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Nuclear Power Play: Ambition, Betrayal And The 'Ugly Underbelly' Of Energy Regulation

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GREGORY JACZKO NUCLEAR REGULATORY COMMISSION
Gregory Jaczko, chairman of the Nuclear Regulatory Commission. | Getty File

WASHINGTON -- A feud at the Nuclear Regulatory Commission, where five presidentially appointed commissioners oversee the safety of the nation's nuclear power reactors, has broken out into full public view, with Chairman Gregory Jaczko's fellow commissioners assailing his character and management style, both in a letter made public earlier this month and in the resulting testimony before Congress.

Republicans have begun calling for Jaczko's ouster.

"The situation at the NRC sounds dire," wrote Rep. Ed Whitfield (R-Ky.) in a letter to President Barack Obama, "leaving me very concerned that the Chairman is unable to lead the Commission in the fulfillment of its responsibilities."

On K Street, energy lobbyists have rallied to support the four other commissioners.

So far, the White House is standing by Jaczko, one of the least industry-friendly leaders to serve at the Nuclear Regulatory Commission in a generation.

For Washington's tight nuclear policy circle, where scientifically trained political operatives move back and forth between the industry, the NRC, the Department of Energy and key congressional committees, it's déjà vu. Interviews with several senior officials who worked on nuclear energy policy in the 1990s reveal that at least two of those operatives -- both with strong ties to the nuclear industry -- were closely involved in the ouster of an earlier reformist regulator and are now involved in the current drama.

What's unfolding at the NRC is a textbook example of a little-discussed corporate tactic that is employed against public officials in extreme situations. Observers of the way Washington works tend to describe the corruption of the political system and the people within it in terms of action and reward: Do what industry wants, and benefit both professionally and personally. But when carrots aren't enough, corporations have sticks to swing, too.

Susan McCue, who served as chief of staff for Jaczko's former employer and chief Democratic supporter, Senate Majority Leader Harry Reid (Nev.), wasn't surprised to see the industry strategy at work.

"They have a lot of power, and they wield it," said McCue. "They can't tell Chairman Jaczko what to do, and I think that frustrates them."

THE FIRST COUP

The Clinton administration's skepticism of nuclear power -- driven in large part by then-Vice President Al Gore -- reached its fullest and earliest expression in 1994 with the installment of Terry Lash at the top of the Department of Energy's nuclear energy program.

Lash was a former staff scientist with the Natural Resources Defense Council, a prominent environmental group, and his appointment rankled nuclear industry insiders and their Republican supporters on the Hill. It wasn't long, say energy policy staffers involved at the time, before Lash's critics began seeking ways to undermine his position inside the department.

They got their chance after the White House struck a broad agreement with Russia, in which the U.S. would help Russia protect its nuclear stockpile. GOP appropriators had zeroed out funding for the program, and they instructed the administration not to use money set aside for other purposes.

Lash funded the program anyway and failed to keep congressional appropriators fully apprised of his activity. He was promptly called before a House subcommittee and publicly excoriated for his failure to communicate with Congress.

A subsequent investigation by the DOE's inspector general concluded that Lash, while violating procedure, had not broken any laws. But according to multiple sources who recalled the incident, Lash's gaffe was clearly being exploited in the service of a coup. These sources identified two men, Bill Magwood and Alex Flint, as being directly involved in Lash's ultimate downfall.

Magwood was Lash's deputy. He had come to the DOE from the nuclear industry, and he would return to it at subsequent points in his career.

Flint, meanwhile, was a clerk for Republican Sen. Pete Domenici, who steered billions of nuclear research dollars to his home state of New Mexico from his perch as chairman of the Senate Appropriations Subcommittee on Energy and Water Development.

Democrats in the Senate and DOE who were involved at the time say that the House only found out about Lash's funding of the Russia program because Magwood, a fellow Democrat, personally alerted Domenici. One source recalled that Magwood went directly to Flint.

"I know that he talked to the Hill," said one former senior Senate Democratic aide who worked directly with Flint and Domenici's office at the time. "Whether he came to the Hill [physically], that's how it was brought to Domenici's attention, was through Magwood."

Lash, realizing too late that he was the likely target of a power play by his own deputy, fought back against Magwood by stripping him of staff. Congressional appropriators then rushed to Magwood's defense.

In an eerie echo of language that would later be used against Chairman Jaczko at the NRC, Rep. Joseph McDade (R-Pa.), who chaired the House subcommittee with nuclear jurisdiction, called Lash's move against Magwood an "unprecedented action which I believe further demonstrates the willingness of the director to treat this office as his personal playground."

