Tuesday, February 28, 2023

Southern Company's boondoggle at the Kemper Plant in Mississippi, prompts the Arm and Arm social coalition to seek justice in showdown with "Big Power"

Kemper Plant (Mississippi Power)


Part Two

A social-change coalition -- devoted to racial and economic justice, and ending the climate crisis -- has joined the fight against alleged corruption tied to Southern Company and its affiliate, Mississippi Power, according to an article at the Mississippi Free Press (MFP)

An organization called Arm in Arm is launching a campaign to bring attention to the societal costs of mismanagement, cost overruns, safety concerns, and other issues at Southern Company's Kemper Power Plant near De Kalb, Mississippi. Writes MFP's Artis Burney under the headline "Power For Southern People, Not the Southern Power Company:

The disaster of the Kemper Power Plant was merely the most recent in a long series of unethical actions taken by Mississippi Power, a subsidiary of Southern Power. Their stunning corporate greed and long history of disregard for the communities of color they disproportionately harm led Arm in Arm, a coalition dedicated to centering racial and economic justice and ending the climate crisis, to launch the Power 4 Southern People NOT Southern Power campaign.

What about background of the 'Kemper disaster" and its impact on everyday Mississippians? Burney provides it:

In 2010, construction began on the Kemper Power Plant, touted as the pinnacle of the movement to bring “clean coal” to America. The plant—which was intended to be the largest of its kind and a proof-of-concept for future plants to follow—then spent the next 11 years trying and failing to become operational, while Southern Power, the monopoly that owned it, fobbed the costs of its ill-conceived venture off on Kemper County residents. 

Despite the fact that the plant never provided clean-coal power to a single person, local people saw their utility bills go up and up as the years wore on—until one day, the plant itself went down.

Power 4 Southern People aims to take power out of the hands of corporate energy monopolies and the corrupt politicians who feed them and return it where it belongs: to the people. This moment marks the one-year anniversary of the Kemper Plant implosion and Mississippi Power’s exploitation—a glaring culmination of years of climate injustice inequities affecting thousands of people in communities across the state.

In some instances, issues at the Kemper Plant were earth-shaking for local residents, writes Burney:

In the early hours of October 9, 2021, houses in Kemper County shook as though from an earthquake. But this was no accident of nature. This was the planned partial implosion of the Kemper Power Plant. Residents were not informed of the plan to demolish a section of the $7.5-billion dollar plant—but  residents were not informed then of a lot of things. 

For instance, many folks living in the plant’s vicinity were told the plant would create jobs, but were not told that their medical bills would likely increase due to the many health hazards associated with living in the immediate vicinity of a power plant. Neither were they told that, in the more than 10 years since construction began on the plant, the project had gone more than $4 billion over budget, despite never producing a megawatt of so-called “clean-coal” power for the community. And they certainly didn’t know that they had personally footed the bill for that overage. 

Mississippi Power had simply and quietly increased utility bill rates on residents to cover rising costs, all while launching insidious ad campaigns implying that the increased cost was due to irresponsible personal usage. Mississippi Power did all of this knowingly and, they believed, with impunity. As the main power provider in the state, they thought they could act in whatever way most benefited their shareholders, without having to suffer the consequences.

Burney is a voice of both journalism and advocacy:

It is time for the people to show Mississippi Power that they are wrong. This is far from the first time a massive corporation has taken advantage of economically disenfranchised people or communities of color (as of 2021 the Kemper County community is comprised of 67.2% majority Black, indigenous and Latino residents). Nor is it the first time a predatory utility monopoly has let those communities foot the bill for their own mismanagement,  while simultaneously taking federal tax credits from corrupt politicians. With your help, however, it could be among the last.

It is imperative that we the people begin to hold Southern Company and its subsidiaries responsible for the economic and climate damage they have caused in our communities. We demand that monopolies like Mississippi Power are held to account for their corrupt practices and begin to make reparations for the damages they have done to communities—disproportionately Black people and people of color—in the past. 

We demand that Mississippi Power prioritize the well-being and prosperity of its customers and communities before its shareholders. In order to advance a pollution-free economy, we center the power of the people over corporations in the battle to end the climate crisis.

The power belongs to the people, and together we can take it back.

Speaking of demands, Arm in Arm has its demands for Mississippi spelled out on its Web site:

We will not be divided or conquered because we are intersectional and inclusive.

Southern Company, a monopoly utility based in Atlanta, GA, owns Georgia Power, Alabama Power, and Mississippi Power. Southern, its smaller companies, and the politicians in their pockets use their power to attack our voting and reproductive rights and cause environmental harm in Black and low-wealth communities. They also work together to pass laws that make the climate crisis worse and continue increasing your energy bills. We in Mississippi, Alabama, and Georgia DEMAND that the new incoming Southern Company CEO put ratepayers and communities first over shareholders and profits. These are our demands:

  1. WE DEMAND that Southern Company stop using our ratepayer dollars in Mississippi, Alabama, and Georgia to influence politicians. 

  2. WE DEMAND that Southern Company stop putting dangerous greenhouse gas emissions that are driving climate change in the air (including Scope 1, 2, & 3 emissions

  3. WE DEMAND that Southern Company immediately halt all dirty-energy projects (including gas, coal and nuclear) and dramatically scale up solar, wind, storage, and energy efficiency through a just transition. 

  4. WE DEMAND that Southern Company through Mississippi Power, Alabama Power, and Georgia Power respect the rights of its workers to form unions and require their contractors to do the same. Mississippi, Alabama, and Georgia 

  5. WE DEMAND that energy production and distribution across Mississippi, Alabama, and Georgia cease to disproportionately impact the health, well-being, environments and economies of those living in black, indigenous, or persons of color, and low-wealth communities. 

  6. WE DEMAND that Southern Company, in authentic partnership and collaboration with the community, take immediate steps to repair the environmental and economic damage it has caused

  7. WE DEMAND that Southern Company prioritize the economic welfare of all its customers and communities, in which they operate or do business, before the financial interests of its shareholders. 

I pledge to further participate in resistance with targeted non-violent civil disobedience against Southern Company until our demands are met. We declare that we are taking back our power and DEMAND Power 4 Southern People NOT Southern Company.

