TO :Steven A. White, Manager of Nuclear Power, LP 6N 33A-C Fton t W. r. Wlllil. General Manager, El2Bl6 C-K DATE SUBJECT: LIMITATION ON QA ENGINEERING SERVICES TO BE ORDERED FROM STONE f. WEBSTER ENGINEERING CORPORATION (SVEC) As we discussed, the Office of Nuclear Power is to order any QA engineering work to be obtained froa SWEC under TVA Contract No. TV-63702A wlth^SWEC and to limit its use of that contract for QA engineering work to $ per year during each of the next two years. Mr. Sikorski. Then, as I understand it, you wrote another memo. What happened next in the chronology? Mr. Sanger. After I wrote the February 13 memo, things got increasingly difficult. But I kept talking with the Board and general manager about the issue, and we prepared a formal opinion on our authority to enter into the contract, the one I referred to earlier. Then on May 5 we prepared a more comprehensive formal opinion on the conflicts-of-interest issue. Mr. Sikorski. Mr. Sanger, before you go any further, I was paging through this and noticed an article in the Knoxville Journal. Evidently there was a meeting in which Members of Congress, or a Member of Congress, had asked you whether there was any problem at all with these contracts, and you gave an absolute answer. You said there was no problem, there was nothing to worry about. Mr. Sanger. There was a meeting at the Sequoyah Nuclear Plant and it was attended by Congressman Cooper and Congresswoman Lloyd, I think Commissioner Asselstine from the NRC was there, and the two TVA Board members. I was asked about our authority to contract for services of that type. Now remember, Mr. Chairman, this was after our February 13 memo. Mr. Sikorski. Right. Mr. Sanger. I advised and I said clearly that we had the authority to enter into such contracts. I had two Board members sitting there, Congressman, one of whom is a lawyer. I had serious problems about voluntarily raising to those people that I had raised other questions about conflicts. I answered the question I thought I was asked. I did not think I was asked about the conflicts. Had I been asked I don't think I could have answered it. Mr. Sikorski. You felt you were asked about the legality of the contractual arrangement? Mr. Sanger. As opposed to the administration Mr. Sikorski. As opposed to the conflicts-of-interest question? Mr. Sanger. That is correct. Mr. Sikorski. Now, you felt constrained by the attorney-client privilege from suggesting another question which would have elicited the conflict of interest concerns that you raised back at the beginning and more recently in the February 13th memo Mr. Sanger. Quite true. Mr. Sikorski [continuing.] Your discussion with the IG was in late March. You felt further contrained, even if you had been asked that question, by the attorney-client privilege from saying you couldn't answer that question? Mr. Sanger. That is right. After all, the TVA Board was sitting there and one Board member is a lawyer. The privilege is the Board's, not my privilege. I can't waive it. If the Board thought a greater answer was needed, it had the memo. Mr. Sikorski. So you wrote another memo, on May 5th, the two of you? Mr. Mason. Yes. Mr. Sikorski. Mr. Mason, did you also work on the February 13th memo? Mr. Mason. It happens that the February 13 memo was a memo that was sent to the people you designated and from both Mr. Sanger and I. Mr. Sikorski. And the May 5 memo raised the same concerns again? Mr. Sanger. In more detail. A more extensive, a better discussion of it. Mr. Sikorski. OK. And that was both your work product? Mr. Sanger. Yes, sir. Mr. Mason. Yes. Mr. Sikorski. Then you sent a copy of those two memos to the Office of Government Ethics? Mr. Sanger. That is correct Mr. Sikorski. Pursuant to statute? Mr. Sanger. Regulation. It is 5 CFR Mr. Mason. 738. Mr. Sikorski. 5 CFR 738, which requires Designated Agency Ethics Officials to supply copies of Mr. Sanger. Any memo written that mentions Title l8, sections 202 through 209, if I remember correctly. Mr. Sikoeskl And this includes 208, conflicts of interest? Mr. Sanger. That is correct. Mr. Sikorski. Have you provided this committee with copies of that material? Mr. Sanger. I have not. I have not provided that to anyone. Mr. Sikorski. We would request at this point, then, that you provide us with those two memos. Mr. Sanger. You asked me about the February l3 and May 5? Mr. Skobskx Yes. Mr. Sanger. If the chairman please, I would respectfully decline to do that. The Board has consistently, the TVA Board has consistently refused to disclose those memos in response to FOIA and other requests. I certainly—I don't want to say this, obviously, disrespectful I certainly have no objection about the memos, but I think iha: is up to the TVA Board and so I would respectfully decline to disrlosp them myself Mr. Sikoeskl. Well the Chair has fully reviewed and considered this kind of objection- and understands the reasons for the objection bei^f raised. 1 have consulted with the Counsel for the U-S. House cc Rtpreset*^^Tes. and under the advice of counsel am overruling ~~" :c •action- And you are therefore directed to submit the materia! to the sabcorrr±ncee pursuant to 2 U.S.C. Section 152. The maseriaJ fc-Il^we" ADMINISTRATIVELY CONFIDENTIAL .0 :C. H. Dean, Jr., Chairman, Board of Directors, El2 A7 C-K FROM Herbert S. Sanger, Jr., General Counsel, Ell B33 C-K DATE MAY 5 1988' SUBJECT: CONTRACT BETWEEN TVA, STONE & WEBSTER ENGINEERING In your memorandum of April l, l986 I. Introductory Discussion you asked that we pects of the subject s authority to enter in light of questions and others; and (2) the ly mentioned orally in , of taking the fullest ntation of the arrangeces of particular violation or appearance erest statute. On memorandum on the first ddresses the second, am E. Mason's and my es, a copy of which you The existing statute on conflicts of interest relate to a |