In the end, Lash was not fired from the DOE, but was instead moved to a top adviser position within what is now the National Nuclear Security Administration in May 1998 -- evidence that Lash had been the victim of politics rather than guilty of wrongdoing. "The Secretary just felt it was better for Terry to step aside," given the political pressure, said a former DOE official who worked with both Lash and Magwood.

Magwood, meanwhile, took over for Lash as acting director of the Office of Nuclear Energy. When George W. Bush became president in early 2001, he asked for the resignations of top DOE officials. But Magwood had a patron in Domenici, and with the senator's support, according to people involved at the time, Magwood was made permanent director of the program.

The coup was complete.

In an interview with The Huffington Post, Magwood denied that he'd orchestrated Lash's overthrow, insisting that he had never spoken to Flint, Domenici or anyone else on the Hill about his former boss. "No, he did it all by himself," Magwood said. "The problem back in the '90s had to do with the allocation of appropriated funds. The House Appropriations Committee was very agitated about that and made a big deal out of that. That's what led to his issues."

Lash's career was effectively over.

"It does change your life," he told HuffPost. "It interferes with personal relationships, the ability to work with others who were not what you would call close, personal friends, but who were acquaintances. You could see in their mind that you have become tainted, and it just makes the whole thing less comfortable, and you never know who's doing what and who believes what at some level."

THE SPOILS

Magwood built a reputation at the Department of Energy as a sharp-elbowed operator. "He was a consummate inside player, a bureaucratic power player of the first order," recalled a former Department of Energy colleague, who, like many others interviewed for this story, requested anonymity because his current work has him interacting regularly with industry clients.

But that level of ambition is hard to contain over a long period of time in a relatively small industry. Every source to whom HuffPost spoke for this story referred to other players, whether friends or foes, by their first names. Magwood never understood it's a small world. "He always struck me as a guy who thought he was playing in a bigger political pond than he was. I mean, there are about 50 people here in town who care about nuclear energy. So it seemed like a lot of politics for no good reason," said one Democratic lobbyist who worked in the Senate while Magwood served in the Department of Energy.

Flint is known as quite the operator as well. "I am telling you this, of all the appropriations clerks, House and Senate, all of them," said a former senior Democratic aide who worked closely with him, "there was nobody as shrewd or full of guile or as politically calculating as Alex Flint. Before you would look at the tables of what you got in terms of earmarks and count 'em up, I kid you not, you'd count your fingers, and you walked out of the room."

Three other former top Democratic Senate aides interviewed for this article who worked closely with Flint described him in similar terms.

Flint has since put those skills to work in the private sector. The year Bush was elected, Flint left Domenici's office for the lobby shop Johnston & Associates, which represented a host of nuclear companies, including the Nuclear Energy Institute. In 2001, Flint set up his own operation, racking up $510,000 in lobbying fees from nuclear clients in 2001 and 2002, according to disclosure records filed with the Senate. That came on top of the $2.125 million he pulled in for Johnston & Associates between 2000 and 2002 -- including $260,000 from Westinghouse Electric Co., one of Magwood's employers prior to arriving at the Energy Department.

When Republicans retook the Senate in 2002, Domenici assumed the chairmanship of the Energy and Natural Resources Committee, and Flint took a nearly order-of-magnitude pay cut -- earning just $150,000 a year, according to the salary tracker Legistorm.com -- to return to Domenici's staff.

Meanwhile, the new vice president, Dick Cheney, made nuclear power a top priority, and subsidies for the industry exploded -- eventually growing by 59 percent during the Bush administration, while giveaways for fossil fuels stayed roughly flat, the Government Accountability Office reported.

Two decades removed from the Three Mile Island accident, a "nuclear renaissance" was under way. With Magwood working the Hill from his new perch at the Department of Energy, Flint pushing the staff effort and Domenici leading a number of Republican nuclear boosters on the Hill, Congress passed the Energy Policy Act of 2005. It included tremendous subsidies for the nuclear industry.

Shortly afterward, Flint announced that he'd accepted the top lobbying job with the Nuclear Energy Institute, the largest industry lobbying group -- although he stayed with the Senate committee for two more months. He cashed his final Senate paycheck in February 2006, the same month the NEI lists as his start with the group.

In his lobbyist bio at the NEI, Flint now claims credit for implementing the very U.S.-Russia agreement that precipitated the Lash affair back in 1998.

Magwood temporarily left public service at roughly the same time, stepping down from the DOE in 2005, nuclear subsidies safely in place. He set up his own consulting shop, which he called Advanced Energy Strategies, and began cashing in. Magwood had a wide range of nuclear clients, many of them in Japan, including the Federation of Electrical Power Companies in Japan, IBT Corp., Marubeni Corp., Mitsubishi Heavy Industries, RW Beck, Sumitomo Corp., CLSA Japan Equities Division and the Japan Atomic Energy Agency, according to financial documents Magwood provided as part of a later nomination and confirmation process, which were obtained by HuffPost.

