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- 06/20/13--09:28: _F35 program may be ...
- 06/21/13--09:59: _Obama’s nuclear tar...
- 06/20/13--13:05: _Wisconsin justice's...
- 06/20/13--10:21: _World leaders tackl...
- 07/09/13--13:48: _Senators grill Trea...
- 07/01/13--14:05: _Koch Industries PAC...
- 06/21/13--10:07: _New scrutiny of 'lo...
- 06/21/13--14:28: _White House nominat...
- 06/21/13--14:57: _More bundlers picke...
- 07/10/13--11:39: _Nuclear Waste: How ...
- 06/24/13--11:31: _OPINION: Pro-indust...
- 06/25/13--14:16: _Groups pump million...
- 06/25/13--21:31: _Obama includes Dem ...
- 07/10/13--11:46: _Nuclear Waste: A $1...
- 06/25/13--18:32: _Super PAC surge can...
- 07/10/13--11:43: _Nuclear Waste: Extr...
- 06/26/13--08:47: _IMPACT: 'Dentists' ...
- 06/26/13--11:36: _DOMA supporters sti...
- 07/10/13--11:41: _Nuclear Waste: Wash...
- 06/27/13--13:12: _'Nuclear Waste' ser...
- 06/20/13--09:28: F35 program may be unaffordable, auditor says
- 06/20/13--13:05: Wisconsin justice's spouse head of union-busting law firm
- 06/20/13--10:21: World leaders tackle tax havens with ICIJ help
- 07/09/13--13:48: Senators grill Treasury official about debit card program
- 07/01/13--14:05: Koch Industries PAC bolts to fast start in 2013
- Steve Southerland, R-Fla.
- Tim Huelskamp, R-Kan.
- Mike Coffman, R-Colo.
- Bill Cassidy, R-La., who is currently seeking the Republican Party’s nomination to challenge incumbent Democratic Sen. Mary Landrieu.
- 06/21/13--14:28: White House nominates new FEC commissioners
- 06/21/13--14:57: More bundlers picked for plush ambassador posts
- 06/25/13--14:16: Groups pump millions into Mass. special election
- 06/25/13--21:31: Obama includes Dem donors at CEO gathering
- 06/25/13--18:32: Super PAC surge can't deliver Gomez victory
- 06/26/13--08:47: IMPACT: 'Dentists' probe leads to new Texas law
- 06/26/13--11:36: DOMA supporters still have friends in Washington
- 06/27/13--13:12: 'Nuclear Waste' series targets seriously troubled project
The troubled F-35 fighter jet, which is supposed to serve as the backbone of the U.S. military’s future air combat forces, may cost much more than the nation can afford, a federal auditor told a Senate panel Wednesday.
Michael J. Sullivan, acquisitions director of the Government Accountability Office, told the Senate defense appropriations subcommittee that current projections call for $316 billion in F-35 development and purchases from now through 2037, an average of$12.6 billion a year. Operations and maintenance costs alone will exceed $1 trillion over the fleet’s 35-year lifespan.
“Congress may want to consider whether the funding assumptions are reasonable in our current fiscal environment,” Sullivan said, responding to questions from Subcommittee Chairman Dick Durbin, D-Ill. Sullivan told the panel maintaining this sustained level of funding “will be difficult in a period of declining or flat defense budgets and competition with other ‘big ticket items’ such as the KC-45 tanker and a new bomber program.”
Meanwhile, J. Michael Gilmore, the Pentagon’s chief weapons tester, warned that the fighter’s costs are climbing — not shrinking as they typically do once production begins — as officials scramble to fix problems cropping up during flight tests of planes already delivered by the manufacturer, Lockheed Martin Corp. The “most challenging portions” of the testing have not yet begun, he said.
“We haven’t actually tested any combat capability,” Gilmore told senators, adding that there may not be enough time or money for full testing of these crucial capabilities in 2018, as scheduled.
Gilmore warned that F-35 may suffer further delays due to the budget sequester. “Reduced funding for test resources and infrastructure while the F-35 is under development ... will likely add to the pressure to either extend [the design and development phase] or accept reductions in capability,” he said.
He blamed the high cost of making design and production changes on “concurrency,” the practice of buying planes even as they are undergoing testing. “Production in this program started before there was any flight testing at all, which was unprecedented in the history of aircraft development programs,” Gilmore said. “That’s about as concurrent as you can get — that’s pretty much 100 percent concurrency. Obviously that’s a bad thing.
“We need to have more rigorous developmental testing. We need to let that testing proceed before we make production decisions,” he added.
Durbin summoned senior military, defense and GAO officials to explain the problems encountered by the high-tech, stealth fighter, the Pentagon’s single most expensive weapons program at a total estimated cost of $391 billion for 2,443 planes. Gen. Mark Welsh, the Air Force chief of staff, who also testified, called the F-35 “the only viable option” to replace the service’s aging F-16s.
"The Joint Strike Fighter program has had more than its share of problems over the last decade," Durbin said. "Frankly, its history reads like a textbook on how not to run a major acquisition effort."
The GAO’s Sullivan said the F-35 program officials expect to spend about $900 million to retrofit aircraft bought under the first four procurement contracts, with $827 million more to fix planes still to be purchased under the next six annual contracts.
The biggest headaches, he said, are the lagging effort to write the complex software, the $34 billion purchase of the first 150 aircraft with less than half of the flight testing completed, and a potentially false assumption that there will be enough money in future budgets to cover annual development, production and operating costs.
“If these risks are not controlled and the cost of the F-35 grows much more, the program is in danger of falling into a much too-familiar cycle of quantity reductions in order to meet a budget,” said Sullivan, adding that cutting the size of the fleet will only drive up the cost of each plane.
Both Sullivan and Gilmore credited the Pentagon for overhauling the program’s development and production plans three years ago. The latest funding projections, Sullivan said, reflect the increased costs, longer schedule times and deferred purchases of 410 of the aircraft.
They said the military was making steady progress in testing, but Gilmore said the software issues have delayed so-called high angle-of-attack testing, and weapons delivery systems and helmet-mounted displays are also behind schedule.
Gilmore also revealed details of two “stop orders” that halted testing and grounded planes earlier this year. The first, due to a hydraulic fuel line failure in a British vertical takeoff version of the F-35, grounded the F-35B fleet from Jan. 16 through Feb. 11. A crack in an engine turbine blade grounded the entire F-35 fleet for a week in February. A less serious hinge problem grounded the test fleet in March for inspections and maintenance.
Frank Kendall, the Pentagon’s acquisition chief, gave an upbeat assessment of the program while agreeing with Sen. Durbin that production of the aircraft began far too soon in the process. “The F-35 program continues to make progress. I believe we have a realistic plan in place,” said Kendall, who once publicly called the fighter program “acquisition malpractice.”
But Kendall added, “We still have a long way to go in the flight test program.”
Durbin asked “if any alternative is being considered for a less costly fighter.” He was told the country could not afford to start from scratch.
“I don’t believe we have any alternative but to make the program work,” Gilmore said.
President Obama disclosed in Berlin on June 19 that he has ordered the Pentagon to revise its plan for targeting America’s arsenal of nuclear weapons in wartime, a decision that opens the door to negotiated reductions in all three categories of these devastating weapons: strategic or long-range; tactical — meaning those deployed in Europe; and the large U.S. inventory of bombs and warheads held in reserve.
Obama signed the classified directive to Secretary of Defense Chuck Hagel on June 18, a senior administration official said. That was one day after Obama and Russian president Vladimir Putin had what several officials describe as a difficult private conversation about nuclear weapons policy, the conflagration in Syria, and other thorny foreign policy issues.
Obama’s speech thus signaled his determination to press for deeper bilateral arms reductions despite Russia’s often-stated reluctance to trim its nuclear forces beyond the cuts called for by the New START treaty both countries signed in 2010.
Obama told a crowd at Berlin’s Brandenburg Gate, the historic symbol of the Cold War rivalry between East and West, that “peace with justice means pursuing the security of a world without nuclear weapons — no matter how distant that dream may be.” He said that “after a comprehensive review, I’ve determined that we can ensure the security of America and our allies … while reducing our deployed strategic nuclear weapons by up to one-third. And I intend to seek negotiated cuts with Russia to move beyond Cold War nuclear postures.”
A senior administration official, asked yesterday how rapidly a agreement with Russia about nuclear reductions might come, said it’s necessary to take the long view. “We’ll get there eventually,” said the official, who along with several others spoke under ground rules that prevented the use of any name. “I won’t predict when.”
In fact, U.S. nuclear policy and weaponry generally has resisted sudden change.
The classified directive — which guides advanced planning for using nuclear weapons in response to the U.S. or its allies — codifies the conclusions of an internal administration review of nuclear policy completed three years ago. The review confirmed the obvious, namely that the nature of the threat to the United States has changed. It called for reducing the role of nuclear weapons on grounds that they are “poorly suited to address the challenges posed by suicidal terrorists and unfriendly regimes seeking nuclear weapons.”
Obama’s aides reached a consensus a year ago about the shift in targeting policy that he just approved. The secret directive he signed has been sitting in draft form at the White House since last winter. The president was reluctant to sign it before the 2012 presidential election, out of concern that it might sow political controversy, according to several officials. This spring, he deferred the issue again while his new national security team got settled, the officials said.
Presidential directives such as this traditionally have set guidelines, which the defense secretary translates into strike options. The Joint Chiefs of Staff uses those to write instructions to the commander of U.S. strategic forces. That officer in turn passes instructions to a 430-person targeting staff, which produces detailed nuclear war plans for the commanders of combat forces.
This process will take at least another year, according to one official, and possibly eighteen months if past targeting revisions are any guide. That means a policy change Obama initially blessed in the second year of his presidency will not fully impact U.S. nuclear forces — the network of deployed bombers, submarines, and missiles — until five years will have passed.
These steps along the road toward a new nuclear policy are laborious and shrouded in secrecy. Admiral James O. Ellis Jr., in a 2004 interview about nuclear planning when he was commander of U.S. strategic forces, said that the "president's direction to me was less than two pages; the Joint Staff's explanation of what the president really meant to say was twenty-six pages," according to an account by nuclear analyst Hans Kristensen. The war plans themselves are book-length.
Obama and his aides provided only a vague account of what the directive says. A White House fact sheet summarizing the document states that Obama told the Pentagon and its war planners that nuclear weapons should only be used in “extreme circumstances to defend the vital interests of the United States or its allies and partners” — phraseology used by Obama in a March 2012 speech in South Korea.
The directive does not, as the Center for Public Integrity previously predicted, push the military to a “deterrence-only” plan, in which nuclear arms would only be targeted against an enemy’s economic capacity. Nor does it reduce the emphasis on attacks on leadership figures, or restrict the use of nuclear arms solely to conflicts in which the United States or its allies are hit first by a nuclear strike. Both approaches have been urged by some independent arms control advocates, but neither attracted support within the Pentagon.
Defense Secretary Hagel, who before his nomination signed a Global Zero report asserting that the current U.S. nuclear arsenal vastly exceeds what is needed “to satisfy reasonable requirements of deterrence,” does not appear to have put a substantial personal stamp on the directive.
The Global Zero report had suggested Russia and the United States shrink their arsenals to 900 nuclear weapons on each side, including reserve weapons, and scrap all of their land-based missiles on the grounds that they are vulnerable to accidental or unauthorized launch. The report also called on both sides to abandon the practice of keeping their nuclear forces on high alert for “launch under attack,” meaning one side would launch a nuclear strike if sensors warned of incoming missiles or bombers. Many experts have said the practice unacceptably raises the risk of accidental, catastrophic conflict.
Obama did not embrace any of these proposals, officials said. “The new guidance states that the United States will maintain a nuclear Triad” that includes land-based and sea-based missiles as well as bombs delivered by aircraft, a separate Defense Department summary of his directive for congressional members stated late Wednesday.
The policy also commits the United States to maintaining “strategic stability” with Russia and China, explaining that while numerical parity is “no longer as compelling” as it was during the Cold War, “large disparities in nuclear capabilities could raise concerns on both sides and among U.S. Allies and partners, and may not be conducive to maintaining a stable, long-term strategic relationship,” the summary stated.
The Pentagon's summary also states that the United States will continue deploying tactical nuclear weapons aboard bombers and fighter aircraft in Europe, a posture that independent arms control advocates and some European government officials have criticized as a relic of the Cold War. UPDATE: A senior administration official said on June 20 that while the directive requires a persistent capability to deploy these weapons in Europe, it does not specifically order their deployment -- a circumstance that leaves room for their withdrawal if NATO agrees.
On the other hand, Obama instructed the Pentagon to “work toward” the goal of targeting nuclear weapons for use only against a nuclear attack — and not attacks involving conventional, chemical, or biological weapons, according to the Pentagon’s summary. Advocates of that shift say it would further restrict the purpose of nuclear arms.
Obama also told the Pentagon to prepare a series of non-nuclear strike options “to assess what objectives and effects could be achieved” with this approach. While the White House directive calls for retaining a “launch under attack” capability, it orders the military to consider reducing the role this option plays in U.S. planning.
The president’s directive also instructs the Energy Department to work with the Pentagon to redesign warheads so they can be used in more than one type of missile or plane, a plan that would leave the U.S. with five types of warheads instead of eight. Officials said that by creating a smaller group of warheads that could be swapped in and out of different weapons, the United States would not have to keep as many warheads in reserve as a hedge against the failure of any one of them.
By most accounts, the United States could save hundreds of billions of dollars if missile launch sites were closed, nuclear weapons facilities were scaled back, and fewer new missile-carrying submarines constructed. But Obama has so far firmly tied these reductions to similar reductions in Russia’s arsenal, eschewing unilateral cuts. The two former superpower rivals still control the vast majority of the world’s nuclear arms.
