Welcome

Ex-Scana CEO Pleads to Fraud Over Failed Reactor Project (1)

Feb. 24, 2021, 7:28 PM

Former Scana Corp. Chief Executive Officer Kevin Marsh pleaded guilty to fraud charges tied to a $10 billion nuclear-power project the South Carolina gas and electric utility abandoned amid soaring costs and construction delays.

Marsh admitted to conspiracy to commit mail and wire fraud in federal court in Columbia, South Carolina, U.S. prosecutors said in a statement. He had already pleaded guilty to other charges in connection with the failed effort to build nuclear reactors in the state.

Under a plea deal with the government, Marsh agreed to cooperate in ongoing investigations relating to the failed V.C. Summer nuclear station and to forfeit $5 million, prosecutors said.

Besides the criminal charges, the U.S. Securities and Exchange Commission accused Marsh and two other former Scana executives in a civil suit of providing misleading construction updates on the Summer plant in Fairfield County, South Carolina, over a two-year period.

The updates let the company line up more than $1 billion in financing for the project before it was eventually abandoned in 2017 after costs soared to more than $20 billion. The plant was slated to be built about 30 miles (50 kilometers) northwest of Columbia, the state’s capital. Scana, once a Fortune 500 company, was acquired by Dominion Energy in 2019.

“Today’s plea shows that no one, not even a Fortune 500 CEO, is above the law,” Peter McCoy, U.S. Attorney for the District of South Carolina, said in the statement. U.S. District Judge Mary Lewis in Columbia accepted the plea Wednesday.

Prosecutors claim Marsh knew as early as 2016 that Westinghouse Electric Co. wouldn’t be able to make a 2020 deadline for completing the project and covered it up for two years to secure funding. Marsh lied to both state and federal regulators about the project’s progress, the government said.

Stephen Byrne, Scana’s former executive vice president, also has pleaded guilty in connection with the scheme to tout the Summer project’s viability in securities filings and earnings calls. He has yet to be sentenced.

It’s not the first time utility executives have run afoul of legal requirements demanding they tell the truth about their companies. Former Enron Corp Chairman Ken Lay and CEO Jeffrey Skilling were convicted in 2006 of deceiving investors, analysts and employees about Enron’s deteriorating financial condition through the use of fraudulent accounting and off-books partnerships that concealed billions of dollars in debt and losses.

(Updates with quote from U.S. Attorney in fifth paragraph)

To contact the reporter on this story:
Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Steve Stroth, Joe Schneider

© 2021 Bloomberg L.P. All rights reserved. Used with permission.

To read more articles log in. To learn more about a subscription click here.