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By: J Truman
January 2, 1997
A front page headline from the SALT LAKE TRIBUNE Saturday December 28, 1996, has set off a major scandal in the Utah State Division of Radiation Control (DRC) that is certain to have wide spread repercussions nationally on low level nuclear waste disposal and clean up issues. The scandal involves the payment of close to $600,000 from the owner of a low-level nuclear dump to the former Director of the state agency in charge of regulating the facility. The dump owner maintains the payments were the result of extortion by the former state regulator. The former state regulator claims they were for "consulting" services. Either way they were in direct violation of Utah ethics laws and a criminal investigation is underway.
The scandal, which has yet to receive national attention, is bound by the nature of the nuclear waste facility involved to have effects on nuclear waste issues far beyond Utah, and is likely to effect the on going, and proposed clean up projects at a number of Department of Energy (DOE) and Department of Defense (DOD) sites nationwide. By the time it is finally resolved and its repercussions played out, the $600,000 payment could totally change the face of the low-level nuclear waste issue in the United States.
The scandal first surfaced when Larry F. Anderson, director of the Utah Bureau of Radiation Control from 1983-1993, now the Division of Radiation Control (DRC) filed a lawsuit in Utah Third District Court in late 1996. In his suit Anderson claimed that he had entered into a business relationship with Khosrow Semnani, the owner of a disposal facility for mildly radioactive waste located in Tooele County, Utah. According to his suit Anderson agreed to help Semnani establish the facility known as Envirocare of Utah and get it licensed to operate in Utah. In return Anderson asked for an advance payment of $100,000 and 5% of the ongoing revenues from the facility's operations. Anderson received the $100,000 in 1987. After the Envirocare facility was licensed by the state and started commercial operations in 1988 he continued to receive payments from the owner until 1993. It was this halt in payments when he left state government that triggered Anderson to file his lawsuit against Semnani asking for over $5 million in unpaid "consulting fees".
There is one little problem with all of this that was not mentioned by Anderson in his suit that triggered the mounting scandal. In 1987 when Anderson, according to his suit, first "approached" Semnani with the idea of establishing a facility and offering his services for $100,000 and then went on to help get the facility licensed a year later, Anderson was also the state official empowered and solely responsible for approving its license and operations. This practice clearly forbidden under Utah ethics laws then in place. Anderson himself drove this point home in his suit where he told the court that,
"Without the express involvement of the plaintiff (Anderson), defendants wouldn't have been able to create such business operations."
Envirocare's owner Khosrow Semnani was quick to respond to the suit both in court documents and to the media. He charged that Anderson's relationship was one of simple extortion, nothing else. He told Salt Lake Tribune reporter Jim Woolf, who first broke the story, that he feared that if he didn't make the payments to Anderson, he would use his regulatory authority to create problems for his disposal company. Semnani admitted paying Anderson the $100,000 advance and said that after making it he was trapped and could not stop out of fear Anderson would go public with their secret relationship.
Then Semnani went on to describe how over an eight year period Anderson had continued the extortion receiving a total of $600,000 before finally telling him to take a walk. He described how the payments had been made with piles of $100 bills, gold, and anything else he could lay his hands on. Included in the payments was the transfer of a $300,000 Park City condominium to Anderson.
After he finally stopped responding to Anderson's demands for more money Semnani claims Anderson continued to badger him and to threaten actions against him. Finally Anderson's attorney sent letters to Semnani's attorney formally threatening a lawsuit. The letter carried what might be considered explicit references to "public exposure" as a means to not let the matter reach the courts;
"I would request that you inform your client of his options, so that he might govern himself and the course of his actions on these issues. I would hope that you would explain the impact of the formal suit, regardless of any judicial outcome."
In addition to labeling the payments to Anderson as outright extortion, Semnani also filed a counter suit against Anderson demanding his $600,000 back. The case, a civil suit, remains before the Third District Court in Salt Lake City.
The results of the public exposure of the lawsuit by Anderson for unpaid "consultant fees" and Semnani's counter charges of "extortion" were swift and dramatic. One of the first responses was from the Utah Attorney General's Office, which Anderson maintained in his suit had given him "informal advice" approving his relationship with Semnani. The AG's office promptly launched a criminal investigation under Utah's ethics laws.
The most dramatic reaction was a media fire storm that quickly turned the matter into one of Utah's biggest scandals. While the media turned its big guns onto the sorrid affair, Utah government rushed to protect its tarnished image and tried to reassure the public that the events coming to life in the press had never, and did not now present any risks to public health and safety regarding operations of the Envirocare facility. Dr. Dianne Nielson, the director of the Utah Department of Environmental Quality (DEQ) which oversees the state Division of Radiation Control, told the Salt Lake Tribune when the story first broke that she had "grave concerns" about the story but that "Envirocare is operating correctly right now."
Later with rising anger Dr. Nielson was to tell the Deseret News, Utah's afternoon daily, that,
"Offering to make payments, being asked to make payments, making payments is wrong. It is illegal, it is unacceptable, and it is clear this is not the way business is done in the state of Utah."
Bill Sinclair who replaced Larry Anderson in early 1993 as Utah's chief radiation control officer, was quick to inform the Deseret News that,
"If you came to me and tried to make an arrangement, there wouldn't be a discussion of any arrangement. It wouldn't be ethical."
One of the first key targets of attention by both current state regulators and the media was Mr. Semnani's position on the Utah Radiation Control Board , an 11 member citizen board that governs the Division of Radiation Control. The board was established in 1992 and was not in operation as an oversight body at the time the Anderson-Semnani alleged business relationship began in 1987-1988. The board is made up primarily of citizens with ties to the radiation technologies regulated by the state. It includes scientists, doctors, dentists, representatives of local governments and health departments, business and industry people, and one public representative. Khrosrow Semnani has been the industry representative since the board was first established, and has been reappointed by two Utah Governors.
