COLUMBIA — SCANA’s executives in 2015 learned about a million-dollar bid-rigging scheme during the construction of their South Carolina nuclear project but never reported the discovery to state and federal law enforcement officials.
Rather, they kept the matter quiet to avoid negative publicity about the project, according to a source with direct knowledge, avoiding unwanted attention from regulators and the public.
The alleged fraud highlights the secrecy that SCANA's leaders cloaked the failed $9 billion project in over the past decade. The previously undisclosed episode has come to light amid continued debate about why the project failed and who is responsible.
Documents show SCANA's employees confirmed Compuworld, a company based in Lexington County, undermined the purchasing rules for the V.C. Summer nuclear expansion project in order to win contracts to supply office furniture.
An investigation by SCANA’s corporate compliance office showed Alan Saleeby, Compuworld's owner, submitted bids for his business and allegedly forged the applications for two other companies — allowing him to rake in money while making the purchases look competitive.
SCANA hired attorneys from Atlanta to complete background checks on all of the people involved in the scheme. They studied whether the utility had to report the questionable purchases under federal nuclear oversight regulations. And they considered “possible civil and criminal fraud claims” against Chicago Bridge and Iron, the contractor that approved the purchases.
News of the suspicious activity traveled quickly to SCANA's top executives as the company's leaders worked behind the scenes to fix other aspects of the struggling power project. One of the nuclear project's top executives flagged the case for SCANA's nuclear chief Jeff Archie. In an email, the executive described the purchases as “potential fraud.”
The investigation forced CB&I to credit SCANA and its project partner, state-run Santee Cooper, for the money they spent on the over-priced office supplies.
But, in the end, SCANA’s executives decided not to share the company’s findings in court or with law enforcement officials, according to the source, who asked not to be named for fear of reprisal.
Where are all the chairs going?
Several other reports produced by an outside engineering firm and SCANA’s own auditors during construction highlighted significant problems with ruined parts, unorganized warehouses and mislabeled supplies.
But the allegations leveled against Compuworld mark the most serious issue yet with the purchasing process at V.C. Summer — a project now considered the biggest economic failure in state history.
SCANA inadvertently disclosed its investigation into Compuworld earlier this year in legal bills it filed with the state Public Service Commission. But since then, SCANA’s attorneys have fought to keep other emails and documents about the investigation secret.
Eric Boomhower, SCANA’s spokesman, confirmed that the utility quietly settled the issue with Chicago Bridge and Iron in late 2015. He described the investigation into Compuworld as a "financial dispute."
SCANA's investigators referred to it simply as fraud.
According to SCANA's documents, Compuworld won nearly every bid it submitted. Saleeby, Compuworld's owner, was chosen month after month to supply hundreds of chairs, desks and filing cabinets that filled the trailers near Jenkinsville.
SCANA’s employees became suspicious of Compuworld after they started reviewing the prices it was charging for the office supplies. The cost of some of the chairs, according to the investigation, was 27 percent to 31 percent higher than the price of the same furniture at retail giants like Amazon and Staples.
The amount of furniture purchased from Compuworld also raised red flags. SCANA’s team critically noted that CB&I purchased 566 chairs from Compuworld in 2014, but only 60 new employees were added to V.C. Summer that year — many of them craftsmen who likely didn’t need office furniture.
“I’m sure there is some need for craft to use desk chairs throughout the site, but I cannot imagine we needed over 500 chairs for craft workers,” Margaret Felkel, a SCANA auditor, wrote in an email to other SCANA officials in September 2015. “Where are all these chairs being used?”
Another 152 chairs were bought in the first half of 2015, Felkel noted.
"This seems excessive, but I may be missing something."
'If that’s fraudulent, then I’m guilty'
The investigation became more serious when SCANA discovered evidence that Saleeby also was submitting bids for companies that were purportedly competing against Compuworld. Email addresses and the handwriting on some of the documents showed Saleeby was personally filing the other offers, too, guaranteeing that Compuworld came out on top.
Saleeby was confronted about the forgery in August 2015 at a meeting at the Post Office in Columbia. SCANA’s investigator met with Saleeby and Joe Elliott, the owner of JBE Media, one of the other businesses used to orchestrate the alleged fraud.
During the interview, Saleeby openly admitted to forging Elliott’s signature and the bids for his company. But he assured the investigator he had Elliott’s permission.
Elliott didn't respond to calls from The Post and Courier. But he explained to SCANA's investigator that he and Saleeby were “friendly competitors.”
“It was another company. It was a legitimate company,” Saleeby told The Post and Courier during an interview in August. “I don’t have anything to lie or hide. If that’s fraudulent, then I’m guilty, because I did do that.”
Mark Jakiela, CB&I's purchasing agent who oversaw Compuworld’s bids, also admitted to knowing about the alleged forgery, according to SCANA's documents. But he told investigators that he didn’t see anything wrong with the setup.
“The main concern I had following the interview was that Mark (Jakiela) seemed to be very content with one company submitting a bid for another,” SCANA’s investigator wrote after the interview. “It appeared that he was simply interested in having a certain number of bids to check a box as opposed to providing true competition.”
Jakiela did not respond to more than five calls to his home in Columbia over the course of two months.
As it turned out, Saleeby and Jakiela had done business together before. According to SCANA’s investigator, Jakiela managed bids from Compuworld several years earlier when he worked for the mattress company Select Comfort.
According to Saleeby, Jakiela reached out after he got his new job with CB&I and asked if Compuworld wanted to submit bids at V.C. Summer, too. But he denies there was any organized effort to fix the bidding system.
“He’s the purchasing agent. I didn’t rig anything with him,” Saleeby told The Post and Courier. “Do I have a personal thing with him? Absolutely not.
“They can check my accounts. I have nothing to hide,” Saleeby said.
He quickly added that he often shreds all of his paperwork dealing with purchase orders and his credit cards.
'Not an isolated case'
SCANA’s investigators were confident it was all a ruse.
“Based on our investigation, the allegation of fraudulent purchasing practices is confirmed,” the SCANA investigators noted. The bids from the other two companies, they added, were “received only for the sake of appearance.”
Jakiela was eventually forced off the V.C. Summer construction site, and CB&I officials assured SCANA that Compuworld was an “isolated incident."
SCANA's auditors disagreed, and for a time they even considered opening a broader investigation into CB&I's purchasing process. "This is not an isolated case," Ken Browne, a former SCANA employee wrote in August 2015 email. "It is only a good and easily understandable example."
But SCANA's executives had different plans. They allowed CB&I to exit the nuclear project in late 2015. The decision allowed CB&I to drop any liability it had for the procurement issues and construction setbacks at V.C. Summer.
Compuworld didn't receive any more contracts at V.C. Summer. But its business remains, including its work as a registered supplier for local, state and federal governments.
Between 2011 and 2016, for instance, state records show Compuworld earned more than $300,000 from the S.C. Department of Corrections for material it supplied to state prisons.
Saleeby is now considering closing Compuworld, he told The Post and Courier, because of lagging business. But he’s fretting over what SCANA’s investigation might mean for him now that it has come to light.
“It worries me because I don’t have attorneys like they have, even though I didn’t do anything wrong,” he said.
Meanwhile, Jakiela has found another job. He’s now working as a buyer for a South Carolina brake manufacturer.