We speak as a unified collective voice.  The choice belongs to Southern Power Company to clean up its act at the scale needed to meet the climate crisis.

Sign on as an Individual OR as an organization.

Monday, February 27, 2023

As costs started soaring at Kemper coal-gasification plant in Mississippi, Southern Company execs turned to deception about the facility's mounting problems

The Kemper Plant near De Kalb, Mississippi


Part One

Most of the reporting on the scandal engulfing Southern Company has focused on mismanagement, cost overruns and other issues at the Vogtle Nuclear Plant in Georgia. But that's not the only place where Southern Company has stepped in doo-doo. In fact, you might say Southern has problems across a swath of the South -- east of Alabama (in Georgia), in Alabama (via chicanery at Alabama Power and Matrix LLC) and west of Alabama (near De Kalb, Mississippi) at the Kemper Plant (also known as Plant Ratcliffe) about 30 miles north of Meridian.

Kemper was supposed to be a shining example of coal gasification technology, a process designed to turn coal into gas. But it hasn't turned out so well. An E&E News article (dated Oct. 26, 2021) carried the glaring news that "The Kemper project (had) just collapsed." From the article, by reporter Kristi E. Swartz:

One of the nation’s largest symbols of carbon capture technology — the Kemper project — has collapsed into a pile of debris, highlighting the strategy of one of the nation’s largest utilities as it aims to decarbonize its fleet.

The project, which was half of a multimillion-dollar power plant in Mississippi intended to gasify lignite coal and store its captured carbon emissions, was imploded by Southern Co.’s Mississippi Power unit earlier this month because the equipment was no longer needed. The facility, Plant Ratcliffe, captured worldwide attention and was supposed to host the first commercial-scale carbon capture project on a large coal plant in the United States.

But what was known as “Kemper” for most of its construction life stopped after delays and increased costs prompted Mississippi utility regulators to say in 2017 the facility could run on natural gas only.

What did the project's failure mean to the people of Mississippi? The Mississippi Free Press addresses that question in a Nov. 11, 2022 article titled "Power for Southern People, Not the Southern Power Company." Artis Burney calls it a "disaster" and goes on to write:

In 2016, construction began on the Kemper Power Plant, touted as the pinnacle of  the movement to bring "clean coal" to America (https://www.theguardian.com/environment/2018/mar/02/clean-coal-america-kemper-power-plant). The plant  . . . was intended to be the largest of its kind and a proof-of-concept for future plants to follow -- then spent the next 11 years trying and failing to become operational, while Southern Company, the monopoly that owned it, lobbed the costs of its ill-conceived venture off on Kemper County residents.

Ill-conceived? That leads us to a report at The UK Guardian, under the headline "How America's clean coal dream unravelled; Exclusive: Kemper power plant promised to be a world leader in ‘clean coal’ technology but Guardian reporting found evidence top executives knew of construction problems and design flaws years before the scheme collapsed." Writes reporter Sharon Kelly:

High above the red dirt and evergreen trees of Kemper County, Mississippi, gleams a 15-story monolith of pipes surrounded by a town-sized array of steel towers and white buildings. The hi-tech industrial site juts out of the surrounding forest, its sharp silhouette out of place amid the gray crumbling roads, catfish stands and trailer homes of nearby De Kalb, population: 1,164.

The $7.5-billion Kemper power plant once drew officials from as far as Saudi Arabia, Japan and Norway to marvel at a 21st-century power project so technologically complex its builder compared it to the moonshot of the 1960s. Its promise? Energy from “clean coal”.

“I’m impressed,” said Jukka Uosukainen, the United Nations director for the Climate Technology Centre and Network, after a 2014 tour, citing Kemper as an example of how “maybe using coal in the future is possible”.

Kemper, its managers claimed, would harness dirt-cheap lignite coal – the world’s least efficient and most abundant form of coal – to power homes and businesses in America’s lowest-income state while causing the least climate-changing pollution of any fossil fuel. It was a promise they wouldn’t keep.

Last summer the plant’s owner, Southern Company, America’s second-largest utility company, announced it was abandoning construction after years of blown-out budgets and missed construction deadlines.

“It hit us hard,” said Craig Hitt, executive director of the Kemper County Economic Development Authority. Some 75 miners, roughly half living inside Kemper County, have already been affected in a region where unemployment is 7.1% compared to a national average of just 4.1%.

“It was going to be the biggest project in the history of the county, possibly in the state of Mississippi,” Hitt said. Instead, this year, Kemper County was home to one of the first large coal-mining layoffs of the Trump era.

Southern Company officials have tried their best to blame someone (or something) else. That does not fly, based on The Guardian's research, writes Kelly:  

Company officials have blamed the failure on factors ranging from competition from tumbling natural-gas prices to bad weather, bad timing and plain old bad luck.

But a review by The Guardian of more than 5,000 pages of confidential company documents, internal emails, white papers, and other materials provided anonymously by several former Southern Co insiders, plus on- and off-record interviews with other former Kemper engineers and managers, found evidence that top executives covered up construction problems and fundamental design flaws at the plant and knew, years before they admitted it publicly, that their plans had gone awry.

Their public statements helped to prolong the notion that their “clean coal” power could be affordable, costing Southern’s customers and shareholders billions, giving false hope to miners and firing dreams that American innovation had provided a path forward for “clean coal” technology at a reasonable price.

In other words Southern Company officials were dishonest, and their deception wound up costing other people a lot of money: Their hopes for Kemper were a "pipe dream," Kelly writes:

“It was exciting times, but it turned out to be like a mirage,” said Brett Wingo, a former Southern Co engineer who first went public with his concerns about Kemper’s construction delays in a front-page New York Times investigative report in 2016 and is now suing the company over alleged retaliation. “It was a cool trick – on all of us.”

Kemper’s failure will have a profound impact on international plans to slow climate change which rely heavily on the rapid development of technology to capture carbon and store it, technology that has so far shown little progress.

The United States has spent hundreds of millions in federal taxpayer funds chasing the chimera of clean coal. Donald Trump has been particularly vocal about his support for clean coal. “We have ended the war on American energy and we have ended the war on beautiful, clean coal,” he said in this year’s State of the Union address.

