South Carolina’s attorney general wants Santee Cooper to stop paying for its executives’ defense attorneys, saying the agency might be violating the state constitution.
Santee Cooper, South Carolina’s government-owned power company, paid a group of five lawyers nearly $850,000 last year to defend the executives who led the failed effort to build a pair of nuclear reactors. The utility faces a swirl of criminal investigations and civil lawsuits in the wake of the massive $9 billion project’s demise.
The expenses were first revealed last week, when Santee Cooper’s new chairman, Charlie Condon, asked why the utility’s legal department had run millions of dollars over budget — and why it had hired criminal defense attorneys.
In a letter obtained by The Post and Courier on Tuesday, Attorney General Alan Wilson wrote Condon that he was “deeply troubled” by the legal fees.
Wilson also asked Condon to have the board consider halting the legal payments, arguing that they may be barred by the state constitution. And he asked board members to send the constitutional question to its little-known and rarely used advisory board, a group made up of the state’s top elected officials.
“The constitution requires that public funds may not be used for private purposes, and the paying of criminal defense fees has been consistently determined to be for the individual’s private purpose,” Wilson spokesman Robert Kittle said.
Condon says he plans to call a special meeting of Santee Cooper’s board to vote on the payments where he plans to vote against paying the invoices. He says he’s worried Santee Cooper might be “running afoul of the law.”
“I think it’s a legitimate issue that needs to be examined,” Condon said.
Condon, who was the state’s attorney general in the late 1990s and early 2000s, was appointed this year by Gov. Henry McMaster, who has called for Santee Cooper’s sale and has criticized the board for its management of the nuclear project that doubled the utility's debt. Condon, Wilson and McMaster — who also was attorney general — are allies, having shared a political consultant for years.
Santee Cooper, meantime, has defended the spending. The attorneys don’t only work in criminal defense, it has said, and none of its executives has been charged with a crime. It says it hired an outside attorney to decide whether its officials should have their legal bills covered, and it expects insurance to cover some of its extra legal expenses.
But the utility has been sued by electricity users and the state’s power cooperatives over the abandoned expansion of the V.C. Summer nuclear plant, and the nuclear project is being investigated by the FBI and the U.S. Securities and Exchange Commission, which oversees agencies like Santee Cooper that sell bonds to raise money.
“They also have experience in civil matters and understand the intersections between criminal proceedings and also civil proceedings to which Santee Cooper is a party,” utility spokeswoman Mollie Gore said.
The utility says it has spent more than $200,000 each on lawyers for former chief executive Lonnie Carter and its top employees overseeing the nuclear project, Michael Crosby and Marion Cherry. It also spent nearly $140,000 on a lawyer for its top in-house attorney, Mike Baxley.
Each of their attorneys is earning $475 an hour, Santee Cooper says.