[Federal Register Volume 63, Number 28 (Wednesday, February 11, 1998)]
[Notices]
[Pages 6967-6968]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-3433]


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NUCLEAR REGULATORY COMMISSION

[Docket No. 030-20644; License No. 37-21428-01; EA 95-025]


Power Inspection, Inc., Wexford, PA; Order Imposing Civil 
Monetary Penalty

I

    Power Inspection, Inc., (PI or Licensee) is the holder of NRC 
Materials License No. 37-21428-01 issued by the Nuclear Regulatory 
Commission (NRC or Commission). The license authorizes the Licensee to 
possess sealed radioactive sources and to utilize those sources to 
conduct industrial radiography in accordance with the conditions 
specified therein. The license expired on January 31, 1994.

II

    An NRC inspection of the Licensee's activities was conducted on 
December 2-3, 1993, and a subsequent NRC investigation was conducted 
from March 9 through December 22, 1994. The results of the inspection 
and investigation indicated that the Licensee had not conducted its 
activities in compliance with NRC requirements. A written Notice of 
Violation and Proposed Imposition of Civil Penalty (Notice) was served 
upon the Licensee by letter dated February 18, 1997. The Notice states 
the nature of the violations, the provisions of NRC requirements that 
the Licensee had violated, and the amount of the civil penalties 
proposed for the violations.
    Two officers of the Licensee responded to the Notice in letters 
dated May 13, 1997, October 28, 1997, and January 6, 1998. The 
officers' responses did not deny the violations and proposed no reason 
for mitigating the civil penalties; rather, each officer maintained 
that he was not responsible for the violations and each officer 
proposed that the other officer should be held responsible for the 
violations and associated civil penalties.

III

    After consideration of the Licensee's responses and the statements 
of fact, explanation, and arguments for liability of the civil 
penalties contained therein, the NRC staff has determined, as set forth 
in the Appendix to this Order, that the violations occurred as stated 
and that the penalties proposed for the violations designated in the 
Notice should be imposed.

IV

    In view of the foregoing and pursuant to Section 234 of the Atomic 
Energy Act of 1954, as amended (Act), 42 U.S.C. 2282, and 10 CFR 2.205, 
it is hereby ordered that:

    The Licensee pay a civil penalty in the amount of $40,000 within 
30 days of the date of this Order, by check, draft, money order, or 
electronic transfer, payable to the Treasurer of the United States 
and mailed to Mr. James Lieberman, Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, One White Flint North, 11555 
Rockville Pike, Rockville, MD 20852-2738.

V

    The Licensee may request a hearing within 30 days of the date of 
this Order. Where good cause is shown, consideration will be given to 
extending the time to request a hearing. A request for extension of 
time must be made in writing to the Director, Office of Enforcement, 
U.S. Nuclear Regulatory Commission, Washington, D.C. 20555, and include 
a statement of good cause for the extension. A request for a hearing 
should be clearly marked as a ``Request for an Enforcement Hearing'' 
and shall be addressed to the Director, Office of Enforcement, U.S. 
Nuclear Regulatory Commission, Washington, D.C. 20555, with a copy to 
the Commission's Document Control Desk, Washington, D.C. 20555. Copies 
also shall be sent to the Assistant General Counsel for Hearings and 
Enforcement at the same address and to the Regional Administrator, NRC 
Region I, 475 Allendale Road, King of Prussia, PA 19406-1415.
    If a hearing is requested, the Commission will issue an Order 
designating the time and place of the hearing. If the Licensee fails to 
request a hearing within 30 days of the date of this Order (or if 
written approval of an extension of time in which to request a hearing 
has not been granted), the provisions of this Order shall be effective 
without further proceedings. If payment has not been made by that time, 
the matter may be referred to the Attorney General for collection.
    In the event the Licensee requests a hearing as provided above, the 
issue to be considered at such hearing shall be:
    (a) Whether the Licensee was in violation of the Commission's 
requirements as set forth in the Notice referenced in Section II above; 
and
    (b) Whether, on the basis of the violations described in the NRC's 
Notice, this Order should be sustained.

    Dated at Rockville, Maryland this 3rd day of February 1998.

    For the Nuclear Regulatory Commission.
Ashok C. Thadani,
Acting Deputy Executive Director for Regulatory Effectiveness.