Kemper promised a way forward. But the documents show that while Southern Company management presented a rosy picture of Kemper’s prospects to the public, numerous structural problems with the project had emerged during construction and internal documents questioned the very foundation of the plant’s viability.

In a 24 April 2013 earnings call, for example, Southern’s CEO Tom Fanning regretted Kemper’s newly announced first budget blowout, a $540-million hike, but described “tremendous progress” on construction and said “the scheduled in-service date” was achievable.

Fanning, it turned out, was painting a picture that was far too pretty:

Several former Southern engineers explained in interviews that construction workers often lacked the right gaskets, bolts and pipe hangers necessary to connect up Kemper’s more than 900,000 linear feet of pipes – but managers ordered them to install the piping anyway.
The orders were “just to show work was being done”, one engineer who worked on Kemper said, requesting anonymity because he still works in the tight-knit utility sector, and describing the inoperable maze of pipes as a “pony show” for the state’s Public Service Commission.

Bosses pressured engineers to turn in impossible cost and schedule estimates, former construction manager Kelli Williams and Wingo both recounted. They faced strong pressure to alter construction planning documents to fit budget goals, they said, even if they had strong reasons to doubt workers could actually achieve what the resulting plans required.

These construction snafus and planning pressures help explain how Kemper ballooned from a $2.4-billion construction project to one that cost $7.5-billion.

But Kemper’s flaws weren’t limited to construction problems. They went right to the heart of the power plant’s “clean coal” design.

What does that mean? Kelly explains:

Perhaps the single most important number for a power plant is its availability rate – the percentage of the time it can be up and running versus down for maintenance and repairs. Southern told the federal authorities that achieving 80% availability was a “key performance target” for Kemper, vital to proving that “clean coal” could be affordable.

After construction was under way, Southern Co hired a consultant called World Oil Services to run the numbers again. World Oil concluded Kemper’s design meant it could only be up and running on coal just 30-45% of the time during its first three to five years.

A 2 May 2014 in-house analysis also presents availability rates far lower than the company’s public numbers, concluding clean coal availability would gradually rise from 25% and not reach its “key” target for nearly a decade.

The figures suggest Southern’s plans for running an affordable “clean coal” plant were a pipe dream or, at best, unachievable for a decade. By the time Southern called it quits, Kemper had produced electricity from just coal for only about 100 hours.

Southern Company's failure at Kemper is not a surprise to everyone:, writes Kelly:

Instead of delivering the promise of clean coal Kemper has shattered them, in the meantime leaving locals out of work and shareholders out of pocket.

“We told them years ago that this was a facade,” said Louie Miller, director of the Mississippi chapter of the Sierra Club. “I think there’s going to be a big scrap metal sale at some point.”

Next, in Part Two: Mississippi Power, a subsidiary of Southern Company, has a lengthy history of dubious actions, and many of those weigh heaviest on communities of color.

Sunday, February 26, 2023

Southern Company could have chosen any number of qualified law firms to conduct racketeering probe, but instead picked a firm riddled with apparent conflicts

King & Spalding

King & Spalding, the Atlanta law firm hired to conduct an investigation of alleged corruption at Southern Company, likely has a conflict of interest because of its past business relationships with the firm and its affiliates, including Alabama Power. Longtime Alabama attorney Donald Watkins says such a conflict could call the validity of an investigation into question.

Under the title "King & Spalding: Is This Law Firm Conflicted In The Southern Company Scandal?" Watkins writes in a special investigative report:

According to published media reports, the Southern Company has paid King & Spalding a seven-figure retainer to conduct the internal investigation.

A deep dive into the relationship between King & Spalding and the Southern Company reveals that King & Spalding may have major conflicts of interest that threaten to undermine the objectivity, validity, and credibility of any investigative report the law firm produces to the U.S. Department of Justice (DOJ) for purposes of Justice Manual (JM) §9-28-900.

What led to the investigation? Watkins provides background: 

In late 2022, the Atlanta-based law firm of King & Spalding was hired by the Southern Company to conduct an objective and “independent” internal investigation of the massive multi-year, interstate racketeering scheme operated by the Southern Company, Alabama Power Company, Georgia Power Company, Montgomery, Alabama-based public relations firm Matrix, LLC, Joseph Perkins, Jr., and others acting in concert with them.

The investigation is part of the Southern Company’s ongoing effort to seek and secure a non-prosecution agreement for itself and its affiliates for their participation in a long-running, interstate, criminal racketeering scheme. The U.S. Department of Justice (DOJ) is authorized to grant the Southern Company and its affiliates a prosecutorial “pass” if they meet the criteria set forth in Title 9-28.000 of the DOJ’s Justice Manual (JM).

At this juncture, King & Spalding is working to position the Southern Company to climb through the window of “Voluntary Disclosures,” as described in JM, §9-28-900.

Watkins points to three King & Spalding attorneys of special note regarding the Southern Company investigation:

Paul B. Murphy is a King & Spalding attorney who once served as a former Chief of Staff at the Federal Bureau of Investigation. He is a member of King & Spalding's Special Matters and Government Investigations practice. Mr. Murphy is working with a team of King & Spalding lawyers who are conducting an internal investigation of the Southern Company and its racketeering enterprise.

David L. Balser is another King & Spalding attorney. He specializes in handling a client's "most sensitive, complex, and enterprise-threatening matters." Mr. Balser is assisting the firm's Special Matters and Government Investigations team in securing the non-prosecution agreement, as well. As discussed below, Balser also handled another sensitive legal matter for the Southern Company.

On January 18, 2023, King & Spalding announced that Olivia Radin had joined the firm as a partner on its Special Matters and Government Investigations team. She is based in the firm’s New York office.

Ms. Radin assists clients on internal and regulatory investigations that arise from allegations of fraud, bribery, workplace misconduct, accounting and securities fraud, market manipulation, mis-selling and anti-money laundering violations. She has extensive experience defending clients before the DOJ, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission, state attorneys general, the Public Company Accounting Oversight Board, and other regulators.

