The feds have two questions for top officials of Arizona Public Service Company: What did you know? And when did you know it?

New Times has learned that federal investigators plan to visit Phoenix this week to interview several high-level APS managers as part of a probe into whether the officials and their lawyers were involved in a conspiracy and cover-up against a whistle-blower at the utility's Palo Verde Nuclear Generating Station.

Sources close to the case say that Nuclear Regulatory Commission investigators will come bearing subpoenas for William Conway, who is in charge of Palo Verde; Jim Levine, APS' vice president of nuclear operations; and other members of the utility's corporate structure.

NRC spokesman Greg Cook would not confirm the timing of the investigation, but did say the agency plans to "be actively involved in following up serious questions about conduct at APS."

The investigation was sparked by APS' unexpected admission August 11 that a Palo Verde supervisor had discriminated against a former employee, Tom Saporito, because Saporito dared point out safety violations at the nation's largest nuclear power plant.

Saporito, who was given a temporary contract to work as a nuclear engineer at Palo Verde in 1991, repeatedly complained to his supervisors about unsafe maintenance procedures, including an incident where Palo Verde workers used hammers to pound on sensitive devices that monitor the nuclear reactor's cooling system. But, Saporito claims, instead of responding to his concerns, plant officials allowed him to be harassed by co-workers (one angrily shoved him into a security fence) and refused to fix the safety problems. Within months, he was informed that his contract would not be renewed.

Saporito filed a federal lawsuit, alleging that he lost his job because of his outspoken criticism. In May, a judge ruled in his favor--despite emphatic sworn testimony from high-ranking APS officials and his immediate supervisor, Frank Warriner, that the whistle-blowing wasn't a factor in the termination of his contract.

But in a letter to employees and the press August 11, APS proved that the judge was correct. In language dripping with contrition, Mark De Michele, APS chief executive officer, explained that Warriner had suddenly and regrettably made a confession: Yes, he had decided to dump Saporito because of his reputation as a whistle-blower at Palo Verde and other nuclear power plants.

In an attempt to distance APS from Warriner's action--and subsequent perjury--De Michele strongly condemned the supervisor's conduct and was careful to note that Warriner had acted alone.

"[Warriner] stated that no one at APS encouraged, pressured or ordered him not to select Mr. Saporito or provide false testimony," De Michele wrote. "He said the misconduct was solely his decision."
But Saporito and his attorney say that claim doesn't ring true. They insist other APS officials must have known about, or even encouraged, Warriner's decision to drop Saporito, and that the public confession is designed to focus the blame on company underlings while shielding top APS managers. It would appear that NRC investigators share some of those same suspicions.

Jaron Norberg, the APS executive vice president who is handling spin control for the utility in the Saporito affair, did not return calls from New Times.

But David Colapinto, an attorney with the Washington, D.C.-based National Whistleblower Center--a group that provides legal assistance to industry employees like Saporito--says that "it just isn't logical that a low- to midlevel manager like Warriner is responsible for getting rid of a whistle-blower on his own.

"Especially in light of APS' past record on whistle-blower harassment."
As New Times documented earlier this year (Critical Mess," May 26), Palo Verde has more pending harassment complaints than any other nuclear plant in the country. APS has lost three lawsuits to whistle-blowers in the past four years, and court records show that workers who were vocal about safety problems have faced harassment ranging from verbal badgering to assault and death threats.

The company was recently fined $130,000 in connection with employee harassment, and APS officials were chided by the NRC last month for creating a "chilling effect" that prevents workers from coming forward with safety concerns, the NRC's Greg Cook says.

Saporito, an unemployed journeyman nuclear technician who--without a lawyer or legal training--fought and won a legal battle against APS and its cadre of corporate lawyers, believes that the numerous examples of employee harassment can mean only one thing.

"The clear pattern of harassment at Palo Verde," Saporito says, "indicates that complicity in wrongdoing goes all the way to the top."
Saporito says that although Palo Verde chief Conway testified during the lawsuit that he had no knowledge of the worker's whistle-blowing activities prior to the decision not to rehire him, several questions remain unanswered. For instance, NRC investigators are expected to ask Conway about telephone calls he made to Florida Power and Light--a utility where Saporito had previously blown the whistle on safety problems--before Saporito was dismissed. They are also likely to ask about meetings that were held between Conway, Levine and other Palo Verde managers--including Warriner--in the days immediately before the dismissal.

Colapinto suggests that Warriner is playing the role of sacrificial lamb.
"Laying it on Warriner is just damage control and cover-up," he says. "[APS] knew this would eventually be exposed, and so they are just trying to contain this thing where it is right now. But I think they are finding that to be more difficult than they expected."
Warriner, who has been placed on leave by APS, did not return calls from New Times. APS officials have been quoted as saying that Warriner came forward because of a need to "unburden" himself.

Colapinto also scoffs at what he says is APS' attempt to shift its culpability to the company's lawyers.

In the August 11 press release, De Michele blasted APS' attorneys, the high-powered Phoenix law firm of Snell & Wilmer, for "not providing relevant documents during the discovery phase of the Saporito case." The documents, a set of employee r‚sum‚s with Warriner's handwritten notes on them, indicate that the supervisor singled out Saporito for elimination from among dozens of contract employees whose working agreements with APS were up for renewal. Snell & Wilmer, however, only presented a set of unmarked r‚sum‚s to the court and defense lawyers.

Snell & Wilmer, Arizona's largest law firm, quickly issued a defensive press release of its own, claiming that the documents were eventually submitted to the judge and that the firm had made only a momentary error.

Nevertheless, De Michele hinted that APS might break with Snell & Wilmer--which has represented the utility for more than 40 years and was founded by Phoenix patriarch Frank Snell, who also helped create APS in 1952. Snell's son, Richard Snell, is currently president of the APS board of directors.

Colapinto expresses disbelief over the official APS version of the lawyers' "mistake."

"I know how thorough a law firm Snell & Wilmer is," he says. "They are equipped with vast resources. It is almost inconceivable that they could overlook or not know about documents like that.

"And if they knew, APS knew, too. This implicates a lot of other people in perjury--including, possibly, the lawyers."
That possibility will be examined by NRC investigators, who reportedly plan to question Snell & Wilmer attorneys during their Phoenix visit, as well.

Whatever the outcome of the NRC probe, it is clear that De Michele's corporate catharsis was for public relations purposes only. Despite the apologetic admission that an APS employee had violated whistle-blower protection laws and then lied to a federal judge about it, APS has brazenly announced its intention to appeal the ruling against it in the Saporito case.

The Washington, D.C., law firm Newman and Holtzinger, retained by APS to handle the Saporito matter after the tiff with Snell & Wilmer, plans to ask the judge who found in the worker's favor to reverse his decision--claiming that Saporito lied on his original job application and thus has no right to sue the utility.

The NRC does have rules that require employees to list all of their past jobs on applications at nuclear power plants. Saporito admits violating the letter of the rules, which were implemented during the Cold War to ensure that workers hadn't been employed by Communists--or, in the 1990s, to guard against employee association with terrorist-linked companies.

But the jobs Saporito says he inadvertently left off his Palo Verde application weren't with the Wobblies or the PLO--but with a few small hotels, where he briefly worked as a repairman.

If APS is successful in persuading the judge to toss out the suit on this technicality, Saporito will face a double loss--not only will he be robbed of compensation for the costs of his two-year legal fight, but he could be banned from working in the nuclear industry for life.

"This tells you a lot about APS' sincerity level," Colapinto says. "They made a big show of owning up to the harassment.

"But the harassment goes on.

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