DC Bureau

Spencer Abraham Cashes In

Joseph Trento — Thu, 02 Feb 2012 21:43:59 +0000

January 30 was former U.S. Secretary of Energy Spencer Abraham’s last day as the non-executive chairman of Areva Enterprises Inc, the French atomic power firm’s American operation. This marked the end of a very lucrative arrangement for both Abraham and the French government own nuclear company – mostly at U.S. taxpayers’ expense.

It all began in the 1990s when the United States’ response to disposing of 34 metric tons of plutonium from shuttered nuclear weapons programs was a proposed mixed oxide (MOX) fuel fabrication facility at the Savannah River Site (SRS) near Aiken, South Carolina. When Abraham became Energy Secretary in 2001, Areva was a key contractor for the MOX plant. According to his DOE calendars, among his first trips were to France to visit their nuclear officials and operations. Abraham maintained a close relationship with the then head of Areva, Anne Lauvergeon. In turn, not long after he left the Energy Department, Abraham cashed in and went to work for Areva and “Atomic Annie,” as she was known. In 2007, DOE broke ground on the MOX plant.

Today, the DOE’s MOX fuel plant is still under construction. It has cost billions of dollars, is over budget and behind schedule. But Spencer Abraham will never be held responsible for the cost overruns and delays. In fact, he has been handsomely rewarded.

Despite spending billions of dollars on the MOX plant, DOE has yet to line up a single customer even with massive government subsidies being offered to buy the fuel. No utility will touch it. DOE’s National Nuclear Security Administration has been playing hardball trying to get the Tennessee Valley Authority to use the fuel.

With the MOX plant, Abraham set in motion a program that will create even more high level nuclear waste at SRS with no facility or ability to dispose of it. The need for related facilities that have yet to be built or approved will add hundreds of millions of dollars to the cost. The plant is supposed to produce the MOX fuel from old nuclear bomb pits. This fuel will be more potent than the MOX made from spent fuel from civilian reactors in France. The support facilities to chemically separate plutonium from other warhead elements will cost hundreds of millions of dollars more. While separation and waste facilities await approval and construction, decrepit, giant, crumbling canyons are kept going to support plutonium disposition at enormous annual costs. To make matters worse, the waste from these processes all add to the huge amount of waste already stored in leaking tanks at SRS.

DOE’s MOX plant is the first of its kind with no indication that it will work. Even if it does work and a customer is found, the spent nuclear fuel rods will be more difficult and expensive to store safely.

But the good news for Areva is the tax paid contract is still bringing in the big bucks with no end in sight.

According to the website of The Abraham Group, Abraham started with Areva in 2006. He says he resigned “due to other roles and commitments I have undertaken …I have enjoyed my association with the company and have the highest regard for the management and team at Areva.”

Last year DCBureau published a series of articles about the French-government-owned company and their operations in the United States. At the time, the United States was in the midst of a “nuclear renaissance” and Areva was one of the main beneficiaries. In March, a tsunami swept across the coast of Japan and set in motion a series of events that made the world pause. Three reactors at the Fukushima Daiichi nuclear power plant exploded.

We reported that Areva had fueled the number three reactor with MOX fuel made in France. The hydrogen explosions spewed plutonium over northern Japan. Plutonium, a byproduct of uranium fission, is also an ingredient in MOX fuel. If inhaled, plutonium can cause cancer. It lingers in the environment for thousands of years. It will take generations to address the damage.

Enthusiasm for the nuclear renaissance in the United States and other countries waned after Fukushima, and Areva’s profits collapsed. Atomic Annie was shown the door by the French government and, as she took her leave, the handwriting was on the wall for her American colleague.

For more than 10 years both Abraham and Lauvergeon dined on their governments’ energy dime.

Abraham, like so many others in Washington, sells his influence. His website says:

“During his four years as Secretary of Energy, Secretary Abraham developed a close working relationship with the corporate leadership of energy companies as well as many energy-intensive companies. He launched several important energy studies involving CEOs and other top private sector leaders on many energy issues including nuclear, oil and natural gas, coal, and hydrogen.”

