SCANA ex-CEO Marsh’s hearing for guilty plea scheduled

Kevin Marsh, the former CEO of the defunct South Carolina energy giant SCANA, will appear in federal court on Dec. 29 to plead guilty in person to federal conspiracy fraud charges, according to court documents filed Tuesday in U.S. District Court in Columbia.

Marsh, 65, who lives in North Carolina, will appear before U.S. District Judge Mary Geiger Lewis, who is newly assigned to the case. Lewis will take Marsh’s plea.

After that hearing, Marsh will appear before Magistrate Judge Shiva Hodges, who will set bond, records said.

In late November, Marsh and his lawyers signed an agreement to plead guilty to fraud charges with federal prosecutors, who with the FBI have been investigating for three years Marsh’s role in the 2017 failure of a $9 billion nuclear project run by SCANA, at that time an investor-owned utility.

SCANA’s junior partner in the ill-fated venture, was Santee Cooper, a South Carolina state agency. But no criminal charges have been brought against any Santee Cooper executives.

In signing the plea agreement, Marsh has agreed to a tentative prison sentence of at least 18 months and to forfeit $5 million in connection with his role in hiding from the public SCANA’s failures of management and oversight that eventually led to the collapse of the V.C. Summer nuclear project in Fairfield County, according to papers in the U.S. District Court in South Carolina.

Federal prosecutors have charged Marsh with helping to 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 nuclear project but also the troubled financial health of SCANA, according to records and evidence in the case.

For years, 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. Its stock, with its rising steady dividends and share price, was avidly sought by investors.

Public companies like SCANA have legally mandated requirements to be open with investors and tell them quickly about events that may affect the company’s stock price.

In addition to a tanking stock price, which cost investors money, the failure of the V.C. Summer plant left more than 4,000 constructions workers jobless. Other losers in the affair were SCANA’s and Santee Cooper’s monthly ratepayers, who paid extra charges each month for years to pay for ongoing construction at the nuclear project.

The specific charges against Marsh — conspiracy and obtaining property under false pretenses — expose Marsh to a maximum of 10 years in prison, according to court records.

The more Marsh cooperates in helping prosecutors with an ongoing investigation in malfeasance at SCANA that is said to involve others, the greater his chances are of a lower prison sentence, according to documents and evidence in the case.

In July, Stephen Byrne, the number two top SCANA executive pleaded guilty to conspiracy charges in SCANA’s downfall.

Byrne’s guilty plea was the first official confirmation that the failure of the nuclear project was not just due to simple mismanagement mistakes at a complex project — one of the biggest ever undertaken in South Carolina — but also resulted from criminal conduct at SCANA’s highest levels.

Byrne is now out on bond.

Both Byrne and Marsh will be sentenced at a later date.

Federal prosecutors in the case are Emily Limehouse, Brook Andrews, Winston Holliday and Jim May. State attorney general prosecutors on the case are Don Zelenka, Creighton Waters and David Fernandez.

Marsh’s lawyers are Robert Bolchoz of Columbia, and Brady Hair and Derk Van Raalte IV, both of Charleston.

Last February, the Securities and Exchange Commission filed civil fraud charges against SCANA, Byrne and Marsh, alleging that they defrauded investors by making false statements about the progress at the nuclear project.

Earlier this month, U.S. Attorney Peter McCoy announced that SCANA has agreed to a settlement that would result in the company — which is now owned by Dominion Energy — paying a $25 million fine to the government.

The SEC’s civil fraud charges against Byrne and Marsh, who the SEC alleged were “at the center of the fraud,” are still pending.

In its complaint, the SEC alleged that Byrne’s and Marsh’s “false statements enabled SCANA to bolster its stock price, sell $1 billion in corporate bonds at favorable rates, and obtain regulatory approval to charge its customers more than $1 billion in increased rates to help finance the project.

“Internally, however, SCANA knew that — contrary to its public statements — the project was significantly delayed, the construction schedule was unreliable and unachievable, and the company was unlikely to qualify for $1.4 billion in federal production tax credits because the new units would not be completed by the January 1, 2021 deadline for receiving the tax credits.”

This story was originally published December 15, 2020 at 3:17 PM.