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US attorney details illegal acts in construction projects, sealing the fate of the “nuclear renaissance”
“The indictment reveals important new information about how Benjamin and Westinghouse conspired to hide crucial information about reactor completion dates from the owners…It states that the defendant made “false and misleading statements” and “knowingly devised a scheme” to continue the project based on misrepresentations.”
By Tom Clements | thebulletin.org
The ill-fated construction of new nuclear reactors in South Carolina—one of two such troubled Westinghouse reactor construction projects in the United States—was abruptly terminated on July 31, 2017, but the effort to determine legal accountability for the project’s colossal failure is only now hitting its stride.
The South Carolina legislature conducted hearings about the project’s collapse. But it has fallen to the United States Attorney for South Carolina to outline internal decisions that led to project abandonment—via court filings, plea agreements, and indictments. These filings are proving to be the best documentation so far of criminal behavior related to projects that were part of a much-hyped “nuclear renaissance” that began in the early-2000s but has since petered out in the United States.
On August 18, 2021, a second Westinghouse official was charged in a federal grand jury indictment filed with the court in Columbia, South Carolina. The charges outline “the scheme” to cover up key details about the problem-plagued project to construct two 1,100 megawatt (MW) Westinghouse AP1000 light-water reactors at the VC Summer site north of Columbia.
The project was initiated in May 2008 and gained final approval in February 2009.
According to the 18-page indictment, former Senior Vice President of New Plants and Major Projects Jeffrey Benjamin “had first-line responsibility for Westinghouse’s nuclear reactors worldwide.” He was charged, according to a news release, “with sixteen felony counts including conspiracy, wire fraud, securities fraud, and causing a publicly-traded company to keep a false record.” On August 30, the US attorney’s office announced that Benjamin would be arraigned on August 31.
In order for SCANA, parent of utility South Carolina Electric and Gas, to gain a federal production tax credit of $1.4 billion, essential to the financial viability of the project, both units had to be finished by December 31, 2020.
Benjamin and Westinghouse knew that the dates would never be met, but SCANA doggedly stuck with them given production-tax-credit pressure.The indictment reveals important new information about how Benjamin and Westinghouse conspired to hide crucial information about reactor completion dates from the owners, the publicly held utility SCANA, now defunct, and its junior partner, the state-owned South Carolina Public Service Authority (known as Santee Cooper). It states that the defendant made “false and misleading statements” and “knowingly devised a scheme” to continue the project based on misrepresentations via Westinghouse to the owners, state regulators, the Securities and Exchange Commission, investors, and ratepayers. Nervous SCANA officials played along with the inept cover-up efforts and passed on false and inaccurate information to regulators.
Benjamin, the fourth official to be charged, faces 20 years in prison and a $5 million fine. Issuance of the indictment suggests he intends to face trial rather than plead guilty—a risky proposition given the waste of $9 billion on construction of a project that delivered nothing to consumers (and potential jury members) but a series of nine rate hikes. While those hikes were eventually eliminated and further rate hikes were avoided, a small nuclear construction charge in current bills stands as an enduring reminder of the debacle.
On May 21, 2021, Carl Churchman, Westinghouse Electric Corporation vice president and project director, was indicted on the felony charge of making false statements to the FBI about the status of the project. He pleaded guilty on June 10.
In February, Kevin Marsh, former SCANA CEO, also entered a guilty plea in federal court for conspiracy to commit felony fraud. And Stephen Byrne, former SCANA chief operating officer and executive vice president, pleaded guilty in July 2020 to conspiracy to commit mail and wire fraud. Both gave false testimony numerous times to regulators.
The August 18, 2021 news release from the South Carolina US Attorney’s Office made clear that the investigation continues: “`This indictment with its attendant allegations and charges is another step toward justice for all those responsible for the VC Summer nuclear plant fiasco,’ said FBI Special Agent in Charge Susan Ferensic.”The two SCANA officials and Westinghouse’s Churchman are subject to five-year prison sentences and stiff fines but will likely face reduced sentences in exchange for fully cooperating with investigators, something required in their plea agreements.