It is not known at this time whether Ms. Radin is performing legal work on the Southern Company's quest for a non-prosecution agreement.

Ms. Radin joined King & Spalding a little more than one month ago, and her location in New York could be of particular importance, Watkins reports:

The Southern Company, Alabama Power Company, and Georgia Power Company are in serious trouble with the DOJ and several regulatory agencies. These companies are facing criminal and regulatory complaints with allegations of extortion, bribery, fraud, witness tampering, money laundering, price-fixing, obstruction of justice, antitrust conduct, and a host of other crimes, all of which arise from a decades-long, interstate racketeering enterprise run by them.

In the event there is a DOJ prosecution of the Southern Company and its affiliates based upon their criminal racketeering activities, it will likely be conducted in the Southern District of New York because the Southern Company is registered on the New York Stock Exchange. This potential scenario makes Ms. Radin's area of professional expertise and employment in King & Spalding's New York office relevant for this article.

A 2022 lawsuit over cost overruns at the Vogtle Nuclear Power Plant in Waynesboro, Georgia, could be at the heart of possible conflicts for King & Spalding. Writes Watkins:

For starters, King & Spalding represented the Southern Company in the case of Municipal Electric Authority of Georgia et al. vs. Georgia Power Company, Case No.: 2022-CV-366416, in the Superior Court of Fulton County, Georgia. According to Law 360, King & Spalding attorneys Brandon R. Keel, Peter Starr, and David L. Balser represented the Southern Company in this case.

The lawsuit, which was filed in June 2022, grew out of a dispute among the four owners of the Vogtle Nuclear Power Plant in Waynesboro, Georgia over how to allocate the $20 billion in cost overruns that have plagued the plant. Municipal Electric Authority of Georgia (MEAG), Oglethorpe Power Corp. (OPC), and the city of Dalton, Georgia’s utility company (Dalton Utilities) sued Georgia Power for $695 million in the dispute.

Georgia Power has a 45.7% ownership in the Vogtle plant, while OPC owns 30%, MEAG owns 22.7%, and Dalton Utilities owns 1.6% of the facility.

On September 30, 2022, Georgia Power announced in an SEC filing that it had reached a settlement with MEAG. Georgia Power said it would pay a portion of MEAG's future construction costs, which are estimated to be as much as $76 million. Georgia Power will also pay 20% of MEAG's construction costs that exceed the project's current, forecasted price tag.

In its SEC filing, Georgia Power also announced that the litigation with OPC and Dalton Utilities remains active and that the company's potential financial exposure could be as much as $165 million of further pre-tax charges to its income.

Apart from the ongoing litigation with OPC and Dalton Utilities, the Southern Company’s “fitness” to hold a combined “Owner/Operator” license for Vogtle has been challenged in regulatory complaints filed with the U.S. Nuclear Regulatory Commission (NRC) by several victims of the Southern Company’s criminal racketeering enterprise. The complaints, which were filed on February 3, 2023, allege that Section 2133(d) of the Atomic Energy Act of 1954, as amended, prohibits any regulated person or entity that knowingly participated in an ongoing criminal racketeering enterprise from owning and operating nuclear power facilities in the U.S.

On January 27, 2023, formal criminal RICO complaints were filed with the DOJ's Criminal Division against the Southern Company and those persons/entities that acted in concert with the company. The complainants are victims of the company’s interstate racketeering enterprise.

The central question likely is this: Does King & Spalding possess the objectivity and independence to conduct an internal investigation of Southern Company on sensitive issues that include power generation, jumbled finances, possible criminality, apparent mismanagement, and potential threats to public health? Watkins writes:

The Southern Company could have chosen any one of hundreds of truly independent and highly qualified Tier One law firms in the United States to conduct its JM, §9-28-900 investigation. A law firm is considered "independent" if it had no prior business relationship with the client. Instead of choosing an "independent" law firm to conduct its internal investigation, the Southern Company chose King & Spalding.

King & Spalding’s prior business relationship with the Southern Company/Georgia Power with respect to the Vogtle litigation, calls into question its objectivity and independence to conduct the JM, §9-28-900 investigation. King & Spalding appears to have a "real" and/or "apparent" conflict of interest in this matter.

Additionally, King & Spalding's representation of the Southern Company/Georgia Power in the Vogtle litigation occurred while the racketeering scheme was in full swing.

Did King & Spalding become aware of the ongoing racketeering scheme when it was representing the Southern Company/Georgia Power in the Vogtle litigation? If so, did King & Spalding report this racketeering activity to the DOJ and Vogtle co-owners MEAG, OPC, and Dalton Utilities?

Based upon confidential and reliable media sources, it appears that the Southern Company kept MEAG, OPC, and Dalton Utilities in the dark about the racketeering activities carried out in Georgia and elsewhere by the Southern Company, Georgia Power, and others acting in concert with them.

It now appears that King & Spalding may be guiding the Southern Company through a maze of thorny regulatory and legal issues that have arisen from the racketeering complaints filed with the DOJ and NRC by its victims.

What is more, it appears that the Southern Company has NOT terminated its business relationship with Matrix/Perkins, despite (a) Matrix's/ Perkins' substantial involvement in the interstate racketeering activities and (b) the avalanche of legal and public relations problems that Matrix has created for the Southern Company and its affiliates in this regard.

Should the public be alarmed that Southern Company chose to be investigated by a law firm with which it has a working relationship? Yes, says Watkins, and he points to specific areas of concern:

Here are four issues that spring from the thicket of King & Spalding's "real" and/or "apparent" conflicts of interest:

1. Whether King & Spalding coached Southern Company CEO Tom Fanning on how to evade a direct question from Angie Storozynski about the link between the negative headlines around Alabama Power Company and the recent management changes at that affiliate during a February 16, 2023, earnings call? Ms. Storozynski is a Managing Director and Senior Equity Research Analyst for U.S. utilities and power companies at Seaport Global Holdings, LLC (New York City). When HealthSouth executives gave Wall Street analysts false and misleading information on the financial condition and operations of that company during earnings calls, it produced multiple felony counts in the 2003 HealthSouth criminal case against the company's senior management team.