Appendix--Evaluation and Conclusions

    On February 18, 1997, a Notice of Violation and Proposed 
Imposition of Civil Penalty (Notice) in the amount of $40,000 was 
issued to Power Inspection, Inc., (PI or Licensee) for violations 
identified during an NRC inspection conducted on December 2-3, 1993, 
and a subsequent investigation was conducted from March 9 through 
December 22, 1994. Two officers of the Licensee responded to the 
Notice in letters dated May 13, 1997, October 28, 1997, and January 
6, 1998. The officers' responses did not deny

[[Page 6968]]

the violations and proposed no reason for mitigating the civil 
penalties; rather, each officer maintained that he was not 
responsible for the violations and each officer proposed that the 
other officer should be held responsible for the violations and 
associated civil penalties.

Summary of the Licensee's Responses Concerning Liability and 
Responsibility for the Violations

    1. PI's Response Dated May 13, 1997 (Submitted by Mr. Chambers, 
PI's Secretary/Treasurer): Mr. Chambers protested the proposed civil 
penalties arguing that he is neither the owner nor President of PI, 
and that his involvement with PI was strictly as an investor. In 
addition, Mr. Chambers maintained that he did not take part in the 
day-to-day operations of PI and that Mr. Kumar, President and major 
stockholder of PI, is fully responsible for the violations. Mr. 
Chambers subsequently provided the NRC a copy of ``Stock Restriction 
and Purchase Agreement'' among PI, Mr. Chambers, and Mr. Kumar as 
evidence that his involvement was strictly as an investor.
    2. PI's Responses Dated October 28, 1997, and January 6, 1998 
(Submitted by Mr. Kumar, PI's President): Mr. Kumar's responses 
submitted by Mr. Manifesto, Mr. Kumar's counsel, argued that Mr. 
Chambers was the secretary/treasurer of PI during the relevant time 
period and that PI was owned jointly by Mr. Kumar and Mr. Chambers. 
Mr. Kumar further argued that Mr. Chambers had total control of the 
bank account of the corporation, and had equal financial control 
over all financial matters, as evidenced by the fact that no payment 
in excess of $1,000.00 could be made without Mr. Chambers' 
signature. In addition, Mr. Kumar maintained that: (1) Mr. Chambers 
served not only as an officer, but also on the Board of Directors of 
PI; and (2) after Mr. Kumar severed his relation with PI in August 
1994, Mr. Chambers maintained all of the assets of PI, including 
bank accounts and equipment.

NRC Evaluation of the Licensee's Responses

    The Licensee's arguments, as set forth above, do not provide a 
basis under the NRC's Enforcement Policy for mitigation or remission 
of the civil penalties. As to the question of responsibility, PI 
must pay the civil penalty in accordance with this Order. The 
Licensee's arguments do not relieve Mr. Chambers or Mr. Kumar of 
their responsibilities for ensuring that PI pays the civil penalty. 
Both Mr. Chambers and Mr. Kumar were part-owners and corporate 
officers of PI during the time period when the violations of NRC 
requirements occurred.
    Therefore, after careful consideration of the responses, the NRC 
has determined that neither Mr. Chambers nor Mr. Kumar provided an 
adequate basis for the NRC to conclude that they should not be 
responsible for ensuring payment of the civil penalties by PI 
concerning its violations of NRC requirements. The NRC's 
determination is based on the fact that:
     Mr. Chambers served as an officer, and on the Board of 
Directors, of PI during the relevant time period; Mr. Chambers had 
control of all personnel matters during the relevant time period; 
Mr. Chambers had total financial control of PI; and Mr. Chambers 
maintained all of PI's assets, including bank accounts and equipment 
after PI became defunct.
     Mr. Kumar was the President of PI during the relevant 
time period; Mr. Kumar is the last known President of Power 
Inspection as noted in a July 16, 1996 ``Stock Restriction and 
Purchase Agreement''; Mr. Kumar is currently listed as the Chief 
Executive Officer of PI on the Pennsylvania Department of State 
Corporate/Limited Partnership records; and Mr. Kumar is currently 
listed as the Chief Executive Officer/President of PI on the Dunn & 
Bradstreet listing.

NRC Conclusion

    The NRC has considered all of the arguments the Licensee made 
and concluded that the Licensee has not provided an adequate basis 
for mitigation of the proposed civil penalties. In addition, the NRC 
has concluded that Mr. Chambers and Mr. Kumar are responsible for 
ensuring payment of the civil penalties by PI concerning its 
violations of NRC requirements. Consequently, the civil penalties in 
the amount of $40,000 should be imposed by order.

[FR Doc. 98-3433 Filed 2-10-98; 8:45 am]
BILLING CODE 7590-01-P