After he worked for former Vice President Dan Quayle, Abraham became a U.S. Senator from his home state of Michigan. (“The Abraham Group will also provide assistance to clients on issues in which Secretary Abraham was a key Senate leader, such as technology, manufacturing and immigration issues.”)

Six years later, in 2000, when he lost reelection, he did not go home. Instead, he became Energy Secretary. When he left the Energy Department in 2005, he did not go home. Instead, he became an executive to one of the contractors he oversaw while Energy Secretary. And now that he is stepping down from Areva, he is not going home. His group, comprised of his stafffrom the Energy Department and Capitol Hill, is signing contracts for new clients.

One association he sells is his relationship with his former Michigan congressional colleague, Fred Upton. Now the chairman of the Committee on Energy and Commerce for the U.S. House of Representatives, Upton is a key energy policy player. Upton and Abraham write opinion piecestogether.

And Abraham does not sell influence only in the United States. He sells himself to the entire world.

“Another major focus and specialization of our firm is the international energy sector. The energy business is first and foremost a global market. Our aim is to help our clients enter and operate in the international energy market, whether it is a U.S. energy company doing business in the Middle East or a foreign energy company seeking to enter the U.S. market. We provide valuable insight and help to enhance relationships with key stakeholders to meet the business objectives of our clients.”

When is enough, enough? How much money do former government officials have to make before they go home and give back to their communities rather than take money to influence their friends in Washington? Perhaps if we knew that answer, we could save the American taxpayers money. Instead of drafting ethic laws that become jokes before the ink is dry, perhaps we could just cut to the chase, cut them a check, and make them go home.

Abraham Areva Documents

The Gingrich FBI Investigation

Joseph Trento — Fri, 27 Jan 2012 17:19:08 +0000

Newt Gingrich

(Photo credit: Gage Skidmore)

On December 13 we posted a 6,400 word story about a FBI probe into Newt Gingrich when he was Speaker of the U.S. House of Representatives and his second wife, Marianne. It was a serious effort to report on a serious matter. My naïve hope was that my colleagues would follow our course and advance this story by expending more resources and pursuing the leads.

We had success getting a number of key people to go on the record and lay out the story. We got key FBI documents from a second Bureau source so we knew what we had was real. We tried to put a complex story into a coherent and verifiable narrative. We contacted three major news organizations about the story before it ran on our website. We offered each of the organizations contact information for our sources, the FBI documents and other information including taped interviews. All three news organizations said they would do the story – yet none of them did.

If you have followed the story then you know most of the details. What you do not know is the story first came to the National Security News Service in 1996 when Sarkis Soghanalian told us about the FBI investigation and Marianne Gingrich’s role. By 2002 I had been in contact with the three major media outlets and had provided them with information confirming the FBI investigation. I was assured they would pursue the story. For almost a decade I got promises but no story until James Grimaldi, who does not work for any of the three organizations, wrote about it in The Washington Post and Nightline ran an interview with Marianne Gingrich.

Though our story had run several weeks earlier, no serious effort was made to hold either Gingrich accountable. Ross mentioned the trip by Mrs. Gingrich to Paris to meet the arms dealer but never mentioned the fact that she had managed to deliver her husband to a fundraiser in Miami in July 1997 at the request of the arms dealer. Jack Abramoff associate Ben Waldman had promised the arms dealer, Sarkis Soghanalian – on FBI tape recordings – that Speaker Gingrich could get the Iraq embargoes lifted in exchange for large amounts of money. When the arms dealer, under FBI instructions, demanded to meet with the Gingriches as proof Waldman could deliver on his promises, on cue, the Gingriches showed up in Miami for the event. But the FBI sting was called off at the last minute by Washington, and Soghanalian was prevented from attending the fundraiser and meeting with the Speaker and his wife.