2. Whether King & Spalding knew at the time, or subsequently learned through its JM, §9-28-900 investigation, that Fanning's answer to Wall Street analyst Angie Storozynski’s question was misleading and grossly incomplete? In his answer, Fanning stated that Alabama Power Company CEO Mark Crosswhite departed from the company because “he had some issues he wanted to deal with.” Fanning also said, “[i]t was reasonably clear that [Crosswhite] wasn't a contender as [his] successor.” Fanning’s answer to Ms. Storozynski’s question conflicts with Alabama Power’s official press release in which Crosswhite said, “[a]s I approach my 60th birthday, though, I have come to realize it is time for me to spend more time with my family.”

3. Whether King & Spalding is responsible, in any way, for the Southern Company’s failure and refusal to promptly issue a Form 8-K announcing that: (a) there have been allegations of violations of law by the Southern Company, Alabama Power, and Georgia Power that have the potential to result in fines, penalties, or other sanctions or effects that may cause reputational damage for the Southern Company and its affiliates, and could hamper their effectiveness in interacting with governmental authorities, and (b) the Southern Company’s business and reputation could be adversely affected by allegations that the parent company, along with its affiliates, have violated laws, by any investigations or proceedings that arise from such allegations, or by ultimate determinations of legal violations? On January 25, 2023, Florida Power & Light and its parent company, NextEra Energy, issued such a 8-K statement to inform shareholders about the mounting legal problems emanating from their toxic business relationship with Matrix and Perkins.

4. Whether King & Spalding helped the Southern Company craft a strategy to blame the external auditing firm of Deloitte & Touche, LLP, for not detecting the long-running racketeering scheme? As stated earlier, two of the main participants in the racketeering scheme are Matrix and Joe Perkins. They were paid millions of dollars, without invoicing, to maul critics and political adversaries of the Southern Company and its affiliates. The Southern Company's blame-shifting legal strategy comes straight out of the playbook used by HealthSouth after its $2.7 billion, multi-year accounting fraud scandal was publicly exposed in 2003. In 2009, Ernst & Young, which served as HealthSouth's external auditors, paid $109 million to shareholders to get out of its HealthSouth-related legal nightmare.

Because of King & Spalding’s role in the Vogtle project litigation and its role in performing the Southern Company's JM, §9-28-900 investigation, attorneys Brandon R. Keel, Peter Starr, and David L. Balser might reasonably be considered "material witnesses" in the DOJ’s criminal investigation. If so, King & Spalding would be disqualified from conducting the JM, §9-28-900 investigation.

Furthermore, any report produced by King & Spalding would be "tainted" and subject to collateral attack by the victims of the Southern Company’s racketeering activities who have formal criminal RICO complaints against the company pending with the DOJ and NRC, as well as OPC and Dalton Utilities.


In 2022, the Southern Company's racketeering enterprise generated $59.7 billion for the marketplace monopolies operated by its affiliates in Alabama, Georgia, Mississippi, Tennessee, Illinois, and Virginia. Corporate insiders thought they could expand the company's interstate racketeering enterprise into Florida. This move backfired on them and exposed the Southern Company, Alabama Power, Georgia Power, Matrix, Joe Perkins, and others to intense media scrutiny and law-enforcement investigations.

Today, Southern Company executives feel confident that the company, its affiliates, its senior management executives, and board members are "too big to prosecute." Their perennial ability to compromise state and federal regulators, prosecutors, and judges in Alabama -- for decades -- leads them to believe that nearly all public officials are "for sale" or "for rent."

Finally, Southern Company “insiders” believe that U.S. Attorney General Merrick Garland and DOJ Criminal Division chief Kenneth Polite are too weak, too inexperienced, and too distracted by the DOJ's criminal investigation of Donald Trump to hold the nation's second largest public utility company fully accountable for its massive, interstate racketeering scheme.

Friday, February 24, 2023

Southern Company board member Kristine Svinicki is a Jeff Sessions ally who has a history of jumping into the mud-wrestling pit when political issues flare

Yucca Mountain nuclear waste facility in Nevada

Published reports tend to portray Southern Company board member Kristine Svinicki as an accomplished nuclear engineer and policy advisor, serving on the U.S. Nuclear Regulatory Commission (NRC) under three presidents, longer than any other commission member. But a 2012 Reuters article paints Svinicki as a divisive political figure, with one U.S. senator, at the time, even accusing her of lying to Congress.

Reuters reports that Svinicki is a political ally of former U.S. Senator and Trump Attorney General Jeff Sessions (R-AL), and that raises questions about conflicts of interests.

Here's why: (1) According to Reuters, Svinicki already has been part of taking favorable action on Southern Company's behalf, helping to approve a license for the company to operate the Vogtle Nuclear Power Plant in Georgia; (2) Her ties to Sessions could be particularly dicey; (3) Svinicki now sits on the Southern Company board, and the law firm that represents the company before the NRC is Birmingham's Balch & Bingham;(4) During Jeff Sessions' political career, his top two financial backers were Alabama Power (a Southern Company subsidiary) and Balch & Bingham; (5) According to its own statement, Southern Company added Svinicki to its board, in part, because she was the former Chairwoman of the NRC and a policy advisor on nuclear energy for various federal entities in Washington, DC. (6)  Longtime Alabama attorney Donald Watkins -- who has filed a criminal RICO complaint against Southern Company with the U.S. Department of Justice, plus a complaint with the NRC challenging the company's fitness to operate a nuclear-power facility due to its alleged involvement in racketeering activities -- said "Ms. Svinicki's board appointment appears to be a classic example of influence peddling."

In other words, Svinicki's appointment apparently was about her influence, not her expertise. That suggests she is a political animal, one with a history of making favorable rulings for Southern Company. That raises this troubling question: Does Svinicki take her marching orders from Jeff Sessions, and if so, does that mean any issue coming before a federal agency is likely to be rigged in Southern Company's favor?

Svinicki seems to have the credentials and intellect to rise above any chicanery. But the Reuters report shows that she has been willing to get down into the political mud-wrestling pit before. Writes Roberta Rampton under the headline "Turmoil at U.S. nuclear regulator spills into Congress":

A toxic internal battle that has scarred the U.S. Nuclear Regulatory Commission as it works on historic reforms now threatens to hold up the work of the U.S. Senate as leaders spar over an opening on the five-member panel.

