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Lawsuit filed by NJ-based atomic power company raises concerns

Firm claims 2 3cecutives embezzled hundreds of thousands of dollars

By: Jeff Pillets
New Jersey Monitor

..... New legal claims lodged in recent weeks offer what critics say are disturbing insights into Holtec, the Camden-based company pushing controversial atomic power projects across the United States.
..... A lawsuit filed by Holtec in October [2024] says two senior company executives embezzled hundreds of thousands form the firm in a "rogue" operation that resulted in $65 million in investment losses.
..... The alleged scheme, plotted by Holtec's former chief finance officer and head corporate counsel, landed the company in a tax break scandal and criminal investigation that need in a $5 million fine and other penalties brought by the New Jersey attorney general, the lawsuit says.
..... The executives even steered Holtec CEO Kris Singh into pouring millions of firm's money into a string of multi-national cannabis companies, according to documents filed with the suit in state Superior Court.
..... Nuclear power watchdogs say the alleged conduct laid out in the lawsuit is only the latest red flag about Holtec's corporate ethics as it pursues untested nuclear initiatives using billions in taxpayer subsidies. The issue, they say, is troubling because the company's plans - from the creation of radioactive waste dumps to the re-ignition of a mothballed power reactor - could profoundly affect the nation's helaht and safety.
..... "The stakes at play in trusting this company are staggering, yet we just keep getting these warning sings,: Kevin Kamps, a leading anti-nuclear activist, told New Jersey Monitor. "You have to wonder why Holtec keeps having what appears to be stunning lapses of characters.
..... Kamps said the lawsuit shows that Holtec's CEO hire two executives who pushed bad investments and cooked up tax break schemes.
..... "How much more evidence do we need that something is amiss?" Lamps said.
..... Patrick O'Brien a spokes,an for Holtec, pushed back on criticism of its corporate character. He said negative views of the company arose mainly from politically motivated investigations and lawsuits pressed by New Jersey.
..... Holtec, he said, acts to root out dishonesty or wrongdoing found anywhere in the corporation.
..... "One of the reason that Holtec is pursuing the case against its former CEO and general counsel is that it does not tolerate ethical lapses from any employee, no mater their status at the com[any," O'Brien said in a written statement to New Jessey Monitor.

New Holtec claims

..... Holtec, in the new lawsuit, names as defendants Robert Galvin, who was chief financial offer, and Andrew Ryan, who was general counsel.
..... The company says the pair trickled Singh into paying them $710,000 in finders' fees for advice on cannabis and other investments.
..... The lawsuit also says the two executives and a third defendant, representing the accounting firm CBIZ, were responsible for arranging the abortive tax break scheme that resulted in the attorney general's investigation.
..... Holtec, in the court papers, now contends it was "forced" by the state to sign the non-prosecution agreement that concluded the investigation, which also implicated Singh Real Estate, a Holtec affiliate owned by the company's founder and CEO.
..... "Heltec and Singh Real Estate were falsely branded as defrauder, liars, exploiters, and manipulators," the suit says. Galvin and Ryan have not yet filed a response in court, and their attorney declined to comment.
..... Amy McGahan, a spokeswoman for CBIZ, said the firm denied any responsibility in the alleged scheme that led to New Jersey's fine and censure of Holtec. CBIZ is also pursuing a pre-exisitng claim against Holtect in Ohio federal court for non-payment of bills connected tot ax work the company did for Holtec staring in 2018, McGahan said.
..... O'Brien, in his written statement to New Jersey Monitor, stressed that no public money form power reactor decommissioning funds was invested in through bad investments described in the lawsuit will to affect Holtec's ongoing projects, O'Brien added. He declined to release details on the firm's finances.
..... "As a privately held company, we do not publicly discuss company profitability ... We have the financial and technical capabilities to execute [our] projects," he said.

