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Mr. GORE. Without objection your statement will be included in the record at this point, and you may proceed as you see fit. Mr. LAROCCA. I wonder if I might be accompanied at the table by counsel, who are familiar with this subject, as well as our outside counsel on this subject.

Mr. GORE. That is fine. Are they to be giving testimony or advising you as counsel?

Mr. LAROCCA. To be advising as counsel and to be assisting in any responses.

Mr. GORE. There is a difference, and it is not a matter to which I attach any great significance at this point, but it could later on acquire some significance, so we would ask them to choose between hats. If they are going to offer testimony, we will swear them. If they are going to advise you as counsel, we will not.

Mr. LAROCCA. Let me ask you your pleasure, Mr. Chairman. I believe each has sufficient knowledge of this history to provide a real service to the committee in understanding the development of this agreement. Now whichever kind of participation would help in that regard would be the one they would select.

Mr. GORE. That is fine. If they would come forward.

Mr. LAROCCA. Phil Gitlen is the former general counsel of the Environmental Conservation Department in New York and is outside counsel to the authority in this matter.

Mr. Clemente has been ill off and on-I hope not as a result of this hearing-but he is expected to be here.

Mr. GORE. Would you identify yourself for the record, please. Mr. GITLEN. Yes. My name is Philip Gitlen. I am a member of the law firm of Whiteman, Osterman & Hanna in Albany, N.Y. Mr. GORE. Is he going to be providing testimony?

Mr. LAROCCA. I would appreciate it if he could assist in the response to any questions.

Mr. GORE. Very well. Will you stand and be sworn, then.

Do you swear the testimony you are about to give will be the truth, the whole truth, and nothing but the truth, so help you God? Mr. GITLEN. I do.

Mr. GORE. We have your statement here, Mr. Larocca. You may proceed to present it as you wish.

Mr. LAROCCA. Thank you, Mr. Chairman.

New York welcomes this opportunity to review the cooperative agreement between the State and the United States to conduct this project which is aimed at both improving our understanding of the national nuclear waste technology and eliminating a very specific unresolved nuclear waste problem which poses a potentially grave threat to the health and safety of the people of western New York. Mr. GORE. Excuse me, Mr. Larocca. Where are you reading from? Mr. LAROCCA. These are introductory remarks.

I would like to apologize to Mr. Jensen. We worked until late last night on the statement. This is just a two-page introduction to the larger document which has already been provided to, and is now in the hands of, the committee staff.

Mr. GORE. That procedure is a little unusual. Under the rules of the committee you are required to present your statement 48 hours in advance. We never received such a statement.

Now, the reason for the rule is to assist the committee in preparing questions and fully understanding the views of witnesses who appear. Now, it is my understanding that after you submitted your prepared statement in accord with the rules of the committee, you came into possession of the subcommittee's internal staff briefing on the hearing outlining in some detail all of the issues of concern to us, and then proceeded to change the statement that you submitted to the subcommittee. Now if that is the case, we have a problem with that. If that is not the case, you may proceed.

Mr. LAROCCA. Mr. Chairman, we did not realize that we would be here today, nor find out the subjects we would have to respond to until last Monday when the Department of Energy letter to Congressman Bevill was described to us for the first time. It was not until Wednesday or Thursday that we actually received a copy of this letter.

When we arrived in Washington yesterday we had a draft statement, in expectation that before the day was out we would be meeting with the Department of Energy for the purpose of discussing the matters raised in the Bevill letter in preparation for this hearing today. So our being unable to complete the statement we wanted to make to you today was not due to any other document, but to the fact that our statement was in draft form and that I would be meeting with the Department of Energy last evening, which I did in fact do.

Mr. LUNDINE. Mr. Chairman, may I ask a question? I have a document called "Statement of James L. Larocca, July 9." This was given to me. Did he not submit this?

Mr. GORE. I was trying to find where he was reading from in the document.

