SCANA execs paid millions of dollars leading up to massive nuclear failure
A new lawsuit filed this week in state court by a SCANA stockholder names 12 top SCANA officials and seeks to recover more than $21 million in bonuses top executives got during the 10 years that a now-failed nuclear project was under construction.
This is the first of some half-dozen lawsuits filed against SCANA to date that names individual top SCANA executives and board members as defendants. It seeks to hold them individually responsible for “willfully violating their fiduciary duties,” or failing to act in the best financial interests of the company.
The lawsuit is also the first of the lawsuits filed by a stockholder. The others have been filed by SCANA customers, ratepayers who allege their monthly bills were unlawfully inflated by the company to pay for the bungled nuclear project.
“While driving SCANA to the brink of financial disaster, the Board (of directors) simultaneously rewarded SCANA executives with millions of dollars of bonus compensation, based upon their performance related to the (nuclear) project and other short-term performance metrics ...,” the lawsuit alleges.
Three top SCANA officials – CEO Kevin Marsh, executive vice president Jimmy Addison, and executive vice president Steven Byrne – “totally failed to perform their duties owed to the company and its shareholders,” the lawsuit said.
SCANA declined to comment to The State newspaper, saying it does not comment on pending litigation.
A number of top SCANA officers received bonuses, and Marsh, Addison and Byrne are among them, according to public records.
The shareholder filing the lawsuit is John Crangle, a Columbia resident and government watchdog the suit says has been “a SCANA shareholder for more than 40 years.”
Crangle, who also declined comment Wednesday, brought the lawsuit “to hold the board and the executives accountable for abandoning their fiduciary obligations to the shareholders and demands that the defendants reimburse SCANA for the ‘appalling, disturbing and galling’ performance bonuses handed out to the executives,” the suit says.
Top SCANA officials displayed “a conscious disregard for their obligations as directors and executives of the company,” the suit says.
Crangle’s lawsuit notes that in early September, an 18-month-old report on progress at the nuclear plant site by the Bechtel consulting firm was made public. That report contained “withering criticism” of the project concerning construction, management and oversight, the lawsuit said.
The lack of accountability uncovered by Bechtel resulted in “a waste of $9 billion,” the lawsuit said. As the project was being built, “the board defendants consistently lavished bonuses on the executive defendants and others,” the lawsuit said.
In all, $21.3 million in bonuses were handed out from 2007 through 2016, when $3.3 million in bonuses were distributed, the lawsuit said.
And, “under federal securities laws, officers and directors have a duty to speak fully and truthfully to shareholders once they undertake the affirmative act of communication or disseminating information,” the lawsuit says.
The lawsuit also noted that SCANA’s stock price is down 20 percent this year. That figure does not take into account a $4.22 drop on Wednesday in SCANA’s stock price, to $51.22.
Ordinarily before filing a lawsuit, the suit said, Crangle would have made a demand that the board take action to get the bonuses back.
But, Crangle’s suit alleges, the board is “incapable of making an independent and disinterested decision to institute and vigorously prosecute this action.”
Since the defendants “had to know (the project’s) true status and the falsity of the public statements they personally made ... all defendants face a substantial likelihood of personal liability for their action and inactions as SCANA directors,” the lawsuit said.
Columbia attorneys Bert Louthian, Jim Griffin and Dick Harpootlian represent Crangle.
Defendants in the lawsuit are:
▪ Kevin Marsh, SCANA board chair and CEO since 2011. He also served as president of SCANA’s principal subsidiary, SCE&G, from 2006-11.
▪ Gregory Afliff, a SCANA director since 2015. Afliff, a Virginia resident, is a certified public accountant.
▪ James Bennett, a SCANA director since 1997. Bennett, a Richland County resident, is chair of the board’s compensation committee, and an area executive for First Citizens Bank & Trust.
▪ John Cecil, SCANA director since 2003, a former president of Biltmore Farms and a North Carolina resident.
▪ Sharon Decker, SCANA director from 2005-13 and from 2015 to the present who serves on the nuclear oversight and compensations committees. A North Carolina resident, she is chief operating officer of Tryon Equestrian Partners.
▪ Maybank Hagood, SCANA director since 1999. A Charleston County resident, he is head of Southern Diversified Distributors.
▪ Lynn Miller, a SCANA director since 1997. A resident of Virginia, she is an environmental consultant.
▪ James Roquemore, a SCANA director since 2007. He is chair of the board’s nuclear oversight committee and sits on the compensation committee. An Orangeburg County resident, he is general manager of a company that produces and markets turf grass and sod.
▪ Maceo Sloan, a SCANA director since 1997. He is a member of the compensation and nuclear oversight committees. A North Carolina resident, he is president of a financial holding company in Durham.
▪ Alfredo Trujillo, a SCANA director since 2013. A member of the nuclear oversight committee, Trujillo is an investment advisor and president of the Georgia Tech Foundation.
▪ Jimmy Addison, SCANA executive vice president and SCE&G president. A Lexington County resident, he is responsible for nuclear financing.
▪ Steven Byrne, executive vice president. He helped oversee the construction at the abandoned nuclear plant site.