NRC 'Coup' Leader, Bill Magwood, Consulted For Fukushima Parent Company
WASHINGTON -- Bill Magwood, the man at the center of an effort to overthrow the chairman of the Nuclear Regulatory Commission and his most likely successor if the move is successful, served as a consultant for Tepco, the Japanese company that owns the Fukushima nuclear power plant, according to information provided by Magwood as part of his nomination and confirmation process, which was obtained by The Huffington Post.
On Friday, Rep. Darrell Issa (R-Calif.) released a letter signed by Magwood and three other commissioners attacking the panel's chairman, Gregory Jaczko, setting off a firestorm in the energy industry. Issa and the four commissioners framed the dispute as personal and managerial, but emails released by Rep. Ed Markey (D-Mass.) show a political and ideological battle underway over post-Fukushima safety standards.
Issa and Markey appeared opposite one another on MSNBC on Monday, continuing to debate whether the issue is one of personality or the politics of nuclear safety. Magwood's previously unreported relationship to Japan's nuclear industry, via the firm he founded and ran, Advanced Energy Strategies, sheds new light on that debate.
On Saturday morning, just hours after the dueling release of documents, utility lobbyists began reaching out to Democrats on key committees, urging them not to back Jaczko. "It's obvious these guys are all in on this coup. They've been whining about Jaczko, particularly after Japan, and what he's been doing since then, consistently," said a senior congressional aide on the receiving end of the lobbying push, who is supportive of Jaczko but wanted to remain anonymous so as not to alienate the industry.
On Sunday, Dale Klein, the commissioner who stepped down to make room for Magwood, suggested to Politico that Jaczko doesn't need to be removed from the panel but could instead be demoted by Obama; a new chairman from among the existing members would then be named to take his place.
On Monday, the Nuclear Energy Institute, the lobby for the nuclear energy industry, issued a statement expressing confidence that Congress and the White House "will take the steps necessary to ensure that the NRC is an efficient, effective regulator."
Jaczko isn't named in the statement, but is clearly the target. "The issue that is of most concern is the question of a chilled working environment at the agency, including the possibility of staff intimidation and harassment," the lobby wrote. "The NRC functions best when it has a full complement of five capable commissioners to provide guidance and direction to the NRC staff."
The critique echoes the letter from the four commissioners, who charged that Jaczko is "causing serious damage" and has "intimidated and bullied" staff, citing a "chilled work environment."
Magwood, a Democratic appointee, would be the leading candidate to take Jaczko's gavel if the coup succeeds, according to people familiar with the internal workings of the commission (as well as through a simple process of elimination: the other Democratic panel member is not considered a serious candidate for the chairmanship).
Issa represents the San Onofre Nuclear Facility in his California district. The plant, which regularly tussles with the NRC over safety complaints, is owned by Edison International, which is Issa's fourth-largest campaign contributor over his career, according to the Center for Responsive Politics.
The Fukushima plant melted down when a tsunami struck it in March, knocking out power as well as disabling backup diesel generators that weren't positioned or prepared to handle the wave. Despite an earlier tsunami that hit Japan in 2007 and caused a minor radioactive leak, Fukushima had not adequately prepared for that type of natural catastrophe.
Magwood gave up his consulting business with the industry as part of his confirmation to the regulatory panel.
When Magwood was nominated by President Obama in 2009 to become a commissioner, nearly a hundred environmental groups, along with the Project on Government Oversight (POGO), urged his defeat in the Senate, arguing that he was too close to the industry to be tasked with regulating it.
He was confirmed in March 2010 by unanimous consent.
Since joining the body, Magwood has coordinated with the two Republicans and the other Democrat on the panel to delay and water down new safety reforms pushed by Jaczko, according to the emails made public by Markey. Following the Fukushima disaster, Jaczko has made a major effort to increase safety standards, an effort that is being closely watched by international regulators and nuclear companies across the globe.
Magwood's recent client list makes up a who's who of Japanese power and nuclear companies, and included CLSA Japan Equities Division, the Federation of Electrical Power Companies in Japan (FEPC), IBT Corporation, Marubeni Corporation, Mitsubishi Heavy Industries, RW Beck, Sumitomo Corporation and the Japan Atomic Energy Agency, which was roundly criticized for its response to the crisis.
The emails disclosed by Markey show that Magwood worked with staff for Sen. Jim Inhofe (R-Okla.) to discredit Jaczko. Magwood told them that he hadn't been informed that Jaczko had put the commission on emergency footing after Fukushima -- a decision that consolidates more power in the hands of the chairman -- but the internal emails show this claim is untrue.