One U.S. official explained that while Washington is eager to negotiate a binding agreement with Russia on further cuts to strategic, tactical, and reserve forces, the form of that agreement — a treaty or an exchange of promises to be verified under procedures already in place — remains uncertain. Congressional Republicans want the White House to pursue a treaty, which they would have a say in approving or rejecting. UPDATE: A senior administration official said on June 20 that "we don't necessarily have to address everything all at once and in one agreement," suggesting that a new deal might just cover strategic arms alone.
Russia is not, however, in the mood for quick treaty negotiations, as a senior official put it. “They are not right now focused on reductions in any category … [but on] fulfilling obligations” under the 2010 agreement, which limits both sides to 1,550 deployed strategic nuclear weapons. Russia also is still objecting to the growing U.S. missile defense system and to a new high-tech, intercontinental, non-nuclear, missile system now in early stages of development.
The two sides “obviously have different perspectives” on missile defenses, one official said, despite Obama’s decision to kill the portion of the defensive system that most alarmed Moscow. In any case, little progress is expected before the first week of September, when another U.S.-Russian summit is scheduled, this time for Moscow.
A Wisconsin Supreme Court justice is preparing to hear the appeal of a lawsuit challenging the constitutionality of Gov. Scott Walker’s union-busting law, despite the fact that her husband is the president of a law firm that helps employers keep their workplaces “union-free.”
Justice Ann Walsh Bradley’s husband is Mark J. Bradley, a lawyer for Ruder Ware, a Wisconsin-based law firm that specializes in decertifying unions and other pro-business work, according to its website. He also serves as the firm’s president.
But union backers aren’t terribly worried. Bradley is a Democrat and part of the court’s liberal minority. In fact, she was on the losing end of a 4-3 ruling in June 2011 that overturned a county judge’s decision halting the implementation of Walker’s law.
On June 14, the state’s seven-member Supreme Court agreed to hear the legal appeal over the controversial 2011 law, which effectively ended the collective-bargaining rights of most public-sector workers.
Ruder Ware employs 40 attorneys specializing in four areas of law, including “Employment, Benefits & Labor Relations.” Bradley practices law in a different division, focusing on trusts and estates. Ruder Ware represents employers in union contract negotiations and arbitration. Its attorneys also “provide counsel and advice regarding development and implementation of campaign strategy to defeat union organizing attempts.”
Its attorneys “have extensive experience working with employers to keep their workplace union-free,” according to the firm’s website.
Justice Bradley’s ties to Ruder Ware are listed on her 2012 financial disclosure form.
The judge declined to be interviewed for this story. Mark Bradley could not be reached for comment. Ruder Ware is not involved in the case, so the justice is under no obligation to recuse herself.
Court spokesman Tom Sheehan issued a short statement on the judge’s behalf: “Justice Bradley does not participate in cases where Ruder Ware is representing a party,” he said.
Marsha Mansfield, a University of Wisconsin law professor who specializes in legal ethics, says the justice’s ethical guidelines in this case are straightforward.
“Unless there is some direct connection between her husband’s role in the law firm and the specific matter” before the court, a conflict of interest probably doesn’t exist, she says. In order for a judge to recuse themselves from a case, she adds, “it has to be more than just a perceived bias.”
According to Wisconsin’s Code of Judicial Conduct, judges should sit out cases in which judges or their family members have “an economic interest in the subject matter in controversy or in a party to the proceeding or has any other more than de minimis interest that could be substantially affected by the proceeding.”
Despite widespread protests, Gov. Walker signed the anti-union bill into law in March 2011 after it passed the Republican-controlled legislature. The law, which applies to most public employees, significantly limits workers’ collective-bargaining rights.
It was quickly challenged in court by unions representing Madison school teachers and City of Milwaukee workers. Last September, a Dane County judge overturned the law, ruling that it was unconstitutional, violating workers’ rights including free speech and equal representation.
The Wisconsin Supreme Court accepted the case at the request of the state’s 4th District Court of Appeals, which noted in an April filing that questions remain about how the law applies to state employees.
The International Consortium of Investigative Journalists (ICIJ) can take partial credit for the results of this week’s G-8 summit meeting in Northern Ireland. Leaders of the world’s major economies agreed to new measures to tackle the lack of transparency associated with offshore tax havens.
These measures include sharing access to information on their residents’ tax affairs and forcing shell companies — often used to exploit investment loopholes — to identify their real or beneficial owners.
Just the fact that tax havens were considered part of the G-8 agenda can be traced to the work of ICIJ. Since early April, ICIJ has published more than 50 investigative reports on the issue of tax havens worldwide, based on 2.5 million leaked files.
Secrecy for Sale: Inside the Global Offshore Money Maze has been one of the largest journalistic collaborations ever, now with 112 journalists in 58 countries. This investigative work – dubbed Offshore Leaks, has received more than 19,000 worldwide media citations — a new record for the Center for Public Integrity.
And, on Saturday, ICIJ published the Offshore Leaks Database which partially opens for the first time the company registries of 10 offshore jurisdictions. This unique, publicly searchable database was produced with our partner La Nación newspaper in Costa Rica. It includes information on more than 100,000 offshore account owners, directors, companies and trusts.
As I’ve noted before, the worldwide response and impact of this work has been extensive.
The BBC has reported that these G-8 actions are designed to combat illegal evasion of taxes, as well as legal tax avoidance by large corporations that make use of loopholes and tax havens. Although critics who have campaigned against tax havens say the G-8 did not go far enough, British Chancellor George Osborne said during the summit that more progress had been made on reforming the global tax system in the past 24 hours than the "past 24 years".
EU Commissioner Algirdas Semeta has been very clear about why progress is being made now. He has stated that the Offshore Leaks investigation by ICIJ and its partners had transformed tax politics and amplified political will to tackle the problem of tax evasion.
As he toldEU Observer, "I personally think Offshore Leaks could be identified as the most significant trigger behind these developments ... It has created visibility of the issue and it has triggered political recognition of the amplitude of the problem."
Nice work ICIJ. And, there is much more work to come.
Until next week,
Democrats on the Senate Special Committee for Aging pummeled a Treasury official Wednesday with questions about the effort to replace paper checks with electronic payments to mostly poor and elderly beneficiaries of government programs.
Questioning Treasury Fiscal Assistant Secretary Richard Gregg, Sen. Elizabeth Warren of Massachusetts repeatedly expressed her concern about the decision to pay an additional $30 million to Comerica Bank that was not in its original contract.
Comerica issues a taxpayer-subsidized debit card that the government is pressuring beneficiaries to use if they haven't already signed up for direct deposit.
Unsatisfied with Gregg's response that the nature of the deal changed between 2008, when Comerica offered to perform the service for free, and 2010, when the Treasury Department agreed to the additional millions, Warren repeatedly interrupted his answers.
“Mr. Secretary, let me stop you there,” she said at one point. “My question is about the contract … and that we agreed to give Comerica — we, the U.S. government, through Treasury — an additional $30 million without knowing if they were already making substantial profits on this contract or not.”
Still, Warren, Florida Sen. Bill Nelson, who chairs the committee and Richard Blumenthal of Connecticut, conceded that the program had achieved its main goal: Saving money for the government by getting people to switch to plastic debit cards and direct deposit for benefits.
At the hearing, Gregg appeared to be inflating the cost savings of the program by using some seemingly contradictory math. Gregg said it costs $1.25 to mail a check — a 19 percent jump from the $1.05 he cited nine months earlier, when he last testified on the subject.
The cost of sending a payment electronically, meanwhile, didn't budge from 9 cents.
As a result, the purported savings for making a payment electronically instead of mailing a check leapt to $1.16 from 96 cents. Multiply that 20-cent difference by the millions of people who receive at least one payment each month on a check, and it adds up to millions in extra savings, at least on paper.
Based on the new math, Gregg claimed, Treasury saved $885 million in the fiscal year ended September 2012 — the same month Gregg testified that the old, less favorable figures were correct.
Asked to explain the discrepancy, Treasury Department officials said that the cost per check has increased as Treasury sends out fewer of them. The officials refused to speak for attribution because they were not authorized to do so.
The biggest group affected by Treasury's e-payments policy is people who collect benefits from the Social Security Administration for old age, or because they are both poor and disabled. But the rules affect all benefits from the Veterans Administration, as well as less-known programs that support retired railroad workers and coal miners who developed black lung disease.
Comerica won the government contract by offering to issue the cards at no cost to taxpayers. After the bank said it was having trouble profiting from the program, Treasury agreed to sweeten the deal with tens of millions of taxpayer dollars. Treasury's inspector general is probing the contract between Treasury and Comerica, The Center of Public Integrity reported early Wednesday.
The political action committee of Koch Industries Inc.— the energy company run by conservative billionaire brothers David and Charles Koch — is off to its fastest start ever for a federal election cycle.
KOCHPAC donated $559,000 to federal-level political candidates and committees during the first five months of the year, according to a Center for Public Integrity review of Federal Election Commission disclosures released today.
That easily bests its output for the same time periods during previous election cycles: $387,500 in 2011, $274,500 in 2009 and $387,570 in 2007.
Such spending is notably aggressive for the nascent months of a two-year election cycle. Only a handful of the nation's thousands of registered PACs, including perennial PAC powerhouses Honeywell and National Beer Wholesalers Association, have donated so much cash so early.
In May alone, KOCHPAC spread $145,000 to 61 different federal candidate committees and other PACs, filings show.
On the year, KOCHPAC has reported making donations to 167 state and federal candidates, parties and other PACs, according to the Center for Public Integrity’s analysis of FEC data.
That includes donating $15,000 apiece to the National Republican Senatorial Committee and National Republican Congressional Committee — while freezing out their two national Democratic counterparts.
Furthermore, KOCHPAC has donated the legal maximum of $10,000 to four GOP congressmen so far this year:
House Speaker John Boehner’s campaign has collected $5,000 from KOCHPAC, and House Majority Leader Eric Cantor’s leadership PAC has received the same amount.
The leadership PACs of Sens. Marco Rubio, R-Fla., and Rand Paul, R-Ky. — both potential 2016 GOP presidential hopefuls — each also collected $5,000 from KOCHPAC.
Notable state-level donations include $5,000 apiece to Republican Govs. Tom Corbett of Pennsylvania and Mary Fallin of Oklahoma, as well as $2,500 to Dewey Bartlett, the Republican mayor of Tulsa, who is squaring off against the city’s former Democratic mayor, Kathy Taylor, this November.
A Koch Industries representative could not immediately be reached for comment, but spokesman Greg Guest in October explained the company's PAC activity as such: "KOCHPAC support candidates based on their support for market-based policies and economic freedom, which benefits society as a whole. Our support is not based on party affiliation, and we support both Republicans and Democrats who support market-based policies and solutions."
This election cycle, as has been the case for all election cycles, KOCHPAC has donated the vast majority of its money to identifiably Republican political committees, according to FEC records. Rep. Jim Matheson, D-Utah, for instance, did get $2,500 from the company’s PAC in March.
Koch Industries, for example, has spent more than $62 million on federal lobbying efforts since 2008, records show.
David and Charles Koch, meanwhile, themselves pledged to contribute tens of millions of dollars during the 2012 election cycle to defeat President Barack Obama and his fellow Democrats.
These committees, which burst onto the political scene in 2010, may raise and spend unlimited amounts of money to independently support or oppose candidates, but must publicly disclose their donors. In contrast, politically active nonprofit groups, such as 501(c)(4) "social welfare" groups and 501(c)(6) trade associations, may keep their donors secret.
David and Charles Koch have heavily supported the 501(c)(4) nonprofit Americans for Prosperity, which ranked among the 2012 election's biggest spenders. Because nonprofits aren't required to disclose their donors, its unclear how much cash the Koch brothers actually spent.
The Koch brothers, through their various foundations, have also made large contributions to Donors Trust, an organization that in turn funds free-market lobbying groups, think tanks and news organizations, as the Center for Public Integrity has previously reported.
The brutally efficient coal-extraction method known as “longwall mining” has permanently damaged a half dozen streams in Pennsylvania, state regulators have found — a finding that could trigger deeper waves for such operations in the state.
In December, the state’s Department of Environmental Protection, or DEP, sent a little-noticed letter relaying its unusual decision to the coal company that has tried to repair one such stream for five years, Consol Energy. Regulators determined the unnamed tributary, UT-32596, “has not been restored to conditions that existed prior to undermining.” They called further remediation attempts “futile,” and demanded the company compensate “for the loss of Commonwealth resources.”
The same day, the DEP sent another notice to Consol conveying a similar conclusion about five other streams “not recovered from the effects of underground mining.” The agency said it “now requires Consol to perform compensatory mitigation or enhancement measures.”
Traditional underground mines use a technique known as “room-and-pillar,” which leaves blocks of coal behind to support the earth. By contrast, longwall mines involve hulking steel shearers that slice off entire coal seams hundreds of feet below ground, and leave in their wake caverns up to five feet tall. The consequent shock waves cause severe damage to structures, disrupt wildlife and deplete water resources.
The state scrutiny targets streams that include a once-gushing waterway cutting across Kim Jones’ 62-acre farm in Wind Ridge, in the bottom corner of western Pennsylvania.
In 2004, when the tributary first fell victim to longwall mining, Jones predicted it would never return. The state-approved plan to “restore” the stream has done little to change her mind, she says.
At her KD Farm and across southwestern Pennsylvania, where five of the nation’s largest longwall mines operate, the full-extraction method has sucked dry water resources and disrupted aquifers for nearly two decades, often with little intervention from the state.
“We knew our stream couldn’t be fixed and we were telling DEP all along, ‘This isn’t working,’” Jones says, referring to the agency’s required remediation. “DEP kept telling us, ‘Yeah, it is.’”
