SCANA OFFICIALS insist they had already told regulators about the major problems that the long-secret Bechtel report documented with their nuclear construction project. Let’s take them at their word and assume that they had in fact been forthright about the construction, procurement and engineering problems at the V.C. Summer nuclear facility.
That is completely irrelevant unless they also informed regulators that they were failing in their duty to oversee the project.
The most important thing to the public about the Bechtel report isn’t that it detailed the construction problems that Santee Cooper had been urging SCANA to correct. The most important thing to us about the report is that a company that SCANA hired concluded that SCANA was not doing its job. That certainly raises questions about whether SCANA was making prudent business decisions. And since the management critique was hidden from the world for 18 months, it might go to questions of securities fraud.
And it turns out that SCANA wasn’t just doing everything it could to keep that report hidden.
It was also working to water down the findings.
A timeline that Santee Cooper CEO Lonnie Carter sent to SCANA CEO Kevin Marsh complaining about delays includes this Nov. 12, 2015, entry: “Bechtel Assessment Report — Issued to George Wenick — Weeks go by with Wenick/Bechtel wrangling over Wenick’s rejection of initial report, redactions, timeline removal, critique of project management.”
That’s one of the most disturbing details so far in an ever-growing pile of the disturbing details about the colossal failure of SCANA and Santee Cooper to stop years of bleeding that eventually killed the two unfinished nuclear reactors.
What that suggests is that the damning report that has upended the whole conversation about that project was originally much worse. What it suggests is that the version of the report that we’ve seen pulled some of its punches.
As I read the report — and I do not fully understand all the engineering and construction criticisms — the whole point of the litany of failures by Westinghouse was to lay out the specific problems that SCANA needed to make its contractors address once it started performing actual oversight of the project. Think of it as a to-do list for getting the project back on track.
One can only wonder what the original, undiluted report looks like. Or, perhaps, if one has access to a federal grand jury, one could subpoena that original, undiluted report. I have no expertise in federal securities law and no inside knowledge about what the U.S. attorney is looking into, but based on what we know so far, that original report is the first document I would want to see if I had the means to see it.
The Mr. Wenick referenced in the 2015 timeline entry is a partner with Smith, Currie & Hancock, the Atlanta law firm that SCANA and Santee Cooper hired to commission the Bechtel report, so they could label it “confidential, attorney-client privileged” and hide it from the public. I can’t say for sure that Mr. Carter was complaining about the report being watered down, and not simply about the delay that was causing. But it seems like both since the timeline also notes that after a Bechtel executive discussed the preliminary findings with both utilities on Oct. 22, 2015, “SCANA management expresses hesitation, routes assessment through legal department, indicates concern Bechtel’s objective is to seek a long-term engagement on the project.”
Either way, what seems most significant to me is the fact that one of the things Mr. Wenick was trying to get watered down was Bechtel’s “critique of project management.”
Even the watered-down version of the report made it clear that SCE&G and Santee Cooper were failing in their responsibility to “manage their portion of the prime contract and ensure that the Consortium contractors are fulfilling their contractual obligations.” The very most important thing that had to happen to get the project back on track, the watered-down report said, was for SCANA and Santee Cooper to develop a “Project Management Organization,” four years into construction, and contract with experienced engineering, procurement and construction personnel to “supplement current Owner staff.”
An internal Santee Cooper memo written a month after the Bechtel report was issued said the utilities needed to begin “intrusive verification” of work the contractors were doing and suggested moving to a “construction milestone payment schedule,” whereby contractors would only be paid as they met specific milestones. There’s no evidence that this was ever done. And for 18 months after they received the Bechtel report, SCANA and Santee Cooper kept spending an estimated $120 million a month on a project that was falling further behind schedule and further over budget.
Earlier this month, the pro-nuclear website NeutronBytes summed up the project’s failure this way: “All of the faults that caused the project in South Carolina to come to an early halt are with failures to follow project management schedule and cost control standard practices that have been known since Admiral Rickover supervised the construction of the first nuclear submarines in the 1950s.… It is hard not to draw the conclusion that mind warping mismanagement is the root cause of the failure of the project.”
The question before state legislators and regulators, and perhaps federal prosecutors, is what the consequences of such mismanagement will be.
Here are some other pieces I’ve written about this topic that you might find helpful:
Ms. Scoppe writes editorials and columns for The State. Reach her at email@example.com or (803) 771-8571 or follow her on Twitter or like her on Facebook @CindiScoppe.