COLUMBIA — Federal prosecutors locked in a valuable witness Thursday who will give them insights and advantages as they continue to bring charges against the leaders of a failed $9 billion nuclear expansion project in South Carolina.
Steve Byrne, the former vice president of Cayce-based SCANA Corp., pleaded guilty in federal court to defrauding electric customers and lying about construction progress as the company tried to build two nuclear reactors at the V.C. Summer Nuclear Station in Fairfield County.
The guilty plea requires Byrne, 60, to cooperate with federal prosecutors who have spent three years investigating the project's sudden abandonment in July 2017. The construction failure cost South Carolina electric ratepayers billions of dollars in higher power bills. SCANA's shareholders also suffered huge losses when the company's stock value tanked. The company was ultimately sold at a bargain price to Virginia-based Dominion Energy.
On Thursday, Byrne admitted to falsely telling regulators, investors and the public the project was on track in order to win rate hikes on customers and keep the venture going while failing to raise alarms about critical flaws that were dooming the expansion effort.
By pleading guilty, Byrne is hoping to avoid a stiffer sentence. The fraud charges he pleaded to can still carry up to five years in prison, a $250,000 fine and three years of supervised release afterward.
He could also be required to forfeit up to $1 million in pay and bonuses tied to his performance when he oversaw the V.C. Summer venture.
For now, Byrne will remain out of jail. A federal magistrate released him on $25,000 bail and required Byrne, who owns a home on the Isle of Palms, to surrender his passport. He will need permission from federal parole officials to leave the state for consulting work or special occasions.
U.S. Magistrate Judge Shiva Hodges said she was providing leniency because it could take years for a judge to issue Byrne's sentence, which will come at the end of a federal investigation targeting other SCANA officials.
Prosecutors revealed Thursday that Byrne has been cooperating with the investigation for about a year, though his plea agreement was made public only last month.
“Today is the start of a process that has been years upon years in the making," U.S. Attorney for South Carolina Peter McCoy said after Byrne's plea. "We’re mighty proud to have gotten this first step down."
Byrne appeared emotionless Thursday as he stepped out of a white SUV, walked past a group of protesters demanding he apologize for stealing customers' money and heard the charges against him read aloud in court.
He stared forward as prosecutors revealed their case against him, rocking slightly in his chair at the federal courthouse in Columbia. He spoke only in response to U.S. District Judge Mary Geiger Lewis, who asked him 82 questions aimed at ensuring Byrne understood the charges against him and still wanted to plead guilty.
Byrne will have more to say as the V.C. Summer investigation progresses. SCANA's former No. 2 official is expected to be a star witness in future trials or grand jury proceedings involving other officials who oversaw the project.
Byrne was at the center of nearly every major meeting involving V.C. Summer and was involved in important decisions regarding the project, which is considered one of the worst economic calamities in South Carolina history.
He participated in monthly construction meetings with officials from Westinghouse, the project's primary contractor. He negotiated with the leaders of state-owned utility Santee Cooper, SCANA's partner on the project. And he was involved in pivotal discussions among SCANA's top executives, including former CEO Kevin Marsh and former Chief Financial Officer Jimmy Addison.
Marsh and Addison are both thought to be targets in the ongoing investigation. Prosecutors have also hinted former SCANA attorneys could face charges.
Documents filed in federal court specifically referenced Marsh and Addison's efforts to persuade state regulators to raise the company's power rates to help pay for the project. The federal court filings also reference attorneys who advised SCANA's leadership team as being involved in the alleged criminal schemes.
Tom Clements, one of a handful of environmental activists who drove to the courthouse for Byrne's plea, has eagerly read those tea leaves.
“I’m glad there is going to be a little bit of justice and that Mr. Byrne is now pleading guilty to his crime, so it’s a matter of holding others accountable who were former executives of SCANA,” Clements said. “I would anticipate that Kevin Marsh and Jimmy Addison are probably next in the queue to be charged, and hopefully some others.”
In court Thursday, McCoy used Byrne's plea hearing to lay out broader allegations of a criminal conspiracy surrounding the nuclear project.
It wasn't the first time that McCoy, a former state lawmaker, spoke at a hearing involving the nuclear project. He also led a special committee in the S.C. House in 2017 that investigated SCANA and Santee Cooper after the nuclear project's demise.
At Thursday's hearing, McCoy explained how Byrne oversaw all aspects of the nuclear project. He described how Byrne and other officials at SCANA allegedly lied to the public, state utility regulators and their investors on Wall Street by providing rosy projections of the project's construction progress as it teetered toward collapse. He detailed how Byrne and others hid damaging information about the project to convince people that the nuclear reactors would be finished in time to qualify for $1.4 billion in crucial federal tax credits.
"Do you understand and agree with Mr. McCoy's summary?" Judge Lewis asked after the prosecutor finished laying out the evidence in the case.
"I do," Byrne said.