Still, she says of the regulators’ newest finding: “I was surprised that DEP did what it did.”
Anti-longwall activists believe the rulings could impact future longwall mining activities in Pennsylvania and beyond. Currently, Consol is applying for a permit revision to expand its largest operation, Bailey Mine, by 3,135 acres, which would mean undermining more than a dozen additional area streams. Most would endure “temporary” damage, including the loss of stream flow, according to the company’s application.
The DEP’s determination could complicate that application, experts say, forcing the company to reconsider its expansion plans or to use a less destructive method beneath water resources. Indeed, the agency’s letters to Consol warn it may have to revise its permit plans to ensure that future longwall mining “will not result in a similar outcome.”
Consol did not respond to repeated requests for comment, but the company has challenged the DEP’s rulings, filing appeals in January with the state’s Environmental Hearing Board.
Some activists hope the agency’s rulings pave the way for a moratorium on longwall mining beneath all streams, springs, seeps, and wetlands for not just Consol, but other coal companies throughout northern Appalachia.
“This is the first time a state agency has come out and admitted permanent damage to a stream from longwall mining,” says Aimee Erickson, director of the Citizens Coal Council. Now, “we have the evidence to try to do something to stop longwall mining.”
And that evidence continues to mount, critics say.
All six of the irreparably damaged streams have suffered “flow loss” from Consol’s Bailey Mine, which snakes beneath 144 square miles of rural terrain in Greene County. Here, Bailey’s longwall machine has caused such hydrologic chaos that Consol has had to conduct state-required remediation on miles of creek, the Center for Public Integrity reported in 2009. Four of the broken streams run above Bailey’s 1-I to 4-1 longwall panels, the same panels underlying Ryerson Station State Park. In 2005, the park lost its 62-acre Duke Lake when its dam cracked after the longwall machine had moved beneath the park.
State officials later filed an unprecedented lawsuit against Consol over the alleged damages; in April, they announced a multi-million-dollar settlement with the company to repair the dam and re-open the lake.
In court documents, Consol describes the recent DEP action as “arbitrary, capricious, contrary to law and … an abuse of discretion.” The company says it has “complied with all its obligations” under existing consent orders, and “minimized the impacts of mining on the streams … to the extent possible using the best technology currently available.”
Citing the pending litigation, the DEP has declined to elaborate on its determinations.
Stephen Kunz, a Pennsylvania ecologist who has chronicled the effects of longwall mining, believes these are “the first in a wave of streams that we’ll find out the mining companies have been working on for years, and can’t restore the flow.” He cites other tributaries that have suffered harm.
From 2003 to 2008, 55 stream-damage claims were filed with the DEP alleging harm from longwall mining, according to a January 2011 agency report cataloguing the effects of underground mining across Pennsylvania. Of those, 24 involve dewatered streams because of Bailey’s longwall machine. To date, most of the claims remain “not resolved,” including 13 relating to the streams now at issue in the DEP case.
Kunz fears the kind of irreversible damage the state law authorizing longwall mining, known as Act 54, supposedly prevents. “Act 54 was meant to say, ‘If you broke it, you fixed it,’ ” he asserts. But “that regional hydrologic impact is not being fixed.”
A Stream Runs Through It
Jones’ stream has long served as a poster child for those pushing to reform Act 54. Since Consol began mitigating it in 2007 — injecting its bed with grout, pumping water into its channel — coalfields activists have toured the tributary with reporters and regulators. Sometimes, water returns at a reduced rate, flowing below the banks. Other times, it remains dry. Years’ worth of photographs and video taken by Jones depict more and more plants sprouting up in the stream’s channel, gradually erasing it from the landscape.
Officials with the federal Office of Surface Mining and Reclamation took in this scene last fall. At the time, Consol had completed its mitigation, and Jones was pressing the DEP for a report. “I kept getting the runaround,” she recalls. When she relayed the situation to the OSM officials, Jones says, they “pretty much told me to file a citizen’s complaint.”
On December 10, she sent a letter chronicling “stream and subsidence damage at my Wind Ridge Property” to the OSM’s David Hamilton, who oversees the DEP’s coal-mining programs.
The federal agency took action. By December 17, Hamilton’s office had issued a 10-day notice to the state agency, warning it “has reason to believe [Consol] is in violation” of mining regulations, and requiring the DEP “to take appropriate action.” The notice cites two alleged violations involving the stream loss — a “failure to maintain the value and reasonably foreseeable uses of a perennial stream as they existed prior to coal extraction”; and a “failure to mitigate the adverse effects to a perennial stream caused by underground mining.”
On December 24, DEP officials essentially confirmed the federal notice. They stated that “a letter is being prepared in conjunction with our legal staff to inform Consol that [its] underground mining operations … have adversely affected an intermittent or perennial stream.”
The DEP’s final report on Consol’s efforts to remediate Jones’ stream, dated Oct. 22, 2012, shows that “for most of the monitoring time there was no flow” along the tributary at any of five monitoring points. “We concur with the state,” Hamilton explains. “Nothing can be done to restore the stream flow and therefore … it’s over.”
He considers the pending litigation “a big deal,” adding, “This is the first case I’ve heard where the agency has made this type of legal finding.”
The DEP has actually gone to court over a dewatered stream before. In 2004, UMCO Energy, operating a now-defunct longwall mine in Washington County, had dried up a stream. Like Consol, the company tried to repair it, using epoxy grout and plastic liners. Workers even tapped a fire hydrant to augment the flow. State regulators required the company to prove it would not cause “irreparable” damage to a nearby stream — or else. By November 2004, they had modified the UMCO permit to prohibit longwall mining underneath that stream; the company appealed.
Kurt Weist, of the Citizens for Pennsylvania’s Future, an environmental group that intervened in the UMCO case, says that, eventually, the agency allowed the company to turn off its hydrant.
The current case hinges on the DEP’s revised stream protection policy. That document dates to 2005, a year after the UMCO case. Under the guidelines, a stream damaged by longwall mining will be considered “adversely affected” if it cannot be restored to its pre-mining condition after five years of remediation trying everything “technologically and economically feasible”; the operator may then be required to perform “compensatory mitigation,” such as restoring an eroded stream bank.
The OSM’s Hamilton says the DEP’s policy represents “an attempt to get some environmental benefit out of a bad situation,” explaining that its compensation provision exceeds what federal mining law requires.
In its appeal, Consol argues that the agency’s stream policy, contained in a “technical guidance document,” is just that — a guidance. “Such reliance is improper,” the company claims, “and constitutes an invalid attempt to impose binding norms and regulatory requirements through a guidance document.”
Currently, the court proceedings have been put on hold after the DEP and Consol requested a stay, in May, “in hopes of reaching a settlement.” The judge set an August 29 deadline to yield a pact, or continue with the case.
When Jones heard that the DEP case is on hold, “I thought, ‘Guess what? They’re going to allow Consol to walk away.’ ”
If she had her way, she’d be ordering Consol to keep working on the six broken streams. She and her husband, Kenny, purchased their farm partly because of its beautiful tributary, which, she says, boasted three waterfalls year round. She dreams of scouring for crawdads with her two kids beneath its rocks, or picnicking with her family beside its banks.
“That is what I truly want,” Jones confides. “I want to see these streams recovered.”
The White House today nominated two people to serve six-year terms on the Federal Election Commission.
The U.S. Senate must confirm the nominees, who have been tapped by the White House at a time when all five current FEC commissioners are continuing to serve despite their terms having expired.
McGahn, for his part, said he's pleased with the decision.
"Finally, President Obama has submitted FEC nominees to the Senate for consideration," he said in a statement to the Center for Public Integrity. "As many well know, I have long desired to leave, but committed to stay to prevent the FEC from further trampling on our First Amendment and due process rights. I am pleased that a willing and capable successor has been vetted and nominated, and look forward to returning to practicing law in the future."
Ravel was appointed to the California Fair Political Practices Commission in 2011 by Gov. Jerry Brown.
During her time there, Ravel fought to force a secretive organization that spent millions of dollars immediately on a California ballot initiative to reveal its donors. The group accused her in a court filing of "rabblerousing and prejudging, including 'tweeting' her incendiary view." In November, she wrote in a tweet that "we will seek legislation for stronger disclosure and enforcement before an election."
Ravel has previously served as deputy assistant attorney general for torts and consumer litigation in the civil division of the U.S. Department of Justice.
Federal records show that Ravel has made reportable campaign contributions to three Democratic presidential campaigns in recent years: $500 to John Kerry’s campaign in 2003, $2,300 to Hillary Clinton’s campaign in 2007 and $1,000 to Barack Obama’s campaign in 2008.
Goodman has been with LeClairRyan since 2005.
His previous work includes stints at Wiley Rein LLP and as deputy counselor and special counselor to the Virginia governor during the late 1990s. He likewise served as assistant attorney general of Virginia.
Goodman also worked as a registered lobbyist last decade, representing America Online and Time Warner, according to U.S. Senate disclosure records. He was an early member of the 2000 presidential vote recount team for George W. Bush and Dick Cheney, according to his Republican National Lawyers Association biography.
Goodman has donated about $18,600 to federal candidates and political committees, FEC records show. All of that has gone to Republicans, except $300 in 2008 to the political action committee of the law firm LeClairRyan, where Goodman worked at the time.
Goodman donated $750 to Bush’s 2000 presidential campaign and $2,000 to Bush’s 2004 re-election efforts.
In 2008, Goodman contributed $1,000 to Republican John McCain’s presidential campaign.
He did not make campaign contributions to any of the 2012 GOP presidential candidates, although he did provide legal counsel to Republican candidate and former Rep. Ron Paul of Texas. In 2012, Goodman did donate $500 to Republican U.S. Senate candidate George Allen of Virginia and $250 to the National Republican Congressional Committee.
The nominations of Ravel and Goodman, who did not immediately reply to requests for comment, are only the second and third FEC nominations Obama has made since becoming president in 2009.
His only other nominee, labor lawyer John J. Sullivan, withdrew from consideration in 2010 after his nomination stalled in the U.S. Senate.
In a statement, Obama said Goodman and Ravel are among several administration nominees out today that "have demonstrated knowledge and dedication throughout their careers. I am grateful they have chosen to take on these important roles, and I look forward to working with them in the months and years to come.”
Longtime campaign finance reformer Fred Wertheimer said Obama's two nominations are a start.
The president, he said, should now "move promptly to fill the remaining four expired seats on the FEC with commissioners who are committed to effective enforcement of the law."
Today's developments are a "step in the right direction," said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, which has criticized Obama for not nominating FEC commissioners sooner.
But she urged the White House to work harder "to elevate the FEC to the respected watchdog the American people expect — and need — it to be."
Chris Zubak-Skees and Michael Beckel contributed to this report.
President Barack Obama’s new choices to represent U.S. interests in Belgium and the Dominican Republic were both key bundlers during his re-election campaign, according to a Center for Public Integrity review of records.
The move comes a week after Obama picked three major campaign moneymen to serve as ambassadors in Europe.
Denise Bauer — who served as the finance chair for Women for Obama during the president’s 2012 campaign — has been chosen to be the new ambassador to Belgium, the White House announced in a press release Friday afternoon.
Bauer, who has also served on the Democratic National Committee, raised at least $500,000 for Obama’s re-election efforts, according to information voluntarily released by the campaign.
The actual amount she raised could be much higher as the Obama campaign only used broad ranges to describe the activities of its bundlers, the highest of which was “more than $500,000.”
If confirmed by the Senate, Bauer will replace current U.S. Ambassador Howard Gutman, who was also a major campaign bundler. He raised at least $775,000 for Obama’s 2008 campaign and first inauguration.
Meanwhile, Obama’s pick to be the next U.S. ambassador to the Caribbean island nation of the Dominican Republic is James “Wally” Brewster, an executive at the Chicago-based consulting firm SB&K Global.
Brewster — who is openly gay and sits on the board of the Human Rights Campaign Fund — also bundled at least $500,000 for Obama’s re-election efforts, along with his partner, Bob Satawake.
Brewster, if confirmed by the Senate, will replace Ambassador Raul Yzaguirre, an American civil rights activist who previously headed the National Council of La Raza.
Chad Griffin, the president of the Human Rights Campaign, called Brewster an “excellent choice” for the position, in a press release.
Presidents have long rewarded top donors and fundraisers with plush diplomatic posts.
More than two dozen of Obama’s bundlers from his 2008 presidential run were awarded ambassadorships. Others received appointments, government contracts and stimulus funds, as the Center for Public Integrity previously reported.
On Friday, Obama also announced his picks for eight other ambassadorships, including former Office of Personnel Management Director John Berry to serve as the U.S. ambassador to Australia.
Adam Wollner contributed to this report.
SAVANNAH RIVER SITE, S.C. — A half-finished monolith of raw concrete and rebar rises suddenly from slash pine forests as the public tour bus crests a hill at this heavily-secured site south of rural Aiken.
Dozens of hard-hatted workers in bright green and orange vests slog through the damp clay and clamber over a half-finished roof five floors up. Others filter in and out of openings cut into the windowless, half-a-million square-foot box, where towering construction cranes are clustered.
Guide Laurie Posey uses the bus loudspeaker to describe the project’s 6,800 miles of cable, 80 miles of radiation-resistant piping and double walls of reinforced concrete. Recently, she said the government factory would cost $4.86 billion, then coughed into her fist and shot a glance at the bus’ driver.
“Do you think they picked up on that?” she asked, shaking her head. The estimate she cited — $4.86 billion — is a fiction the government used well after its lead contractor said the real number was likely to be $3 billion higher.
Dark clouds hover over this ambitious federal project, 17 years in the making and at least six more from completion — if, indeed, it is ever completed. It lies at the center of one of the United States’ most troubled, technically complex, costly, and controversial efforts to secure nuclear explosive materials left stranded by the end of the Cold War.
