Ties that bind? How SCANA pursued SC’s top pol as nuclear expansion unraveled

S.C. Gov. Henry McMaster was a strong ally of SCANA in the months before the Cayce-based utility abandoned plans to build two nuclear reactors at a cost to its customers of $1.7 billion and rising.

Only a month after taking office, South Carolina’s new governor endorsed as “fair” a now-loathed 2007 law that allowed SCANA to charge its customers for part of the cost of the two reactors while they were under construction.

When the two reactors were shelved on July 31, however, McMaster flipped his script.

He called the failed nuclear project’s abandonment “a jarring break of faith” with South Carolina’s electric customers. He supported investigations into what went wrong by lawmakers, a federal grand jury, the S.C. attorney general and state law enforcement. And, against SCANA’s wishes, the governor forced the release of a secret report detailing red flags about the nuclear project long before it was abandoned.

For months, the McMaster-SCANA relationship – as sketched by emails obtained by The State newspaper in a public records request – followed the traditional dance between political and business powerhouses.

SCANA, one of South Carolina’s largest and most powerful companies, courted McMaster, suddenly made the state’s most important politician when Gov. Nikki Haley resigned. SCANA then sought help from McMaster on its biggest problem – the bankruptcy of Westinghouse, the contractor building the two new reactors in Fairfield County. The governor weighed in, offering assistance to the utility, one of the state’s largest employers. SCANA and its employees then showered McMaster with political donations.

Then, the relationship soured.

McMaster only found out that SCANA would abandon its plan to expand the V.C. Summer Nuclear Station the night before the utility and its state-owned partner, the Santee Cooper utility, said they would walk away from the project.

McMaster then walked away from SCANA, lambasting the company.

But McMaster might have trouble distancing himself from SCANA as he fights for a four-year term next year. He faces a tough GOP primary battle in June and the state’s voters next November.

‘It was a real treat’

According to emails obtained by The State newspaper, SCANA sought and was granted McMaster’s ear and influence as early as one week after he was sworn into office. The company continued to court the governor until the nuclear project’s July 31 abandonment.

During that time, McMaster took several steps helpful to SCANA.

▪ Less than a month after he was sworn in, McMaster’s office expressed support for a 2007 law that allowed SCANA to charge its customers for part of the cost of the reactors while they were under construction. Without the law’s passage, that cost could not have been passed on to customers until the reactors were producing power.

▪ McMaster appointed two SCANA executives to powerful state boards and helped the utility secure meetings with President Donald Trump’s administration about the future of the V.C. Summer project.

▪ McMaster also agreed to sign a letter to Trump, on behalf of SCANA, about the threat to the V.C. Summer project posed by a financial crisis bearing down on Toshiba, the parent company of contractor Westinghouse. (SCANA wanted Trump to raise the issue of the importance of Toshiba fulfilling its obligations on the V.C. Summer nuclear project with the prime minister of Japan, where Toshiba is headquartered. The letter was never sent because of timing issues, according to McMaster’s office.)

▪ On the same day that Westinghouse declared bankruptcy, McMaster spoke to hundreds of SCANA employees at the utility’s retreat. That evening he hosted its executives at the Governor’s Mansion.

SCANA Chief Executive Officer Kevin Marsh hand-wrote a letter thanking McMaster for his hospitality.

“It was a real treat to get a personal tour and learn the history of the governor’s mansion,” Marsh wrote. “I sincerely appreciate your support of SCANA, Santee (Cooper), and our nuclear project. We will keep you posted as we move forward.”

Then in June – a month before SCANA pulled the plug on the nuclear project – the utility and its employees poured more than $115,000 into McMaster’s 2018 election campaign.

The donations made McMaster one of the biggest beneficiaries of SCANA’s political generosity ever. (McMaster has said he will not return the donations.)

‘Everything in his power’

Before the collapse of V.C. Summer’s expansion, McMaster’s office says the governor was doing what any state chief executive would do: trying to save a troubled multibillion-dollar nuclear power project where thousands of jobs were on the line.

"It was unquestionably in the best interest of all South Carolinians for the reactors to be completed at V.C. Summer and, as any governor would, Gov. McMaster did everything in his power to keep the project moving forward,” said McMaster spokesman Brian Symmes.

