30 letter Cf l '6 rP v - vi- Checki ng on answer Advised him that we go along wi cf what ts proposed and shoul d get out 1etter soon Advised him that we will pull out of UNC-WR end of this week for a week or 10 days and then be back fcir a couple of weeks 1-29-68 Jim Lovett Re looking at WoodRiverjob DonCox doesn't want to he1p since on1y be there this week Lovett has 2 men and would like help for 3rd shift Told him we'd look at 1-30-68 Lou Hansen • • t Had call from Lovett re scrap reprocessing at UNCand felt he had problem on covering Advised Lou of my discussions with Lovett yesterdc 2-8-68 Zal Shapiro EdgewoodArsenal out for proposal to run a plant at Niagara Falls Zal asked ff we would be amenable to an arrangement where they would propose splitting some of the overhead activities security payroll etc if NUMEC got operating contract Told him if it would cut our costs I'm interested Advised him we are holding action on Pep for added data from hfm Inquired about s10 Plant operations Told him they were going reasonably well and I knowof no ser i ous problem I referred to their personnel problem loss of people he feels this may change since others are layin off people 127 · J' T I I ' r - -•t J L - • • - - ' ·4-9-68 - 38 - i Jim Lo i · Hodelcontracts on TE and Sales would like 3 or 4 copies sent to him r Wheelbrator grit - Bettis scrap Weplan to buy J Prst buyJng or getting someway Pointed out our problem of sale to them related to fact we llfght be buying back at high price Thinking about semi-annual inventory in Mayor possibly Jun - in case we are interested in witnessing 4-16-68 John Carey Purchasing NUMEC Harry Coffmancalled re Grit we have on hand Thinking of $4000-$5000 for the lot Said $5000 would be offered 6-3-68 Whitaker - NUMEC Wheelabrator grit Howis the material packaged Are they licensed containers - no of contai ners shipment rail or truck ' · • If by Co truck are two drivers required The license no of cont 6-4-68 Si Smiley - NUMEC Wouldlike to visit Discuss Y-12 work on crystalline Boron Dykstra on setting up small F2 plant - 1 or 2 cells size With AEC- Discussion of responsive reply on grit Wouldlike 6 11 6 12 6 13 Suggested possibility of 6 12 6 13 6 14 Simley Al Witt and Ted Tripp Looking for someoneto handle licensing work - nuclear safety 6-12-68 DougGeorge Weberhas asked for some info re MUF@Y-12 in early May- April info came in yesterday Crowsonwants to knowwhat should be done Interested in any info on May and what we'll do in June if no pick up in May • Re NUMEC info ' · l»PS T on survey on 7- 12 Crowsonadvised that no plan to will 2'g Question whethe NUMEC cover Crowsonwants someone to v - - · · --- - -· · · _- • • ' 1' _ - - • • • go ' · · ' -' to Regulatory at this ' ''- - 39 - time• Dougplans to check on just what coverage Crowsonwantl Maywant man from OR one from Safeguards II and one from Headquarters c_ -- 6-12-67 S1 Smiley - NUMEC NUMEC interested In Ni powder and White powder production Question how to proceed Told Si I'd follow up on how to go Interested in amountof depleted U shipped to industry Agreed to develop info and send to him NUMEC might be interested in barrier production this due to classification - Discouraged S1 on problems at this time Discussed proposal for borrowing depleted UF6 • Told him Hqs turned dow1 a proposal of this type but if NUMEC wishes to pursue it might be · good idea to go via Tremme l• 7-23-68 Si Smiley NUMEC Plan to send us letter on getting in on nickel powder business Advisee ' ' him that this will open up a long row to hoe and that initial reaction 1n ORhas been negative 8-20-68 DeanCrowther Be here next week on close out on equipment Tuesday Meet with me on Wednesdayon studies of diffusion plant transfer to industry Suggested h·e talk to SRSon this point 9-5-68 Si Smiley NUMEC Re letter on barrier business Raised question of whether his next place to go is Headquarters I told him yes He raised question of chanc him I thoughtra t her slim - advised 10-21-68 RCACrowsontold SRSthey have to clear the wheelabrator grit with JCAE ' He ting set up 10 28 with Shapiro to answer questfons is d _by JCAE • ' _ ·- - - - - - - ' ' ·-- ---- 129 _ - 1 t·- - • I I I • • l r - - 40 - f ' • • • • • • J • _ Tri 1-24-69 lovettt I J ··- ·-· Bid 2S loss max 35 kgs to weJt l o ilt uo3• - to recover ·as UNHor Wouldlike to retu rn all material with the 35 kgs being credited to NUMEC privately owned Told him we aren't in storage business and would not wish to hold any material for NUMEC against future requirements agains-t orders that are at this time non existen t As I understood conversation NUMEC planned to send back material to us - and any losses less than 35 kgs they would take as gravy 4-23-69 Si Smiley- NUMEC Re visit 5-1 Interested in going from UF4 to metal and metal thru rolling 1000-2000 T yr Pl ant costs etc Roll to bar Also interested 1n 6 to 4 Interested in Boron · -- -- t 130 - ' _' - - f1 - --_ ·· _____ _ _ _ · __ _7 7 ·- _ - - -- - - - ·- ·- - ·- - _ - _· b c rNP · 1 3 - A review • t of r '- a shin 131 - i '· ' F' ·' 117-273 _ _ b1c I • - · t Internal Sec rity Depart ent of Energy DOE Gerr antown taryland furnished inforMation to the ashington Field Office FO of the Federal Dureau of Investigation FBI re arding the present location of current and former Members of DOC Energy csearch o nd evelopr ent AdMinistration ERDA and the Ato ic Lnergy · T owever clue to the expiration of tine on AF C ould not provide current addresses for th followin uals - Arc AEC AEC A EC - AEC F RDA h7c j In addition -dvised inr i •iriuals are Jecea R - that 7S 1 1Ar 7LI TT - Af C JOI i WA' 'ERS - DOF 132 ' · · ·•· ·· the following • ·- 0 b1 e 7C-f 7 i ' - - - M- · Security Office Tuclear -- · ·- -- - -- · · effulator C Washington I C WDC · - · ··· furnished intorMation as to the current and ·· · ould not ·forr ier r 1er 1bers · of NRC However provide intoroation regarding the o r · 'I r--·X· · b as rnished indica - the following --· - aoir - -· - · · - -·· - · j '• r -- ' ·' 133 - V addresses --- - - - - - - ·'- - --_-· ·-- ' - · · · · _7b7c J 'lipst The followi · individuals could not be located by either the Pittsburgh or T ew York Off ices of the Federal Bureau of In vestiga t ion FBI CHARLES BELTRA i - ru n c tfILLIA f FmmILLER - rEC In addition the New York Office PRESSLEY fC CA -ICE - NIDIEC i s deceased reported that -··· - --· X r- - ' ' ' ' - -· 134 - -·-· ·-- '·- ·