This plant — and another just like it in Russia — is meant to transform one of these materials, plutonium, into commercial reactor fuel that can be burned to provide electricity for homes, schools and factories, essentially turning nuclear “swords into ploughshares.” The aim of the so-called Mixed Oxide, or MOX, plant is to ensure the material never winds up in the hands of terrorists.
In the right hands, only nine pounds of plutonium — an amount about the size of a baseball — could make a bomb as powerful as the one the U.S. dropped on Hiroshima. The world’s military and civilian nuclear programs have produced about 500 metric tons of pure plutonium, an amount that could fuel tens of thousands of nuclear weapons yet fit into a backyard shed. Countries with nuclear programs continue to add roughly 2 tons to this inventory every year.
Washington has been spending hundreds of millions of dollars annually to help secure or remove plutonium and weapons-grade uranium in dozens of countries. But the U.S.-Russia plutonium disposition program, which includes the Savannah River plant, is the U.S. government’s single most expensive nonproliferation project now, according to Michelle Cann, senior budget analyst with a nonprofit group called Partnership for Global Security.
Its aim is to eliminate 34 metric tons of U.S. plutonium — or 40 percent of the U.S. stockpile of military plutonium — in exchange for a similar destruction of 34 tons of plutonium in Russia.
But that noble goal has slowly turned into a classic Washington disaster.
The plant here — the core of the American half of the bargain — is so grossly over its original budget and so unlikely to achieve its original ambitions that lawmakers and government officials in Washington are on the verge of killing it — even though $3.7 billion has already been spent.
After four contentious, high-level recent government meetings — including several attended by the secretaries of State, Defense and Energy — the Obama administration has proposed to put the plant’s construction on life support, at a cost of $320 million in the next year, while it examines a cheaper method of eliminating the plutonium.
Blown deadlines, lax oversight, and design and construction snafus have transformed the project into an embarrassing symbol of mismanagement by the DOE’s National Nuclear Security Administration, which auditors have repeatedly placed on the government’s “high risk” list of agencies vulnerable to fraud, waste and abuse.
And the original deal with the Russians that called for construction of the U.S. plant has been quietly altered and twisted to the point that Russia may actually emerge from the arrangement with more plutonium in its stocks, not less, experts say.
The plutonium glut
The huge new nuclear fuel plant at Savannah River reached this shaky stage via a convoluted path. The idea behind it grew out of a crisis. Arms control agreements in the 1980s had left both the U.S. and the Soviet Union with huge stockpiles of fissile materials from dismantled warheads. The collapse of the Soviet economy left workers at vast weapons production complexes without heat, power or paychecks, a circumstance that threatened security and raised the risk of nuclear smuggling.
At least four times between 1994 and 2000, small amounts of smuggled plutonium were recovered by law-enforcement officials in Europe, the Caucasus and Central Asia, according to the International Atomic Energy Agency — all at the height of the Russian economic meltdown.
The United States and its allies worried these cases were the tip of an iceberg. Princeton physicist Frank von Hippel, a key player in the early push for a disposal agreement, recalls his surprise on visiting the huge Mayak nuclear complex in western Siberia in 1994. There, he found thirty metric tons of plutonium oxide from civilian reactors capable of being fashioned into bombs, stored in 12,000 tea-kettle-sized containers. A fence surrounded the reservation, but inside the gates all that stood between a thief and the plutonium was a padlock on the warehouse door and a nervous conscript guard.
A distinguished panel concluded in a special 2001 report for the Energy Secretary that the threat of diverted weapons materials from the former Soviet Union “is a clear and present danger, to the international community as well as to American lives and liberties.”
Nor has the risk of nuclear terror diminished since then, U.S. officials say. “Two decades after the end of the Cold War, we face a cruel irony of history —the risk of a nuclear confrontation between nations has gone down, but the risk of nuclear attack has gone up,” President Obama warned on the eve of an April 2010 global summit on nuclear security in Washington. Former vice president Dick Cheney told the American Enterprise Institute the following year that a terrorist with nuclear materials and know-how was “the most dangerous threat” the U.S. faced.
But even though the United States and Russia worked together to stem nuclear security problems in the 1990s, the two countries disagreed from the start about controlling plutonium. The U.S. view, initially, was that the best way to prevent the explosive from being used in new bombs was to lock it away in ceramic and glass.
Russia, though, was eager to tap the vast riches locked in its Cold War detritus. The country pressed to use its plutonium as fuel for a type of nuclear reactor that can actually produce more plutonium than it burns, in a form that is more easily used in nuclear explosives — a reactor known as a “breeder” that many Western experts say can promote a dangerous international trade in the nuclear explosive.
In a long struggle to resolve this disagreement, the Russians got the better of Washington, according to some experts who followed it closely. As a result, the South Carolina plant’s troubles partly reflect the fact that soaring U.S. national security ambitions were brought to earth by unsuccessful diplomacy. Officials in Washington thought they had clinched a deal with Moscow to ensure that the Russian plutonium stockpile would shrink, only to discover after years of delay that Russia had other plans.
How did the agreement wander so far off course, and disappoint many of its earliest advocates? First, some background is needed.
Breeder reactors, in a kind of Atomic Age alchemy, can manufacture more plutonium than they consume, inspiring dreams of almost limitless energy. By generating fast-moving neutrons that transform the uranium mixed into their fuel into additional plutonium, they hold the promise of a significant energy reward: One gram of plutonium can produce more energy than a ton of oil. At one time or another, breeders have been pursued by every major nuclear nation.
Until 1983, the federal government’s biggest civilian nuclear program was the promotion of plutonium breeder reactors, according to von Hippel. But breeder reactors are costly to build and operate, have special safety and reliability problems, and have long raised proliferation concerns. President Jimmy Carter decided not to pursue them, principally out of worry that making a lot more plutonium would eventually promote the spread of nuclear weapons worldwide.
His decision, which was opposed by the U.S. nuclear industry, led to a fundamental disagreement with Russia. “The US has always looked at plutonium as a proliferation risk,” said Kenneth Bromberg, who helped set up the Energy agency’s Office of Fissile Materials Disposition in the early 1990s and served as its chief from 2004 until his retirement in 2011. “The Russians have always looked at it as an energy source,” ideal for use in breeders.
In early discussions, Nikolai Yegorov, the deputy minister at Russia’s Ministry of Atomic Energy, described the American plan to immobilize the plutonium in ceramic and glass as foolhardy. Yegerov told Matt Bunn, an MIT-trained policy expert who helped craft the deal, that “If the United States wants to throw gold down the toilet, let them.”
Ernest Moniz, an MIT physicist who became Energy Secretary last month, played a key role in resolving the early impasse, while serving as a special negotiator for the Clinton administration. His June 2000 deal, approved by the two country’s presidents, called for both sides to use the plutonium mostly as a reactor fuel, as Moscow sought.
But the deal also demanded that almost all of the fuel be burned in standard reactors, from which Russia could not extract any residual plutonium in spent fuel for several decades, a significant nonproliferation achievement.
To encourage Moscow to proceed, Washington agreed to forego the burial option for all but 9 tons of its plutonium. Washington also promised to share technology and help fund the Russian effort, including construction of the Russian MOX fuel plant.Some
Some experts say that lurking behind that deal were not-so-hidden political and industry agendas to revive the development of breeder reactors. Breeder advocates were pleased because it would create, for the first time, an industrial-scale facility in America capable of turning plutonium into reactor fuel — a key step on the path to a revived breeder program.
The MOX plant was “the plutonium nose under the tent,” said Henry Sokolski, who served as a senior nonproliferation official under President Reagan.
The U.S. breeder revival got a more concerted push in 2001, when an industry-friendly energy task force formed by Vice President Dick Cheney called for nuclear “fuel treatment technologies” that would lead to the recovery and reuse of plutonium for electricity production.
A year later, the Energy Department dropped the plan to encase some of the U.S. plutonium in glass or ceramic, citing the Russian insistence on burning plutonium as a fuel and asserting it was too costly to pursue both approaches.
The George W. Bush administration subsequently embraced a plan to promote breeder reactors and the recycling of plutonium, not just domestically, but by other nuclear states including Russia, in a controversial program known as the Global Nuclear Energy Partnership. Formal papers ordering the start of the MOX plant construction were signed in August 2007 by a former chief of the Bush-Cheney energy policy transition team, according to an internal Energy Department document.
Russia’s construction of its own MOX fuel factory nonetheless stalled as the two countries squabbled about whether U.S. contractors working on it would have immunity from Russian lawsuits. A U.S. official involved in the discussions said the spat could have been resolved sooner but that Moscow wanted an excuse to delay producing the fuel to be burned in standard reactors, as its agreement required.
Moscow initially demanded that Washington pay for most of the plutonium disposal project’s expenses. But by 2007, the United States had only managed to corral promises of $800 million in aid — $400 million in U.S. funds, and $400 million from its allies — while Russia estimated the amount it needed was $4 billion.
The shortfall allowed the Russians some wiggle room. During this period, a former U.S. negotiator recalled, the Russians were saying “more and more, ‘Look, we are willing to do it your way if we don’t have to pay for it. But if we are going to have to pay for it, we want to do it our way.’” Jerald Paul, principal deputy administrator of the National Nuclear Security Administration from 2004 to 2006, said “the Russians were constantly moving the goalposts.”
The Russians get their way
With a shortfall of Western aid and a new pro-plutonium policy in Washington, Russia pressed to renegotiate the deal. At a meeting in Paris in Feb. 2005, Russian atomic agency chief Alexander Rumyantsev told top Energy Department officials that “Russian plutonium disposition should be recast to focus on fast [breeder] reactors,” according to a classified cable disclosed by Wikileaks.
His ambition was clear: Moscow wanted the Russian MOX plant, financed by Washington, to make fuel not for standard reactors, but for a full-scale breeder program, including a reactor the country is building 880 miles southeast of the Russian capital, an older reactor, and at least two other breeders in the development stage.
Negotiations reopened, and in mid-November 2007 — 3 ½ months after construction began at the Savannah River MOX plant — Bush administration Energy Secretary Samuel Bodman and the director general of Russia’s atomic ministry, Sergey Kiriyenko, announced the outlines of a revised deal.
The Bush administration agreed — with little public notice — to let Russia renege on its original promise and burn its plutonium in two breeders —breeders that could produce more plutonium.
Bodman also recommitted the U.S. to spending $400 million to help finance the deal and to “seek other donor funding.” It was a strange outcome, in one respect: At that time, the U.S. was spending $926 million to replace three aging Chernobyl-style reactors in Siberia with two fossil fuel power plants, partly because of safety concerns but mostly because those plants were churning out weapons-grade plutonium.
Linton Brooks, who served from July 2002 to January 2007 as administrator of the National Nuclear Security Administration, defended the deal in an interview. He noted that the Russians promised not to make more plutonium than they burned in the breeders — at least for several decades — or to use it in weapons.
“If the alternative is having Russian and U.S. plutonium sit around for a long time, I’m fully happy with what the administration did,” Brooks said. “I would not accept the view that we added to proliferation rather than reduced proliferation.”
New U.S. concessions
The pact was still not signed when President Obama entered office in 2009, eager to “reset” U.S. relations with Moscow. Top officials initially hoped to nail details down before Obama met Russian President Vladimir Putin in July that year.
Russian hesitation over the deal’s high costs prevented that from happening, and the summit deadline was missed. But the Obama administration dangled a legal agreement Russia wanted — allowing the transfer of U.S. nuclear power-related technology — to help gain Moscow’s approval of a new deal in time for the president’s April 2010 summit in Washington on nuclear security.
The terms, signed by then-Secretary of State Hillary Clinton and Russian Foreign Minister Sergey Lavrov, were radically different from the 2000 Clinton-era deal, though little changed from the arrangement worked out by the Bush administration. They spelled out how the Russians could use $400 million in U.S. funding to design the core of a new breeder reactor, and to modify an older breeder to accommodate the MOX fuel.
In a significant concession by Washington, Russia would be allowed to extract some plutonium immediately from fuel burned in one of the reactors used in the program — rather than waiting for decades to undertake such a process as Clinton officials had insisted. With the technical assistance Washington reaffirmed it would provide, Russia could make even more plutonium in additional breeder reactors now on drawing books. Russia promised, however, to accumulate any new plutonium only for civilian power rather than nuclear weapons.
U.S. officials recall no big internal debate about the terms amid the scramble to “find things that would make [the Russians] happy” and promote warmer ties, as one former senior Obama administration official put it.
On signing the agreement, Clinton hailed a “historic time for U.S-Russian relations,” and said the accord would “irreversibly and transparently dispose” of weapons-grade plutonium in both countries. Obama separately hailed the accord as a way “to prevent terrorists from acquiring nuclear weapons.”
Since then, work on the MOX plants in both countries has proceeded. But Congress so far has refused to approve any U.S. funding for the Russian reactor and fuel plant. Japan and the other Western countries that pledged money to the original effort also have not ponied up funds for the revised deal.
More plutonium, not less?
Joan Rohlfing, president of the Nuclear Threat Initiative, a nonprofit group that promotes aggressive action to reduce nuclear explosive risks, said she believes the project is still worth completing. “I am both surprised and disappointed” that the administration is questioning its investment, she said.
Likewise, a Russian official who has followed the plutonium agreement closely denied that Russia’s breeder program undermined nonproliferation goals and said the project was still worth pursuing to reduce the threat of the theft of nuclear materials.
But the deal has not been popular among arms control and nonproliferation groups, which argue that it enables Russia to use U.S. funding and technical assistance to help design and fuel its new fleet of breeders, allowing it to expand its plutonium production in the future, or to help other countries — that buy Russian breeders — expand theirs.