Separate claims

..... The new lawsuit comes on the heels of other recent allegations form former Holtec senior executives.
..... In September, [2024] former Holtec Chief Investment Officer Michelle Tate said she was fired after Singh improperly withheld hundred of thousands in compensation from her. Tate was in charge of sovereign the investment of some $5 billion in reactor decommissioning trust funds Holtec now controls in New Jersey and three other states.
..... Last year, [2023] former Chief Financial Officer Kevin O'Rourke filed a whistle-blower suit against Holtec saying he was fired after refusing to endorse alleged falsehoods about the company's finance and future prospects.
..... O'Rourke says Holtec sought to conceal $150 million in projected losses for its proposed nuclear waste facility in New Mexico. He also says Holtec "grossly overstated" the amount of money it spends annually on research and development, lied about long-term company debt, and inflated the value of its manufacturing facilities.
..... After objecting to the falsehoods, O'Rourke says, he was shut out of meetings and soon fired.
..... "Oh Kevin, you are just an accountant, you don't know anything about business and finance,: O'Rourke claims Singh told him, according to the court papers. Holtec denies the claims of both O'Rourke and Tate and says it will vigorously oppose them.
..... Under Singh, an Indian-born engineer who founded the firm in the 1980s, Holtec has become a global leader in the storage of spent reactor fuel. It is now expanding into the decommissioning of old reactors and the creation of a new class of so-called small modular reactors, or SMRs.
..... Despite racking up plant security violations in New Jersey and facing Nuclear Regulatory Commission scrutiny for quality assurance issues in the manufacture of its waste containers, Holtec says it has a strong safety record and points out that federal regulators like the Nuclear Regulatory Commission and the Department of Energy review and approve all its work. Hotec's corporate ethic have been under scrutiny for at least a decade and a half.
..... In 2010, the company was temporary banned form working for the Tennessee Valley Authority after the company was implicated in a bribery scandal.
..... Investigators said some 450,000 in bribes accepted by a plant contracting official operator had originate with Holtec, which was seeking an extension of a $54 million long-term contract for engineering services on a spent fuel facility at Browns Ferry. Holtec also "misled" the sate agency about prices for various materials, investigators said, concluding that Holtec over-billed the agency by $272,000.In addition to paying a $5,000 fine, Holtec agreed to pay $2 million in "administrative fees,' appoint a corporate governance officer, install an independent monitor at its own expense, implement a code of conduct, initiate ethics training for all employees, executives and directors, and add three non- company members to tis board.
..... The Tennessee agency's inspector general said its action debarring Holtec for 60 days was a first in the history of the federal unclear power agency.
..... Four years later, in applying for $260 million in New Jersey tax breaks, Holtec submitted paperwork saying it had never been banned form federal contract work. When the Tennessee censure was revealed in press reports, the state withdrew the tax abatement and said Holtec had lied.
..... An appeals court eventually returned the tax abatement to Holtec. The court found that the administration of the tax break system was flawed and potentially confusing to applicants.
..... In 2019, New Mexico state officials said Holtec submitted misleading claims in seeking permission to create a waste dump for 8,600 metric tons of spent nuclear fuel form power reactors across the country. The officials said Holtec falsely claimed it had obtained property rights form landowners and mine operators near the proposed waste site.
..... The landowners sued successfully to intervene, and a federal court rescinded the Nuclear Regulatory Commission's approval of the waste site. Holtec is now appealing the decision in the U.S. Supreme Court.

A 'kind of deception'

..... State authorizes and local groups in New Jersey and other states also joined in court actions seeking greater public protections and financial guarantees in Holtec's campaign to decommission retired nuclear power stations in four states, including the Oyster Creek plant in Lacey Township and the Indian Point facility on the Hudson River in Westchester County, New York.
..... Activists say Holtec has delayed decommission work and left a string of broken promises regarding the handling of highly radioactive waste in storage at the shuttered reactors.
..... In Massachusetts and New York, regulators banned Holtec's plan to dump mildly radioactive water in nearby rivers amid a huge public outcry.
..... Diane Turco, a Massachusetts resident who lives near the former Pilgrim nuclear power plant on Cape Cod, leads a group of citizens who have joined Massachusetts regulators seeking to compel higher standard from Holtec.
..... In 2022, Turco and others, including U.S. Senator Edward Markey, confronted Singh during a public meeting called to discuss Holtec's plans for dumping more than 1 million gallons of radiated water into Cape Cod's bay. Singh promised he would hold off on the wastewater disposal until all stakeholders agreed on a solution and scientist assess the potential impact of radiated water on the delicate estuarine environment.
..... A few months later, however, Turco said an anonymous whistle-blower inside the Pilgrim plant revealed that Holtec had installed submersible heaters in the waste tanks and was slowly evaporating the water - and its low-level radioactive load - into the air. More than 200,000 gallons have already gone into the atmosphere, watchdogs say. Holtec said the heaters are being used to warn workers and not to disperse the waste.
..... "This is the kind of deception we have seen time and time again," Turco said in an interview. "The bottom line is that Holtec is a house of cards, and it seems there is very little we can do about it but keep complaining. can anyone be surprised to hear that senior executives at this company were dishonest or running some kind of scheme?"
..... Activists say Holtec's recurring ethics issues sh9ow that the Nuclear Regulatory Commission has strayed from meaningful regulations of the company.
..... "You're got a hisoptory of alleged bribery, debarment and a long string of misleading and false statements," Kemps said. "But the NRC basically says, 'It's not my job to investigate.'"
..... Preme Chandrathil, a spokesman for the agency, said the Nuclear Regulatory Commission insists that all licensees submit complete and accurate information about their use of radiative materials and operating or decommissioning of nuclear plants.
..... "If information comes to light that calls into question the company's conduct on an issue that falls within the NRC's jurisdiction, the NRC can inspect, investigate, and take enforcement action against the company should violations be identified,' he said in a written statement.
..... "We understand that this may not satisfy everyone," Chandrathil said, adding that the agency is always open to complaints from the public. "All stakeholders have recourse in such cases and may submit a petition for NRC to take enforcement action."

..... Jeff Pillets is a freelance journalist whose work has appeared in ProPublicca, New jersey Spotlight News, WNYC-New York Public radio and The Record. Contact: jeffpillets@icloud,com. the story appears with permission of New Jersey Monitor.

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