HOT NEWS! Former SCANA Nuclear Boss Pleads Guilty to Fraud for Nuclear Reactor Construction Debacle in South Carolina!

Marsh, 65, who now lives in North Carolina, helped lead a two-year cover-up, from 2016 to 2018, of the serious financial trouble that was jeopardizing the success of not only the ongoing Fairfield County nuclear project but also the troubled financial health of SCANA, according to records and evidence in the case.

At the time, the now-defunct SCANA was a respected gas and electric publicly-traded utility and the only Fortune 500 company in South Carolina. It had 700,000 electric customers and 350,000 natural gas customers.

Marsh, SCANA CEO from 2011 to 2017, will need to have his guilty plea formally accepted by a U.S. District Court judge before it becomes official. Under the plea agreement, Marsh will likely face a prison term of between 18 and 36 months.

However, charges against him — conspiracy and obtaining property under false pretenses — expose him to a maximum of 10 years, according to court records. The more he cooperates in helping prosecutors with an ongoing investigation that is said to involve others, the greater his chances are of a lower prison sentence, according to documents and evidence in the case.

“As construction problems mounted, costs rose, and schedules slipped, Marsh … hid the true state of the project,” an information — a charging document — in the case said. “Through intentional and material misrepresentations and omissions, the defendant, Kevin Marsh, deceived regulators and customers in order to maintain financing for the project and to financially benefit SCANA,” the information said.

Marsh’s long running cover-up enabled him and other SCANA top officials to continue collecting generous salaries and bonuses and to deceive stockholders, investors and regulatory officials about the true state of the company and its high-profile nuclear project, according to records and evidence in the case.

Among people hurt by the cover-up were hundreds of the nuclear plant’s construction workers who lost their jobs when SCANA abandoned the project and hundreds of thousands of SCANA’s utility customers, who for years had extra fees tacked onto their monthly bills to help pay for the massive nuclear project.

Losses were in the “billions of dollars,” the information said.

SCANA, with the permission of state regulators who were kept in the dark about problems at the nuclear construction site, raised customers’ rates nine times to help pay for the project. In all, customers paid an additional $2.2 billion in monthly bills over more than five years, the information said.

SCANA used $500 million of that $2.2 billion to pay dividends to its shareholders, the information said. On Wall Street, the company became known for a reliable stream of increasing dividends and a rising stock price.

In 2017, following disclosure of the nuclear project’s shaky financial status, SCANA’s stock nosedived from more than $70 a share to around $40 a share, its debts rose and the troubled company — which began more than 100 years ago and was one of the state’s crown business jewels — was eventually acquired by out-of-state energy giant, Dominion Energy. SCANA’s downfall was perhaps the most costly business failure in South Carolina history.

The criminal charges against Marsh are the result of a three-year law enforcement investigation led by the FBI and months of behind-the-scenes negotiations between federal prosecutors and Marsh’s criminal defense attorneys.

Under terms of a formal agreement to plead guilty, Marsh has agreed to cooperate with law enforcement in the bringing of criminal charges against others yet to be named.

Marsh is the second top SCANA executive to be charged with criminal conspiracy fraud in connection with the utility’s failed nuclear project.

In June, Stephen Byrne, 60, a former SCANA executive who worked just under Marsh, pleaded guilty to working with others to carry out the conspiracy to hide the true extent of the nuclear project’s problems.

Marsh’s agreement to plead guilty — he will apparently do so before a federal judge in the next few weeks — is yet another piece of evidence that demonstrates that SCANA’s disintegration and nuclear plant downfall were not just due to incompetence but to criminal conduct by the company’s top leaders.

In 2007, the nuclear project began with high hopes and big dreams.

In that year, SCANA, a state-owned facility that lacked the financing to tackle such an expensive project, persuaded the Legislature to pass a law allowing the utility to charge its 700,000-plus electric customers a monthly add-on fee to pay ongoing costs while the project was being built.

In May 2008, SCANA and its junior partner in the project, Santee Cooper, a state-owned utility, agreed to construct two nuclear reactors at the V.C. Summer site in Jenkinsville in Fairfield County. SCANA would have a 55% ownership stake in the project and control the project’s daily oversight. Santee Cooper had a 45% minority role.

By 2012, SCANA had signed agreements with Westinghouse and other contractors to help build the two nuclear reactors. The cost was estimated at nearly $10 billion. SCANA told the public the first reactor would be up running by 2016, and the second, by 2019.

However, things did not go according to plan.

“From its inception, the Nuclear Project was plagued by schedule delays and cost increases,” the information said. Over the next few years, SCANA officials became aware of numerous examples of poor performance, missed work deadlines and other mishaps that would likely delay the project far beyond the announced completion dates.

According to federal documents, the conspiracy in which March was involved included:

▪ Lying to South Carolina state lawmakers, regulatory bodies like the state Public Service Commission, the news media, the state government and SCANA’s customers that the two nuclear reactors would be working by 2020 at the latest.

▪ Applying for and receiving rate increases based on Marsh’s and others’ false and misleading statements that led to “fraudulently inflated bills to customers for the stated purpose of financing the project.”

▪ Applying for repeated rate increases on the false basis that the project was going well.

In 2015, under Marsh, SCANA commissioned a secret fact-finding investigation by Bechtel — an internationally-recognized Virginia consulting and management firm — into what was happening at the nuclear project. When Bechtel made a report that the project was “failing,” SCANA did not report the information to regulatory agencies and “buried” the report “under disingenuous representations of attorney-client privilege,” the information said.

“The Bechtel conclusions were not made public until after abandonment of the Nuclear Project,” the information said. Governor Henry McMaster released the report to the public.

U.S. Attorney for South Carolina Peter McCoy said, “In these already challenging times, no one should be able to use a position of trust, power, and influence to take from the hardworking people of South Carolina … (T)his office will continue to work with our federal and state partners to stand firm against those who would seek to defraud South Carolina taxpayers.”

Prosecutors in the case are assistant U.S. Attorneys Jim May, Brook Andrews, Winston Holliday, and Emily Limehouse; Special Assistant U.S. Attorney John O’Halloran from the Securities and Exchange Commission; State of South Carolina Attorney General Alan Wilson and attorney general prosecutors Donald Zelenka, Creighton Waters and David Fernandez.

Marsh’s attorneys are Anne Tompkins of Charlotte, Brady Hair of Charleston and Robert Bolchoz of Columbia. Tompkins is a former U.S. attorney for the Western District of North Carolina.

An ongoing Securities and Exchange civil prosecution into SCANA, Marsh and Byrne has been temporarily halted until the criminal prosecutions are resolved. The SEC probe covers much of the same ground as the criminal investigation. However, in a civil prosecution, wrongdoers do not face prison.