The first outcry about Semnani's position on the Radiation Control Board came on the day the scandal broke when Dr. Dianne Nielson told NBC affiliate in Salt Lake City, KSL-Ch. 5 T.V that,
"If I were Khos Semnani, I would offer my resignation. Serving on a citizen board, it's a public trust, and we cannot and should not allow the actions of individual board members to compromise or jeopardize the integrity of the entire board action."
Over the next few days the demands for Semnani's resignation escalated with Utah's largest newspaper The Salt Lake Tribune editorializing that,
"It doesn't matter whether Khosrow Semnani is a victim of extortion or was himself a payer of bribes. Either way, he must resign immediately from the Utah Board of Radiation Control." In the same January 2, 1997 editorial the newspaper also stated that, "a grand jury should be impanneled to investigate the financial relationship between Semnani, the owner of a disposal facility in Tooele County that accepts mildly radioactive wastes, and Larry F. Anderson, the former director of the Utah Bureau of Radiation Control."
The calls were echoed by the rest of Utah's media throughout the rest of the day. Late in the day Utah's Governor Mike Leavitt, vacationing with his family out of state, responded through his aides stating that he was not ready yet to take any action on the matter, "until I have more facts". And he reported that Semnani had agreed not to attend the next board meeting set for Friday January 3. This gave the Governor more time before having to make a decision. The Governor's position turned to one of embarrassment the next morning when the Salt Lake Tribune reported that Semnani was also one of the largest contributors to both sides of Utah politics, and that in the 1996 campaign had made at least $22,200 in contributions to state candidates, the largest of which was $17.800 to Governor Leavitt.
The Mormon Church owned Deseret News editorialized the same day that,
"Threats of extortion, when they come from people in powerful public positions, may be difficult to resist. In the case of Envirocare of Utah's owner Khosrow Semnani, such alleged threats have been likened to a gun against the head. Semnani claims the state's former chief radiation-control officer demanded money from him with the implied threat that Anderson would create problems for the company.... For his part, Anderson has sued, claiming he was owed even more money as a type of consulting fee. Regardless of which story is correct, Semnani should resign his seat on the state's Board of Radiation Control. He has said he will take a leave of absence for a few months until the case runs its course, but that is not enough."
The Deseret News also pointed out the real importance of the scandal when it ended its editorial with the comment that,
"Waste-management may be a highly competitive, cutthroat business, as Envirocare officials say, but the public must be satisfied that its relationship to the state is above reproach. Semnani may have felt he had a gun to his head, but the threat really is against the people of Utah."
Late on Friday January 3, the Utah Board of Radiation Control met for its first meeting since the scandal broke. Held in the glare of television lights from every Utah network, and the presence of the state's newspaper reporters, only one of the ten board members present addressed the scandal. In an angry, emotional, and plain spoken tirade Preston Truman, the public interest representative on the board, tore into the scandal calling it the
"most disgusting in Utah history.... We will not have government influenced by piles and piles of Ben Franklins! This situation is not just over the line, it is so far over the line that the Hubble Space Telescope turned back around could not even see where the line ever was... The system has failed. We have a responsibility to do something."
Some of the harshest criticism was also directed against the lack of involvement from members of the public and the environmental community in the state's radiation control decisions. Truman lambasted this lack of involvement as one of the factors that allowed the scandal stating that,
"While I am delighted to see this hearing room filled with more people than we ever have in attendance, and with the media present, but I am saddened that it took a freight train -- the longest you can imagine -- filled to the brim with unmentionable material suddenly hitting the fan to get everybody here. We discuss these issues at our meetings, send our decisions out for public comments, hold public hearings, and end up being the only ones to attend. It remains only the direct and active involvement of the public in this process that offers the best and final deterrent to this type of behavior... And it is time they better start excercising their rights and responsibilities and start showing up."
Strangely absent from the media and public discussions of the scandal was any realization of its wider implications. Envirocare is the only completely privately owned and operated facility of its kind in the United States. Among its 50 some odd customers from around the country are the Departments of Energy and Defense involving wastes from key clean-up sites stretching from New York state, Ohio, St. Louis, Rocky Flats, INEL, to name only a few. Whatever the outcome of the scandal in Utah, its effects will be likely felt at each of those sites. In addition Envirocare does not operate in a local vacuum involving Utah. It is a key player in the national low-level nuclear waste debate and what effects it will affect the issue on a national scale in ways that could be minor or major levels that could completely turn the entire issue upside down nationally.
In addition the low-level waste disposal business is an extremely competitive and cut-throat business, marked by vicious and expensive corporate warfare. Envirocare is currently locked in a vicious and intense battle in Andrews County, Texas with the Waste Control Specialists company over competing plans for a low-level waste disposal site. The industry is locked in a series of wide ranging battles, both among themselves, and with state and federal regulators across the nation.
At stake is tens, if not hundreds of billions in potential profits to those corporations that get the rights to clean up and dispose of just the nuclear waste left over from the Cold War nuclear weapons development facilities -- a scandal in itself with clean up costs likely to exceed One Trillion Dollars! And that does not even start to include the potential profits from the commercial nuclear industry side. The current scandal with Envirocare in Utah must be viewed at the level of the national waste battles currently underway to fully understand the profound national implications it will have on nuclear waste no matter what the outcome here.
These issues will be covered in the current and future issues of Testing News On-Line. Please check out the current issue for additional information and check back regularly for updates.