Russia’s nuclear energy chief was quoted in the official government newspaper last year, for example, saying that Russia’s breeder reactors “are the basis of our competitiveness” in the global contest for nuclear plant construction contracts. The country is already discussing the sale of two to China. Anatoli Diakov, a Russian physicist who founded and directed an arms control and energy study center in Moscow, said in an interview that no matter what the United States does, Russia “is going to use the plutonium fuel” in breeder reactors.
“Down the road, we could see the MOX program in Russia lead to the creation of more separated plutonium, not less,” said Tom Z. Collina, a senior official with the Arms Control Association. “That’s one of the dangers of the agreement. It could ultimately defeat the original purpose … which is to eliminate stocks of separated plutonium.”
An administration official who has been critical of the cost overruns, says the effort does not deserve further funding because “it’s not going to do what it was supposed to do.” The official, who asked not to be named because he spoke without authorization, added that the deal “gives the Russians what they want and limits our options.”
Von Hippel said the MOX plant has “become from my point of view a pretty meaningless program” that should now be killed. “The problem … is that Russia doesn’t intend to dispose of its plutonium permanently, right?” he said. “In fact, it’s setting itself up to produce and recycle its plutonium indefinitely.” That creates risks “that this stuff will get stolen, so in fact the security situation gets worse.”
Pavel Podvig, an independent Russian arms control specialist based in Vienna, agrees.
“The irony of this whole project is that it basically started with a good goal, of eliminating weapons grade material with the idea that it won’t be available for weapons purposes,” Podvig said. “But then it sort of evolved into this program that provides a fairly significant subsidy to the plutonium economy. So in the end, we will end up with more plutonium.”
Missouri Gov. Jay Nixon is facing a dilemma.
Should he sign a bill that was intended to help many state residents get coverage for cost-effective health care that insurers often refuse to pay for?
Or veto the bill because it is loaded with amendments that will benefit insurers and force many Missourians to pay far more for medical care than they do now?
Senate Bill 262, introduced by Sen. Kiki Curl, D-Kansas City, would require insurers to pay the same for specialty care delivered via telemedicine as for an office visit. Similar bills have been enacted in other states, including Arizona just last month.
But in Missouri, Democrats are now regretting voting for the bill because of amendments added at the last minute that will result in a financial windfall for insurance companies, agents and brokers at the expense of residents.
SB 262 would enable insurers to achieve one of their top objectives: converting HMOs into high-deductible plans.
HMO customers enjoy relatively low copayments when they get care from in-network doctors and hospitals. The bill would remove the current requirement that HMO cost sharing be “reasonable” and allow HMOs to impose high deductibles and coinsurance — up to $3,100 for an individual and $6,250 for a family — in addition to copayments.
If Nixon signs the bill into law, Missourians in HMOs who are unlucky enough to get sick or injured next year will have to shell out thousands of dollars more to pay for their care.
Insurers could avoid paying for necessary care in yet another way under the bill as amended.
HMOs would be able to reduce the size of their provider networks, meaning their enrollees would have far fewer choices of doctors and hospitals. HMO members needing care from a specialist not in the network would not be covered.
Insurers would win in another important way.
The bill would reduce from 60 days to 45 days the amount of time the state’s Department of Insurance would have to review and approve a new or modified health insurance policy. If the department doesn’t act within 45 days, the policy would be deemed approved.
Most state insurance departments already are inadequately staffed and resourced. Cutting the review and approval time by 15 days would mean that insurers would gain a significant advantage by being able to sell policies that do not meet federal and state standards.
As if all of this weren’t bad enough for consumers, the amended bill would also make it unlawful for anyone other than a licensed agent or broker to give advice or recommendations to any Missourian about choosing a health plan.
This would be a major victory for agents and brokers who are concerned that their incomes might take a hit when people start shopping for insurance on the online health insurance marketplaces or exchanges that states must have up and running by Oct. 1.
The amendment is an apparent violation of federal law, which states that individuals other than brokers and agents who complete a certain level of training can serve as “navigators” to help people choose plans that are best suited for them.
As now worded, the bill would bar social service organizations from helping low-income people who can’t afford to hire an insurance agent.
Nixon undoubtedly was eager to sign SB 262 before all the special interest-backed amendments were added. It was the first bill sponsored by Curl, a Democrat, who said she was motivated because of the role telemedicine played in saving the life of her father.
Regrettably, the best thing for Nixon to do now is exercise his veto and ask lawmakers to send him a clean bill during the next legislative session. If he signs it, more people will be hurt than helped by SB 262.
Political allies of Democratic U.S Rep. Ed Markey and Republican Gabriel Gomez have together reported spending more than $5 million on advertisements designed to boost their preferred candidate in the Massachusetts U.S. Senate general election, according to a Center for Public Integrity review of federal records.
And Markey’s supporters have thumped Gomez’s backers: Since the contest began on May 1, pro-Markey super PACs, nonprofits, party committees and other political groups have accounted for 70 percent of the spending.
In the weeks after the race’s primary elections concluded, attacks by groups such as the Democratic Senatorial Campaign Committee and the Senate Majority PAC went unanswered.
During the GOP primary, Gomez received super PAC support from an outfit called the Committee for a Better Massachusetts, as the Center for Public Integrity previously reported. But the group has been largely dormant since he won the nomination.
Only since mid-June has a pro-Gomez outside cavalry arrived on the scene.
From June 13 through Sunday, Gomez-supporting groups have reporting spending more than $1.5 million on independent expenditures, essentially matching the expenditures of Markey’s outside allies in the final stretch of the campaign, according to the Center’s analysis.
The GOP Senate hopeful has been bolstered by the Massachusetts Republican Party, as well as two super PACs — Americans for Progressive Action and the American Unity PAC — although most polls show him far behind Markey.
Because of their late entry into the race, the donors fueling these two super PACs won’t be officially reported until after all the votes have been cast in Tuesday’s special election.
Billionaire hedge fund manager Paul Singer has been the driving financial force behind the American Unity PAC, which backs Republicans who support marriage for same-sex couples. Records show he gave the super PAC more than $1.7 million in 2012.
And on Friday, the Wall Street Journalreported that wealthy California vintner John Jordan, a longtime Republican donor, was providing the cash to fund pro-Gomez Americans for Progressive Action, which registered with the Federal Election Commission on June 6.
“I saw an American hero running in a close race in a tough state while getting absolutely pounded by Democrats throwing everything they could at him,” Jordan told the Journal. “I just couldn’t sit by and watch and leave him alone while the establishment Republican groups decided to sit on their hands and just leave him on the beach.”
The disclosure lapse is also true for the Senate Majority PAC, which has reported about $1.4 million in expenditures but did not start spending in the race until June 7.
Meanwhile, the NextGen super PAC, which has spent more than $500,000 on pro-Markey yard signs, aerial banners and online ads since May 1, counts billionaire Thomas Steyer as its main funder. Steyer has pumped at least $750,000 into the super PAC, records show.
Markey — a 20-term veteran of the U.S. House of Representatives who chaired the Select Committee on Energy Independence and Global Warming for years — has also been backed by a variety of labor unions and environmental groups, including the League of Conservation Voters.
Markey’s own campaign, too, has enjoyed a large fundraising advantage over Gomez. Markey raised more than $8 million for use during both the primary and general election — roughly double Gomez’s haul.
Notably, in the final stretch of the general election, Markey has received campaign donations from the likes of super donor trial lawyer Amber Mostyn, former Secretary of State Madeleine Albright, former Senate Majority Leader Tom Daschle and Harold Ickes, the longtime Democratic operative who headed the main super PAC supporting President Barack Obama’s re-election bid.
Gomez, a political newcomer, is a former Navy SEAL who resigned from a position at the Boston-based investment firm Advent International to pursue his U.S. Senate bid.
Adam Wollner contributed to this report.
President Barack Obama met with nine business leaders from around the country today at the White House, one of whom is a major Democratic donor.
Sunil Puri, the founder of the Illinois-based real estate company First Rockford Group, bundled between $50,000 and $100,000 for Obama’s re-election campaign, according to federal data compiled by the Center for Responsive Politics.
Puri also contributed $32,500 to a number of Democratic candidates and political action committees last election cycle — all hailing from Illinois.
He additionally gave $20,000 to the Democratic National Committee and more than $32,000 to the Democratic Senatorial Campaign Committee.
Puri’s activity was similar during the 2008 campaign, when he donated more than $80,000 to Democrats, federal records show.
Steve Case, the CEO of the invest firm Revolution LLC, was another big political donor present at the meeting, but he did not contribute to Obama during the 2012 election cycle.
Rather, Case directed most of his $76,500 in campaign cash to influential members of Congress from both parties, including House Speaker John Boehner, R-Ohio; House Minority Leader Nancy Pelosi, D-Calif.; Sen. Marco Rubio, R-Fla., and Sen. Chuck Schumer, D-N.Y.
Yonja Media Group CEO Dilawar Syed also split $1,000 between two different Democratic congressional campaigns in 2012.
Today's White House meeting focused on immigration reform.
SAVANNAH RIVER SITE, S.C. — Scattered among the pine forests of this 310-square mile federal reservation are five mothballed nuclear reactors where tens of thousands of workers were once engaged in a grim race to create as much plutonium as they could.
By the time production ended here in 1988, the site was a horrendous mess. Today, about 36 million gallons of radioactive liquid wastes sit in underground tanks, and most federal spending here is devoted to nuclear-related cleanup, not production.
So when U.S. and Russian dignitaries in 2005 helped turn the first shovels of dirt here for a new plant to produce reactor fuel from weapons plutonium, it seemed like an entirely new industry, with a vital international purpose, was coming to Savannah River.
Eight years later, though, that optimism has given way to exasperation.
The fuel plant now under construction was the product of a U.S. agreement with Russia for each country to dispose of 34 tons of its own plutonium, an explosive material withdrawn from retired nuclear weapons. The plant was supposed to transform the plutonium into fuel rods to produce electrical power, ensuring it could not be put back in weapons or stolen by terrorists.
So when a reporter asked one of the shovelers at the ceremony, Sen. Lindsey Graham, R-S.C., if Congress would pay for the expensive facility, he said all other threats "pale in comparison of what could be done if plutonium fell into the wrong hands.”
Since then, the cost of the U.S. plant has ballooned while its goals have contracted.
The original agreement with Russia has been changed so significantly that it may help Russia produce more plutonium, not less. And today — after a federal expenditure of $3.7 billion — the incomplete facility is on the brink of being cancelled. “Cost growth and fiscal pressure may make the project unaffordable,” states the Energy Department’s latest budget proposal to Congress.
The project’s steep decline from a presidentially-blessed priority to a multi-billion dollar concrete edifice that may never produce an ounce of fuel is due in part to a stubborn gap between the Energy Department’s predictions about the plant and the messy reality of its design and construction.
A close look at its history reveals that the project had a weak construction contract; that Washington officials initially paid little attention to the project, despite its scope; that mismanagement and shoddy contracting practices cost the government more than $1.38 billion in avoidable expenses; that its piping may be flawed; and that prospects for selling its plutonium-laced fuel appear dim.
In 2002, the Energy department said the mixed oxide or MOX plant would cost $1 billion to design and construct and start operating in 2007. But the lead contractor — Shaw Areva Mox Services LLC in Baton Rouge — told the Department of Energy last August the true cost was likely to be $7.37 billion, a fact that DOE kept hidden from the public for months.
Since then, the DOE has told auditors the construction will cost at least $7.7 billion and it won't begin operations before 2019, about 12 years late. The cost of keeping it running over 15 to 20 years is likely to be another $8 billion to $12 billion, bringing the total price to nearly $20 billion.
Matthew Bunn, a nuclear expert at Harvard, said that according to the government's own figures, using MOX to eliminate excess U.S. plutonium could thus cost around $243,000 a pound. Disposing of extremely hazardous industrial waste, in comparison, costs thirteen cents a pound. These figures assume that the MOX plant isn’t stopped dead in its tracks by cost over-runs and the current federal budget squeeze.
The steep pricetag is partly due to the grave risks of handling plutonium, a potent carcinogen when it is inhaled and prone to explode if concentrated or compacted. The plant is designed to take this dangerous material, once it is ground up at other Energy Department facilities, and mix it with uranium oxide, the fuel that nuclear power plants typically burn.
This mixed oxide, or MOX powder, would then be compressed into pellets, baked and hardened in furnaces, and machined to a precise size to fit inside nuclear fuel rods. The rods would be loaded into nuclear reactors, where the plutonium would be partially burned to heat water that drives steam turbines.
Unexpected challenges arise
Optimism that this would be straightforward was widespread at the outset — in contrast to today, when the contractor has warned employees to expect layoffs and slowdowns.
Energy officials told Congress in 2002 that the design of the plant was 60 percent complete and its technology had been proven by decades of operations by two MOX facilities in France. Areva, which owns 30 percent of contractor Shaw Areva MOX Services LLC, is a French government-owned, nuclear behemoth with more than 46,000 employees that built more than 100 operating reactors and has a huge financial stake in pushing related technology.
But by the time of the 2005 groundbreaking — which was mostly for show since actual construction did not start until two years later — the MOX project was in deeper trouble than most people knew.
Its designers had discovered that using weapons-grade plutonium, instead of the plutonium produced by civilian reactors like those in France, posed special challenges, and so by then the project had eaten up 45 percent of its budget while the design was still only 70 percent complete.
It had reached this point without establishing key operating requirements for the completed plant, a circumstance that alarmed Energy Department Inspector General Gregory Friedman when he reviewed the program in the summer of 2005.