Ross let Marianne Gingrich off the hook in his interview and allowed her to offer a denial that contradicted what she had told me in several hours of conversations. At no time did Ross ask for our interviews to compare what she had told me to what she had told him. Instead, Marianne Gingrich turned attention away from her involvement in the FBI investigation when she spoke about her husband’s alleged request for an open marriage. Like lemmings, the rest of the media followed the open marriage angle.

Had CNN’s John King asked Gingrich why he and his wife had attended a Miami fundraiser at the behest of a notorious arms dealer, Gingrich might have actually felt compelled to explain his presence.

Perhaps the response to John King’s question would have been different if King had asked Gingrich to call on the FBI to release the wiretaps so the public could judge for themselves whether or not the former Speaker had used his position of trust to solicit a bribe from the arms dealer.

N.Y. Gov. Andrew Cuomo Sidesteps Natural Gas Hydrofracking Controversies

Peter Mantius — Wed, 11 Jan 2012 15:46:07 +0000

ALBANY, N.Y. — Ignoring taunts from anti-hydrofracking protestors marching outside, New York Gov. Andrew Cuomo delivered a nearly hour-long State of the State address to lawmakers Jan. 4 without mentioning the hot-button gas drilling technique.

In his speech, the governor skipped over a section of his prepared remarks that had promised to deliver in 2012 both the state’s final rules for new gas well permits and recommendations from his own gas drilling advisory panel.

Asked about the omission, Cuomo spokesman Matt Wing said of his boss’ hydrofracking policy: “We are still waiting for the facts … We base everything on facts.”

While he’s been hunting facts, the governor has been postponing tough decisions on how to adequately fund state environmental regulators and — even more challenging — how to tax the industry.

He has also sidestepped controversial stands on which local and regional bans on hydrofracking are valid and on whether the state needs to set up a damage recovery fund paid for by gas drillers.

Gov. Andrew Cuomo

If Cuomo has stayed above the fray, the state Department of Environmental Conservation sits squarely in the center of the storm over whether potential economic benefits from hydrofracking the Marcellus Shale outweigh the risks to state water quality. The DEC closes a multi-year comment period on its proposed rules for well permits Jan. 11.

The DEC has received more than 18,000 comments on its latest proposed Supplemental Generic Environmental Impact Statement (SGEIS), which includes conditions for well permits. Energy companies will use the SGEIS as the basis for their applications for permits to conduct water-intensive hydraulic fracturing at new gas wells tapping the Marcellus Shale.

The agency will not respond to each comment, but it has promised to respond to each point raised before granting any new permits. And DEC Commissioner Joe Martens, who Cuomo appointed during his first days in office last January, has said permitting will need to move slowly because the DEC remains critically understaffed.

Such regulatory delays frustrate gas drillers and those who have leased land to them, as well as business groups like the Associated General Contractors of New York State.

Pro-drilling advocates argue that New York is sitting on the sidelines while gas drilling booms are lifting states like North Dakota and Pennsylvania out of recession.

Mike Elmendorf, president of Associated General Contractors, says people in New York’s Southern Tier look across the border to northern Pennsylvania and “scratch their heads as they see the sudden influx of jobs and economic growth in areas that have been stuck in neutral or going backwards for years.

Mike Elmendorf

“Right now, the Southern Tier is just getting the scraps, the overflow at their restaurants, hotels, airports.”

Meanwhile, the anti-drilling coalition has broadened considerably beyond environmental advocates to include a host of scientists, physicians and community leaders who worry about threats to water quality and a host of so-far untallied infrastructure and social costs.

“Gov. Cuomo: If you can’t protect NY water, you can’t become president,” one protester’s sign warned the governor as he prepared to deliver his State of the State speech.

Diverse groups have argued that the understaffed DEC is not equipped to handle the unique threats presented by an industrial process as invasive as high-volume fracking.

Martens himself has estimated that the DEC will need at least 200 new employees to oversee gas well permitting and regulation over the next five years. Even advocates of drilling favor big increases in the agency’s handful of inspectors, but the source of the funding to do so hasn’t been identified yet.

One potential source, which is popular across the country, is a state severance tax on natural gas as comes out of the wellhead. Virtually every state with significant gas drilling imposes a severance tax to cover regulatory costs, road repair and in some cases schools. For example, Texas collects at a rate of 7.4 percent.