Both Westinghouse and SCANA were eventually forced into bankruptcy. Westinghouse was acquired by Brookfield Business Partners, and SCANA vanished after an easy takeover by Dominion Energy, approved in December 2018. The fate of the debt-strapped, state-owned partner Santee Cooper rages on in the South Carolina Legislature.
One entity that will likely never be held responsible for the disastrous project that it authorized is the South Carolina Public Service Commission. Members of this body unanimously voted in favor of anything SCANA requested during the entire course of the project and balked at providing oversight as it fell apart. All were replaced by the Legislature at the end of their terms with new members, who have been less accommodating to utility requests.
Public interest intervenors were prescient in their early assessments of the project. Friends of the Earth, which intervened before the Public Service Commission against the project in August 2008, noted SCANA’s disregard for energy efficiency and alternative forms of energy. That organization predicted that the project’s fate would be what the US Attorney’s Office affirmed in the August 18, 2021 indictment: “from the outset, the Project was characterized by cost overruns and significant delays.” Likewise, toward the end of the project in June 2017, just after Westinghouse declared bankruptcy, Friends of the Earth and the Sierra Club filed a formal complaint detailing why the project must be canceled. As money hemorrhaged, the owners made that earth-shaking decision a month later. And the mighty crash still reverberates.
In Georgia, construction of the other AP1000 project, located at Plant Vogtle, stumbles along to massive cost overruns and significant schedule delays. A main difference between the projects: Georgia Power has a large enough customer base to absorb the financial blow of its struggling project. With cost projections for the two Vogtle units nearing a stunning $30 billion, finishing dates presented to the Georgia Public Service Commission remain open to question.
The Carolina and Georgia reactor projects went forward under laws related to “construction work in progress” that allowed financing charges to be billed to the ratepayers from the start of construction, long before the reactors were online. Both the South Carolina law, the Baseload Review Act, and Georgia’s Nuclear Energy Financing Act have been repealed.
The fault for the shocking AP1000 misadventure falls squarely on the shoulders of Westinghouse and the involved utilities. They all fell victim to their own reactor-promotion propaganda but lacked the technical and management competence to pull off the projects as envisaged. With pursuit of large light-water reactors in the United States all but dead, the nuclear industry is now endlessly touting an array of “small modular reactors” and a dizzying menu of so-called “advanced reactors,” all of which exist only on paper. It’s unclear if there’s a path forward for this nuclear renaissance redux, and if there is, whether taxpayers will be put on the hook for financing some of it.
New criminal charges filed against Westinghouse official in SC’s nuclear plant failure
“As construction problems mounted, costs rose, and schedules slipped, (and) defendants hid the true status of the project,” the indictment said.
“…Delays and cost overruns — hidden by SCANA officials from the public and state regulators — eventually doomed the effort, making it one of the largest business failures in South Carolina history.”
BY JOHN MONK | August 19, 2021 thestate.com
Acting United States Attorney Rhett DeHart pledges continued efforts in prosecuting those responsible for the failed nuclear site in Fairfield County. BY TRACY GLANTZ
A second high-ranking employee of Westinghouse Electric Corp. is facing criminal charges in connection with the multi-billion dollar failure of the doomed nuclear project in Fairfield County.
Jeffrey Benjamin, a former Westinghouse senior vice president of new plants and projects, faces multiple counts of fraud, according to an 18-page indictment made public Wednesday in U.S. District Court in Columbia.
It is the latest criminal charge in a four-year federal investigation of what went wrong at the highest levels of two substantial American companies — Westinghouse and the former SCANA Corp.
The charges against Benjamin are “for his role in failing to truthfully report information regarding construction of new nuclear units at the V.C. Summer nuclear plant,” Acting U.S. Attorney Rhett DeHart said in a press release.
Benjamin’s alleged cover-up of billions of dollars in losses at Westinghouse’s troubled nuclear plants in South Carolina and Georgia were part of a series of events leading to the company’s bankruptcy in March 2017, according to the indictment.