Friedman’s report disclosed that at the outset the NNSA had assigned only a single technical person to the project and that by 2004 only a “handful” of employees were overseeing it. No one from NNSA was stationed at the site until around 2003, even though the contractor was spending $13 million in taxpayer funds every month. Monthly reports on the work were confusing and misleading, and budgets lagged months behind the actual work, Friedman said.
A $39 million cost ceiling on one aspect of the project was somehow set 15 months after the contractor had already spent $47 million to complete the work, his report said. The Defense Contract Audit Agency, asked to examine two contract change proposals in 2003, withdrew from the assignment because it could not find a decent rationale for them in the submitted documents. And the NNSA regularly approved spending increases without demanding corrective action, Friedman wrote.
The MOX project contractors had little incentive to find efficient solutions, because NNSA had signed a “cost-plus fixed-fee” deal in which the contractor passes on to the government whatever costs it incurs — even though the agency was warned against doing so by a review team in 1999. In his 2005 report, Friedman concluded the real cost of the MOX plant was likely to be $3.5 billion, or more than triple the initial estimate.
The initial design, moreover, proved flawed: It turned out that the facility needed nearly 1,400 miles of electrical cabling, not 735 miles; it also needed engineering supports that were stronger and more costly to install than anticipated.
So in April 2007, the estimated cost jumped again, this time to $4.8 billion, according to an internal DOE memo. Meanwhile, the government had started scaling back the project’s scope.
The projected cost of a related plant meant to tear apart and grind up plutonium weapons cores more than doubled, so it was cancelled and the work parceled out to existing DOE facilities. A Government Accountability Office report partly blamed ineffective DOE oversight and poor contractor work. The Senate Appropriations committee said it supported the decision but expressed frustration that NNSA had failed to “identify alternatives earlier, before spending $700,000,000 over 13 years and determining that existing facilities could be used to meet mission needs.”
The MOX fuel facility itself, the heart of the disposal effort, was also scaled back. Instead of being equipped with three furnaces to harden the fuel pellets, the plant is to have only two. One of three presses meant to mold the fuel pellets was dropped, as were two of four emergency diesel generators.
Kelly Trice, president of Shaw Areva MOX Services, a partnership between Areva and the Shaw Group that manages the MOX construction work, has attributed the cost overruns mostly to the difficulty of finding and retaining qualified workers at a time when other nuclear plants were being started in the Southeast, and the need to get regulatory approval for “every piece of equipment, every piece of pipe, the concrete, even the dirt under the facility.” Speaking with reporters at an industry conference on Feb. 22, he also cited the rising cost of fuel and materials, including a spike in the price of concrete caused by the 2008 Beijing Olympics.
Faulty rebar undermines the construction
But some of the project’s problems resulted from cutting corners, according to an April 2009 report by DOE Inspector General Friedman.
Soon after construction started, when someone at the construction site attempted to hammer a steel bar important to the reactor’s safety into a needed shape, it broke instead of bent. That small but shocking event set off a major investigation leading to Areva’s return of 935 tons of rebar, supplied by a subcontractor whose work had not been inspected and didn’t meet federal standards for nuclear construction. Another 135 tons of improper rebar were diverted to other uses and 14 tons already embedded in concrete were allowed to remain in place after special inspections by the Nuclear Regulatory Commission (NRC). Fixing the problem cost more than $680,000.
Three years later, Shaw Areva fired construction supervisor Jeffrey Derrick of South Carolina after he complained about inconsistent or missing instructions for the installation of the plant’s 80 miles of piping. In a whistleblower complaint Derrick filed with the Energy Department, he alleged that half of the work might have to be ripped out and redone. “This will be costly and time consuming….We can not [sic] continue to ignore this issue,” Derrick told a Shaw Areva vice president on March 15, 2012, six days before Derrick says he was fired. DOE’s Office of Hearings and Appeals, in a ruling last October, rejected Shaw Areva’s bid to have the complaint dismissed. Derrick declined to discuss it, and the NNSA did not respond to a request for comment.
Separately, on April 29, Shaw AREVA reported to the nuclear commission that it had taken delivery of some defective corrosion-resistant, stainless steel piping, used in what the industry calls “high-stress environments,” leaving them susceptible to corrosion by acids found in the MOX process. The company didn’t say how much piping was affected, but told the NRC that five different sizes were involved and that it was still testing spools of pipe to determine the problem’s scope.
In 2010, the commission had faulted Shaw Areva for not identifying or correcting “conditions adverse to quality” at the site and in its equipment. Shaw Areva did not contest these claims, which it described as minor. But it also became embroiled in a dispute with the commission over whether it should have filed annual reports to the agency listing all of the 18,000 design changes made to the plant since construction began.
Then, last month, Friedman again faulted the project’s managers, this time for approving millions of dollars in “temporary living expenses” for workers who did not qualify.
Areva declined to address the construction problems in detail, but spokeswoman Kelly Cousineau said in a statement that “MOX is one of the first NRC-regulated, new nuclear construction projects in the U.S. in over 20 years; helped to revive a dormant nuclear industry by standing-up a national supply network; [and] has reached nearly 60% completion of major facilities.”
No customers for the fuel
Neither the contractor nor the Energy Department have been able to resolve another problem, however: Although the plant is supposed to make nuclear fuel for reactors, no reactor operators have agreed to buy it. That could leave the plutonium in unused fuel rods, where it could more readily be diverted to dangerous uses.
Heightened safety concerns pose one challenge. After the March 2011 tsunami crippled a MOX-burning reactor at the Fukushima Daiichi nuclear power plant in Japan, Edwin Lyman, a physicist at the Union of Concerned Scientists, a group skeptical of nuclear power, calculated that the increased plutonium released by a major accident involving a reactor using MOX could produce up to 30 percent more deaths than a reactor without it. The Energy Department has said the increased risk would be much smaller than Lyman calculates.
Unexpected technical problems have also arisen. Duke Energy was interested in using the fuel until 2005, when it was granted a license to burn French-made MOX in a trial run at its Catawba Nuclear Station in York County, S.C. The company abandoned the testing after part of the structure holding the fuel in the reactor core expanded more than expected.
Since then, Shaw Areva has been unable to find a utility willing to burn the mixed-oxide fuel in its reactors. “Those discussions are part of an on-going process,” according to Areva spokeswoman Cousinea.
The Energy Department has been counting on the government-owned Tennessee Valley Authority to use some of the MOX fuel, for example. But TVA spokesman Ray Golden said “we have made it clear that we have made no decision on whether we will use MOX or not.” He added that nothing was likely to change for “quite some time,” because the NRC still has not licensed the use of MOX fuel. TVA is presently having financial problems of its own and the Obama administration is considering selling it.
The Government Accountability Office says DOE has disclosed its intention to sell MOX fuel at 15 to 25 percent less than the cost of conventional fuel, but still has no takers. And if it did sell the fuel, the Congressional Research Service said that the government would likely see a return of just $1.1 billion to $2 billion on its investment of more than $20 billion.
Rep. Ed Markey, D-Mass., tonight weathered an 11th-hour surge of super PAC attacks to win the special U.S. Senate election in Massachusetts, buoyed by his own massive campaign war chest and deep-pocketed backers.
Allies of Republican Gabriel Gomez spent more than $1.5 million on advertisements since June 13, many of them highly critical of Markey, according to a Center for Public Integrity analysis of filings submitted to the Federal Election Commission through Monday.
One ad accused Markey of learning to "distort" facts as he served 37 years in Congress.
Another hit Markey for voting to let the Internal Revenue Service play a role in the enforcement of health care reform. (The agency is tasked with penalizing employers that do not offer affordable coverage and individuals who do not have health insurance, as well as discerning who qualifies for subsidies, among other duties.)
But the GOP spending spree proved to be too little, too late for the former Navy SEAL-turned-Senate candidate.
During the race, Markey raised roughly twice as much money as Gomez. And his supporters spent roughly $2.40 on independent expenditures for every $1 that pro-Gomez groups spent since the general election began on May 1, the Center’s analysis indicates.
The pro-Markey forces included the Democratic Senatorial Campaign Committee, the Senate Majority PAC super PAC, the League of Conservation Voters and several unions, as the Center previously reported.
In all, such groups reported spending about $3.8 million on Markey's behalf.
Super PAC ads accused Gomez of being "not someone we can trust" in Washington, and ads criticized him for being open to raising the retirement age and supporting tax breaks for millionaires, despite pledging to be a "different kind of Republican."
First elected to the U.S. House of Representatives in 1976, Markey has served 20 terms in Congress.
In 2009, he notably introduced legislation with Rep. Henry Waxman, D-Calif., that would have implemented a cap-and-trade program to curb greenhouse gas emissions.
The special election in Massachusetts was conducted to fill the vacancy created when President Barack Obama tapped Democratic Sen. John Kerry to serve as the secretary of state.
Before retiring from Congress four years ago, David Hobson, a powerful subcommittee chairman, says he couldn't fathom why the Energy Department was so determined to build a multi-billion dollar plant in South Carolina for transforming plutonium into fuel for U.S. nuclear reactors.
Although the plant was billed as a noble arms control initiative, meant to dispose of the plutonium so it could not be used in weapons again, Hobson was troubled by its billions in cost overruns, a lack of demand for the reactor fuel, and the existence of cheaper alternatives.
Hobson, now 76, said in an interview that he concluded the project had three real aims: It was a multi-billion dollar jobs program for South Carolina, a Bush White House political gift to then-Gov. Mark Sanford and the state’s mainly Republican congressional delegation, and the potential kickoff of a much more ambitious and costly enterprise meant to benefit the nuclear industry.
None of those justifications appealed to Hobson, a Republican from west of Columbus, Ohio, that the Almanac of American Politics once described as “a practical-minded politician” with a steady demeanor at the helm of the House appropriations subcommittee on energy and water. But they reflected the heavily political impetus for the project, which so far has survived billion-dollar cost overruns, a series of construction snafus, and revisions to its goals that call into question whether the effort will shrink the risks of plutonium’s misuse.
In 2006, Hobson recalls, he abandoned his effort to halt construction of the plant, in the face of intense lobbying by the Department of Energy, the Bush administration, and fellow congressional Republicans. “It should never have been done,” Hobson said about construction of the so-called Mixed-Oxide (MOX) fuel plant at the Savannah River site. “I tried to kill it, but I was pressured not to.”
Officials in the Bush administration, Hobson explained, said the project was vital to Sanford’s re-election that fall. “I was told [that killing] it would hurt his chances of getting elected,” he said. They said that after the election, he could "do what you’ve got to do,” he recalls. So, he says, he reluctantly agreed to back down. Hobson did not say who contacted him, but his account was separately confirmed by a former aide.
The MOX fuel factory rising in the piney woods near rural Aiken, S.C. sounds a lot like the kind of mammoth federal public works project that fiscal conservatives say they love to hate: Experts say it will cost at least $20 billion to build and run over its lifetime. It employs 2,100 skilled workers, many of them union members, and has burned through at least $3.7 billion in federal construction funds. But it is nowhere near completion and some doubt it will ever be finished.
The MOX plant has survived threats before, howeever, thanks to the ardent support of a handful of powerful public officials in South Carolina and their allies in Congress, including some leading deficit hawks who publicly scorn earmarks.
Many in the state’s Congressional delegation have benefited from a stream of campaign donations by major companies with a financial stake in the project, and have been lobbied by former government officials and ex-congressional aides on the contractors’ payroll.
While the Obama administration wants to slash planned spending on the plant by half next year and maybe eliminate it in 2015, citing a history of mismanagement and budget troubles, the Palmetto State's politicians in the past have proven adept at keeping MOX alive by making the prospect of cancellation as painful as possible.
South Carolina’s outsized influence
At a critical early juncture, the State’s Democrats helped keep the MOX plant from foundering. Crucial support was provided as construction began by James Clyburn, D-S.C., then-House Majority Whip, whose district includes part of the Savannah River site, and by then-Rep. John Spratt, S.C., a senior Democrat on the House Armed Services committee and, from 2007 to 2011, chairman of the House Budget Committee.
Clyburn, after beating back Hobson’s efforts to halt the program, said in a May 2007 press release: “I am pleased to have worked closely with John Spratt to secure the funding to move this [MOX] project forward…[It] was a priority of mine while serving on the Appropriations Committee, and I am pleased they responded to my insistence that the funding remain in this year’s appropriations bill.”
His efforts didn't go unnoticed. “When it comes to nuclear power, Jim Clyburn is always on our side,” Robert Eble, a nuclear safety manager from Shaw Areva Mox Services, the firm that is designing and constructing the MOX factory, told The New York Times in 2010. Eble was explaining the firm’s repeated financial donations to an annual golf tournament organized by Clyburn, now the House assistant minority leader.
More recently South Carolina’s Republicans have played an even bigger role in the effort, with none more crucial than Sen. Lindsey Graham, R-S.C., who once represented the town of Aiken, near the Savannah River site, as a member of the House.
Graham has emphasized his credentials as a deficit hawk, and on Jan.1, he said that “the time has come for the President to face up to the need to control federal spending.”
For many in Congress,however, such sentiments apply to spending in other states, not at home. For a month this spring, Graham blocked confirmation of the president’s nominee for energy secretary, Ernest Moniz, because Moniz refused to promise that the MOX plant — now six billion dollars over its initial budget—will be finished. Under pressure from colleagues, Graham relented and let Moniz start his work, but the lawmaker pledged to carry on his fight in other ways.
During an April hearing of a Senate armed services subcommittee, Graham reacted with icy intensity when Anne Harrington, deputy administrator for defense nuclear nonproliferation at the National Nuclear Security Administration, tried to defend what she called the White House's “assessment pause” while cheaper alternatives are studied.
“MOX remains clearly on the table,” she said.
