Senior Exec Will Plead Guilty to Fraud in Abandoned Nuclear Project

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The man considered second-in-command at the former SCANA Corp. has agreed to plead guilty to criminal conspiracy fraud charges stemming from his role in the failed V.C. Summer nuclear power plant construction project.

Stephen A. Byrne, SCANA's former chief operating officer, will plead guilty for his alleged criminal actions, according to a document filed June 8 in U.S. District Court in Columbia, South Carolina. The V.C. Summer project included construction of two new AP1000 reactors to join another operating unit at the site in Jenkinsville. The project was abandoned in 2017, and the FBI and prosecutors with the U.S. Attorney's Office in Columbia have been investigating whether criminal actions-not just mismanagement-were involved in scuttling the expansion.

Analysts have said the project's abandonment cost the state $10 billion. It is considered the largest business failure in South Carolina history. Toshiba, whose subsidiary Westinghouse declared bankruptcy in large part due to losses from the Summer project and the oft-delayed Vogtle nuclear expansion project in Georgia, in late July 2017 agreed to pay $2.2 billion to cap its liabilities from the Summer expansion. SCANA and Santee Cooper announced they were abandoning the project just days later.

Byrne will need to have his guilty plea formally accepted by a U.S. District Court judge for it to become official. A court document said Byrne is charged with conspiring to commit mail fraud.

Civil Lawsuit, and Criminal Case

The document filed Monday is a motion requesting a stay in a Securities and Exchange Commission (SEC) civil fraud lawsuit filed in February against Byrne and Kevin Marsh, SCANA's former CEO. The civil lawsuit was filed in February. Byrne's guilty plea, as part of an ongoing criminal investigation in the Summer case, could result in a prison term, separate from damages stemming from the civil lawsuit.

This is an aerial photo of the abandoned V.C. Summer nuclear project in South Carolina, taken in September 2017. Courtesy: Courtesy of High Flyer (C) 2017

The document filed Monday alleges that through intentional and material misrepresentations and omissions, Byrne and others deceived regulators and customers to maintain financing for the (nuclear) project and to financially benefit SCANA." The filing notes there is an ongoing criminal investigation," and indicated that more criminal charges against other former SCANA top officials could be forthcoming. It said, The United States anticipates filing additional criminal charges against other members of the conspiracy."

The document continued: Given that the same alleged fraudulent schemes are at issue in both the civil and criminal cases, a stay of the proceedings is necessary to protect the United States' interest in connection with the ongoing criminal investigation and to guard against use of the civil discovery process in ways that might compromise the ongoing criminal investigation."

The document, known as a motion to intervene and to stay civil proceedings," was filed by U.S. Attorney Peter McCoy, along with four federal prosecutors on the criminal case. The document said that Byrne and his attorney, Jim Griffin, do not oppose the motion. The stay must be approved by a federal judge.

Griffin in a statement Monday said, It would be inappropriate for me to comment about an ongoing criminal investigation or Mr. Byrne's plea agreement until he enters a formal plea in open court before a judge."

McCoy, the U.S. Attorney for South Carolina, in a statement said, We cannot comment on this specific matter and would rely on the public filings in this case. However, the U.S. Attorney's Office will continue to protect the citizens of South Carolina from all crimes, be they violent or economic."

Billions Paid by Power Customers

The economic damage from the failure of the Summer project cost South Carolina power customers billions of dollars. SCANA for several years increased customers' power bills to pay for the two new reactors' construction costs. SCANA had about 700,000 electric power customers in South Carolina, along with about 350,000 natural gas customers.

SCANA and Santee Cooper, the smaller partner in the Summer project, said they were abandoning construction in July 2017. Santee Cooper is a state-owned electric utility. SCANA's financial problems escalated after the nuclear project was scuttled, and the company in January 2019 was taken over by Dominion Energy.

Abandonment of the Summer plant's construction led not only to investigations of the project management, but also to a dispute about rights to the equipment left behind.

-Darrell Proctor is associate editor for POWER (@DarrellProctor1, @POWERmagazine).

The post Senior Exec Will Plead Guilty to Fraud in Abandoned Nuclear Project appeared first on POWER Magazine.