In typical pushback against a public statement about safety that Jaczko wished to release, Magwood asked it to be toned down, saying that "someone reading this would think that every reactor in the country is a time bomb waiting to go off" and that the release was "almost breathless."
Magwood has regularly voted against safety proposals put forward by the chairman, urging instead delay and more study. Between 1998 and 2005, Magwood served as the Director of Nuclear Energy for the Department of Energy. In that capacity, it was his job to support the nuclear industry, while the NRC was established to regulate it. After leaving in 2005, he went to work directly for the industry.
It took a unique confluence of events to get the reformist Jaczko in the chairman's seat, especially given Obama's close ties to Exelon, an Illinois-based nuclear energy company. Jaczko was a senior staffer with Sen. Harry Reid (D-Nev.) when he was nominated to the commission in 2005 as part of a deal Reid struck with President Bush that also allowed the administration to seat a Republican on the commission. Reid is a long-time opponent of storing nuclear waste at Yucca Mountain in Nevada and was an early supporter of Obama. When Obama was elected, Reid called in a favor and had Jaczko named chairman.
David Lochbaum, a nuclear engineer and director of the Nuclear Safety Project at the Union of Concerned Scientists, said reformist commissioners at the NRC naturally tend to generate more conflict within the agency.
"When you rock the boat and you disturb that status quo, that tends to be more of an irritant than if you don't make waves," Lochbaum said, adding that the last time there was this much internal static at the nuclear regulator was in the late 1990s, when chairwoman Shirley Jackson famously tussled with fellow commissioners -- as well as with then-Senator Pete V. Domenici, a New Mexico Republican with close ties to the nuclear industry.
But Lochbaum, who worked briefly for the NRC himself in 2009 and 2010, also said that Jaczko has provoked frustration from his fellow commissioners by consistently pushing the somewhat blurry line between what are considered day-to-day operations -- the purview of the chairman -- and matters of policy, which are supposed to be the province of the full commission. This includes decisions like going into emergency status after the Fukushima disaster, or closing out the NRC's scientific review of the Yucca mountain facility. Jaczko has drawn fire from his fellow commissioners for what they have characterized as a failure to consult them fully on these and other matters.
"The industry would certainly be pleased if Jaczko found another vocation," Lochbaum said. "But I don't think they are egging the other commissioners on. A lot of critics try to claim the industry controls the commission, but I really think they're just smart people, and they feel their abilities aren't being fully used."
When Congress passed legislation in 2009 to eliminate Yucca Mountain as a storage facility, Jaczko acted to shut down planning related to the project and took administrative action to terminate it. His colleagues on the panel were angry that the commission wasn't able to vote on the matter. Complaints were lodged with an inspector general, beginning the fight that culminated on Friday. The IG found that some commissioners and staff were unhappy with Jaczko's decision-making, an unhappiness that has resulted in opposition that has gone from anonymous sniping to an internal investigation to now a full-fledged fight for control of the panel.
The IG, however, found that Jaczko's "decision to direct the staff to follow the FY2011 budget guidance was supported by the NRC general counsel and (1) consistent with the discretion within his budget execution authority," as well as with Obama's decision to terminate the repository." The IG also found that Jaczko had been selective in the information he provided to the commissioners, but added that the commissioners had means through the commission process of gathering such information for themselves.
Jaczko issued a statement upon release of the IG's report, noting that it exonerated him. But when the IG appeared before a House subcommittee in June 2011, he backtracked and said that Jaczko had behaved improperly, calling into question the statement Jaczko had released. Under questioning from Markey, the IG flipped and said that, in fact, he had told Jaczko's chief of staff that he had no objection to the statement, according to a transcript of the hearing.
As HuffPost previously reported, the NRC's inspector general's office has been plagued by charges of incompetence.
In 2008, Magwood, a Clinton appointee, gave $3,300 to Hillary Clinton's campaign for president. According to Federal Election Commission records, the Clinton campaign returned all of the contributions within three months, and (in what is likely an accounting error) an additional $300.
Magwood did not respond to an email requesting comment; Jaczko, through a spokesperson, declined to comment.
Jaczko and the four other NRC panel members will appear before Issa's House Oversight and Government Reform Committee on Wednesday and before the Senate Environment and Public Works Committee on Thursday, chaired by Sen. Barbara Boxer (D-Calif.), who, along with Reid, has come out strongly in support of Jaczko.
Tom Zeller contributed reporting to this article.
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First Posted: 12/12/11 03:50 PM ET Updated: 12/12/11 03:50 PM ET