Senate Republican leaders want the White House to renominate Kristine Svinicki, a Republican whose term expires in June. Republicans believe the process is being held up because she, along with three other commission members, accused the current NRC chairman, a Democrat, of bullying women.

“There is no legitimate reason for Commissioner Svinicki not to have been renominated and reconfirmed by now. And any further delay is unacceptable,” said Republican Leader Mitch McConnell in a speech on the Senate floor on Wednesday.

A leading Democrat, from a state familiar with nuclear-energy issues, did not agree with McConnell's take:

Senate Majority Leader Harry Reid, a Democrat, is vehemently opposed to the idea, and says Svinicki is too close to the nuclear industry she regulates and does not deserve the job.

A vacancy could cause gridlock along party lines at the commission and delay safety reforms at U.S. nuclear plants that the NRC mandated after Japan’s nuclear disaster in 2011. Republicans are rallying behind Svinicki as they try to improve their ratings among female voters in the run-up to the November 6 presidential election.

Jeff Sessions made it clear he wanted Svinicki to remain on the board. Was that because he knew she would be a favorable voice for Southern Company and Balch & Bingham, his political benefactors?

Senator Jeff Sessions said last month that Svinicki “should not be forced to leave” the commission when her term ends. “I’m not going to let that happen ... even if we have to bring the Senate to a grinding halt,” he said.

McConnell, Sessions and other senior Senate Republicans are slated to speak to reporters about the brewing controversy that has already revived past accusations about lies, bullying and revenge at the helm of the nuclear regulator.

As for political battles, Svinicki did not shy away from them:

Last year, Svinicki and the three other commissioners at the NRC - two Democrats, two Republicans - took the unprecedented step of complaining to the White House about the management style of Gregory Jaczko, the NRC chairman.

Their concerns were made public in December during hearings on Capitol Hill, where the commissioners accused Jaczko - a former Reid staffer - of berating senior women NRC staff members, bringing them to tears in front of others.

McConnell questioned whether Svinicki’s renomination was being “held up in retaliation for speaking up against a rogue chairman who bullies his subordinates.”

Jaczko denied intentionally threatening others.

Reid said Jaczko was the victim of what he called a “witch hunt,” because he aggressively sought safety reforms in the wake of Japan’s 2011 nuclear disaster.

The NRC is in the midst of mandating costly changes for the nation’s 104 nuclear plants, owned by companies such as Exelon and Entergy Corp. It also recently approved licenses for the first new U.S. plants in more than 30 years, owned by Southern Co and Scana Corp.

Jaczko cast the lone dissenting vote against the new licenses (including the Southern Company license for Plant Vogtle).

Svinicki was in the middle of another controversy that arose in 2012:

Reid said Svinicki disqualified herself from the job by lying during a 2007 hearing, an aide said.

“Senator Reid opposes Commissioner Svinicki’s renomination because she lied to Congress about her past work on Yucca Mountain,” said Adam Jentleson, a spokesman for Reid, in a statement.

At the hearing, Svinicki said she had done some work related to the Yucca Mountain, a nuclear waste dump site in Nevada, that Reid successfully killed, earning the ire of many Republicans. But she said she had not worked directly on the license.

Technical reports authored by Svinicki during her time at the Energy Department seem to show she was much more intimately involved in Yucca, but Svinicki maintains she did not mischaracterize the extent of her work.

If Svinicki's spot goes unfilled, the NRC could face gridlock on some of its votes - as could the Senate, if Republicans make good on threats to tie up business because of the dispute.

It would not be the first time an NRC appointment disrupts the work of the Senate. In 2005, when Jaczko was first put forward for a Democratic commissioner spot on the NRC, Reid held up about 175 other political appointments from then-President George W. Bush until Republicans lifted their objections.

Thursday, February 23, 2023

CDLU advocacy group seeks investigation of Southern Company board member Kristine Svitnicki as attention turns to cost overruns at Vogtle and Kemper

Kristine Svitnicki

An oversight body for the U.S. Nuclear Regulatory Commission (NRC) has formally been asked to investigate former NRC Chairperson Kristine L. Svitnicki in her current role as a member of the Southern Company Board of Directors, according to a report today from banbalch.com, which operates under the CDLU public charity and advocacy group.

K.B. Forbes, CEO of the CDLU and publisher of the Ban Balch blog, writes under the headline "OIG Asked to Investigate Svinicki; FBI Probe of Southern Company Grows": 

The Office of the Inspector General (OIG) of the U.S. Nuclear Regulatory Commission has been formally asked to investigate Kristine L. Svinicki, a Board Member of Southern Company and former NRC Chairman, for “any direct or indirect communication” between Svinicki and the NRC after she was appointed a member of Southern’s Board in October of 2021.

As Chairman of the NRC, Svinicki is restricted from contacting or communicating with the regulatory body under federal law, even if the communication was done through the embattled law firm Balch & Bingham, which represents Southern Company before the NRC.

As DonaldWatkins.com wrote:

An employee or member of a federal regulatory agency who participated personally and substantially in a particular matter involving a specific party… may never appear before or communicate on behalf of another with any federal department, agency, or court regarding that same particular matter. This is a lifetime restriction.

For particular matters involving specific parties under the employee’s or agency member’s official responsibility during his/her last year of government service, the employee or member of a federal regulatory agency is restricted for two years after he/she leaves government service from appearing before and/or communicating on behalf of another with any federal department, agency, or court regarding those same particular matters.

Is Svinicki an influential figure in the nuclear-energy world? Recent events suggest the answer is yes, Forbes writes:

Yesterday, Svinicki was elected member of the Board of Directors of Pinnacle West Capital Corp., the large utility holding company in Arizona, that operates three nuclear reactors. Unlike Southern, Pinnacle’s appointment comes more than two years after Svitnicki left government service.

Jeff Guldner, CEO of Pinnacle, stated, “Her vast experience in the nuclear energy industry and in government will be of great value to our company, not only from the perspective of our nuclear operations at the Palo Verde Generating Station, but also as we take advantage of opportunities in our evolving utility business.”

