Last defendant in $9 billion SCANA nuclear construction scandal pleads guilty

Jeffrey Benjamin, the last defendant in the $9 billion SCANA nuclear scandal that destroyed one of South Carolina’s most prestigious and profitable companies, pled guilty Thursday for his role in a cover-up of problems that led to the company’s downfall.

Benjamin, 61, pled guilty before U.S. Judge Mary Lewis to an information felony charge of “aiding and abetting the failure to keep accurate corporate records” in connection with SCANA’s doomed effort to build two nuclear reactors to produce electricity at the V.C. Summer facility near Jenkinsville north of Columbia.

Benjamin, a former Westinghouse Electric Corp.’s senior vice president for new plants and major projects, is the fourth and last defendant in an FBI investigation that began in 2017, shortly after SCANA and its junior partner, Santee Cooper, abandoned the project because of massive cost overruns and missed production schedules.

As a result of the abandonment, thousands of workers at the nuclear site were left jobless, and SCANA — an electric utility that for years was one of the state’s most successful companies — was eventually absorbed into energy giant Dominion, headquartered in Virginia.

Other losers in the debacle were SCANA’s hundreds of thousands of ratepayers, who for years paid multiple surcharges tacked onto their monthly bills to help pay ongoing costs of the doomed project. Investors also suffered from a steep decline in SCANA’s stock price. It was one of the worst business failures in state history.

In his role at Westinghouse, Benjamin oversaw construction of Westinghouse’s nuclear reactors worldwide, including the two at the V.C. Summer plan that were abandoned in 2017.

According to the government’s case, both Benjamin and top SCANA officials concealed from the public — in different ways and for different reasons — the fact that construction of the two nuclear reactors at the V.C. Summer nuclear site was woefully behind schedule and would miss deadlines of August 2019 for one reactor and August 2020 for the other.

SCANA had hired Westinghouse in 2015 to complete construction at the site, and Westinghouse was obligated to pay SCANA damages if the work was not completed on time. SCANA would suffer also, losing large federal tax breaks if the reactors weren’t finished on time.

Hiding the truth about construction at V.C. Summer was a federal crime because SCANA — a company whose shares were traded on the New York Stock Exchange — had a legal duty to make truthful and timely disclosures to investors, regulators and the public about events that might affect the company’s stock price, according to the prosecution’s case.

While SCANA officials deliberately made false optimistic statements about progress at the nuclear site, Benjamin’s crime was different: He knew the statements were false and didn’t correct them, assistant U.S. Attorney Winston Holliday told the judge Thursday during a 50-minute hearing at the downtown federal courthouse in Columbia. .

“Mr. Benjamin failed to correct misrepresentations that he knew were wrong,” Holliday said.

Holliday also told Judge Lewis that the executives were not making their false rosy projections “for personal gain. Their primary interest was to complete the project. We wish they had succeeded. But they didn’t.”

More serious charges against Benjamin, including conspiracy, wire fraud and securities fraud, were dropped Thursday as a result of a plea deal between the government and Benjamin.

In answering Lewis’ questions about his education and work experience, Benjamin spoke at length, beginning with his undergraduate and graduate degrees in nuclear engineering from Oregon State University and being in an advanced management program at the Harvard Business School. He led nuclear projects in Washington state, Illinois and New Jersey, among others, and worked for major utilities. He also headed up major nuclear ventures in the United Kingdom, China, Poland and the United Arab Emirates and is now involved in nuclear and other energy consulting, he said.

“I hope that’s not too much detail,” Benjamin told the judge.

“No, that’s very impressive,” Lewis replied. “It seems like you are well equipped to understand these proceedings.”

Toward the hearing’s end, Lewis asked, “How do you wish to plead?”

“Guilty, your honor,” Benjamin said.

By pleading guilty, Benjamin avoided what would have likely been a long jury trial that could have run weeks, if not well more than a month.

Benjamin will be sentenced at a later, as-yet undetermined date. Under the plea deal with government prosecutors, he could get anywhere from probation to 12 months and a day in prison and pay a financial penalty of up to $100,000.

Previously, two former SCANA top executives — CEO Kevin Marsh and Chief Operating Officer Stephen Byrne — pled guilty to fraud in the case and were given prison terms. Marsh received two years in federal prison and Byrne, 15 months. Both have been released.

A former Westinghouse executive who worked under Benjamin, Carl Churchman, pled guilty to lying to an FBI agent in the case. He received six months home detention.

After the hearing, Benjamin’s attorney, William Sullivan of Washington, issued the following statement to reporters: “Mr. Benjamin is pleased to move beyond this matter and looks forward to continuing to apply his comprehensive professional expertise to all sectors of the energy industry.”

Holliday told reporters that Benjamin’s plea marks the end of the federal investigation into the nuclear project’s collapse.

“Our goal has been to hold those responsible for what crossed over into criminal conduct,” Holliday said. “To be clear, it’s not a crime to fail at a business venture, no matter how catastrophic, but when customers’ money is involved, and oversight measures are evaded through a series of misrepresentations and lies, then poor performance becomes criminal.”