Mr. LUNDINE. I have never seen any procedure like this. I mean, I have only been in the Congress for 6 years or something. Is it permissible that a witness summarize his testimony and not have to read from the statement?

Mr. GORE. The gentleman may not be familiar with the work of investigative and oversight subcommittees, but it is quite common for such subcommittees to insist on adherence to the rules of the House and the rules of the committee when witnesses appear. One such rule-it is not an Earth-shattering matter, but one such rule is that witnesses provide the subcommittee statements in advance so that we can fully understand them and prepare questions based on the statements.

Mr. LUNDINE. In fact, the State of New York did submit a 20page statement with 8 exhibits attached thereto. Right?

Mr. GORE. Not within the time required by the rules. As I say, it is not an Earth-shattering matter. In some hearings it does acquire more significance. Because of the unusual circumstances involved in this hearing and because of the witness' unusual and unintentional access to the internal papers of the subcommittee, I simply wish to, insofar as possible, get an accurate presentation of the views of the State of New York as they existed prior to the opportunity afforded the witness to review the subcommittee's internal

papers and tailor his statement to exactly match the questions which we intend to ask.

Mr. LUNDINE. Mr. Chairman

Mr. GORE. The gentleman is recognized. Please proceed.

Mr. LUNDINE. Was this witness informed in writing and invited to testify in writing?

Mr. GORE. Yes.

Mr. LUNDINE. On what date?

Mr. GORE. I am advised by staff that it was June 25, but we will check the records. In courtesy to the gentleman we will pin down the exact date.

Mr. LUNDINE. I just do not understand. I have never seen anything like this.

Mr. GORE. Has the gentleman ever served on an investigative committee?

Mr. LUNDINE. I have served on investigative subcommittees in the House Banking Committee.

Mr. GORE. I have seen it plenty of times, but the gentleman may proceed.

Mr. LUNDINE. My point of order is, I wonder what the problem is with this rather lengthy statement that has been submitted. Was it that it was submitted too late?

Mr. GORE. No problem at all. There is no problem at all. The gentleman was proceeding with a statement that was not a part of this statement and no part of which appeared in the statement. I simply inquired of the witness as to what he was presenting and how and why it differed from the statement presented pursuant to the rules of the subcommittee.

Now as I say it is not an Earth-shattering matter. We are prepared to hear from this witness, but I think the record ought to reflect the matters that have been discussed in introduction to the witness' statement.

Now the witness may proceed with the presentation of the statement which he has before him, which is the one you were reading from.

Mr. LAROCCA. Thank you.

I began by saying that we welcome this opportunity to appear. Mr. GORE. You are under oath, Mr. Larocca.

Mr. LAROCCA. The project involved has two aspects, providing valuable contribution to national nuclear waste technology understanding as well as eliminating a very specific problem of nuclear waste which poses a potentially grave threat to the health and safety of the people of western New York.

I must say, Mr. Chairman, that this hearing is a unique experience for me, as apparently it was for Dr. Bateman because I have never before been called to account for having done too good a job on behalf of the people I represent. I would be only too pleased if it happened more often.

Several issues have been raised by the agreement. My detailed statement-which you have-will follow this introductory statement. This detailed statement discusses each of the issues, and demonstrates in my view, the agreement's consistency with the act. The key issues raised in-and when I make reference to the issues raised I find myself referring to the DOE letter to Chairman

Bevill as the most specific enumeration I have had of what the issues may be are really cost issues. That is, who pays, the taxpayers of the United States, the taxpayers of New York, or both. Now very often we bureaucrats get carried away with our concern over which one of the taxpayer's pockets we intend to invade for public purposes. I have told the Department of Energy, and reiterate to this committee today, that New York will review with the Department any of the cost-sharing issues, the value of the facilities, the ceiling on State contributions, if that is the proper term for that feature, which are found by this subcommittee to be inconsistent with the act. But I also told the Department yesterday that it would be inappropriate to force the State to reopen any other provisions of this agreement which are not found to be inconsistent with the act, simply because the Department of Energy now finds those provisions inconvenient, bothersome, or not quite as the Department's new management would have them be.