Will Svinicki announce her resignation from the Southern Company Board of Directors shortly?

Meanwhile, there is news regarding the filing of a Criminal RICO complaint against Southern Company, Forbes reports:

King & Spalding was hired with a seven-figure retainer to look at the criminal RICO enterprise including the inappropriate relationship between disgraced ex-U.S. Attorney Jay E. Town and ousted Alabama CEO Mark A. Crosswhite who are accused of obstructing justice in the North Birmingham Bribery Scandal.

Now, sources claim that the deferred prosecution agreement that King & Spalding apparently is seeking includes alleged criminal misconduct at the Vogtle Nuclear Power Plant and possible criminal findings by an FBI probe surrounding the Kemper Plant in Mississippi.

Both boondoggles have cost Southern Company billions in cost overruns and tarnished the utility’s reputation with gross mismanagement.

Cost overruns and construction delays apparently will be part of investigations into Southern Company's business practices:

In May of 2019, Southern Company acknowledged there was an FBI probe of the Kemper Plant. The Atlanta-Journal-Constitution wrote at the time:

Southern… reported in a quarterly filing that it could not determine the outcome of the investigation but that it ultimately might prove significant enough to materially affect the parent company’s financial disclosures to investors.

A Southern spokesman emailed The Atlanta Journal-Constitution Thursday that, “As this is an ongoing investigation, we cannot comment beyond what we provided in our filing.”

Sources claim that Southern Company is furiously conducting financial audits of both the Vogtle and Kempler cost overruns to complement the report by King & Spalding to be used to argue for a deferred prosecution agreement.

However, multiple victims of Southern Company’s criminal RICO enterprise have lodged formal criminal complaints with the U.S. Department of Justice and have asked to be consulted and advised before any deferred prosecution agreement is reached.

Analysis of U.S. presidents rekindles memories of my old newspaper pal, Paul Finebaum, who has become "King of All Media" for sports in the South and beyond

Paul Finebaum

One of the distinctions of my journalism career is that I used to work with a fellow sportswriter at the Birmingham Post-Herald (now defunct) who went on to become famous. In fact, you might say this guy now is one of the best-known sports-media figures in the country, especially for those who follow college football and the Southeastern Conference.

I had been working at the Post-Herald for about two years when a fresh face arrived in the newsroom one day, from a brief stint at the newspaper in Shreveport, Louisiana. His name was Paul Finebaum, and I learned right off the bat he had a quick mind and a biting wit. In fact, being around Paul was a bit like watching a Don Rickles appearance on The Tonight Show. He also was opinionated, with a touch of Howard Cosell in his manner.

I think of Paul often because, in this age of talk radio and cable TV, he has become part of life's soundtrack. In fact, I can recall walking down the aisle of a Missouri library, and in a "hey, I know that guy" kind of moment, seeing one of Paul's books on the shelf. At times, I will hear Paul's voice -- perhaps interviewing Nick Saban on ESPN or bantering with Tim Tebow on the SEC Network -- and it brings back fond memories of our early days together in the newspaper business.

Finebaum particularly came to mind this week as our nation celebrated President's Day. (more on that in a moment.)

Paul and I covered a number of stories together, and I always valued him as a confidante, with reportorial instincts that were usually on the mark. Probably our best-known joint work was a series of investigative stories about the recruitment of Birmingham basketball star Buck Johnson, who wound up at the University of Alabama (and later, the NBA) after a bitter recruiting battle with UAB. I think Paul and I won a few awards for that one.

Having grown up in Memphis, Paul probably viewed me, not incorrectly, as a rube from the Missouri Ozarks. That, plus the fact our desks were side by side in the newsroom, made me a convenient target for Paul's zingers, which could come at a furious pace. Looking back, I'm not sure how we managed to turn out any stories amid the laughter that Paul tended to generate. His humor, even when I was the butt of the joke, was a welcome relief from the drabness of our newsroom, which featured hospital-green walls, a dull brown (or was it gray?) floor, the rat-a-tat-tat of wire-service machines, and the regular haze of cigarette smoke; yes, people could smoke in offices back then.

Paul was an odd bird, but we quickly struck up a friendship. That might have been, in part, because he was different from any sportswriter (or journalist) I had ever come across. Many sportswriters are what you might call "stat junkies"; they are adept at reeling off statistics and long-forgotten names from yesteryear. But that wasn't Paul; in fact, he seemed only mildly interested in sports and had little use for the games' minutiae.

Instead, Paul focused on the personalities of sports, and he knew how to push an audience's buttons -- a skill that would later serve him well.  (On a personal note, Paul has had a profound impact on my life, helping to introduce me to Mrs. Schnauzer. Carol and I have been married for 33 years -- despite having loads of bizarre obstacles thrown in our path -- so Finebaum's skills as a matchmaker must be pretty good. Carol and I like to think they are, anyway.)

Paul had his own way of doing things. Most journalists that I knew liked to jot down a few questions in a notebook before starting an interview, almost like having an abbreviated script. (It's important, of course, not to stick too closely to a script. Follow-up questions are essential to any interview, and you have to listen closely for the right moments to get those in; Finebaum long has been an expert at that.) Paul did not tend to jot down questions, and at times, it seemed like he didn't do any research at all. He just winged it. (And I suspect that also served him well down the road.)

I can remember listening to Paul at the neighboring desk conducting a phone interview with an offensive lineman on Auburn's football team. I quickly realized that Paul had no idea who the guy was. He scrambled to find an Auburn media guide, sifted through some pages to find the guy's bio and said, "Oh, I see you play right tackle." Best I could tell, Paul actually made the interview work and probably wound up with a pretty decent story.

George W. Bush
While Paul did not have an encyclopedic mind about sports, he had a lot going on between his ears. One major interest was politics, appropriate since he had a degree in political science from the University of Tennessee. During breaks in the action at the Post-Herald, Paul and I used to have discussions about U.S. presidents, ranking the good, the bad, and the ugly. I learned that Paul was not an amateur at this; he really knew his stuff. In fact, I'm surprised he didn't become an analyst or a policy wonk in the political world.

