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# Demand for Information Owner of Envirocare of Utah

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No. 99-143 July 12, 1999

**NOTE TO EDITORS:  DEMAND FOR INFORMATION FROM OWNER OF ENVIROCARE OF UTAH**

The Nuclear Regulatory Commission has called for Khosrow B. Semnani, owner of Envirocare of Utah, Inc., to provide it with information concerning his past relationship with Larry F. Anderson, former director of the Utah Division of Radiation Control. NRC is seeking this information to determine whether it should take any action concerning the Envirocare license or Mr. Semnani himself.

The text of NRC's formal demand for information is attached. Envirocare is a radioactive waste disposal facility near Clive, Utah, about 75 miles west of Salt Lake City. It holds licenses from both the NRC and the State of Utah.

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UNITED STATES NUCLEAR REGULATORY COMMISSION

In the Matter of Khosrow B. Semnani, Owner Envirocare of Utah, Inc.

Docket: No. 40-8989 License No. SMC-1559 EA 99-180

DEMAND FOR INFORMATION

I

Khosrow B. Semnani, is the owner of Envirocare of Utah, Inc. (Envirocare). The corporate headquarters of Envirocare is located in Salt Lake City, Utah. The site itself is located near Clive, Utah, some 75 miles west of Salt Lake City. Envirocare holds License No. SMC-1559, issued by the Nuclear Regulatory Commission (NRC or Commission) pursuant to 10 CFR Parts 19, 20, 21, and 40, including Appendix A; 10 CFR Parts 51, and 10 CFR 61.80 and 61.82, as of November 19, 1993. License No. SMC-1559 will expire on November 30, 2003. The license authorizes Envirocare to receive, store, and dispose of uranium and thorium byproduct material (as defined in Section 11e.(2) of the Atomic Energy Act of 1954, as amended) in accordance with the conditions specified therein. Khosrow B. Semnani is identified on the license as the President.

II

From 1980 until June 30, 1988, Larry F. Anderson was the State of Utah Director of the Bureau of Radiation Control. From July 1, 1988, until June 1993, Mr. Anderson was the State of Utah Director of the Division of Radiation Control. In July 1993, Mr. Anderson****was replaced as Director of the Division of Radiation Control and remained employed with the State of Utah until his retirement in May 1994. During the period of Mr. Anderson's term of employment as the Director of the Bureau of Radiation Control and as Director of the Division of Radiation Control, he supervised the activities of those agencies, which activities included the issuance of licenses for the disposition of radioactive material within the State of Utah.

You testified in civil proceedings concerning Envirocare, Nuclear Fuel Services v. Khosrow Semnani, et al (No. 970901677CV); Waste Control Specialists v. Envirocare of Texas, et al (No. MO 98 CA 062); and UMETCO Minerals Corporation v. Envirocare of Utah, et al (No. 97 Z 1323), that, in 1987, you filed an application with the Utah Division of Radiation Control for a license permitting the disposal of radioactive material within the State of Utah. You also testified that, beginning in 1987 and continuing through 1995, you made payments of approximately $600,000, in the form of currency, gold coins, funds deposited in a Swiss bank account, and property, to Larry F. Anderson. You testified that although you knew that Mr. Anderson's requests for the payments were not appropriate, you did not report such payments to any governmental authorities, nor did you file any U.S. Internal Revenue Service Form 1099s for the payments you made to Mr. Anderson.

On July 31, 1998, you entered into a plea agreement with the United States, in which you agreed to: (1) plead guilty to one count of Title 26 U.S.C. Section 7207 and Title 18 U.S.C. Section 2, involving aiding and abetting Mr. Anderson's filing of a false Federal tax return (for the year 1993) which did not include $40,000 in income paid by you to Mr. Anderson; (2) pay a $100,000 fine; and (3) cooperate fully with the Department of Justice's investigation and prosecution of others.

On July 31, 1998, you signed a plea and cooperation agreement (agreement) wherein you admitted aiding and abetting, on or about April 15, 1994, in Mr. Anderson's filing of a fraudulent 1993 Federal tax return.