As HuffPost reported earlier, Magwood's client list included the Japanese firm Tepco, which owns the Fukushima nuclear facility that melted down earlier this year following the devastating earthquake and tsunami. He confirmed the connection under Senate questioning.

Magwood returned to regulatory work in 2009 -- this time at the Nuclear Regulatory Commission.

THE SAME PLAY

The current fight against NRC Chairman Jaczko began with anonymous accusations that he was improperly asserting his authority to follow an administrative dictate, namely to shut down the planning for the Yucca Mountain nuclear waste repository, and that he'd been heavy handed with fellow commissioners, while failing to fully communicate in the wake of Fukushima -- precisely the sort of charges leveled at Lash. An inspector general investigation was launched -- step two -- and, again, it found that the head of the federal office in question had acted within his legal authority and that he was carrying out administration policy.

Step three in the playbook went public on Friday night, Dec. 9. Rep. Darrell Issa (R-Calif.), an industry ally whose fourth-largest campaign contributor is a company that owns a nuclear plant in his district, released a letter signed by Magwood, another Democratic NRC commissioner, and the two Republican commissioners attacking Jaczko. Internal emails released by Rep. Ed Markey (D-Mass.) show that staff for Magwood and Sen. James Inhofe (R-Okla.) closely coordinated the gathering of information damaging to Jaczko, information that the Markey emails later showed to be false.

On the Monday after Issa released Magwood's letter, Flint's Nuclear Energy Institute issued a statement that echoed it, sometimes verbatim. Both the letter and the statement referenced "a chilled work environment," and, while the statement didn't explicitly call for Jaczko's head, it left little room for doubt, saying that the industry was "confident that Congress and the White House will take the steps necessary."

(Despite the work environment charge, the NRC has routinely been rated as one of the best agencies to work for in the federal government, according to anonymous surveys of government employees.)

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 her fellow commissioners -- as well as with Domenici.

The issue that most frequently provoked the commissioners under Jaczko, said Lochbaum, who worked briefly for the NRC himself in 2009 and 2010, had to do with 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. Who had what power was the animating criticism of Jaczko's decisions to put the commission on emergency footing to study and upgrade safety at U.S. nuclear plants after the Fukushima disaster and to close out the NRC's scientific review of the Yucca Mountain facility. The commissioners charged that Jaczko failed to consult them fully.

A former senior Democratic aide who has worked with Jaczko, Magwood and Flint sees more political motivations at work behind the attacks on Jaczko. Magwood "and the industry hate Greg because they think he was put on the commission by Reid, who's anti-Yucca, and he's gonna be a Reid stooge. And you know what? They're f*cking right," the former aide said. "That's exactly why he was put on there. But that commission and that agency were complete and total captives of the nuclear industry. One and the same. And what's happening now is Alex is orchestrating this whole thing, and Magwood is."

For all its brazenness, a Democratic lobbyist and former senior Senate aide who worked on nuclear policy with Magwood and Flint sees the attack on Jaczko as a bit cowardly. "This whole thing is just a big proxy fight, where Greg is at the center of a fight where no one wants to take on the actual people you need to fight with, Harry Reid and Barack Obama, on Yucca Mountain. I mean, going after the civil servants, it's just pathetic," he said.

Lochbaum, though, said he thinks the charge that the NEI is driving the turbulence goes too far, despite its well-known opinion of Jaczko. "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."

Whether the NEI is leading from in front or behind, step four came the following Wednesday, Dec. 14, when Rep. Issa and fellow Republicans raked Jaczko over the congressional coals at a hearing of the House Oversight and Government Reform Committee. Later that day, the NEI blasted out a transcript of Issa's hearing to key energy policymakers, according to one person who received it. It was the first time he'd ever received a hearing transcript from the industry.

At the hearing, the full force of personal destruction was brought to bear. Magwood dropped an explosive charge that Jaczko had mistreated women at the agency. "These women remain very disturbed by these experiences," Magwood said, declining to name the women or offer details. "A common reflection they all shared with me was, 'I didn't deserve this.' One woman said she felt the chairman was actually irritated with someone else but took it out on her. Another told me she was angry at herself for being brought to tears in front of male colleagues. A third described how she couldn't stop shaking after the experience. She sat talking through what had happened to her with her supervisor until she would calm down enough to drive home."

"Senior female staff at an agency like NRC are tough, smart women who have succeeded in a male-dominated environment," Magwood continued. "Enduring this type of abuse and being reduced to tears in front of colleagues and subordinates is a profoundly painful experience for them. The word one woman used was 'humiliated.' I must note that none of these women want to have their names used publicly. As another woman told me, 'It's embarrassing enough I went through this. I don't want to be dragged through the mud before some congressional committee.'"