“The defendant’s misrepresentations and omissions, as well as the associated cover-up, resulted in billions of dollars in losses to (SCANA), ratepayers and investors,” the indictment said.
Benjamin, who was responsible for Westinghouse’s worldwide construction of nuclear reactors, is the fourth person to face criminal charges in connection with the SCANA scandal. The three others — another former Westinghouse employee and two top SCANA officials — all have agreed to plead guilty to various counts of fraud but have not yet been sentenced.
Top Westinghouse Nuclear Executive Charged with Conspiracy, Fraud in 16-Count Federal Indictment
Department of JusticeColumbia, South Carolina — Acting United States Attorney for the District of South Carolina M. Rhett DeHart announced today that a Federal Grand Jury has charged former Westinghouse Electric Company Senior Vice President Jeffrey A. Benjamin for his role in failing to truthfully report information regarding construction of new nuclear units at the V.C. Summer nuclear plant.
Benjamin, who served as Senior Vice President for New Plants and Major Projects and directly supervised all new nuclear projects worldwide for Westinghouse during the V.C. Summer project, is charged in a federal indictment with sixteen felony counts including conspiracy, wire fraud, securities fraud, and causing a publicly-traded company to keep a false record.
The charges Benjamin faces carry a maximum of twenty years imprisonment and a $5,000,000 fine.
The indictment alleges that Benjamin was personally involved in communications between Westinghouse and its owners, SCANA and Santee Cooper, regarding the status of the V.C. Summer project.
The indictment further alleges that, throughout 2016 and into 2017, when Westinghouse had direct control over the construction and schedule of the project, Benjamin received information that the V.C. Summer units were materially behind schedule and over budget. Nevertheless, at various times from September 2016 through March 2017, the indictment alleges that Benjamin assured the owners that the units would be completed on schedule and took active steps to conceal from the owners damaging information about the project schedule. During this time period, the owners paid Westinghouse over $600,000,000 to construct the two V.C. Summer units, both of which were ultimately abandoned.
House nears vote to repeal nuclear plant bailout
“We need to hit the reset button and start from scratch here,” state Rep. Jeffrey Crossman (D., Parma) said. “We can’t continue this nonsense of pretending that the corruption didn’t happen.”
By: JIM PROVANCE | The Blade, Toledo (TNS)
COLUMBUS — A House committee Tuesday set the stage for a full chamber vote to partly repeal provisions of a state law at the heart of a $61 million Ohio Statehouse bribery scandal.
The full Ohio House of Representatives was expected to vote Wednesday.
This would mark the House’s first action to undo a $1 billion, consumer-financed bailout of the Davis-Besse nuclear power plant near Oak Harbor and the Perry plant east of Cleveland. That law has come to epitomize shady, backroom dealing hidden even to those lawmakers ultimately manipulated to get it passed.
Two players and a nonprofit, dark-money corporation have already pleaded guilty to federal racketeering charges carrying up 20 years in prison for the individuals. Three others — including former House Speaker Larry Householder (R., Glenford) — face similar charges.
Ex-SCANA CEO pleads guilty to fraud in SC nuclear fiasco: ‘I’m sorry it’s come to this’
Tom Clements, an environmental activist who criticized the nuclear project even before its abandonment, noticed and shouted a question as the former SCANA executive walked past. “Mr. Marsh, are you going to apologize to the people of South Carolina for this nuclear nightmare?”
By Avery G. Wilks & Conor Hughes | postandcourier.com February 24, 2021 – updated March 5, 2021
COLUMBIA — Former SCANA Corp. Chief Executive Officer Kevin Marsh will spend at least two years in prison and pay back at least $5 million for defrauding electric ratepayers in South Carolina’s $9 billion nuclear power fiasco, according to a plea deal that was presented to a federal judge Feb. 24.
The 65-year-old Marsh appeared in court for the first time to plead guilty to fraud charges and formally accept responsibility for his role in the failed, decade-long expansion of SCANA’s V.C. Summer nuclear power plant in Fairfield County. Marsh had to surrender his passport at the courthouse but was released without having to post money for bond.
