WASHINGTON -- Nuclear Regulatory Commissioner William Ostendorff has invested in Honeywell International Inc., an NRC licensee, since as early as 2009, according to financial disclosure records reviewed by The Huffington Post. Honeywell operates a controversial uranium conversion facility in Illinois and has come before the Nuclear Regulatory Commission several times for a variety of issues at the site since Ostendorff became a commissioner.
A lockout of the union workforce at Honeywell in 2010 and 2011 raised safety concerns that the agency investigated. And Honeywell battled the commission over a critical regulatory exemption it sought, a fight that finally went against the company in January 2013. Honeywell has also held regular discussions with the NRC regarding an upgrade to its emergency preparedness in the wake of the Fukushima disaster in March 2011.
Ostendorff personally visited the Illinois plant, known as the Honeywell Metropolis Works Uranium Conversion Facility, on Oct. 5, 2012, according to an NRC document. Later that month, on Oct. 16, the NRC issued a "confirmatory order" listing upgrades that needed to be made for earthquake and other natural disaster preparedness before the plant could re-open, at the same time praising Honeywell for its cooperation. "Due, in part, to Honeywell’s cooperation and stated commitment to protect workers and public safety, the NRC decided to issue a Confirmatory Order in lieu of a Notice of Violation and consideration of civil penalties," read the NRC's public statement at the time.
The NRC's commissioners are chosen by the president, but are typically selected in a bipartisan pair. Ostendorff was the GOP choice, picked in 2009. A former captain in the Navy, Ostendorff also worked in the Bush administration as a top official in the National Nuclear Security Administration, and was previously a GOP staffer on the House Armed Services Committee from 2003 to 2007.
His term officially began in April 2010, and he was confirmed to a second term in 2011, which runs until 2016. In 2009, he signed his personal financial disclosure form in November and listed his ownership of Honeywell International, putting it at a range of $1,000 to $15,000. In March and April 2011, two forms, the most recent available, list his Honeywell investment increasing in value to a range of $15,000 to $50,000.
Ostendorff, like all senior officials at the NRC, promised not to participate in decisions that could have "a direct and predictable effect on my financial interests," according to a letter he sent to the agency's ethics office when he was tapped for the post in 2009.
In a statement to the Huffington Post Monday, an Ostendorff spokesperson noted that top NRC officials are not specifically barred from owning shares of Honeywell. "The stock was sold last summer before the Commission considered an adjudicatory matter last fall involving the Honeywell operation that holds an NRC license. Commissioner Ostendorff followed applicable NRC requirements," the statement added.
When notified of Ostendorff's investment, Stephen Lech, president of the United Steelworkers Local 7-669, which represents workers at Honeywell's plant in Illinois, responded: "I'm speechless."
"Even if he did sell his stock before the decision to approve the current seismic work, his investment in the company prior to that is inappropriate," Lech added later. "He was on the commission prior to and during our lockout in 2010 and 2011 when we were pleading with the agency to prevent the company from operating our facility with unsafe and untrained scab labor. During that same period, the scabs in [the] plant had a release of deadly hydrofluoric acid and the NRC took no enforcement action, instead referring the incident to OSHA [Occupational Safety and Health Administration]."
A reader tipped off HuffPost to the existence of Ostendorff's Honeywell investment in response to a request for NRC staffers to share stories about the ongoing internal turmoil that led former NRC Chairman Gregory Jaczko to resign. (Send additional tips to firstname.lastname@example.org.)
In August 2012, HuffPost reported that Ostendorff was under investigation for attempting to thwart a probe into safety concerns at the Palisades Power Plant on Lake Michigan, a location represented by Energy and Commerce Committee Chairman Fred Upton (R-Mich.). Last Monday, news broke that the plant was leaking "slightly" radioactive water.
The NRC updated its list of restricted securities in a December memo sent to The Huffington Post by an NRC official. But the memo also adds that even if a stock were not on the list, it could still present a conflict. "There is no prohibition against owning security interests in entities not on this list. However, employees are required to disqualify themselves from participation in any NRC particular matter involving parties affecting the financial interest of any entity not on this list if they, their spouse, or minor children, collectively hold securities worth more than $15,000 in that entity," the memo reads.
Honeywell does not appear on the December 2012 list of restricted securities, but the memo does bar commissioners from investing in "[e]ntities licensed or regulated by the Commission to mill, convert, enrich, fabricate, store, or dispose of source, byproduct or special nuclear material," which Honeywell does. The company's sheer size may have kept the firm off the list, since its nuclear operations make up only a small part of its overall business.
While Honeywell has had a host of issues before the NRC, few have come up for a vote, which meant that Ostendorff wasn't legally required to divest until fall of 2012. But current and former NRC officials say that rules focusing exclusively on cases that require a formal vote do not address how NRC policy is set, and understate the role commissioners can play in influencing issues that don't come up for a formal vote.
The NRC has some of the strictest restrictions on investment for its senior leaders, because its decisions don't just have a tangential relationship to companies' bottom lines, but can make or break a quarter, or a year. Honeywell's stock tanked in 2009 in the wake of the financial crisis, but it has been rising steadily since.
"It's unfortunate that anyone in such a powerful position within the NRC would even own stock in a company that they have regulatory authority over," Lech said.
Clarification: This piece has been updated to clarify that uranium conversion, rather than enrichment, is conducted at the Honeywell facility in Illinois, and that Honeywell has had regular discussions with the NRC over emergency preparation upgrades and has not entered into any related litigation.