McMaster appealed to the White House and the state’s congressional delegation to push Congress to renew tax credits for nuclear projects. He helped set up meetings between SCANA, Santee Cooper and Washington officials.

Since the collapse of the V.C. Summer project, McMaster also has been trying to find a buyer for Santee Cooper. McMaster has said he hopes to revive plans to build the reactors or to pay back S.C. electric customers some of the money they lost on the project.

McMaster’s relationship with SCANA could dog him during the 2018 elections.

His top GOP primary rival so far, Catherine Templeton, is making SCANA and the nuclear debacle a campaign issue, pitching herself as a conservative outsider who will root out corruption in Columbia. The leading Democratic contender, state Rep. James Smith of Columbia, is using a similar anti-corruption theme and decrying the V.C. Summer debacle.

In the weeks since the utilities abandoned the nuclear project, McMaster has grown more critical of SCANA and a 2007 law that forced its customers to pay for the doomed nuclear expansion.

That is a flip-flop from February, when McMaster’s chief of staff, Trey Walker, said the governor supported the now widely disparaged Base Load Review Act.

“He (McMaster) believes the current (Base Load Review Act) has served as a fair and functioning check and balance for both consumers and industry,” Walker said in an email to another McMaster staffer who was asking how to respond to a reporter’s question.

In that email, Walker also said McMaster “has every confidence that they (SCANA and state-owned Santee Cooper) have taken necessary precautions and safeguards to guarantee completion” of the nuclear project.

McMaster’s office said recently that the opinion of the law was based on information available at the time.

Board appointment raises questions

Some of McMaster’s moves since taking office also have benefited SCANA executives.

Less than a week after he was sworn in, succeeding Gov. Haley, who resigned to become U.S. ambassador to the United Nations, McMaster had a meeting with two top SCANA executives: CEO Marsh and Vice President Kenny Jackson.

Columbia public affairs consultant Ed McMullen, a SCANA consultant for more than a decade, also attended the meeting.

The meeting, as described by a SCANA spokesman and McMullen, was to give Marsh and Jackson an opportunity to meet with McMaster, a longtime S.C. politician, in his new role as governor. The meeting had “no specific agenda,” SCANA spokesman Eric Boomhower said.

The governor’s office said the men discussed the importance of Congress renewing tax credits for nuclear construction, vital to the V.C. Summer project moving forward.

Less than a month later, McMaster appointed Jackson to the S.C. Ports Authority’s board of directors. Raising questions about cronyism, McMaster appointed Jackson to replace a critic of the governor’s longtime political consultant, Richard Quinn. Quinn and his Richard Quinn & Associates political consulting and strategy firm, which SCANA also employs, are under investigation as part of a state and federal investigation into State House corruption but have not been charged with any wrongdoing.

During his confirmation hearing, Jackson said he thought McMaster contacted him about the Ports Authority post after SCANA consultant McMullen talked to chief of staff Walker, The Associated Press reported.

McMaster had come to know Jackson over the years and thought his expertise would make a good addition to the Ports Authority, the governor’s office told The State newspaper, adding SCANA officials have a history of participation on the Ports Authority board that made Jackson a good fit.

McMaster drops SCANA exec

Some emails suggest that as late as early July, McMaster did not know fully the details of the nuclear debacle that emerged later that month, when SCANA and Santee Cooper abandoned the V.C. Summer project.

McMaster’s office said the governor only learned SCANA and Santee Cooper, whose board is appointed by the governor, were suspending construction at the nuclear plant on the night of July 30, the day before the utilities announced their decision.

Just three weeks earlier, on July 6, McMaster’s office had informed SCANA nuclear chief Stephen Byrne that he had been reappointed to the Governor’s Nuclear Advisory Council, according to an email.

Byrne had been on that advisory panel since 2003 as the nuclear industry’s only representative.

In mid-September, however, McMaster reversed his plans for Byrne’s reappointment.

McMaster said he would appoint someone new to the nuclear panel in light of the V.C. Summer debacle.

This story was originally published October 14, 2017 at 11:16 AM with the headline "Ties that bind? How SCANA pursued SC’s top pol as nuclear expansion unraveled."