Once one of South Carolina’s top businessmen, Marsh has spent the past six months as a criminal informant and will continue to be a key witness for state and federal prosecutors who continue to probe the V.C. Summer project’s failure. He faces up to 10 years in prison if he does not fully cooperate with that investigation, according to the new terms of his plea deal.
“Justice has been served,” U.S. Attorney for South Carolina Peter McCoy said after the hearing. “For years, institutions and individuals have abused the public trust with little to no accountability. This includes corporations that have increased profits at the expense of their customers. Oftentimes, it’s assumed that these executives will avoid any oversight because of who they are and where they’ve worked.”
Marsh’s first day in court was a long one, a product of a three-year investigation by the FBI, U.S. Attorney’s Office for South Carolina, State Law Enforcement Division and S.C. Attorney General’s Office that brought both state and federal fraud charges against him.
New Aerial Photos Released of the Trio of Failed Nuclear Projects in South Carolina & Georgia: Plutonium Fuel/MOX (Proposed to be Converted into a Plutonium Bomb Plant) and the Vogtle & V.C. Summer Nuclear Reactor Construction Sites
Savannah River Site Watch
Columbia, South Carolina
https://srswatch.org/
November 30, 2020
Columbia, SC (aka new Nuclear Ground Zero) — Dramatic aerial photos of the massive nuclear construction projects in South Carolina and Georgia have been released by the public interest organization Savannah River Site Watch. The photos of the three failed projects, two of which have been formally terminated, were taken by a local anonymous pilot who goes by the nom de avion High Flyer.
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Nuclear fiasco: SCANA ex-CEO to plead guilty to fraud, get prison, pay $5 million
Former SCANA CEO Kevin Marsh has agreed to plead guilty to federal conspiracy fraud charges, go to prison for at least 18 months and forfeit $5 million in connection with SCANA’s $10 billion nuclear fiasco, according to papers filed in the U.S. District Court in South Carolina.
Subcontractor sues WIPP for $32 million in canceled work
Critical Applications’ ventilation project was tied to a radiation leak in 2014 that often is recalled as the “kitty litter” incident.
BY: SCOTT WYLAND | santafenewmexican.com
A subcontractor is suing the company that operates the Waste Isolation Pilot Plant in Southern New Mexico, claiming $32 million for what it says was gross mismanagement of a major construction project at the nuclear waste disposal site.
In a federal lawsuit, Texas-based Critical Applications Alliance LLC, which was hired to build a ventilation system at WIPP, says Nuclear Waste Partnership was such a disorganized project manager that it caused repeated delays and cost overruns, resulting in multiple breaches of contract.
The subcontractor also complains WIPP managers abruptly canceled its $135 million contract in August with no explanation and without paying millions owed.
Political strategist & lobbyist each plead guilty in federal public corruption racketeering conspiracy involving more than $60 million
United States Attorney David M. DeVillers
Southern District of Ohio
FOR IMMEDIATE RELEASE THURSDAY, OCT. 29, 2020
CINCINNATI – A longtime campaign and political strategist for Ohio House Representative Larry Householder and a lobbyist hired by an energy company to funnel money to Householder’s enterprise each pleaded guilty in federal court today.
Jeffrey Longstreth, 44, and Juan Cespedes, 41, of Columbus, each pleaded guilty to participating in a racketeering conspiracy involving more than $60 million paid to a 501(c)(4) entity to pass and uphold a billion-dollar nuclear plant bailout.
Column: Yes, Santa Susana is a ‘landmark’ — as a historic environmental disaster
The Santa Susana Field Laboratory site is “one of the most toxic sites in the United States by any kind of definition,” Jared Blumenfeld, head of the California Environmental Protection Agency, told me. “It demands a full cleanup.”
BY: MICHAEL HILTZIK
One thing is certainly true about NASA’s curious effort to place 2,850 acres above the Simi Valley on the National Register of Historic Places: The parcel is certainly a landmark.