“Ms. Harrington, I just don’t — I don’t mean to be rude,” Graham replied. “And you’re a very smart lady. It’s not on the table. It’s the pathway forward. It’s not subject to debate.” Graham said he also pressed the issue in a late April phone call with Denis McDonough, President Obama’s chief of staff. A White House spokeswoman declined to elaborate on the substance of the call.
Support from “deficit hawks”
Former Sen. Jim DeMint, R-S.C., a fiery promoter of the Tea Party’s fiscal conservatism, has also quietly supported the MOX project. While touring the site in May 2009, DeMint declared that “Savannah River Site is at the center of the nuclear renaissance,” according to an Associated Press account.
In April, a week after DeMint – who resigned his Senate seat this spring – became president of the conservative Heritage Foundation, its web site published an article entitled, “Mixed Oxide Fuel Facility in South Carolina Needs Congress’s Support.” Asked to explain, Jack Spencer, the article’s co-author, said through a Heritage spokesman that DeMint neither requested the article nor influenced its message.
Former governor Sanford, elected to Congress on May 7, has long backed the plant despite his carefully cultivated reputation as a critic of government spending. Although in 2009 he spearheaded a losing legal battle to block federal stimulus funds for his state, Sanford embraced the multi-billion dollar MOX project. "He sees it as an opportunity for Savannah River to have a new mission,"a Sanford spokesman told the Associated Press in 2003.
DeMint’s replacement in the Senate, former Republican congressman Tim Scott, has been described as “a fighter for limited government” by the president of the Club for Growth, a group dedicated to cutting federal spending. “We must also eliminate Pork barrel legislation,” the group declares on its website. “No more bridges to nowhere!” In an April statement, Scott called the White House search for a cheaper alternative to the MOX plant “irresponsible.”
Rep. Joe Wilson, R-S.C., whose district includes part of the Savannah River site, claims the White House’s stimulus spending has achieved nothing except “growing our national debt.” But when rumors circulated early this year that the administration might slash MOX, Wilson – along with Clyburn and the rest of South Carolina’s House delegation -- wrote to Obama warning of the “additional and unnecessary” proliferation risks if the project was suspended.
Sitting in the airport lounge in Columbia, S.C., Tom Clements of Friends of the Earth, a longtime critic of the MOX plant, reflected on the irony of fiscal conservatives rushing to the rescue of a big government, job-generating project like the plutonium plant. Clements noted that the company with the contract to build and operate the MOX plant is now a joint venture of two European companies, one based in France and the other in the Netherlands -- albeit with many American workers on their payrolls. Both are countries with left-leaning governments.
“These are cheese-eating socialists who are [building] the MOX program, and Graham’s in bed with them,” Clements said with a sly grin. Then, referring to the other South Carolina Republicans who support the plutonium plant, he added: “They’re posing as fiscal conservatives, but in fact they’re big spenders.”
Graham, Sanford, Scott, and DeMint declined to comment on that claim. Wilson said he supports the plant because it is in “our national interests.”
Hobson now says that the soaring costs of the MOX plant have vindicated his opposition. “You go back and look at the hearings,” he said. “Everything I said would happen has happened. All that’s come true. And there is no end in sight.”
At one of the hearings he chaired, in April 2008, Hobson complained that “we went forward and did this deal…[because of] some deal that the Secretary [of Energy] made and the president made to give jobs to South Carolina.” Samuel Bodman, the energy secretary then, did not respond to requests for comment, but his former chief of staff said allegations that Bodman pressed a political agenda were “absurd.”
A contractor’s adroit lobbying
It’s hardly surprising the MOX project is popular in South Carolina. The region near the Savannah River site is a sea of prosperity in a rural corner of the state. The roughly 11,000 workers at the site enjoy an average income more than double that of their neighbors who work elsewhere, according to a May 2011 study by the University of South Carolina at Aiken.
An industry-funded group, Citizens for Nuclear Technology Awareness in Aiken, holds “Up and Atom” breakfasts, sponsors golf tournaments and each year there is an Atomic City Festival in New Ellenton, a town close to the site entrance.
Aside from proliferation concerns, South Carolina politicians have a strong political motive to support the MOX project. But they and their allies in other states have also benefited from campaign donations by companies with a financial stake in the project.
Shaw Areva Mox Services LLC, which is designing and building the MOX plant, until this year was a joint venture between the Shaw Group and Areva SA, the French government-owned international nuclear giant. Shaw, based in Baton Rouge, La., was purchased in February by the Netherlands-based Chicago Bridge & Iron NV – which now controls 70 percent of the MOX project.
Since 2003, Areva’s employees and the political action committee formed by its U.S. subsidiary have contributed at least $582,000 in campaign donations, an analysis by the Center for Public Integrity of donations listed by the Center for Responsive Politics revealed. Chicago Bridge and Shaw Group’s employees and committees have provided at least $2.2 million.
In total, donors from Shaw, Areva, and Chicago Bridge spent at least $416,000 of this amount on members of the four committees that control spending on the MOX plant. Among South Carolinians, Lindsey Graham’s campaign and leadership committee received $41,500, Wilson’s received $26,000, and DeMint’s received $5,000. Scott, who was first elected to Congress in 2010, received $5,500 for his campaign.
Three other South Carolina Republicans received a total of $39.500 from the same donors for their campaigns after 2002. Areva, Shaw, and a law firm that lobbied for the plant on Areva’s behalf also contributed $40,000 to Clyburn’s golf charity from 2008 to 2012. Political action committees controlled by Shaw and Areva contributed a total of $51,000 to Clyburn’s campaign and leadership committee and $41,500 to Spratt after 2002. Clyburn’s spokeswoman Hope Derrick, said, the lawmaker “is solely motivated by the best interests of the people and communities he serves in Congress.” Spratt, in a telephone interview, similarly said the contributions had not influenced his support.
A spokesman for DeMint said the donations did not affect his policy positions, while Graham and Scott did not respond to requests for comment.
To advance their interests on Capitol Hill since 2001, the Shaw Group, Shaw Environmental and the Bethesda, Md.-based U.S. arm of AREVA – also spent at least $21.1 million on both in-house and outside lobbyists, according to disclosure forms. Many of their lobbyists held earlier jobs in Congress or federal agencies, and pursued multiple interests for their clients.
But in the last three years alone, Areva and Shaw have spent at least $6.3 million on lobbying, including efforts by at least four former congressmen and some former committee staffers that advocated spending on MOX and related nuclear issues, according to an analysis by the Center for Public Integrity.
The project’s lobbying team has included several heavy hitters: former Sen. John Breaux (D-La.), who left Congress in 2005; Leonard Bickwit Jr., general counsel to the Nuclear Regulatory Commission from 1979 to 1983; and Linda Ann Lingle, the Energy Department’s former top liaison to Congress.
Lingle, who was paid $80,000 by Areva last year, said the company ramped up its lobbying after Hobson attempted to kill the MOX project; her responsibility, she said, was to promote the project to South Carolina and Georgia politicians so they could be better advocates. The support of the South Carolina delegation in Congress, she said, was “very important” to keeping MOX alive.
Spencer Abraham, who was President Bush’s Energy Secretary when the department abandoned a major alternative to the MOX plant in 2002, became the non-executive chairman of Areva’s U.S. arm after leaving government. He told The New York Times in 2011 his role was “largely advisory.” His consulting company announced he quit that post in January 2012, citing other responsibilities. He did not respond to a request for comment.
A Shaw Group subsidiary, Shaw Environmental and Infrastructure, last year also hired three savvy Capitol Hill veterans at the international law firm K&L Gates to lobby for the MOX plant: Slade Gorton, a former senator from Washington who sat on the Senate's Appropriations and Energy Committees; James T. Walsh, a former House member from New York who served on the Appropriations Committee; and Tim Peckinpaugh, a former staff member of the House Science Committee.
Gorton signed a March 10 op-ed article for the Tri-City Herald in Washington state defending the MOX project, saying there remained a “very clear danger” that nuclear materials could fall into the hands of terrorists. “Some want to delay this important plutonium disposition, which would be a critical mistake,” he wrote.
Gorton did not mention his work for Shaw in the piece, which was excerpted on Areva’s website. Asked why, Gorton said that at the time it was published, he was only a consultant to K&L Gates, and wasn't aware of which client had requested the article: “I don’t even know who their client was. They [K&L Gates] asked me to do it.”
Walsh did not respond to a request for comment. Peckinpaugh declined to discuss his work.
A way to make Washington pay
MOX plant supporters and contractors have additional leverage. When plans for the MOX plant were first hatched, South Carolina worried about becoming a dumping ground for U.S. plutonium. It agreed to host the plant only after Washington promised the plutonium would eventually leave the state in the form of fuel.
From the outset, South Carolinians worried this promise could be broken, and in 2002, then-Gov. Jim Hodges, a Democrat, threatened to lay down in front of any trucks bringing plutonium to his state. “I asked, ‘What happens if MOX does not work? We’re stuck with it,’” he recalled. “They never did provide a rational answer to that question.”
Hodges’ threat provoked local supporters of the deal to nickname him “Governor Speedbump.”
Then-Rep. Lindsey Graham and then-Sen. Strom Thurmond (R-S.C.) responded to the state's concerns by securing congressional approval for a unique system of fines: Washington would pay South Carolina $1 million a day – up to $100 million a year – if the MOX plant did not begin producing a ton of plutonium-laced fuel a year by 2009.
Graham has since twice inserted revised language into atomic energy legislation delaying those fines until 2016. “Last year they were off track in terms of the timetable, but I sat down with the Obama administration and said, ‘Listen, we don’t want the $100 million, we want the MOX facility,’” Graham said at the April subcommittee hearing. “And so we extended the time period for two years. I can assure you I would not have done that if I’d known this year in the president’s budget they would be suspending the MOX program for study. We have studied this thing to death. It is now time to get on, and getting it built.”
Graham’s view resonates at the National Nuclear Security Administration, which oversees the plant and remains wedded to it. NNSA officials sought to increase spending for it by 47 percent in 2014, according to internal DOE budget documents. But policy officials at the Defense Department, including Deputy Secretary of Defense Ashton Carter, urged instead in private interagency meetings that the MOX plant be scrapped, and its budget shifted to modernizing nuclear warheads, according to participants in the deliberations.
After a series of high-level meetings, Obama administration officials reached a compromise: They would reduce funding now, spend $320 million more to keep the plant’s construction going for another year, and study cheaper alternatives.
Asked about the $100-million a year fines looming over any cancellation, NNSA spokesman Joshua McConaha said “we understand our commitments under current legislation, and we will look to ensure compliance with the law.”
When Graham agreed on May 15 to lift his hold on Moniz’s nomination, he did so without gaining a promise that the project will be completed. Instead, he released a joint statement with three other Republican senators — Tim Scott, Saxby Chambliss (Ga.), and Johnny Isakson (Ga.)—vowing to hold up other nominations and use the budget process “to ensure the program moves forward.”
Speaking of the administration’s desire to reduce the project's funding and pursue potential alternatives, they said “we will not allow this ill-conceived plan to proceed.”
Data editor David Donald and data reporter Alex Cohen contributed to this article.
A new Texas law will give regulators more power to crack down on dentists performing unnecessary treatments, especially on children.
A spokesman for the bill’s author — Republican State Rep. Lois W. Kolkhorst of Brenham, Texas — said the law came about largely because of a joint investigation by the Center for Public Integrity and PBS Frontline. The investigation revealed a pattern of questionable practices by Kool Smiles, a chain focused on Medicaid-provided dental care for children. The spokesman also credited independent reporting by Dallas station WFAA-TV on Medicaid fraud.
The joint investigation by the Center and Frontline, titled“Dollars and Dentists,” quoted former employees who alleged that dentists at Kool Smiles were encouraged by company production standards to put more expensive stainless-steel crowns, rather than fillings, on cavities in baby teeth. Kool Smiles denies those allegations.
“As a mother of two children, I was shocked to learn that in 2010 there were estimated to be over 15,000 Texas children who were given inappropriate dental care, including braces on baby teeth,” Kolkhorst said in a statement.
Kolkhorst said only one dentist had has his license revoked for Medicaid fraud or patient complaints in the past two years. “That’s just not acceptable,” she added.
The law beefs up the ability of the state dental board to investigate complaints. It also gives parents the right to be in the room with their children while they are at the dentist.
In addition, dentists working for corporate dental chains are required to report information about the chains to the dental board. Currently, the state maintains no information about dental chains.
Gov. Rick Perry signed the bill last week. It takes effect on Jan. 1.
Supporters of the Defense of Marriage Act — parts of which the U.S. Supreme Court today deemed unconstitutional— still have allies on Capitol Hill.
Rep. Tim Huelskamp, R-Kan., for one, has already said that he plans to introduce a constitutional amendment later this week to restore the 1996 law that defined marriage as between one man and one woman.
A staunch conservative, Huelskamp has also already this year received the legal maximum of $10,000 from the political action committee of Citizens United, which filed an amicus brief with the Supreme Court supporting DOMA. The brief argued that “homosexuals are neither politically powerless nor singled out by law for discriminatory treatment.”
Huelskamp is one of 19 beneficiaries of Citizens United’s PAC during the year's first five months, according to a Center for Public Integrity review of filings with the Federal Election Commission.
Citizens United’s PAC has donated $96,500 to Republican politicians and committees including Reps. Jim Bridenstine, R-Okla.; Ron DeSantis, R-Fla.; Mick Mulvaney, R-S.C.; and Steve Stockman, R-Texas.
During the 2012 election cycle, the PAC doled out $939,000 to conservative candidates and committees, records show.
Meanwhile, the PACs of the Eagle Forum and Family Research Council — which, like Citizens United, also filed amicus brief with the Supreme Court in support of DOMA — each gave out about $250,000 during the 2012 election cycle.
