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Uranium enrichment – how crooked deals on USEC enrich the private sector

uranium-enrichmentTo keep a large campaign contributor out of bankruptcy court for a few more months, the Paducah plant was permitted to reach the current crisis state. And the people of Kentucky were sent straight to nuclear hell. 

highly-recommendedCountdown to Nuclear Ruin at Paducah  EcoWatch May 22, 2013 by Geoffrey Sea “……….Murphie’s Law    So how did it come to this? Since the plant was originally scheduled to cease operations on May 31, 2012, why didn’t USEC and DOE have plenty of time to plan for orderly and funded clean power-down, which was precisely what the sleazy one-year extension deal was supposed to give time to accomplish.

The answer is that the entire uranium enrichment enterprise of the U.S. has become a sham operation, a sham designed to funnel U.S. Treasury funds to private companies including USEC and its partners, a sham designed to convert any problem or scandal into additional contractor award fees, a sham designed to keep the fig-leaf of a privatized USEC Inc. from blowing away and exposing all the naughty bits.

Those became the goals of the operation, not enriching uranium, developing new technology or achieving safe operations or cleanup of the sites. Murphie’s Law is that if anything can go wrong, it will boost contractor award fees, for a select group of companies hand-picked by Murphie himself. Thus, the principal “cleanup” contractors at Piketon are Fluor and Babcock & Wilcox (B&W), both of which are suppliers to USEC’s fake “American Centrifuge Project,” and B&W is a strategic partner of USEC with a large share of USEC preferred stock, poised to take over USEC’s operations if the latter goes under.

And USEC is going under, by design, leaving its bondholders, pensioners and U.S. taxpayers holding one very empty bag. USEC stock has now lost 99% of value since its bubble peak in 2007. USEC’s auditors issued a “going concern” letter in March of this year, warning that the company appears to have no viable business plan moving forward. The New York Stock Exchange issued a delisting warning to USEC in May of 2012, and a second warning on a separate deficiency in May of 2013.

If USEC is delisted, about half a billion dollars of debt to bondholders becomes due immediately, and at least $100 million in pension obligations are owed in Ohio and Kentucky each. But the entire company is only worth about a twentieth of its debts, or about 1 percent of the cost of the new commercial plant it pretends it will build. USEC’s 2013 shareholders meeting, at which the crisis might come to a precipitous conclusion, was postponed from April to June, presumably to give the company a chance to depart from Paducah without adding a nuclear crisis to its public liabilities. USEC is now an empty shell about to be shucked: the company’s dissolution and the Paducah plant’s decommissioning have been timed to coincide.

Once USEC has departed Paducah, it will no longer be in the uranium enrichment business, as it will operate no enrichment facilities. The company, which was created by statute for the sole purposes of enriching uranium and developing new technology, will be doing neither. It will only be an international uranium broker, ironically a front for Russian uranium interests. Imagine if the U.S. Postal Service decided to hoard its U.S. government subsidies, exit the mail delivery business and become only a marketing agent for Russian stamps. That analogy precisely applies to what USEC is doing, in stark violation of the USEC Privatization Act.

But USEC has had two quite powerful politicians in its service, from the states in which it has operated, men who control the Republican caucuses in both chambers of Congress—John Boehner of southern Ohio and Mitch McConnell of Kentucky. If Congress had appropriated the funds to pay for Paducah power-down in a timely fashion, for fiscal year 2013, then the USEC house of cards would have come down one year earlier. There could not have been rumors of federally-financed extension deals, or stock speculation runs premised on talk of a USEC buyout, or shipments of “spare parts” from Piketon to Paducah just to make it look like USEC is a going concern.

In short, if Bill Muphie’s office had secured the funds and let the contracts to do a clean power-down of Paducah starting June 1, then the jig would have been up for USEC months ago, the company might already be in liquidation, and hundreds of millions of dollars in continuing federal subsidies to USEC might not have been wasted. For its part, USEC has even now failed to announce a date certain for Paducah closure, although cancellation of its power contract was an effective extortion tactic for wheedling additional dollars from federal coffers.

So Murphie didn’t secure the funds and didn’t issue the contracts, and kept right on doing federally-paid PR work to falsely suggest there could be a smooth economic conversion at Paducah. Boehner and McConnell ate it all up while chanting the “jobs” mantra, for it reinforced their narrative that USEC Inc. is the best thing since sliced atoms. To keep a large campaign contributor out of bankruptcy court for a few more months, the Paducah plant was permitted to reach the current crisis state. And the people of Kentucky were sent straight to nuclear hell.

Nine days. http://ecowatch.com/2013/countdown-to-nuclear-ruin-at-paducah/

May 25, 2013 - Posted by | business and costs, politics, secrets,lies and civil liberties, Uranium

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