Nuclear power watchdogs say new court claims are the latest red flag about Holtec’s corporate ethics as it pursues untested nuclear initiatives. (Getty Images)
New legal claims lodged in recent weeks offer what critics say are disturbing insights into Holtec, the Camden-based company pushing controversial atomic power projects across the United States.
A lawsuit filed by Holtec in October claims two senior company executives embezzled hundreds of thousands from the firm in a “rogue” operation that resulted in $65 million in investment losses.
The alleged scheme, plotted by Holtec’s former chief finance officer and head corporate counsel, landed the company in a tax break scandal and criminal investigation that ended in a $5 million fine and other penalties brought by the New Jersey Attorney General, the lawsuit claims.
The executives even steered Holtec CEO Kris Singh into pouring millions of the firm’s money into a string of multinational cannabis companies, according to documents filed with the suit in Superior Court.
Nuclear power watchdogs say the alleged conduct laid out in the lawsuit is only the latest red flag about Holtec’s corporate ethics as it pursues untested nuclear initiatives using billions in taxpayer subsidies. The issue, they say, is troubling because the company’s plans — from the creation of radioactive waste dumps to the reignition of a mothballed power reactor — could profoundly impact the nation’s health and safety.
“The stakes at play in trusting this company are staggering, yet we just keep getting these warning signs,” Kevin Kamps, a leading anti-nuclear activist, told the New Jersey Monitor. “You have to wonder why Holtec keeps having what appear to be stunning lapses of character.”
Kamps said the lawsuit shows Holtec’s CEO hired two executives who pushed bad investments and cooked up tax break schemes.
“How much more evidence do we need that something is amiss?” Kamps said.
Patrick O’Brien, a spokesman for Holtec, pushed back on criticism of its corporate character. He said negative views of the company arose mainly from politically motivated investigations and lawsuits pressed by New Jersey.
Holtec, he said, acts to root out dishonesty or wrongdoing found anywhere in the corporation.
“One of the reasons that Holtec is pursuing the case against its former CFO and general counsel is that it does not tolerate ethical lapses from any employees, no matter their status at the company,” O’Brien said in a written statement to New Jersey Monitor.
New Holtec claims
Holtec, in the new lawsuit, names as defendants Robert Galvin, who was chief financial officer, and Andrew Ryan, who was general counsel. The company claims the pair tricked Singh into paying them $710,00 in finders’ fees for advice on cannabis and other investments.
The lawsuit also claims the two executives, and a third defendant, representing the accounting firm CBIZ, were responsible for arranging the abortive tax break scheme that resulted in the attorney general’s investigation.
Holtec, in the court papers, now contends it was “forced” by the state to sign the non-prosecution agreement that concluded the investigation, which also implicated Singh Real Estate, a Holtec affiliate owned by the company’s founder and CEO.
“Holtec and Singh Real Estate were falsely branded as defrauders, liars, exploiters, and manipulators,” the suit claims. Galvin and Ryan have not yet filed a response in court, and their attorney declined to comment.
Amy McGahan, a spokeswoman for CBIZ, said the firm denied any responsibility in the alleged scheme that led to New Jersey’s fine and censure of Holtec. CBIZ is also pursuing a pre-existing claim against Holtec in Ohio federal court for non-payment of bills connected to tax work the company did for Holtec starting in 2018, McGahan said.
O’Brien, in his written statement to the New Jersey Monitor, stressed that no public money from power reactor decommissioning funds was invested in marijuana. The millions of dollars lost through bad investments described in the lawsuit will not affect Holtec’s ongoing projects, O’Brien added. He declined to release details on the firm’s finances.
“As a privately held company, we do not publicly discuss company profitability… We have the financial and technical capabilities to execute [our] projects,” he said.
Separate claims
The new lawsuit comes on the heels of other recent allegations from ex-Holtec senior executives.
In September, former Holtec Chief Investment Officer Michelle Tate claimed she was fired after Singh improperly withheld hundreds of thousands in compensation from her. Tate was in charge of overseeing the investment of some $5 million in reactor decommissioning trust funds Holtec now controls in New Jersey and three other states.
Last year, former Chief Financial Officer Kevin O’Rourke filed a whistleblower suit against Holtec claiming that he was fired after refusing to endorse alleged falsehoods about the company’s finances and future prospects.
O’Rourke claims Holtec sought to conceal $150 million in projected losses for its proposed nuclear waste facility in New Mexico. He also claims Holtec “grossly overstated” the amount of money it spends annually on research and development, lied about long-term company debt, and inflated the value of its manufacturing facilities.
After objecting to the falsehoods, O’Rourke claims, he was shut out of meetings and soon fired.
“Oh Kevin, you are just an accountant, you don’t know anything about business and finance,” O’Rourke claims Singh told him, according to the court papers. Holtec denies the claims of both O’Rourke and Tate and says it will vigorously oppose them.