However, neighboring Pennsylvania does not collect a severance tax, and the industry fiercely opposes one in either Pennsylvania or New York.

If Cuomo decides not to tangle with the industry over the severance tax, he will need to find another major source of funds in order to break with New York’s long tradition of shortchanging the agency charged with protecting the environment.

Martens’ predecessor as Commissioner of the DEC, Pete Grannis, was fired in late 2010 after the leaking of a memo that detailed how budget cuts would cripple his agency’s efficiency.

Pete Grannis

Grannis’ situation was nothing new. In 1994, an audit team from the Interstate Oil and Gas Compact Commission found the DEC’s “budget and personnel allocations are not commensurate with its program needs, causing substantial deficiency in program effectiveness.”

The Oklahoma City-based IOGCC’s 12-person team also criticized the DEC for failing to codify its conditions for issuing well permits into formal state regulations. The audit group said the agency should begin the rule-writing process “as soon as possible.” Eighteen years later, it still has not happened.

Martens has promised to write formal state regulations that reflect the permit conditions spelled out in the latest SGEIS — eventually — but he has not committed to a timetable. He did say that he expected the DEC to begin issuing Marcellus well hydrofracking permits before the rules are put in place.

That stance has fueled criticism that the DEC is more focused on the financial interests of the gas drilling industry, in which foreign entities hold major stakes, than on citizens of New York.

In October, more than 100 physicians and health care professionals signed a letter to Cuomo to protest the failure of the SGEIS to assess fracking’s impact on human health.

“There is a growing body of evidence on health impacts from industrial gas development,” the letter said. “In Texas, Wyoming, Louisiana, North Dakota, Pennsylvania, and other states, cases have been documented of worsening health among residents living in proximity to gas wells and infrastructure such as compressor stations and waste pits. Symptoms are wide-ranging, but are typical for exposure to the toxic chemicals and air and water pollutants used in oil and gas development and can often be traced to the onset of such operations.”

A month earlier, dozens of scientists signed a letter to Cuomo stating that the DEC’s rationale for banning fracking within the New York City and Syracuse watersheds while allowing it elsewhere in the state had no basis in scientific fact.

New York has 70,000 miles of rivers and streams that you can help keep clean - NY DEC

The agency said the two watersheds qualified for the ban because their public water supplies lack filtration systems to purify water contaminated by fracking. The scientists’ letter pointed out that the filtration systems that do exist in municipal water facilities in upstate New York where fracking would be allowed are not capable of filtering fracking-related contaminants out water. Therefore, the scientists conclude, since the agency has issued an unsupported justification for treating the regions differently, it should reconsider its policy.

The DEC has not given any public indication it will budge on the points raised by either the doctors or the scientists.

However, Martens has taken action to address perceived shortcomings in the SGEIS about the socio-economic impacts of fracking the Marcellus Shale.

The analysis by an outside consultant to the DEC, Ecology and Environment Inc., attempted to quantify potential benefits in somewhat greater detail than it quantified potential costs. Martens deemed the consultant’s effort “a little thin” and ordered E&E to go back and try again.

In a followup letter to Martens, economist Jannette Barth noted that E&E failed to adequately analyze fracking’s impact on home values, home mortgage and insurance eligibility and the use of eminent domain, as well as the costs of damage to the environment and human health and the costs of repairing highways.

Concerns about those potential costs have led many upstate New York towns to enact local bans or moratoriums on fracking based on their zoning powers granted under the state constitution.

But it is not clear whether they will be enforceable due to a legal challenge. A Colorado-based driller has sued the Town of Dryden over its fracking ban, claiming that the DEC’s authority to site gas wells supersedes all local zoning authority. That court case is pending.

Meanwhile, bills in the state legislature attempt to clarify the primacy of local zoning power, but Cuomo has not weighed in yet.

Neither has Cuomo lent his support to a proposal by State Comptroller Thomas DiNapoli for an industry-financed remediation fund that would quickly cover the costs of accidents or damages caused by gas drilling.

