Final part of a three-part series. Read the first and second part here.
A multi-billion-dollar nuclear energy venture that has churned through billions in federal funds despite having no business plan has been pumped full of tax dollars by high-profile Republican critics of government waste.
Public support for the United States Enrichment Corp. far exceeds what was lost on the infamous Solyndra solar energy boondoggle, and funding provided ostensibly to build a new plant will almost certainly yield the same results for taxpayers — nothing.
The company has over $2 billion in debts and liabilities and is valued at only $28 million on the stock market.
Company executives have acknowledged to shareholders that the firm has no viable business plan and lacks financing to build its proposed American Centrifuge plant — even as it collects money from the government as a down payment.
Still, in January 2012 — only days after Solyndra executives pleaded the Fifth Amendment during rancorous congressional hearings — House Speaker John Boehner and other Republicans wrote to the Department of Energy pleading for funds for USEC through the same federal loan program that provided backing for Solyndra.
The company has asked DOE for a $2 billion loan guarantee towards the American Centrifuge project's $4 billion estimated total cost.
The company’s main plant, which is now being vacated, is in Kentucky, home of Senate Minority Leader Mitch McConnell and in a town represented by Rep. Ed Whitfield, chairman of the House Energy and Commerce Committee's subcommittee on energy and power.
House Appropriations Committee Chairman Hal Rogers is also a Kentucky Republican. Kentucky's other senator, Tea Party favorite Rand Paul, is yet another Republican USEC backer.
Enrichment at the public till
How Republicans - and some Democrats - steered billions to a failing privatized arm of the government many times the size of Solyndra, executives profited, and taxpayers lost.Part One: Feds invested billions in energy firm virtually sure to fail
Part Two: Privatizing energy project led to rich bureaucrats, drained federal coffers
Part Three: Republican leaders steered billions in pork to failing company in home states
The company now hopes to move to Piketon, Ohio, in a politically sensitive swing county in the state from which Boehner hails.
Beginning with the Tea Party-fueled takeover of the House in the 2010 elections, Rogers has promoted himself as the “enforcer” of a House ban on earmarks, the practice of shoveling federal funds to home districts without votes by the full Congress.
Many Republicans condemn earmarks as wasteful and often can lead to projects such as Alaska’s “bridge to nowhere.”
Rogers’ spokesman said the USEC bills he backed were requested by the president, not congressionally initiated, and thus weren’t earmarks.
Yet no fewer than 57 bills, virtually all from Republicans, have been written containing various carveouts, additional protections and targeted incentives for USEC.
In May 2011, for example, McConnell and Paul offered a bill that would have directed the Department of Energy to use federal funds to keep the for-profit company’s antiquated and inefficient Kentucky plant operation.al
That particular bill, which a McConnell spokesman said “would have created 15 years-worth of uranium for U.S. national security purposes and kept 1,200 jobs in Kentucky,” died in committee, but USEC was nonetheless the recipient of countless other appropriations, including in the fiscal year 2014 budget.
Massachusetts Democratic Sen. Ed Markey, one of the few in Congress to push back against such appropriations, calls USEC “the United States Earmark Corporation.”
Paul’s office did not return a request for comment.
USEC’s stock prices have fallen steadily for years, and most recently so sharply that the decline threatens the firm's continued listing on the New York Stock Exchange.
But that didn’t stop USEC's Republican backers from steering the government towards it.
In fact, USEC began as a part of the government, until Congress decided to spin it off as a for-profit company in 1998 to save money and foster innovation.
Instead, USEC continued to derive almost all of its funds from the federal government, and reinvested plenty in keeping the political spigots open.
USEC and its executives have donated $1.3 million to federal politicians, 70 percent of which went to Republicans. And by 2000, it was spending well over a million dollars a year lobbying officials for cash.
In 2002 alone, USEC spent $5 million on a team of lobbyists, including those with connections to then-President George W. Bush; Gregory H. Laughlin, a just-retired member of Congress; and former staffers of congressional appropriations committees.
USEC also has ties to Democrats, including Ohio Sen. Sherrod Brown, and counted Secretary of Energy Ernest Moniz as a member of its strategic advisory council between 2002 and 2004.
Moniz was quizzed by Wyoming Republican Sen. John Barrasso during his April 2013 Senate confirmation hearing about his relationship with USEC:
"You were one of 9 members of the council and you were a paid adviser for the work. In March, a spokesman for USEC, they applauded your nomination.
"The reason I'm asking this is because there have been extraordinary steps taken by the Department of Energy to bail out USEC," Barrasso said.
Barrasso described DOE’s May 2012 agreement to give “publicly owned uranium” as “an effort to prop up USEC” that “contributed to a near-20 percent drop in the price of uranium and put new uranium mining projects at risk in other locations. It’s threatened good paying jobs in Wyoming and other states.”
Obama has repeatedly included USEC money in the budgets he sends to Congress, and, during an Ohio campaign stop in August 2008, implied that he would create jobs by building the plant.
But some in the Department of Energy have recently expressed serious reservations about USEC’s ability to manage finances and develop technology, and encouraged it to withdraw its application for a $2 billion loan guarantee.
That drew accusations from Boehner in September 2011, as the Solyndra scandal swirled, that Obama was “betraying Ohio” by applying scrutiny to the proposal.
Boehner’s spokesman did not return a request for comment.
This year, USEC has a team of 20 lobbyists, virtually all of whom previously worked for Republican members of House and Senate committees on energy, appropriations, and armed services, or for the Department of the Treasury and White House during Republican presidential administrations.
Multiple Republican lawmakers hammered Obama to back the $2 billion loan guarantee to USEC, even though DOE's technical and financial reviewers roundly panned the project.
A March 2012 report by the House Oversight and Government Reform Committee chaired by Rep. Darrell Issa said “DOE loan commitments exposed taxpayer funds to excessive risk as a result of DOE's bias toward approving loans without regard to warning signs.”
In January 2012, Boehner, Whitfield and others wrote to DOE imploring it to conduct "a title transfer of [uranium] tails with the loan guarantee applicant" and to "include American Centrifuge in the president's Fiscal Year 2013 budget request."
Fifteen House members, mostly Republicans, wrote that "we respectfully request that you make rapid completion of USEC, Inc.'s loan guarantee application for American Centrifuge a top priority."