MEMOS REVEAL WORRY OVER INCIDENT.

Byline: Patricia Farrell Aidem Daily News Staff Writer

At 3:38 p.m. Oct. 28, a high-ranking supervisor at the Castaic Lake Water Agency urged his staff to ``flush the rat out,'' certain that a disgruntled employee was responsible for tipping news reporters to a toxic leak.

At 5:32 p.m. the same day, that official wrote a follow-up memo noting that employees have ``Constitutional rights as American citizens to freedom of speech.''

In just under two hours, Steve McLean, operations engineer for the agency, had gone from joking that a whistle-blower be tortured to citing the Bill of Rights' guarantee that employees can speak out - as long as the information they leak is factual. Otherwise ``such acts could be construed by the Department of Health Services and/or the District Attorney as criminal and subject to prosecution,'' according to the second memo.

McLean's memos were in response to Daily News stories about his decision Oct. 8 to dump a leaking tank of concentrated hydrogen peroxide into a wastewater recovery basin at the agency's Rio Vista Water Treatment Plant. Before the chemical was diluted, it was returned to the water distribution system and pumped to customers.

While water agency officials maintain that the information in the stories was erroneous, state Health Department investigators said the agency, if anything, has underplayed the problem in the press. The state is continuing its investigation.

``While everyone has the right to free speech, we need to make sure information that we pass out is correct,'' said Kiza Stratton, a public relations consultant for the agency who was assigned to field all calls on the spill and its aftermath. ``We're dealing with public health issues. We can be unnecessarily putting fear in the public.''

In his second memo, McLean asks five supervisors whether a note should be distributed to employees explaining the risks of leaking information.

``Would this be a good idea, or would this just serve to upset our many good, reliable, loyal employees?'' he asks. ``Another potential action is to do nothing in writing, but to have each of you express these concepts to your crews - probably in kinder, gentler language.''

In a memo obtained Friday by the Daily News, Rich Krieger, the agency's supervisor of operations, advised McLean that a note accusing an employee of improper behavior would damage morale. Plant operators, Krieger said in his Nov. 3 note, already feel they are being tagged as informants.

``This fingerpointing, if it is fingerpointing, must stop before we get into some serious accusations,'' Krieger's memo said.

McLean backed down.

``Everyone seems to agree with your opinion on the memo so there will be none,'' he wrote Nov. 3 to Krieger. ``There will also be no fingerpointing. If someone steps forward and admits to their actions, so be it, but we're not going to shake people down or beat them with rubber hoses to get confessions.''

Krieger and McLean have refused to talk to the Daily News about the spill and the concern about news leaks.