Byrne’s guilty plea showed that SCANA’s downfall — triggered by a failed $9 billion effort to build two nuclear reactors in Fairfield County — was the result of not just mismanagement or incompetence, but criminal conduct at the company
‘s highest levels.
SCANA, a Fortune 500 publicly traded company whose business lineage traced back to 1846, was one of the crown jewels of South Carolina’s economy. But the failure of its effort to build two nuclear reactors at its plant in Jenkinsville led to multiple lawsuits and mounting financial troubles. Eventually the company was absorbed by Dominion Energy. SCANA’s downfall is perhaps the most costly business failure in state history.
Byrne was part of a conspiracy that engineered a “cover-up” to hide the extent of the publicly traded company’s financial problems caused by the nuclear project’s difficulties, according to charging documents in his case. “Through intentional misrepresentations,” Byrne and others deceived regulators and customers, documents said.
Byrne, 60, who appeared with his lawyers, Jim Griffin and Maggie Fox of Columbia, said little during Thursday’s hearing before U.S. District Judge Mary Lewis. He will be sentenced at a later date and, as part of a plea bargain, could testify against any alleged co-conspirators.
Lewis asked if Byrne understood that “when you plead guilty, you admit the truth of the charges against you?”
Byrne replied, “I do.”
However, Byrne will be sentenced last of all — a stipulation that indicates he is a key witness who potentially will testify against other SCANA executives against whom charges may be brought.
Byrne, a former Irmo resident who lives in Mt. Pleasant, could be sentenced to a maximum of five years in prison and up to a $250,000 fine. He also faces restitution up to approximately $1 million. However, prosecutors have agreed to recommend a lighter sentence if his testimony against other conspirators proves helpful.
Following the guilty plea hearing, Magistrate Judge Shiva Hodges gave Byrne a $25,000 unsecured bond, which means he doesn’t have to put up any money and can remain free until his sentencing. Byrne, who was born in England near Liverpool but grew up in Michigan, can leave the state and the country but only with permission. He is surrendering his passport as a condition of bond.
Byrne’s bond is low and unsecured because he has been cooperating with investigators for more than a year, is married with three grown children and has extensive ties to South Carolina and a clean record.
“He has never even had a traffic ticket,” Byrne’s lawyer Griffin told Magistrate Judge Hodges.
Except for the judges, everyone in the courtroom, for both hearings, wore a mask or a clear-plastic face shield.
Peter McCoy, U.S. Attorney for South Carolina, spoke about Byrne during the hearing.
Byrne, McCoy told Judge Lewis, “joined a conspiracy with other senior SCANA executives to defraud customers of money and property through … false and misleading statements and omissions.”
The conspiracy’s aim was to hide the truth about the woeful lack of progress in the ongoing nuclear project, McCoy told the judge. Byrne and other conspirators made false statements to regulators and investors in order to make them believe the project was progressing well and in line for $1.4 billion in future tax credits, McCoy said.
So far, Byrne is the only former SCANA official to be formally charged in the case. Prosecutors have said they expect charges to be made against other former SCANA top officials, but declined to say how many.
Byrne has cooperated with the investigation for about a year.
“Today is a start in a process that has been years upon years in the making,” McCoy said to reporters after Thursday’s proceedings. “We’re mighty proud to have gotten this first step down.”
McCoy was flanked by four assistant U.S. attorneys who have been working on the case: Winston Holliday, Jim May, Brook Andrews and Emily Limehouse. FBI agents involved in the case, including Reid Davis, Luke Davis (no relation to Reid Davis) and Aaron Hawkins, were also with McCoy.
Prosecutors declined to say how many more defendants they expect will be charged. “What you can see is that this is an ongoing investigation,” May told reporters at the press conference.
Also on hand was Don Zelenka, a senior attorney with S.C. Attorney General Alan Wilson’s office. As part of the plea bargain, Wilson has agreed not to prosecute Byrne on any state charges connected to the SCANA debacle. Wilson’s pledge not to prosecute Byrne means Byrne will avoid serving prison time in a South Carolina prison. If Byrne goes to prison, it will likely be at a minimum security facility for other non-violent offenders.
The guilty plea was the result of a three year investigation by the FBI and prosecutors at the U.S. Attorney’s Office in Columbia.
Byrne was greeted at the courthouse shortly before 10 a.m. by half a dozen protesters who jeered him. Most of them had objected to SCANA’s rate scheme which made customers pay for the nuclear project for years in advance.
“Justice for ratepayers today!” one protester called. “We’re here to accept your apology — won’t you apologize to South Carolina ratepayers?” another protester taunted.
They held signs reading “Recognition for Worst Performance in the 21st Century” and “Scene of the Crime” — a large aerial photo of the unfinished nuclear construction site.
“We are here to see justice served on Mr. Stephen Byrne,” said protester Tom Clements, one of a few citizens who protested for years the scheme by which SCANA and Santee Cooper, its junior partner in the nuclear venture, could charge customers for ongoing construction costs.
Once SCANA and Santee Cooper announced they were abandoning the venture in June 2017, SCANA’s stock price began to plummet and its financial and political troubles began to mount. SCANA was hit by multiple lawsuits, most of which have now been settled with multi-million dollar payoffs to investors and ratepayers.
SCANA’s failure affected the pocketbooks of hundreds of thousands of people and businesses. For years, the company had jacked up customers’ monthly power bills to help pay the billions in ongoing construction costs for the two nuclear reactors that were supposed to be built, but now will never generate power.
For years, SCANA gave off a dependable stream of steadily rising dividends to investors and current and retired company employees. It was headquartered in Cayce, had thousands of employees and some 700,000 electric customers and 350,000 natural gas customers in South Carolina.
SCANA has since been absorbed by the Virginia-based Dominion, an energy giant. Dominion has agreed to return $4 billion to ratepayers as a result of the failed nuclear project.
At Thursday’s bond hearing, Magistrate Judge Hodges — who must approve any out-of-state travel — told Byrne she will be receptive to his going to England, where Byrne still has family ties, for events like weddings and funerals.
“But if you want to to the Caymans (islands in the Carribbean Sea) for vacation, that is probably a no-go for me,” Hodges said.