At least three House Republicans at the hearing called for Jaczko to step down. The New York Times led its story on the hearing with a reference to the charge that Jaczko mistreated women.

But unlike 1998, Republicans don't control both chambers. The next day, the five commissioners appeared again before Congress, but this time Sen. Barbara Boxer (D-Calif.), an aggressive environmentalist known for chopping down witnesses, held the gavel. Senate Republicans -- including Sens. Inhofe, the ranking member of the Environment and Public Works Committee, David Vitter (La.) and John Barrasso (Wyo.) -- hammered away at the abusive-toward-women charges, but Boxer and her allies were quick to deflect the accusations.

"Senator Vitter opened up the issue of treatment of women so I'm going to take that up, because what is said here reminds me of the days -- gosh, am I dating myself -- of Joe McCarthy. 'I have in my pocket a list of three people who said this and this and they're anti-American,'" Boxer mimicked.


Boxer told the panel that she had queried women at the NRC about Magwood's claims and heard nothing but warm words from women who worked with Jaczko, who noted at the hearing that 10 of his 15 long-serving personal staff members are women -- an unusually high number in a male-dominated field -- and none has complained.

Susan McCue and another woman Jaczko worked closely with, Carolyn Gluck, both strongly rejected the notion that Jaczko mistreats women. "Anyone who knows Senator Boxer knows she would never defend anyone guilty of mistreatment of women," said Gluck, who has been with Reid since the '90s and handles women's issues for him. "If she thought there was even the slightest possibility any of the claims made about him were true, she would be one of his most vocal critics rather than one of his strongest defenders."

Capitol Hill is dominated by a happy hour culture that often leads to inter-office romances that can last just moments or a lifetime. But not for Jaczko, said Gluck, who shared a fake wall with him when they both worked for Reid. "He met the woman who is now his wife on our staff, but he never even considered asking her out on a date until she left the Senate, because he didn't want to do anything that could make her uncomfortable or be construed as inappropriate," Gluck said.

At the hearing, Sen. Bernie Sanders (I-Vt.), who challenged Magwood on his connections to Fukushima, compared the charges to the trick question, "When did you stop beating your wife?" He asked the other commissioners if they'd ever lost their temper at work.

"No," said Magwood.

"Wow. That's interesting," Sanders said. He asked the Republican senators on the committee if they'd ever lost their temper at staff, and several smiled sheepishly.




The White House, for its part, isn't buckling. On Dec. 12, White House Chief of Staff Bill Daley sent a letter to Issa and the commissioners laying out his support for Jaczko and declining Issa's request to send a witness to his hearing. Daley suggested the commissioners seek mediation.

THE UGLY UNDERBELLY

Jaczko, through a spokesman, declined to comment for this article, but one former top Democratic Senate staffer suggested the attacks against the chairman are the flip side of the spreading of corporate largesse. "This is the ugly underbelly of large corporate lobbying," said the former staffer, who has worked with the men at the center of both controversies and is now a corporate lobbyist himself. "It really is by any means necessary."

Gluck, Jaczko's former colleague, pointed to the accusations about his treatment of women by way of example. "He's the kind of guy who invites his sister to his bachelor party at a bowling alley because all he really wanted to do to mark the occasion was spend an afternoon with his closest friends," she said. "I imagine that the fact that his wife, sister and mother have had to witness these outrageous personal attacks has been just devastating for him."

Lash said he knows what Gluck is talking about. "It's not only hard on the individual. Your family suffers through this infamy," he said. "People have spouses, they have children, and it's not always easy to explain this to your family members."

Lash, 69, is now retired. "It's very hard, and it does take a while," he told HuffPost, when asked how long it took him to come to terms with what happened in the '90s. "Maybe I never fully put it behind me."

Magwood, meanwhile, told HuffPost that any suggestion that he and Flint have worked together to smear Jaczko is false and that his work in the nuclear industry has had no influence on his service at the NRC.

"I haven't talked to Mr. Flint in probably three or four years," he said, adding, "There's nothing in my background that I believe suggests that I can't act as an independent agent. I don't have a special connection with Tepco or other Japanese companies. I did minor things for them, just wrote a couple of reports."

Whatever the full story behind the attacks on Jaczko, Gluck thinks they will backfire. "It's such an overreach that I think they've severely miscalculated," she said.

If Jaczko's opponents have judged wrong this time, that doesn't mean there won't be another attempt. One former Senate Democratic aide turned lobbyist, who followed both coups, marveled at the hubris: "How much trouble can you stir up in one tiny industry?"

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