IG Found Former NRC Commissioner Merrifield Violated Ethics Laws

The Project On Government Oversight has obtained hundreds of pages of internal NRC documents
from an NRC Inspector General investigation into then-Commissioner
Jeffrey Merrifield. The documents outline, among other things, how he
disregarded advice from NRC's General Counsel and voted on two matters
that "could have potentially" financially benefitted three
companies-Shaw Group, Westinghouse, and General Electric-during the
time he was directly involved in employment negotiations with those
companies. The IG investigation found that in the two months before
accepting a job created for him at the Shaw Group, Commissioner
Merrifield voted both to approve China's purchase of AP 1000 reactors
(in which the Shaw Group had a financial interest) and to change
criteria of emergency cooling systems that would directly benefit
Westinghouse (of which the Shaw Group owned a 20 percent interest). The
IG referred the case to the Department of Justice.

The IG investigation shows that months before he left his post,
Commissioner Merrifield tore down the firewall, which he said he had
set up in order to protect himself from potential conflicts of
interest, and started making calls and visits to potential employers
while still a voting NRC Commissioner. The IG determined that
Commissioner Merrifield participated in 27 final decisions that could
have benefitted licensees or licensee contractors, and "did not take
effective measures to prevent a potential conflict of interest during
the last 2 months of his term." Instead, Commissioner Merrifield
designed a process in which he would verbally inform his staff of
recusals but would not provide them with a list of the companies he was
recusing himself from voting upon. As the IG learned when interviewing one of Commissioner Merrifield's staffers:

Merrifield did not want the details of his job search public. The
potential for having to release written documentation under a Freedom
of Information Act (FOIA) request was a major reason for not
documenting his recusal from commission actions.

The documents also show that during the 2007 NRC Regulatory
Information Conference (RIC), Commissioner Merrifield asked the CEO of
a licensee why the CEO had not contacted him with a job offer, an action then-Commission Chair Dale Klein found "possibly inappropriate." The documents
further show that because Commissioner Merrifield had not received any
job offers, he asked the CEO of Exelon, the largest nuclear utility, to
call the Shaw Group and General Electric to recommend him as a future
executive. The CEO complied
with the request. Commissioner Merrifield later called Exelon's CEO
asking for advice on what he should ask for his compensation package.

Despite these findings and the IG office's referral of the case to
the Department of Justice, POGO was shocked to learn that the U.S.
Attorney's Office in the Southern District of Maryland declined criminal prosecution of Mr. Merrifield. The U.S. Code, 18 U.S.C. SS 208 (a),
prohibits an official from taking actions on matters related to an
organization "with whom he is negotiating or has any arrangement
concerning prospective employment, has a financial interest."

"This is not an isolated case of one Commissioner trying to cash in
on his years as a regulator; this investigation shows what happens when
industry is too close to those who are tasked with regulating them,"
says POGO Senior Investigator Peter Stockton.

POGO is asking the White House to refer the Merrifield case for civil penalties in violating 18 U.S.C. SS 208. POGO is also calling on NRC Chair Gregory Jaczko
to take several actions to fix the problems raised by the Merrifield
case, including barring Mr. Merrifield from contact with the NRC for
the maximum time allowable.

Improper industry influence on the NRC does not end with Mr.
Merrifield's departure, however. President Obama recently nominated
William Magwood to fill an empty seat on the NRC. POGO is concerned
that Mr. Magwood does not have the independence from the industry
sufficient to serve as a regulator of the nuclear power industry.

"As one nuclear industry lapdog leaves the Commission, another one
is entering via the revolving door," says POGO Investigator Ingrid
Drake. POGO has sent letters to President Obama and Vice President
Biden asking that the White House withdraw its nomination of Mr.
Magwood.

POGO obtained the IG investigation and supporting documents as part of a Freedom of Information Act request
in our ongoing investigation into Mr. Merrifield. At the time of Mr.
Merrifield's departure from his NRC Commissioner post, POGO publicly
questioned his role in championing several major policy initiatives
which directly benefitted his future employer, the Shaw Group. POGO
also brought this case to the attention of the Inspector General.