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USEC : Markey, Burgess Release Report Showing Legal Concerns over Energy Dept.'s Deals with Uranium Enriching Company

06/10/2014 | 03:56am US/Eastern

WASHINGTON, June 9 -- The office of Sen. Edward J. Markey, D-Mass., issued the following news release:

A new report by the Government Accountability Office finds that the Department of Energy did not follow the law and lost taxpayer money when it conducted several transfers of uranium worth hundreds of millions of dollars to the U.S. Enrichment Corporation, known as USEC. These transactions still could not prevent USEC'sKentucky facility from closing down and the company from declaring bankruptcy. The report released today, requested by Senator Edward J. Markey (D-Mass.) and Rep. Michael Burgess (R-Texas), also says that DOE erratically assesses the value of nuclear material used to make reactor fuel, also potentially costing taxpayers hundreds of millions of dollars.

The report details a pattern of actions by DOE that kept USEC's facility in Paducah, Kentucky open and subsidized the development of questionable centrifuge technology at its Ohio facility, even as the company was rated as junk bond status, threatened with de-listing from the New York Stock Exchange, and ultimately spiraled into bankruptcy.

Congress had privatized USEC in the 1990s to eliminate the U.S. government from the uranium enrichment business, but as the company's technology and finances grew more precarious, its eligibility to receive a $2 billion taxpayer-backed loan guarantee disappeared and so did Congress's willingness to write a blank check. That is when DOE engaged in several transactions that failed to follow applicable laws and procedures, did not properly value the material to protect taxpayers, and did not succeed in keeping the facility alive.

"Our government has kept this uranium company on life support, wasting money and flouting the law, even though it was clear that it would end up in bankruptcy. This is the kind of government waste that Americans just don't understand," said Senator Markey, who is a member of the Environment and Public Works Committee. "It's time to commit this junk technology to the junk bin."

"For the past decade, the Department of Energy has turned a blind eye to how its actions have deeply hurt the livelihoods of so many uranium workers in western states," Rep. Burgess said. "Americans place their trust in the U.S. government to act in their best interest, and DOE has abused that trust by taking hard-earned tax dollars and wasting them on a junk project in a way that was wasteful and, indeed, illegal. I commend GAO for its non-partisan and diligent work, and for calling out DOE for acting without authority and for breaking the law."

The GAO report, which can be found HERE (http://www.gao.gov/products/GAO-14-291), had several key findings, which include:

--GAO identified legal concerns with every single uranium transactions between DOE and USEC in 2012 and 2013, violating the USEC Privatization Act and the Atomic Energy Act.

--Taxpayers lost $9 million in one of the transactions when DOE undercharged USEC for transferred uranium.

--One transaction kept the Kentucky facility open for an additional year by transferring hundreds of millions of dollars' worth of uranium through a complicated series of contracts that DOE cannot enforce or oversee.

--GAO found that DOE does not have guidance for determining the value of some leftover uranium, called "tails", which means DOE values these leftovers anywhere from $0 to $300 million, leaving huge questions about how much taxpayers may have lost in these transactions.

- GAO found shortcomings in the market impact studies used by DOE to satisfy the legal requirement that it determine uranium transfers would not adversely impact the domestic uranium market. DOE also accepted the studies' conclusions that the larger uranium transfers it planned would not harm the U.S. industry without consulting the U.S. industry.

An additional summary document of the report prepared by Senator Markey's staff can be found HERE (http://www.markey.senate.gov/imo/media/doc/2014-06-09_GAOSUMMARY.pdf).

GAO is expected to release a second report responding to the request from Senator Markey and Rep. Burgess to investigate USEC.

TNS30VitinMar-140610-4761671 30VitinMar

(c) 2014 Targeted News Service

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