Thomas DiNapoli

DiNapoli, who hired former DEC head Grannis as his No. 2 man early last year, favors using surcharges on well drilling permit fees to finance the fund. DiNapoli has also stated that gas drillers should be required to obtain substantial bonds on each well they drill.

Assemblyman Robert Sweeney, chairman of the New York Assembly’s Committee on Environmental Conservation, has taken up DiNapoli’s idea and introduced it as a bill. Cosponsors include Assembly Speaker Sheldon Silver.

The legislation is targeted to address crises such as the one faced by a group of residents of Dimock, Pa., who blame nearby well drilling by Cabot Oil & Gas Co. for ruining their private well water.

Cabot had supplied the residents with uncontaminated water until November, when it suspended water deliveries to those who declined a settlement agreement, according to Bloomberg News.

But Elmendorf of the Associated General Contractors warned that the state should move cautiously on the mediation fund concept. “There is a limit to what this industry or any industry will accept,” he said. “New York has not been a very hospitable place for economic development. You have to weigh the pros and cons for anybody who wants to create jobs.”

Parched for Water — Controversial Southern California Desalination Pilot Projects

David Rosenfeld — Wed, 04 Jan 2012 18:37:28 +0000

King Harbor Marina in Redondo Beach, California.

Tucked behind the northeast corner of King Harbor Marina in Redondo Beach, California, there is a $10 million experiment taking place over how best to turn the salt water of the Pacific Ocean into drinkable tap water.

The demo plant here represents the second of two pilot projects – the other one previously in El Segundo began 10 years ago and has since been concluded. The two pilots have cost at least $18 million. A review of board meeting documents by the nonprofit Desal Response Group reveal more than $23 million in construction and consulting services since 2006 related to the development of these two pilot projects.

Out of more than a dozen water agencies in California thinking about building a full-scale ocean desalination facility, none have spent as much time and money on demonstration projects than the West Basin Municipal Water District in Southern California.

The public agency, governed by a five-member board of directors, controls a $166 million annual budget and distributes water wholesale to 17 cities and unincorporated areas of Los Angeles County. West Basin would also be the chief sponsor of a local desalination plant.

El Segundo Plant

District leaders say they need this second pilot plant because desalination facilities are extremely site specific, and they could possibly build one at either of the two locations. The Redondo plant, which began operating earlier this year, is expected to run until January 2013 with the potential for another two years if there is still value, say district engineers.

“This board wants to be responsible,” says Rich Nagel, West Basin district general manager. “Are we going to 100 percent mitigate every environmental impact? I don’t know if that’s possible. But we’re going to do a good job at trying.”

Environmental groups have opposed ocean desalination in general for decades, painting it as a costly alternative that misdirects funds from conservation. They also point to desalination’s heavy carbon footprint and its possible harmful effects to marine life such as small fish and even seals that could become entrapped in the water in-take pipes.

Legal challenges have dragged out the permitting for more than 10 years on similar, proposed plants in Carlsbad and Huntington Beach. The possibility of desalination coming to Redondo has already sparked heated criticism from Redondo Beach City Councilman Bill Brand.

“We ought to be tapping into conservation much more than we are,” Brand said. “We shouldn’t feed our wasteful ways with a new desalination plant.”

A guided tour through the Redondo Beach facility starts with a review of the six-member West Basin board members, whose portraits line the wall. There is an educational exhibit about water conservation, an explanation of the looming water shortage facing Southern California and the undisputed need for ocean desalination. The tour also covers energy recovery technology, a new type of screened water in-take and an experiment with discharging the residual brine of concentrated salts and other elements.

“Our goal would be to walk away from this demonstration period having a foundational approach to how we’d operate a full-scale facility,” says Phil Laurie, principal engineer.

The plant itself, which began operating in February, produces 35 gallons of freshwater per minute, which officials say is an amount necessary to demonstrate full capacity. Most other pilot projects, however, such as one in Dana Point process much less, around 4 gallons per minute.