Under Singh, an Indian-born engineer who founded the firm in the 1980s, Holtec has become a global leader in the storage of spent reactor fuel. It is now expanding into the decommissioning of old reactors and the creation of a new class of so-called small modular reactors, or SMRs.
Despite racking up plant security violations in New Jersey and facing Nuclear Regulatory Commission scrutiny for quality assurance issues in the manufacture of its waste containers, Holtec says it has a strong safety record and points out that federal regulators like the Nuclear Regulatory Commission and Department of Energy review and approve all its work.
Holtec’s corporate ethics have been under scrutiny for at least a decade and a half.
In 2010, the company was temporarily banned from working for the Tennessee Valley Authority after the company was implicated in a bribery scandal.
Investigators said some $50,000 in bribes accepted by a plant contracting official operator had originated with Holtec, which was seeking an extension of a $54 million long-term contract for engineering services on a spent fuel facility at Browns Ferry. Holtec also “misled” the state agency about prices for various materials, investigators said, concluding that Holtec overbilled the agency by $272,000.
In addition to paying a $5,000 fine, Holtec agreed to pay $2 million in “administrative fees,” appoint a corporate governance officer, install an independent monitor at its own expense, implement a code of conduct, initiate ethics training for all employees, executives, and directors, and add three non-company members to its board.
The Tennessee agency’s inspector general said its action debarring Holtec for 60 days was a first in the history of the federal nuclear power agency.
Four years later, in applying for $260 million in New Jersey tax breaks, Holtec submitted paperwork claiming it had never been banned from federal contract work. When the Tennessee censure was revealed in press reports, the state withdrew the tax abatement and said Holtec had lied.
An appeals court eventually returned the tax abatement to Holtec. The court found that the administration of the tax break system was flawed and potentially confusing to applicants.
In 2019, New Mexico state officials said Holtec submitted misleading claims in seeking permission to create a waste dump for 8,600 metric tons of spent nuclear fuel from power reactors across the country. The officials said Holtec falsely claimed it had obtained property rights from landowners and mine operators near the proposed waste site.
The landowners sued successfully to intervene, and a federal court rescinded the Nuclear Regulatory Commission’s approval of the waste site. Holtec is now appealing the decision in the U.S. Supreme Court.
A ‘kind of deception’
State authorities and local groups in New Jersey and other states also joined in court actions seeking greater public protections and financial guarantees in Holtec’s campaign to decommission retired nuclear power stations in four states, including the Oyster Creek plant in Lacey Township and the Indian Point facility on the Hudson River in Westchester County, New York.
Activists say Holtec has delayed decommissioning work and left a string of broken promises regarding the handling of highly radioactive waste in storage at the shuttered reactors.
In Massachusetts and New York, regulators banned Holtec’s plan to dump mildly radioactive water in nearby rivers amidst a huge public outcry.
Diane Turco, a Massachusetts resident who lives near the former Pilgrim nuclear power plant on Cape Cod, leads a group of citizens who have joined Massachusetts regulators seeking to compel higher standards from Holtec.
In 2022, Turco and others, including U.S. Sen Edward Markey, confronted Singh during a public meeting called to discuss Holtec’s plans for dumping more than 1 million gallons of radiated water into Cape Cod’s bay. Singh promised he would hold off on the wastewater disposal until all stakeholders agreed on a solution and scientists assessed the potential impact of radiated water on the delicate estuarine environment.
A few months later, however, Turco said an anonymous whistleblower inside the Pilgrim plant revealed that Holtec had installed submersible heaters into the waste tanks and was slowly evaporating the water — and its low-level radioactive load — into the air. More than 200,000 gallons have already gone into the atmosphere, watchdogs say. Holtec said the heaters are being used to warm workers and not disperse the waste.
“This is the kind of deception we have seen time and time again,” Turco said in an interview. “The bottom line is that Holtec is a house of cards, and it seems there is very little we can do about it but keep complaining. Can anyone be surprised to hear that senior executives at this company were dishonest or running some kind of scheme?”
Activists say Holtec’s recurring ethics issues show the Nuclear Regulatory Commission has strayed from meaningful regulation of the company.
“You’ve got a history of alleged bribery, debarment, and a long string of misleading and false statements,” Kamps said. “But the NRC basically says, ‘It’s not my job to investigate.’ “
Prema Chandrathil, a spokesman for the agency, said the Nuclear Regulatory Commission insists that all licensees submit complete and accurate information about their use of radioactive materials and operating or decommissioning of nuclear plants.
“If information comes to light that calls into question the company’s conduct on an issue that falls within the NRC’s jurisdiction, the NRC can inspect, investigate, and take enforcement action against the company should violations be identified,” he said in a written statement.
”We understand that this may not satisfy everyone,” Chandrathil said, adding that the agency is always open to complaints from the public. “All stakeholders have recourse in such cases and may submit a petition for NRC to take enforcement action.”
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