This year, the Eagle Forum’s PAC has contributed $3,000 to Virginia gubernatorial candidate Ken Cuccinelli and $1,000 to Republican House candidate Jason Smith, who prevailed in a special election in Missouri last month.
And Rep. Louie Gohmert, R-Texas, currently ranks as the sole beneficiary of the Family Research Council’s PAC so far this year, collecting $1,000 in March. Gohmert gained notoriety earlier this year after he compared marriage between same-sex couples to polygamy and bestiality.
By contrast, the PAC of the Human Rights Campaign, which advocates for the rights of gays, lesbians, bisexuals and transgender people, has made $61,000 in political donations so far this year. It gave out more than $1 million during the 2012 election cycle, mostly to Democrats.
Ahead of the 2012 election, the Human Rights Campaign also donated $100,000 to Women Vote!, the super PAC of EMILY’s List, which seeks to elect Democrats who support abortion rights.
After the Supreme Court’s ruling this morning, Human Rights Campaign President Chad Griffin praised federal recognition of married lesbian and gay couples as “a massive turning point for equality,” adding that all families must have “guaranteed complete access to the protections they need regardless of state borders.”
A release on the organization’s website also calls Huelskamp’s move to reinstate DOMA a “shame.”
For the past decade, Washington has known how to dispose of excess U.S. plutonium at a cost estimated to be hundreds of millions of dollars less than what the Energy Department is spending on a South Carolina factory meant to transform plutonium into fuel for nuclear reactors.
Instead of burning the plutonium, the cheaper alternative mixes it with glass or ceramics and some other materials, so it can be buried deep underground.
The government — until now — has rejected that option. But after spending $3.7 billion on the still-incomplete fuel factory, the Obama administration is giving the immobilization alternative a closer look. And independent scientists who formerly supported the so-called Mixed-Oxide (MOX) plant are now arguing that the alternative, called “immobilization,” seems the wiser choice.
Immobilization “appears to be cheaper and easier to do,” said Matthew Bunn, who was U.S. staff director for a joint U.S.-Russian panel that drafted a blueprint for the huge plutonium disposal project at the request of the White House in 1996.
The fuel factory is at the heart of a U.S.-Russian pact that calls for each nation to dispose of 34 tons of plutonium withdrawn from excess nuclear weapons — a deal that’s been altered so many times that it’s now unclear if the end result will be a world with less plutonium or more.
Meanwhile, the MOX fuel factory is billions of dollars over budget and under new scrutiny by the Obama administration, which has threatened to cancel it.
“I was one of the ones pushing [the project] … I used to be strongly in support of the program, but have gotten fed up with the sheer cost” of the fuel factory, said Bunn, now a co-director of Harvard University’s Project on Managing the Atom, aimed at reducing the risks posed by nuclear explosive materials.
At the factory, located on the Savannah River government reservation near Aiken, S.C., the plutonium is supposed to be mixed in a powder with another radioactive oxide, and then compressed into pellets to be stacked in fuel rods for nuclear reactors.
Under the immobilization option, plutonium would instead be ground up and encased in ceramic material shaped like a hockey puck, before being stacked in a can. The cans could be placed in a larger canister filled with molten glass contaminated by intensely radioactive nuclear waste — deadly enough to stop any thief or intruder. It would then be stored in subterranean vaults or inserted into 3-mile-deep boreholes, probably in a western state.
Under the original deal with Russia, the United States planned to immobilize a little over a quarter of the 34 tons of plutonium and convert the remainder into MOX fuel. In 2002, however, the administration of President George W. Bush canceled the immobilization option, arguing it lacked the funds to pursue both. Subsequently, Energy Department scientists discovered that some of the plutonium could not easily be converted into reactor fuel, forcing them to come up with an immobilization scheme for at least 4 metric tons of plutonium now at Savannah River.
The mystery glue
That requirement inspired the scientists to invent a mysterious substance that can be mixed with plutonium, which they have called “stardust.”
James Giusti, a DOE spokesman at the Savannah River site, said the precise composition of “stardust” is classified, but he confirmed that it’s not radioactive, which greatly eases handling of the wastes. When the “stardust” is blended with small amounts of plutonium, he said, it is hard to separate the two materials — and that’s crucial. “The compound makes it extremely difficult if not impossible to recover the plutonium unless you have a special chemical separation facility,” he said.
On a minute scale, this immobilization process has been shown to work. About 22 pounds of weapons plutonium have been mixed with “stardust,” placed in drums and stored at the bottom of a 2,150-foot-deep, man-made cavern east of Carlsbad, N.M., according to DOE officials. The remote, $1 billion government facility there was carved out of salt beds to be a repository for materials contaminated with highly radioactive wastes left over from U.S. weapons work, and in theory it could be expanded to hold larger quantities of immobilized plutonium.
Kenneth Bromberg, a former DOE official, said he has seen studies asserting that immobilization would cost 20 to 30 percent less than building the fuel factory, although he warned that cost estimates are difficult on such complex projects.
A 2002 report to Congress by the National Nuclear Security Administration, the division of the Energy agency overseeing the plutonium disposal effort, stated bluntly that immobilization was cheaper. The study estimated that long-term immobilization and storage of the plutonium — the option now getting a new look — would cost $600 million less than fashioning it into reactor fuel using the MOX plant: $3.2 billion instead of $3.8 billion (those were the prices at the time).
The Bush administration rejected the cheaper approach, however, citing the fact that the Russians disliked immobilization and wanted America to pursue the alternative approach Moscow preferred — namely construction of a factory that would turn the plutonium into reactor fuel.
Moscow said only this method would extract financial value from the plutonium. So the Russians are building a similar factory, in a mountain tunnel complex at the formerly closed city of Zheleznogorsk in central Siberia, and they intend to burn that factory’s MOX fuel in two nuclear “breeder” reactors. Those two reactors are ideal for creating new plutonium — just the opposite of what the original deal was supposed to accomplish, causing many arms control advocates to question the virtue of the arrangement.
The NNSA report, which said that immobilization was a cheaper option, was actually drafted to explain why that path was not selected. It did so by citing Russia’s preference, and by noting — in a politically savvy fashion — that pursuing immobilization would reduce “employment that would have been created in South Carolina.”
Congress knew from the outset that building the fuel factory was not the cheapest option. “It was a cost that Congress was willing to accept in order to help the Russian MOX program stay on track,” the House Appropriations Energy and Water subcommittee noted in an April 2006 report.
This history has since been garbled a bit by DOE: When asked to explain the choice at a recent congressional hearing, Neile Miller, then the acting head of NNSA, responded that when MOX was chosen “as a way to get agreement with the Russians,” U.S. officials believed the arrangement could be “more cost effective.”
Not the only solution
In the debate over what the government should do now, William H. Tobey, a former DOE official in both Bush administrations, said the South Carolina project is still vital to the world’s security, despite its soaring pricetag, because immobilization on a large scale is unproven. “I think it is necessary to eliminate it [the plutonium], even at great cost,” said Tobey, who is now at Harvard’s Belfer Center. Cancelling the fuel factory “would be a grave mistake.”
But some of those who helped launch the fuel factory project in the 1990s now say it was the wrong decision, due to the growing gulf between the plant’s staggering expense and its modest goals.
Frank von Hippel, a White House science official in the early 1990’s who chaired a working group on Russia’s weapons plutonium, said he initially supported the MOX plant because the threat was high and MOX was the only solution Russia would support. But Russia’s decision since then to burn its new MOX fuel in reactors that can actually produce more plutonium was the last straw for von Hippel. As a result, he said, the MOX plant “[has] become from my point of view a pretty meaningless program” — one that’s cost billions of dollars so far.
Last May, von Hippel joined three other prominent scientists in a commentary published in Nature, entitled, “Time to Bury Plutonium,” in which they criticized Britain’s draft plans to dispose of its huge stockpile of surplus reactor plutonium by building a new MOX plant of its own. The four authors wrote that MOX programs worldwide have been plagued by extravagant expenses, technology breakdowns and design flaws.
In France, Areva’s recycling of plutonium from spent fuel for MOX adds about $750 million each year to the cost of electricity, according to a French study in 2000 cited by their article. Britain closed its Sellafield MOX plant in 2011, they pointed out, after it operated at just 1 percent of capacity for a decade.
The authors urged the country to “give plutonium immobilization another look … Although the technique has not been demonstrated at full scale, there is substantial literature on how to do it. Immobilization should be easier and cheaper than MOX production.” Von Hippel separately said that according to his calculations, it could be as much as seven times cheaper.
A few months after the article appeared, two of the authors were named by President Obama to key posts: Rodney Ewing, a University of Michigan nuclear waste expert was named chairman of the U.S. Nuclear Waste Technical Review Board in September, and Allison Macfarlane, an MIT-trained geologist was appointed to chair the Nuclear Regulatory Commission in July. The MOX plant is being built to NRC quality standards, and the agency must license the MOX plant before it can begin operations.
The immobilization alternative is not worry-free. One longstanding concern is that over hundreds of thousands of years, the glass, ceramic or metal could degrade and the plutonium settle into a pile large enough to create a “critical” mass of the explosive material and spark spontaneous nuclear blasts. That’s the sort of scenario that gives public officials pause.
Ewing, explaining that he was speaking for himself and not for the Nuclear Waste Technical Review Board, told the Center for Public Integrity that he couldn’t say how much immobilization would cost. But he said that recent research leaves no doubt that plutonium can be locked into a crystalline ceramic material and stored safely for tens of thousands of years.
Although the White House has not allocated any additional funding for the South Carolina plant after 2014, the Energy Department claims it remains in contention as a solution to the plutonium disposal problem. But already it’s clear that the original U.S. goal for the program — reducing the world’s supply of nuclear explosive material by 68 tons – will not be realized.
Washington compromised repeatedly with Russia to pursue a program that even for some of its initial supporters has long since ceased to be a top nonproliferation priority. Meanwhile, the price of the MOX fuel factory soared far beyond the Energy department’s estimates, making it one of many, multi-billion dollar, Energy Department programs accused of being poorly run.
“MOX is just a sample of a larger problem,” says Gene Aloise, a senior federal auditor who tracked nonproliferation projects for the Government Accountability Office from 1994 to 2012.
The result is that Washington has spent at least $3.7 billion on a plant to manufacture reactor fuel no U.S. utility is eager to buy, after rejecting alternatives that likely would have been cheaper.
“The government’s plutonium plan is a pluperfect disaster,” Sen. Edward Markey, a newly-elected Massachusetts Democrat, told the Center for Public Integrity in a statement. “And all to produce $2 billion worth of reactor fuel at a cost of tens of billions of taxpayer dollars and damage to our global non-proliferation efforts.” Markey was the ranking member of the House Natural Resources Committee, has long been active on nuclear safety issues, and in 1986 chaired hearings on the Chernobyl disaster.
The factory’s fate might be decided next year, as the administration prefers, after another $320 million is spent on its construction. Or Congress might decide to take swifter and more decisive action in budget legislation this summer.
No matter what the outcome, it’s clear that the MOX fuel plant project has provided hundreds of high-paying jobs to South Carolina, helped stimulate the economy during a deep recession, and served as a training program for a new generation of nuclear workers. All may be worthy.
But the price has been steep. And after twenty years of negotiations, promises and plans, and billions in spending, the U.S. appears no closer — in its principal plutonium disposal efforts — to the goal of making the world safer from a nuclear disaster.
In four superb reports this week, The Center for Public Integrity’s national security team tells the disturbing story of how billions of dollars are being wasted on a specialized nuclear plant that was supposed to produce fuel for nuclear energy and reduce weapons grade plutonium. Not only could this failing enterprise end up costing as much as $20 billion, it may also create more nuclear weapons material instead of less. The Center’s Nuclear Waste series kicks off what will be an ongoing investigation into the world’s faltering efforts to control these most dangerous nuclear explosives.
In 2002, the so-called MOX plant being built by the Energy Department on a Savannah River site near rural Aiken, S.C., was estimated to cost $1 billion and start operating by 2007. It began with good intentions, but has since been hijacked in part by Washington’s dysfunctional, money-driven politics and pork-barrel mentality.
The idea started in the last days of the Clinton Administration when the U.S. and Russia agreed to dispose of 34 tons each of plutonium taken from retired nuclear weapons. This agreement was designed to ensure that this material would never again be used to build deadly nuclear devices. But after the expenditure of billions of dollars under three Presidents, the arrangement is close to collapse, due to a 600% budget overrun and Russia’s adroit diplomatic maneuvering.
A closer look at the troubling history of the MOX plant reveals that the project had a weak construction contract; that Washington officials initially paid little attention to it, despite its scope; that mismanagement and shoddy contracting practices cost the government more than $1.38 billion in avoidable expenses; that its piping may be flawed; and that prospects for selling its plutonium-laced fuel appear dim.
The true cost of the plant is now said to be more than $7 billion. The facility will cost another $8-12 billion to operate, and it won’t even begin working until 2019—about 12 years late.
Matthew Bunn, a nuclear expert at Harvard, said that according to the government's own figures, using MOX to eliminate excess U.S. plutonium could thus cost around $243,000 a pound. Disposing of extremely hazardous industrial waste, in comparison, costs thirteen cents a pound. These figures assume that the MOX plant isn’t stopped dead in its tracks by cost overruns and the current federal budget squeeze.
It will not be a surprise that the MOX plant has survived threats before, thanks to the ardent support of a handful of powerful public officials in South Carolina and their allies in Congress, including some leading deficit hawks who publicly scorn earmarks elsewhere. Also no surprise, many in the state’s Congressional delegation have benefited from a stream of campaign donations by major companies with a financial stake in the MOX project. And these same members of Congress have been lobbied by former government officials and ex-congressional aides on the contractors’ payroll.
Read this entire four-part series to see public service investigative journalism at its best.
Until next week.