After touring the exhibit recently, Azita Yazdani, founder of Exergy Solutions, a technology company that builds industrial water recycling facilities, said at most the processing plant should have cost around $3 million.

“When someone told me they possibly spent more than $10 million on all this, I said, ‘You’re kidding me,’” Yazdani says.

District officials dispute the amount. “We’re being very diligent and good stewards of our ratepayers’ money,” Laurie says. “The expenditure of these funds now will give us many folds return in the full-scale development.”

West Basin Municipal Water District's recycling facility

So far the district has not committed a dime to a full-scale plant. But they have stated their goals. In order to reduce imported water demand by 2020, part of California’s overall water plan, West Basin expects to bring water imports down by 10 percent with desalination, which would amount to a 20 million gallon-per-day plant. A facility of that size would cost around $400 million and require roughly 40 million gallons-per-day of seawater.

At the same time, they want to double sewer water recycling from 40 million gallons per day to 70 million through a program that has gained national recognition. Residents too would be expected to reduce consumption by about 20 percent. All of it put together would reduce the district’s dependence on imported water from 66 percent today to 33 percent by 2020, Laurie said.

Desalination opponents want to see water use drop even further. The district has already reduced consumer use by about 15 percent over the past year. But today, overall per person water use is still somewhat high. In Redondo and Hermosa, residents currently use about 116 gallons of water per day. In Australia, they brought water use down to around 60 gallons per person before turning to desalination.

“It may be a bit ambitious to think people will just shut off their water,” said Bob Muir, spokesman for the Metropolitan Water District of Southern California, which distributes imported water to regional water agencies. As part of an incentive program, Metro is offering water agencies $250 per acre-foot toward water they get from desalination. The incentive represents a huge taxpayer subsidy for burgeoning projects. Muir says the agency has not lost sight of conservation, but that it is about tapped out.

“Since 2000, we’ve really encouraged people to make wise choices when it comes to their landscaping because it can make a difference,” Muir said.

Making the case

It might be difficult to tell from the sprinklers and manicured grass, but Southern California is running out of water.

The state’s latest drought designation was officially lifted last year, yet according to many experts, if development continues at its present pace and people keep using about the same amount of water, Southern California could face skyrocketing water rates within 10 to 20 years.

Southern California, and the South Bay in particular, is largely dependent on imported water. In Manhattan, Hermosa and Redondo as much as 80 percent of the water that rinses out shampoo in the morning or washes the dishes and clothes originates hundreds of miles away.

A 400-mile aqueduct carries water each day over mountains and across valleys from the San Joaquin Basin near Sacramento – as does another pipeline from Lake Mead on the Colorado River. Most of it goes to agriculture and the growing needs of urban Southern California. The source of that water, however, is drying up due to global climate change, and, when water levels get too low, court orders limit imports to protect endangered species such as salmon and Delta smelt.

Water experts predict that California could soon face its greatest water challenge yet. The question is whether state and local leaders will impose the strictest conservation measures or resort to the costly, energy intensive method of seawater desalination.

“We’re looking at desalination because of some major changes to the water system, such as the bay delta and the ability of judges to interrupt the water flows,” said Ron Wildermuth, manager of West Basin Municipal Water District’s public information and conservation. “There’s climate change, more evaporation, longer droughts, heavier rain that goes to the ocean. The Colorado River is going to be a drier river. If we weren’t examining local alternatives, we wouldn’t be doing our job.”

Conservationists argue that desalination is too energy intensive. Removing salt from seawater requires about 3,400 kilowatt-hours per acre-foot of freshwater produced, based on a study by University of California at Santa Barbara researchers. By comparison, a typical residential solar panel might produce the same amount of energy in an entire year, and the average family inside might use about a quarter of an acre-foot of water each year.

Almost all of today’s ocean desalination plants use reverse osmosis technology, where saltwater under about 800 pounds-per-square-inches of pressure is driven through woven membranes. The process requires large amounts of energy, and it can be harmful to marine life.

