Information Notice No. 92-37: Implementation of the Deliberate Misconduct Rule

                                UNITED STATES
                        NUCLEAR REGULATORY COMMISSION
              OFFICE OF NUCLEAR MATERIAL SAFETY AND SAFEGUARDS
                          WASHINGTON, D.C.  20555 

                                May 8, 1992 


NRC INFORMATION NOTICE 92-37:  IMPLEMENTATION OF THE DELIBERATE 
                               MISCONDUCT RULE 


Addressees 

All Nuclear Regulatory Commission Materials Licensees 

Purpose 

The U.S. Nuclear Regulatory Commission is issuing this notice to describe to 
licensees a recent enforcement action and to alert licensees and their 
employees that, under the Deliberate Misconduct Rule, they can be subject to 
criminal prosecution and penalties for deliberately violating or causing a 
licensee to violate NRC requirements, or deliberately submitting to the NRC, 
a licensee or its contractor, information that is materially incomplete or 
inaccurate.  It is expected that recipients will review this notice, 
distribute it to responsible staff, and consider actions, as appropriate, to 
ensure compliance with NRC requirements.  However, suggestions contained in 
this information notice are not new NRC requirements; therefore no written 
response is required. 

Description of Circumstances 

The Department of Justice recently initiated a prosecution resulting in an 
indictment against a licensee and the licensee's president.  The licensee's 
president pled guilty to conspiring to improperly dispose of three scales 
containing nuclear byproduct material and was sentenced to 3 years probation 
and fined $30,000.  Criminal proceedings involving the licensee's president 
are ongoing.  These findings were based on an investigation conducted by 
NRC's Office of Investigation (OI) which concluded that the scales had been 
improperly disposed of through burial and that several individuals may have 
conspired to deceive NRC about the disposal of the scales. 

The OI investigation followed special inspections conducted by NRC.  The 
inspections involved several unsuccessful attempts to find three nuclear 
weigh scales.  Based on the results of these inspections and the subsequent 
investigation, NRC determined that certain of the licensees activities were 
not conducted in full compliance with NRC requirements as they involved the 
unauthorized and improper disposal of licensed material and that certain 
individuals had provided inaccurate and misleading information to NRC. 

Discussion 

NRC requires a high standard of compliance and accountability from 
licensees. NRC also requires all licensees to provide NRC with complete and 
accurate 

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                                                       May 8, 1992 
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information, and that records required to be kept, and information provided 
to the Commission, both oral and written, be accurate and complete in all 
material aspects.  

Deliberate misconduct, by licensed or unlicensed individuals, resulting in 
violations, such as the unauthorized disposal of licensed material, 
falsification of records, or false or misleading statements, undermines the 
NRC's confidence that these individuals will conduct themselves in a manner 
that adequately protects public health and safety, when participating in 
future licensed activities.  The "Deliberate Misconduct" rule (56 FR 40664) 
provides a basis for enforcement action directly against any person, 
licensed or unlicensed, who deliberately causes a violation of NRC 
requirements or deliberately submits information that is materially 
incomplete or inaccurate. Actions against individuals involved in such 
violations may include civil penalties, orders to modify, suspend, or revoke 
licenses, and orders to the individuals restricting future involvement by 
the individual in any licensed activities.  The aforementioned case is an 
example of a situation where such enforcement actions will be applied, in 
future cases, against specific individuals.  Furthermore, the NRC intends to 
refer to the U.S. Department of Justice for consideration for criminal 
prosecution cases involving individuals who deliberately cause a violation 
of NRC requirements.  Licensees and their employees should refer to the 
Deliberate Misconduct rule for a more complete discussion of its scope. 

This information notice requires no specific action or written response. If 
you have any questions about the information in this notice, please call one 
of the technical contacts listed below, or the appropriate regional office. 


                                   Richard E. Cunningham, Director 
                                   Division of Industrial and 
                                     Medical Nuclear Safety 
                                   Office of Nuclear Material Safety 
                                     and Safeguards 

Technical contacts:  Jamnes L. Cameron, RIII 
                     (708) 388-5636 

                     Susan L. Greene, NMSS 
                     (301) 504-2686 

Attachments:
1.  List of Recently Issued NMSS Information Notices
2.  List of Recently Issued NRC Information Notices

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