Former Westinghouse official to plead guilty in FBI probe of SCANA’s nuclear failure

A top former Westinghouse official who helped oversee the construction of a now-abandoned multibillion dollar nuclear plant in Fairfield County was charged Monday with the felony offense of lying to an FBI agent.

Carl Churchman, 70, will plead guilty to the offense, which carries a maximum five-year prison sentence, according to records filed in federal court on Monday. No hearing date has been set for the in-person guilty plea, which will take place before a federal judge.

A one-page charging document said that Churchman falsely told an FBI agent that he was not involved in communicating how the project was going to SCANA officials. SCANA, the now defunct Cayce-based power company that embarked on the nuclear expansion, had hired Westinghouse to oversee the project.

In fact, Churchman — who was managing the project for Westinghouse — was communicating “with colleagues from the Westinghouse Electric Corporation through multiple emails in which they discussed the viability and accuracy of (completion dates) and thereafter, he reported those dates to executives of SCANA and Santee Cooper during a meeting held on Feb. 14, 2017,” the charging document said.

The charge against Churchman is the first indication by federal law officials that they have extended their investigation beyond SCANA. Two of SCANA’s top officials have been charged with fraud and pleaded guilty in connection with the nuclear debacle.

There may be more ex-Westinghouse officials or others to be charged.

In a seven-page plea agreement also filed Monday, Churchman has agreed to cooperate with prosecutors.

Churchman was vice-president of new plants and major projects for Westinghouse, according to news accounts. His work made him familiar with progress at SCANA’s Fairfield County nuclear site, where two 1,117-megawatt reactor units were being built. After years of planning, Westinghouse started construction in 2013 and was behind almost from the start, according to federal investigations.

In a 2016 interview with the S.C. Biz News during a media event, Churchman told a reporter he was optimistic about the SCANA nuclear project. “We’ve reached a pivotal point here on the project. ... We’re no longer a project that’s just now a civil structure project, but we’re a project now that’s installing reactor vessel, reactor cooling equipment. It’s a very exciting time.”

In 2020 and this year, two former top SCANA executives — Stephen Byrne and Kevin Marsh — pleaded guilty to criminal fraud charges related to their knowing about costly delays to the project, delays they unlawfully kept secret for years from regulators and shareholders. Sentences in those cases are pending.

In 2020, The Securities and Exchange Commission also accused Byrne and Marsh of civil fraud in being at the center of a brazen con scheme that propped up SCANA’s stock price for three years before 2017. Those civil charges are pending.

SCANA was a publicly traded company and, as such, its executives were required by law to make disclosures about events that might affect its business and stock price.

Building two nuclear reactions had been one of the state’s largest construction projects ever. But delays and cost overruns eventually doomed the effort, making it one of the largest business failures in South Carolina history. The failed project spawned some 20 lawsuits by ratepayers and SCANA shareholders, as well as federal criminal and civil fraud charges. Nearly 4,000 construction workers were laid off.

The failure also led to the collapse of SCANA, once one of the state’s crown business jewels with 750,000 electric customers and 350,000 natural gas customers, and its 2019 acquisition by Dominion Energy, a Virginia-based utility giant.

From the conception of the project, in 2008, SCANA had hired Westinghouse, a Toshiba-owned company that had experience building nuclear reactors, to oversee construction at the nuclear facility in Fairfield County. Westinghouse was to build two nuclear reactors for a cost estimated at that time to be about $10 billion.

In 2008, SCANA said it aimed to get one reactor online by 2016 and the second one by 2019. The utility convinced South Carolina regulators to let it add a monthly surcharge to the bills of its hundreds of thousands of electric customers as construction of the project went along.

But as the years went by, the project was plagued by mounting costs and delays. Still, SCANA executives kept up their optimism, giving the public and regulators rosy projections about when the project would be completed.

In February, 2017, SCANA issued a press release saying that Westinghouse was “committed to completing” the two nuclear reactors in time to qualify for hundreds of millions of dollars worth of federal tax credits SCANA was trying to get by completing the project in a timely fashion.

In March 2017, Westinghouse filed for bankruptcy.

Four months later, on July 31, 2017, SCANA and its junior partner, the state-owned utility Santee Cooper,stunned the South Carolina political and business worlds in announcing they were abandoning the project.

In documents and public court statements, prosecutors have said that top SCANA officials participated in an illegal abuse of public trust by engaging in a deliberate plan to hide the extent of SCANA’s financial troubles at the nuclear project from the public, from regulators and from investors in the publicly traded utility.

Churchman’s lawyer is Lauren Williams of Charleston. Federal prosecutors include Jim May, Winston Holliday, Brook Andrews and Emily Limehouse.

This story was originally published May 24, 2021 at 12:24 PM with the headline "Former Westinghouse official to plead guilty in FBI probe of SCANA’s nuclear failure."