California's Marine Life

Desalination’s benefits would allow the region to import less water, which comes with its own energy and environmental costs. It takes about 3,100 kilowatt hours of electricity to pump water from the Delta compared to around 3,400 for desalination.

Companies trying to sell desalination to public officials claim to be able to produce water for around $1,000 per acre-foot, an amount equal to the average cost of imported water today. But most accounts put the cost of desalination, based on energy prices in the United States, at more than $3,000 per acre-foot. Water officials generally believe they can produce it for around $1,400.

Locally, West Basin officials say desalination will directly offset the amount of water the district imports. But even this claim seems wishful when considering that overall imports to Southern California will not diminish, because ongoing demand exists from agriculture and other inland communities, according to Muir.

“I don’t think it’s ever been explained as a way to decrease the use of imported water. It’s really to provide more water reliability for the region,” Muir said. “Every drop of water desalinated will free up the like amount of water for other uses.”

Others see desalination as an emergency measure. If, for instance, the levies holding back the San Joaquin Basin were to burst because of an earthquake, which some analysts predict, Southern California could be without a large part of its water supply.

“Conservation is not the same as water supply,” says Redondo councilman Steve Diels, who supports a possible desalination plant in the city. “It does appear that we are going to need additional supplies in the future. And we can’t rely on Northern California.”

The push for desalination ebbs and flows in California with the ongoing cycles of drought and abundance. Santa Barbara built an ocean desalination plant in the 1990s during a drought. Now it sits idle, too costly to operate. Another plant in Catalina is reserved strictly for emergencies. The City of Los Angeles relieved its water woes through strict conservation measures. And discussions in Long Beach to build a plant have largely subsided.

Plans to bring desalination to the South Bay have been percolating among West Basin officials for more than a decade. Unlike privately-owned ventures in Carlsbad and Huntington Beach, West Basin officials say they want to maintain public ownership.

Carol Kwan, the West Basin board member representing the South Bay beach cities, is a staunch supporter of desalination. She said the district is exploring building a full-scale plant at this point, but nothing has been approved so far.

“Because it’s so controversial we can’t even publicly say much about it,” Kwan says. “It’s no sure thing at all.”

Carol Kwan, CalDesal Board Member

Kwan, who has served on the West Basin board for more than a decade, has shared time on the board of the American Membrane Technology Association and the New Water Supply Coalition – both pro-desalination trade groups – as well as CalDesal, a pro-desalination lobbying group funded by California water agencies. She also took a trip to Australia to visit desalination plants there.

Critics of desalination feel board members receive a one-sided perspective from the various trade groups and industry representatives at conferences such as the annual California Water Association meeting.

“Sometimes they lobby pretty hard,” Kwan says. “You have a few private firms that would like to see if a public entity would like to privatize. With all due respect you listen to them.”

Conner Everts, who heads the non-profit Desal Response Group, would rather see the district resist desalination at all cost.

“They haven’t paid attention to some of the other stuff because they have redirected money to desalination,” Everts said.

Environmentalists historically have opposed desalination plants largely due to the water intake issues. Wildlife can be sucked in along with the ocean water brought in for treatment. Those concerns have lessened as desalination technology has improved, which is partly the function of pilot projects.

A plant in El Segundo or Redondo would likely share the existing surface water in-take pipes used by the power plants there now. The state of California is in the process of outlawing these same pipes in coming years when it comes to power plants.

Surfrider Foundation Ad

“That just exacerbates the problem in our mind,” said Joe Geever, a spokesman for Surfrider Foundation, which has opposed multiple desalination plants in courts over the past 10 years. “If you’re going to protect marine life, you have to protect it from all of these industrial in-takes.”

As part of the demonstration project in Redondo, engineers are experimenting with a new wedge-wire screen to minimize harm at the ends of those pipes. So far, the technology is working, according to West Basin officials.

By 2020, AES Corporation, an energy company, hopes to decommission the existing power plant and build a newer, more efficient plant with a smaller footprint and without ocean cooling water at the same location, said Eric Pendergraft, president of AES Southland.

