COLUMBIA — A second employee tasked with auditing South Carolina’s failed nuclear reactors says that SCANA Corp. executives were “not being truthful” with investors about the problems that would eventually sink the $9 billion project, according to his testimony under oath.
Ken Browne, who helped oversee the contractors at V.C. Summer nuclear project, said in a sworn deposition that he felt SCANA painted a rosier picture of the project in public than it did in private. Browne, a former engineer, said that he could see the company’s plans to build a pair of nuclear reactors slipping off track for years.
His testimony comes as part of a high-stakes legal fight over who should pay for one of the biggest financial debacles in state history — the power companies behind it or their customers. And it hints at what federal investigators are considering as they probe the project for possible criminal wrongdoing.
“The health of the project was not good,” Browne said. “But if you read in the reports, the health of the project was always good, a positive outlook.
"I used to say Ray Charles could have seen it because it was so obvious, but nobody wanted to do anything about it," Browne added.
An attorney asked if it was possible top management didn’t know about the problems he did.
“It's not possible,” he responded. Internal reports made it to their desks, he said.
Browne talked to the FBI about one of them — an internal analysis that predicted that the project would cost far more to finish than the company told state regulators. Investigators had also heard about the report from another whistleblower within SCANA’s inner circle.
Details of what that analysis found have not come to light yet: SCANA has resisted efforts to make the analysis public. But the outlines were revealed in a separate deposition of Carlette Walker, who was the top accountant on the nuclear project.
Walker’s testimony has been an explosive force in a series of legal fights over the nuclear project, which was called off last summer. She testified that she quit her job because she felt pressured to lie about the project’s progress. And in a voicemail she left for her counterpart at the project’s co-owner, Santee Cooper, she warned that her bosses were being deceptive to prop up SCANA’s profits.
Browne and Walker worked closely on the project, talking every day before they quit their jobs. His deposition, taken last month, represents some of the first public testimony to support her claims.
“I was not pleased with the path that the project was taking at the time,” Browne said, referring to a slipping project schedule and contractors’ sluggish results. “There didn't appear to be any end in sight in those issues. We had been through many rounds of promises of improvement, but they never followed through on those promises.”
SCANA, the Cayce-based owner of South Carolina Electric & Gas, declined to comment on the testimony, saying it would only respond in regulatory filings.
The deposition, which was taken as part of a class action lawsuit filed against SCANA, is only the latest evidence to emerge in the ongoing investigations into the nuclear fiasco.
Just last week emails came to light showing how SCANA handled a highly critical audit of the project’s problems — and how they dealt with questions about whether to disclose it. The company was steadfast in avoiding disclosure, even as financial auditors pressed the question.
According to an email from one of SCANA's attorneys, the company's former chief financial officer and current CEO Jimmy Addison said he "didn't want to volunteer anything" to the Securities and Exchange Commission, the federal agency that regulates Wall Street.
SCANA and its project partner, the state-owned power company Santee Cooper, have been under mounting legal and financial pressure since cancelling the decade-long construction project last year. SCANA is fighting off multiple lawsuits and regulatory cases filed by its electric customers, its investors on Wall Street and the Office of Regulatory Staff, the state’s utility watchdog.
Electricity users who get power from SCE&G have paid more than $2 billion toward the V.C. Summer project, and they could keep paying for decades. Regulators will begin deciding next month how the costs of SCE&G’s share of the project will be divvied up. Browne’s testimony was filed as part of the evidence they will consider.