South Carolina

Former Santee Cooper CEO in secret talks with feds over failed VC Summer project

Santee Cooper CEO says nuclear project didn’t fail. “It was an investment.”

Santee Cooper CEO Lonnie Carter testified before the House Utility Ratepayer Protection Committee. He believes the nuclear reactor project was an investment that could still be built.
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Santee Cooper CEO Lonnie Carter testified before the House Utility Ratepayer Protection Committee. He believes the nuclear reactor project was an investment that could still be built.

Former Santee Cooper chief executive Lonnie Carter is being interviewed by federal law enforcement as part of an ongoing criminal investigation into the failed V.C. Summer nuclear construction project, The State has learned.

Carter was scheduled to be deposed by trial attorneys earlier this month as evidence for lawsuits against the state-owned utility, which raised customers’ power bills for years to finance the construction of a nuclear power plant that was never finished.

But that interview has been postponed until next month so the retired CEO can first speak with criminal investigators, according to two people closely involved with the civil lawsuits.

The talks are the most recent evidence that the secretive criminal investigation into the failed V.C. Summer project remains ongoing — even though no charges have been filed 22 months after the construction effort collapsed.

The FBI, U.S. Attorney’s Office, State Law Enforcement Division, S.C. Attorney General’s Office and U.S. Securities and Exchange Commission opened investigations within months after two S.C. utilities — Santee Cooper and SCE&G — surprisingly pulled the plug on the near-decade-long, $9 billion venture in July 2017.

The investigations have sought to pinpoint what the utilities’ executives knew about the project’s shortcomings, when they knew it, and whether they misrepresented the project’s progress and failures in statements to investors, bondholders or regulators.

Failing to convey the project’s shortcomings accurately to people with a financial stake in V.C. Summer or SCE&G itself could constitute fraud and lead to jail time for top executives. Civil lawsuits against the company have accused as much, arguing SCE&G executives wanted to keep the struggling project alive to meet earnings goals and collect hefty bonuses.

The timing of Carter’s interview indicates he is not likely a target of the probe, sources told The State. It instead hints that he is a cooperating witness, helping investigators build their case against other executives — likely his former counterparts at SCE&G, the sources said.

Investigators working a case of this size and complexity typically start by subpoenaing and reviewing troves of documents, then interviewing low-level witnesses and working their way up the flowchart of command. The main targets of a sophisticated criminal investigation are typically interviewed last, after investigators have built a case against them and can pressure them into pleading guilty.

Efforts to reach Carter’s defense attorney, Columbia lawyer Greg Harris, were unsuccessful on Monday. Santee Cooper is paying Harris $475 an hour to represent Carter, an arrangement that has drawn criticism from S.C. Gov. Henry McMaster, Attorney General Alan Wilson and former Santee Cooper board chairman Charlie Condon.

Santee Cooper spokeswoman Mollie Gore said the state-owned utility could not comment on an ongoing investigation.

SCE&G’s new owner, Dominion Energy, also declined to comment. Dominion has said it is cooperating with the investigation.

Assistant U.S. Attorney Katie Stoughton declined to comment, saying “our office cannot comment regarding ongoing investigations.”

Carter’s rescheduled deposition is the latest of several hints that the criminal investigation remains active.

FBI agents visited the abandoned nuclear site in May 2018. And investigators have silently attended public hearings at the State House and the Public Service Commission to hear key utility executives testify about the project.

Carter retired from Santee Cooper on Aug. 25, 2017, just over a month after the utility quit the project.

Carter’s deposition has been delayed to mid-July.

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Avery G. Wilks is The State’s senior S.C. State House and politics reporter. He was named the 2018 S.C. Journalist of the Year by the South Carolina Press Association. He grew up in Chester, S.C., and graduated from the University of South Carolina’s top-ranked Honors College in 2015.

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