Among the points in dispute is what makes it so.
To several local Native American tribes, including the Santa Ynez Band of Chumash Indians, the Ventura County site’s cave drawings and rock shelters bespeak a cultural heritage dating back centuries.
The time has come for us to make sure that we hold the polluters accountable for their legacy….We will make sure the site gets cleaned up and we will exercise our legal authority in pursuit of that. – CALEPA SECRETARY JARED BLUMENFELD
To environmentalists and the site’s neighbors, it’s historic for the extent of its contamination by chemical and nuclear research performed there during the Cold War.
Nuclear Power goes South in South Carolina
“It looks like crime might well pay after all.”
That was the weary and only slightly tongue-in-cheek conclusion drawn by longtime anti-nuclear campaigner, Tom Clements recently, after a former South Carolina nuclear utility executive pled guilty to fraud in federal court.
BY: Linda Pentz Gunter | beyondnuclear.org
Clements is the director of Savannah River Site Watch, but his activism has, for decades, extended well beyond the perimeter of that vast nuclear site.
For years, Clements and others have followed — and attempted to stand in the way of — the forced march of South Carolina ratepayers toward nuclear fiasco. When it finally unraveled in late July, there was only cautious cause for celebration.
On July 23, Stephen Byrne, the former COO of SCANA, the South Carolina utility originally in charge of the construction of two new nuclear reactors in the state, pled guilty in a massive nuclear conspiracy that defrauded ratepayers, deceived regulators and misled shareholders.
Top Ex-SCANA Official Stephen Byrne Pleads Guilty in SC Nuclear Fiasco Fraud Case
Stephen Byrne, a top executive of the now-defunct SCANA electric utility, pleaded guilty Thursday to criminal conspiracy fraud charges in federal court in Columbia.
BY: John Monk & Joseph Bustos | thestate.com
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.
Ohio Nuclear Power Scandal
As [David] DeVillers described it at a press conference: it was the “largest bribery, money laundering scheme ever perpetrated against the people of Ohio.”
BY: KARL GROSSMAN | counterpunch.org
The U.S. Attorney’s Office and FBI this week charged the speaker of the Ohio House of Representative and four others in a $61 million scheme to use $1 billion in ratepayers money to keep two decrepit nuclear power plants operating.
And, said the U.S. Attorney for the Southern District of Ohio, David DeVillers, at a press conference after the arrests Tuesday: “This is by no means over. We are going to continue with this investigation.”
Those charged were involved in a “Conspiracy to Participate, Directly or Indirectly” in the scheme “through a Pattern of Racketeering Activity,” declared the “Offense Description” that headed an 81-page federal “Criminal Complaint.”
Bribed Ohio’s $60 Million Radioactive Uproar Rocks the 2020 Vote
“Ohio is in election-year turmoil over a Trump-supported nuke bailout bought with bribery. Whether public fury will kill the handout and affect the fall presidential election remains to be seen…But Bribed Ohio 2020 has clearly gone radioactive.”
BY: Bob Fitrakis & Harvey Wasserman | readersupportednews.com
Ohio’s biggest-ever bribery case is rocking America’s reactor industry … and the fall election.
Full details of the shocking arrest of Ohio’s powerful Speaker of the House are still unfolding.
But on Monday, the FBI charged Larry Householder and four associates with taking $60 million (that’s NOT a typo) in bribes from “Company A,” suspected to be the Akron-based nuke utility FirstEnergy. The company has not been formally named as the source of the bribe, but FE’s stock has since plummetted.
Former SCANA Executive Pleads Guilty to Fraud Charges Tied to Failed SC Nuclear Project
“I’m glad there is going to be a little bit of justice and that Mr. Byrne is now pleading guilty to his crime, so it’s a matter of holding others accountable who were former executives of SCANA,” Tom Clements said. “I would anticipate that Kevin Marsh and Jimmy Addison are probably next in the queue to be charged, and hopefully others.”
BY: Andrew Brown & Avery G. Wilks | postandcourier.com