The NRC is concerned that your participation in the payment of money and other value to Mr. Anderson, as described above, in connection with Mr. Anderson's official responsibilities as a State of Utah official over matters subject to an Agreement State program, pursuant to Section 274 of the Atomic Energy Act, a program integrally related to the Federal regulatory process administered by the NRC, raises questions of whether your future involvement in NRC-licensed activities would undermine the NRC's reasonable assurance of adequate protection of public health, safety, and interest. In particular, the NRC is concerned that you did not take advantage of avenues apparently available to you to prevent, cease, and/or report such payments. This raises concerns that you would engage in similar conduct in connection with NRC-regulated activities. Accordingly, the NRC needs further information to determine whether it should modify, suspend, or revoke, or take other appropriate action, regarding the Envirocare license, or take action to prohibit your involvement in licensed activities.

III

Accordingly, pursuant to Sections 161c, 161o, 182, and 186 of the Atomic Energy Act of 1954, as amended, and the Commission's regulations in 10 CFR 2.204, the Commission needs the following information to determine whether enforcement action should be taken to ensure future compliance with NRC requirements:
        - Provide information that demonstrates how, in light of the facts set forth above, you can be relied on to comply with NRC requirements and to provide complete and accurate information to the NRC.
        - In addition, respond to the following questions:
        - Did you believe the payments to Mr. Anderson to be either inappropriate or illegal?

B. If you believed that such payments were either inappropriate or illegal, why did you not notify either State or Federal authorities?
        -  With regard to the payments, did you first approach Mr. Anderson or did Mr. Anderson first approach you? Was this contact made before or after October 12, 1987, the date of Envirocare's submission of the license application to the State of Utah for naturally occurring radioactive material (NORM) waste? Was this contact made before the expenditure of money for the purchase of the Envirocare site from Tooele County, Utah? Was this contact made before the expenditure of any money for consultants and other experts assisting Envirocare in the preparation of the NORM-related license application documents?
        - Were you ever a member of the Utah Radiation Control Board (Board)?
        - If so, during what time period were you a member of the Board?

F. Does the Board have regulatory oversight of Envirocare?

G. If the Board has regulatory oversight of Envirocare, did you, as a member of the Board and as the owner of a company being regulated by the Board, not have the responsibility to report to the Board your payments to Mr. Anderson as either inappropriate or illegal?
        - Mr. Anderson retired from the State of Utah in the summer of 1994. When did you make your last payment to him? Why did you not, after Mr. Anderson's retirement, immediately notify either State or Federal authorities of your payments to Mr. Anderson?

IV

You may provide any other information that you want the NRC to consider, including whether the statements made in Section II are correct. You may respond to this Demand for Information by filing a written answer, under oath or affirmation, or by setting forth your reasons why this Demand for Information should not have been issued, if you do not provide the requested information. The response to this Demand for Information is to be submitted to the Director, Office of Enforcement, U.S. Nuclear Regulatory Commission, Washington, DC 20555, within 30 days of the date of this Demand for Information, in writing and under oath or affirmation. Copies also shall be sent to the Assistant General Counsel for Materials Litigation and Enforcement at the same address, and to the Regional Administrator, U.S. Nuclear Regulatory Commission, Region IV, 611 Ryan Plaza Drive, Suite 400, Arlington, TX 76011.

On review of your answer, or if no answer is filed, the Commission may institute a proceeding pursuant to 10 CFR 2.202 or take such other action as may be necessary to ensure compliance with regulatory requirements, including prohibiting your future involvement in licensed activities. Your response to the Demand for Information will be considered before a decision is made in this matter. However, if no answer is filed, we will proceed on the basis of available information.

If you choose to respond, your response will be placed in the NRC Public Document Room (PDR). Therefore, to the extent possible, it should not include any personal privacy, proprietary, or safeguards information, so that it can be placed in the PDR without redaction. If personal privacy or proprietary information is necessary to provide an acceptable response, then please provide a bracketed copy of your response that identifies the information which should be protected and a redacted copy of your response that deletes such information. If you request withholding of such material, you must specifically identify the portions of your response that you seek to have withheld and provide in detail the bases for your claim of withholding (e.g., explain why the disclosure of information will create an unwarranted invasion of personal privacy or provide the information required by 10 CFR 2.790(b) to support a request for withholding confidential commercial or financial information). If safeguards information is necessary to provide an acceptable response, please provide the level of protection described in 10 CFR 73.21.

FOR THE NUCLEAR REGULATORY COMMISSION

/s/

James Lieberman Director, Office of Enforcement Dated at Rockville, Maryland

This 12th day of July, 1999

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