WASHINGTON - August 3 - In a troubling post-9/11 move, the federal government is allowing the nuclear industry’s leading lobby to develop the teams of mock terrorist attackers who evaluate security at nuclear power plants, according to a letter released today by the Project On Government Oversight (POGO). “This is more than a case of the proverbial fox guarding the henhouse. It is not an apparent conflict of interest -- but a blatant conflict of interest,” said POGO’s letter from Executive Director, Danielle Brian, to the Nuclear Regulatory Commission (NRC).

The lobby, called the Nuclear Energy Institute (NEI), in turn hired the company with the biggest financial stake in finding no problems at the plants, to provide the specialized teams. That company is Wackenhut Corporation which is the nation’s largest nuclear security plant provider, with contracts to protect roughly half of the plants.

Wackenhut has a strong incentive to discourage the mock terrorists it hires from mounting a realistic security test. Earlier this year, the Department of Energy’s Inspector General found that Wackenhut managers had been cheating on such force-on-force exercises for two decades at the Y-12 nuclear facility in Oak Ridge, TN. According to NEI: “The Wackenhut contract employees selected for the exercises must meet NRC requirements. The NRC has the authority to determine and ensure that the force-on-force exercises meet the level of attack against which the industry must defend” (see http://www.nei.org/doc.asp?docid=1203).

According to POGO’s conversations with NRC officials, the agency claims it cannot afford to pay for the security testing so has turned to the nuclear industry organization NEI to fund the tests. NEI has aggressively lobbied against legislation aimed at improving security at the power plants and ran a series of misleading advertisements claiming the plants were well-protected post-9/11.

Wackenhut is a subsidiary of a Danish-British conglomerate. As Brian notes, the Congress has barred foreign firms from operating security at U.S. airports. Full text of the letter follows bellow. An inside story appeared in the Wall Street Journal today on the topic.

July 30, 2004

Chairman Nils J. Diaz

Nuclear Regulatory Commission

11555 Rockville Pike

Rockville, MD 20852

Via facsimile: (301) 415-1757

Dear Chairman Diaz,

We have been encouraged by and supportive of the NRC’s recent efforts to develop a credible force-on-force program to test the effectiveness of guard forces and defensive strategies at nuclear power plants. We were led to believe that the NRC would develop its own adversary teams for these tests. Credible adversary teams are essential for these performance tests.

Therefore, we were shocked to learn that Nuclear Energy Institute (NEI), the lobbying arm of the nuclear industry, has hired Wackenhut Corporation to supply and manage these adversary teams. This is more than a case of the proverbial fox guarding the henhouse. It is not an apparent conflict of interest -- but a blatant conflict of interest. As you know, Wackenhut guard forces protect 30 of the nation’s 64 nuclear power plants. At nearly 50 percent of the nuclear plants, then, Wackenhut guard forces would be tested by Wackenhut adversaries. Under these conditions no one would have any confidence in the results of these force-on-force tests, regardless of whatever oversight the NRC might provide. The NRC should not abdicate its responsibility to run security preparedness tests to the nuclear industry, much less hand over authority to the very entity being tested. (Appendix A)

Having a trained full-time adversary force is a good idea, but any benefit gained is lost by the current arrangement. Oversight of critical infrastructure security is an inherently governmental function and must not be entrusted to a private company, particularly one with an obvious self-interest and poor track record, like Wackenhut.

If this inappropriate arrangement were not enough for the commission to reclaim the force-on-force program, Wackenhut’s dubious past performance should. Some examples of Wackenhut’s performance:

As recently as last January, DOE inspector general reported that Wackenhut personnel had cheated during a force-on-force exercise of June 2003 at the Y-12 plant in Oak Ridge, Tenn. This facility houses hundreds of tons of highly enriched uranium. The inspector general, Greg Friedman, said the test results were “tainted and unreliable.” Moreover, Friedman gleaned from more than 30 testimonies that this was part of “a pattern of actions” dating back almost two decades. (Appendix B)

A stunning case study of Wackenhut’s incompetence with nuclear security:

Between 1986 and 2003, Wackenhut provided security at Indian Point #2 Nuclear Power plant, which is less than 35 miles north of Manhattan. The utility, Entergy, that had recently acquired the plant, hired a consultant to conduct an internal probe of security at the facility; and found:

· “Only 19 percent of the security officers stated that they could adequately defend the plant.”