That's how I came to think of Paul this week upon reading a President's Day column by MSNBC's Michael A. Cohen. The title -- "George W. Bush was worse than you remember" -- gives away some of Cohen's insights. But the whole piece is a worthwhile read, and it kind of made me wish Finebaum would tackle this subject someday. From the Cohen article:

The American presidency is one of the strangest jobs in the world.

 Politicians aspire to it. The media focuses obsessively on the person who holds it and those who want to win it. Millions of books and articles have been written about it. And yet, most of the people who've held the job haven't been that good.

There are a few truly great presidents, some pretty good ones and a handful of complete disasters. But most can be summed up, as The Simpsons famously once did, as the "adequate, forgettable, occasionally regrettable, caretakers of the U.S.A."

In fairness, the presidency radically changed in the 20th century, especially as the United States became a global power, so it's a bit hard to compare the earlier commanders in chief to the modern ones. And despite the many mediocrities, ranking the presidents is a popular pastime, one I've dabbled in myself. So let's ask a slightly different question: Who are the most overrated and underrated holders of the most thankless job in American politics?

Cohen now gets down to names:

Historians generally rank Franklin D. Roosevelt, Abraham Lincoln, and George Washington as the three best presidents, and it's hard to say that any of them are overrated -- though Roosevelt's and Lincoln's accomplishments (the former steered the country through economic calamity and world war and the latter saved the Union) were arguably more significant than Washington's (whose  greatest presidential act perhaps was relinquishing the job after two terms).

But I'll make the case for Dwight D. Eisenhower as slightly underrated. On domestic policy, we're still living in the shadow of his accomplishments: the national highway system, increased federal support for higher education and national investments in technology, research, and development. He also presided over a period of extraordinary national prosperity and growth.

On foreign policy, Eisenhower ended the Korean War, skillfully managed superpower relations, largely kept the U.S. out of foreign entanglements. And he slew the isolationist wing of the Republican Party and helped bring an end to McCarthyism. Critics will take issue with his civil rights record (somewhat deservedly) and his support for coups in Guatemala and Iran that installed pro-American dictators, but all in all, his tenure is remarkably solid-- and I'd put him right behind the top three.

John F. Kennedy is another president who often shows up in the top 10 of historical rankings, but even though he served only a little more than two and a half years before his assassination, it's still possible he doesn't fully get his due. An essential part of the presidency is crisis management, and few presidents faced a more serious crisis than the Cuban Missile Crisis in the fall of 1962. Even though all of his top aides (including his brother Robert) argued for the use of American military force in Cuba, Kennedy demurred, instead reaching a diplomatic solution with Soviet leader Nikita Khruschev that defused the superpower showdown. His high ranking by historians is, I believe, a tribute to how inspirational a figure he was to millions of Americans. But any president who skillfully manages a situation as potentially catastrophic as the Cuban Missile Crisis deserves high marks.

Ronald Reagan moves in and out of most top 10s, but I think he probably deserves to rank higher. His overall record on foreign policy is not great (including his support for the Contras in Nicaragua and death squads in El Salvador). But he helped to end the Cold War by giving Mikhail Gorbachev the political space to push reforms that ultimately led to its collapse (and, like Kennedy, overruled his close aides). I'm not a fan of Reagan's, domestic record of cutting taxes and weakening the regulatory state, but if we judge presidential effectiveness by the ability to enact one's policy agenda, his record is strong. And he helped a Republican successor win re-election -- a further indication of his political success.

What about those who aren't quite so highly touted?

I'll put in  good word for George H.W. Bush. He lost his race for re-election, his handling of the economy was not great and he was a nasty and divisive campaigner. But on foreign policy he did a fantastic job of handling the breakup of the Soviet Union and the unification of Germany. His leadership of the Gulf War was masterful and arguably, his efforts on Arab-Israeli peace helped lead to the Oslo accords in 1983. He also signed into law the Americans With Disabilities Act. Compared with most American presidents, that's a pretty good track record.

Has history treated some presidents too kindly? Yes, says Cohen:

Others may disagree, but Harry Truman probably gets more credit than he deserves. Yes, the Marshall Plan, the creation of NATO and the U.N. system are huge deals. But his mishandling of the Korean War -- and particularly his failure to rein in Gen. Douglas MacArthur as he sent U.S. troops farther north, baiting Communist China into invading and prolonging the war -- is oddly swept under the rug. The Truman Doctrine, issued in 1947, turned the Cold War from a geopolitical contest into an ideological conflict and laid the foundation for America to define its national interests in near-limitless terms, which contributed to a host of foreign entanglements, including Vietnam. Perhaps that's a bit unfair to Truman, but as the sign on his desk famously read: "The buck stops here."

Also, Truman barely won re-election in 1948 and did so by running a vicious and nasty campaign that contributed to the adoption of McCarthyite tactics by Republicans. Four years later, he was so unpopular he couldn't run for a second full term and arguably helped cost the Democrats the White House after they had held it for 20 years. Also, midterm elections in 1946 and 1950 were bloodbaths for Democrats. Politics is essential to the presidency, and Truman wasn't all that great at it. Truman should rank high, but his presidency is more of a mixed bag than people realize.

What about a president who was even worse than we remember? Cohen has that covered, too:

Here's one more overrated resident to consider: George W. Bush. Yes, generally speaking, Bush is considered an awful president. My argument is that he was worse than we remember. There's the Iraq War and all its accompanying disasters (torture, undermining civil liberties, mishandling Afghanistan). Not only did he not confront climate change, his policies arguably made it worse. His job creation record is one of the worst in modern history, and that's almost separate from the fact he sat by idly as the global economy fell apart in 2088. He's so unpopular that even his own party acts as though he was never actually president.

After four years of Donald Trump's dumpster fire of a presidency, Bush might have seemed "not that bad." Nope, he was terrible, and next to Trump and Andrew Johnson, who took over for Lincoln and completely screwed up Reconstruction, the worst president in American history.

There you have Michael A. Cohen's take on U.S. presidents --and it's a good one. I hope Paul Finebaum will tackle that subject someday. He could do it justice.