The contract was entered into in good faith by New York and the United States. It would establish a very sorry precedent indeed if the Department were permitted to back away from its legitimate obligations under this agreement because a new administration has come to town or because new personalities are now involved.

Are we not a Government of law rather than of men?

If the Department is permitted to renege on any legitimate, negotiated, and executed agreement, what value will a contract with the United States have for any of us?

The situation at West Valley could lead to a radioactive waste crisis at any time. We have known this for years. Not since October 1, 1980, but since 1976, the State has been diligently pursuing a program to prevent such a catastrophe.

Last September the Congress provided for such a program, and last November the two parties involved agreed on an implementing framework to put DOE in possession of the site by October 1981.

Whatever you do, Mr. Chairman, do not allow this project to be delayed because of arguments over which of the taxpayer's pockets is involved. Require the parties to review and rework only those parts of the agreement you find inconsistent, although I sincerely hope to persuade you that no such parts are inconsistent with the law.

With regard to any other provisions, I hope your conclusion and message will be, "for God's sake get on with the job before it is too late."

Live up to your commitments, Department of Energy, be there by October 1981 and remove this threat which has hung over western New York for far too long.

Now if I may, Mr. Chairman, I would like to jump to the portion of my detailed statement beginning at page 5 which deals with issues the Department now contends require modification or clarification in the agreement.

First is the value of and need for facilities and services. The Department has said it does not believe it has a supportable basis for its estimate of the value of facilities at the center for use in the project. The Department has also represented that it does not now know what facilities at the site it intends to use for the project, and

cannot validate the need for all of the services to be provided by the State.

The act requires that the cooperative agreement provide for the State to pay 10 percent of the cost of the project, "as determined by the Secretary"; and that, in determining the costs of the project, the Secretary "consider the value of the use of the Center for the project." (Emphasis added.)

Article 5 of the agreement provides "the Authority shall pay ten percent (10 percent)" of the costs of the project. In that article, the Department determines that the use of the center will have a value over the 15- to 20-year life of the project of between $35 and $60 million. Additionally, the authority has agreed to provide services over the life of the project which the Department determined have an aggregate value to the project of between $15 and $25 million.


We have read statements by the Department's spokesmen to the press saying that New York negotiated got a "sweetheart deal" for what these critics say is a worthless plant. This criticism is unsupportable and directly contradicts the determinations the Department itself made as part of our agreement.

Representatives of the authority attended no less than three separate meetings with the Department and NFS in October 1980 for the purpose of determining the value to be attributed to use of the center for the project.

At these meetings, the Department and the authority agreed upon a methodology to be used. We agreed that the value of the center as a nuclear fuel reprocessing facility was irrelevant. No further processing of spent fuel was to take place. Rather, under the act, the proper question was "the value of the use of the center for the project" (emphasis added)-in other words, what costs would be avoided by using the center's facilities, rather than building new ones. From the inception of the legislation, the sponsors of the act had pointed out that one of the most important advantages of using the center for a solidification demonstration project was the ability to use the existing facilities and avoid the costs of new


Mr. Chairman, when you strip away the verbiage and contemplate what the meaning of any other conclusion might be, that the Department of Energy would come to western New York, where we already have a large number of highly radioactive facilities, and construct new ones for the purpose of conducting this project, thus creating two sets of radioactive facilities for our grandchildren to decontaminate.

Department counsel also repeatedly told the authority that it would be impossible to assign a rental value to the center. This question came up in Dr. Bateman's testimony. We were advised that Federal law limits capital expenditures at leased facilities to 25 percent of the first year's rent, making implementation of the project impossible-see 40 U.S.C. section 278a. Moreover, even if a rental value could be assigned to the center, the cumulative rental value over the estimated life of the project would equal the fully amortized present value of the facilities calculated at the beginning of the project.

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