#NukeGate: Investigation Progressing

“Steady stream” of information …

A criminal investigation into #NukeGate – the state of South Carolina’s spectacularly failed intervention in the energy industry – is making “considerable progress,” sources close to the case tell this news site.

Multiple sources close to the probe tell us investigators have been receiving a “steady stream” of information related to the ongoing inquiry – which obviously involves both federal and state law enforcement assets.

Moreover, we’re told there has been extensive collaboration between the various jurisdictions involved in the investigation – which targets crony capitalist utility SCANA, government-run utility Santee Cooper and as-yet-undefined “co-collaborators.”

On the record, neither the Federal Bureau of Investigation (FBI) nor the S.C. State Law Enforcement Division (SLED) would provide us with any details.

“Our work on the case is continuing,” SLED spokesman Thom Berry said.

Behind the scenes, though, sources familiar with the investigation tell us the floodgates have opened – with a wide range of “actionable information” pouring in on multiple fronts.

What sort of information?  Good question …

From our prior reporting, we know agents of the U.S. Securities and Exchange Commission (SEC) are deeply involved in the probe – reportedly pulling records of SCANA stock transactions in an effort to determine whether any corporate officials, government regulators, lawmakers or other interests benefited improperly.

Beyond that, specific details about the nature and scope of the investigation have been closely guarded – although we have been reliably informed that multiple executives with both SCANA and Santee Cooper are actively cooperating with law enforcement.

How did we get here?

Whew …

(Click to view)

(Via: High Flyer)

With the enthusiastic support of state lawmakers, SCANA and Santee Cooper spent the past decade building two next generation AP1000 pressurized nuclear water reactors in Jenkinsville, S.C. at a cost of $9.8 billion.  The money was spent, but the reactors were never finished.  In fact they’re not even half-finished – with the cost to complete them reportedly ranging anywhere from $9-16 billion.

Unable to pony up that kind of cash, Santee Cooper pulled the plug on the project on July 31 … killing an estimated 5,600 jobs, squandering billions of dollars in investment (including more than $2 billion raised through rate increases on consumers) and throwing the state’s energy future into chaos.

Recently released documents revealed executives at the two utilities knew over a year-and-a-half ago that the project was doomed – yet continued to raise rates on consumers anyway.  In fact, ratepayers are shelling out an estimated $37 million per month on these reactors … still.

These payments come courtesy of the controversial “Base Load Review Act,” a piece of constitutionally dubious special interest legislation advanced by liberal “Republicans” – and then allowed to become law by former governor Mark Sanford.

Not surprisingly, these politicians are now running for their lives.

In addition to the criminal probes, the #NukeGate debacle has also spawned a flood of lawsuits – and efforts on the part of politicians to unload Santee Cooper in a fire sale.

Meanwhile SCANA appears to be on the verge of declaring bankruptcy or being sold outright – and is reportedly engaged in “offline” negotiations with conflicted state leaders including governor Henry McMaster over the particulars of such a deal.

The latest development in this ongoing drama?  Our exclusive report earlier this week detailing an offer from a Chattanooga, Tennessee-based businessman to buy the half-finished reactors using federal loan guarantees.

These guarantees were reportedly made available to SCANA and Santee Cooper, but the companies declined to accept them.

Why not?  SCANA appears to be dead set on abandoning the project and reclaiming assets as best it can – including the likely invocation of a complex financial process known as “securitization.”  This process would help the utility recover up to $2.2 billion in sunk costs related to #NukeGate (after anticipated federal tax write-offs, payments from contractors and ongoing revenue from ratepayers).

Legislative leaders have threatened SCANA in an effort to keep them from following through on this plan … while an ongoing court battle could result in the appointment of a receiver to manage corporate assets related to the debacle.  A hearing on that matter was originally scheduled for this week but was pushed back to a later date.

Stay tuned …

There are so many fronts to keep track of related to this story, but we’re pleased to hear the law enforcement agencies investigating #NukeGate are making good progress.



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