· Some officers believed that as many as “50 per cent of the force may not be physically able to meet the demands of defending the plant”;

· Wackenhut allowed guards to take their weapons qualifying tests over and over again until they passed;

· Citing officers’ fears of retaliation for raising concerns, the report said, “The security officers stated that a chilled environment existed among security officers… as a result of issues related to Wackenhut site management;”

· Guards told of minimal training, of other guards reporting for duty drunk, of security drills that were carefully staged by Wackenhut to insure that mock attackers would be repelled, and of out of shape guards forced to work 70 to 80 hours or more per week. Entergy subsequently terminated Wackenhut’s contract as a result of the investigation. (Appendix C)

The vast majority of the almost 200 guards at both NRC and Energy department sites that have complained to POGO about security problems have been Wackenhut employees.

Another of Wackenhut’s most notorious cases came in the 1990s, and involved Wackenhut’s work on the Alaskan pipeline. Chuck Hamel coordinated a number of whistleblowers who testified about serious structural problems before Congress (Hamel is currently a member of POGO’s board of directors but was not at the time of this case). Wackenhut then fired most of the whistleblowers, and mounted a massive undercover surveillance operation against Mr. Hamel. The undercover private investigators acquired the Hamel family private phone records - to identify and fire pipeline whistleblowers. Wackenhut also used clandestine and malicious tactics such as stealing his garbage, creating a phony environmental front-organization, employing hidden cameras in hotel rooms in an attempt to compromise him with women, and stationing, for several months, an eavesdropping electronics van beside his Alexandria, Va., home. Federal Judge Stanley Sporkin, during the 1993 U.S. District Court proceedings, described the details of Wackenhut’s operation on Mr. Hamel as "horrendous" and "reminiscent of Nazi Germany." Judge Sporkin further observed, "no one should be subjected to the kind of treatment the Hamels were." (Appendix D)

We have another major concern about the NRC’s reliance on Wackenhut to provide security - and now the testing of security - at our nation’s nuclear power plants. As you probably know, the Department of Homeland Security has a pilot program to evaluate the possibility of private contractors taking over passenger and checked bag screening from the federal government at some U.S. airports. The legislation authorizing the pilot program – the Aviation and Transportation Security Act of 2001 – specifically prohibits foreign firms from being hired to handle screening. Congress wanted to preserve the security of such critical infrastructure for domestic companies.

Why is the NRC, a federal regulatory agency with responsibility for security of nuclear power plants, increasing rather than decreasing reliance on a foreign owned corporation – Wackenhut – to manage security at the majority of U.S. nuclear power plants? Why would the United States government want a foreign corporation to know the defensive strategies, vulnerabilities, targets, timelines, and protective weapons of nuclear power plants, some of which are close to U.S. cities?

Wackenhut is owned by Group 4 Falck A/S, a Danish company, which has just merged with a British firm, Securicor, PLC. Securicor is the parent company of Cognisa - the same company that was in charge of airport security on Sept. 11, 2001 when terrorists with weapons passed through checkpoints at Washington-Dulles and Newark International Airports (back then the company called itself Argenbright). We now have one mega-foreign owned corporation with an abysmal record inside the U.S. operating security at many our nuclear power plants.[1]

We are not suggesting that Group 4 Falck-Securicor would disseminate this information to a terrorist group or foreign power. The point is that the U.S. government and the nuclear power utilities should keep this critical information in as few hands as possible, or the risk increases.

Security of nuclear power plants is a fundamental homeland security issue. If the NRC does not have the resources to support this effort, then it is imperative that you ask the Department of Homeland Security to provide this funding.

As always, we would be happy to meet with you to discuss our concerns.

Sincerely,

Danielle Brian

Executive Director

[1] We are aware of the procedures of the Foreign Ownership, Control and Influence (FOCI) programs. We are not confident that the oversight of the foreign corporation is adequate to ensure that the so-called firewall between the domestic subsidiary and the foreign owner is effective.

POGO investigates, exposes, and seeks to remedy systemic abuses of power, mismanagement, and subservience by the federal government to powerful special interests. Founded in 1981, POGO is a politically-independent, nonprofit watchdog that strives to promote a government that is accountable to the citizenry.

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