“We’re going to have property available open to all types of uses including desalination if it’s supported by the city and the local community,” Pendergraft said.

The energy company is currently leasing space adjacent to its Huntington Beach generator for another proposed desalination plant that would also use the water in-take pipes targeted by the state. He acknowledged the existing pipes currently result in the loss of some marine life, but says it is negligible.

“The operation of those ocean water cooling systems certainly result in the mortality of marine life, but it does not, in our view, change the productivity of the overall marine environment,” Pendergraft said.

Redondo Beach Waterfront and AES Plant

Any talk of a new industrial plant in Redondo also brings up the heated debate over development around the AES plant.

“I’m mainly opposed to the re-industrialization of the Redondo Beach waterfront,” says Brand, who led a citizen’s initiative to shut down the power plant and build a park. “A desalination plant is more industrialization of our waterfront and an inappropriate use of what’s there now.”

Manufactured crisis

Water experts say California cannot conserve its way out of an impending water crisis, citing a landmark Scripps Institute study in 2008 saying Lake Mead had a 50 percent chance of going dry by 2021.

Conservationists say it is a manufactured crisis, especially considering more than half of all household water in Southern California is used outdoors. A Pacific Institute report, Waste Not, Want Not, said that California’s water needs could be met in the foreseeable future with the use of “water-saving technologies, revised economic policies, appropriate state and local regulations, and public education.”

“We don’t have a water crisis, we just mismanage the water we have,” Everts says.

Debbie Cook, a former Huntington Beach City councilwoman, believes water agencies could drive conservation by imposing more drastic tiered pricing structures.

“Every year they sell this idea that we are in a drought,” Cook says. “Let’s start to learn to live with the normal weather patterns of Southern California. If we had a drought we would price water appropriately, which we don’t.”

Due to record rainfall last year Southern California will have more water in storage than it has ever had as a region, says Muir, spokesman for Metro, which controls imported water flows. But that does not change the outlook for desalination, he says.

“We really have an obligation in Southern California to develop any and all of our resources,” Muir says. “Whether it be desalination, continuing to recycle supplies, conserve supplies or manage efficiency. It’s not an either or proposition. We can’t invest in one alternative. We need a series of alternatives to maintain reliability in the coming decades.”

Are we conserving enough?

West Basin officials insist they are doing as much conservation and recycling as they possibly can.

“It’s not like we’re looking at the ocean to solve all our future water problems,” says Phil Laurie, principal engineer. “The mainstay of our expansion will be conservation and recycling.”

The district currently produces five types of potable water from recycled sewer water, a process similar to desalination yet requiring roughly a quarter of the energy.

In order to encourage conservation, California Water Services Company offers subsidies for low-flow nozzles and other water saving devices, but it is up to cities to enforce reductions if they so choose, he said.

“We’re interested in working with all our cities to identify ways that make sense to that community to reduce water use,” Jenkins said. “Desalination would be one more water supply option that can be drawn upon if needed. It’s important to keep all these water supply options in context and how they interact with one another.”

In July 2009, Manhattan Beach restricted outdoor irrigation during the day and within 24 hours of any rainfall. Those measures were lifted when the state drought order was repealed, but it is still having an impact on consumers, said Raul Saenz, utilities director.

Over the past two years, Manhattan residents lowered their water consumption by 16 percent, said Saenz, who credits the success largely to an education campaign by LA Department of Water and Power. Even before the city instituted the water restrictions, people reduced consumption by about 20 percent, he said.

“I was so incredulous of the numbers even though I had witnessed them begin to diminish, I sent people back into the field to have our meters calibrated to be absolutely sure we were seeing what we were seeing,” Saenz said.

In January 2010, Manhattan created tiered pricing, where it costs more when residents use more, which pushed more reductions. After the drought was lifted earlier this year, the numbers rose a bit, yet they are still down 16 percent from 2008 levels, Saenz said.

“While the pocketbook is important, in a community like Manhattan Beach if you address people with advertising and various incentives and you keep them informed, people will respond.”

Newt Gingrich, Marianne and the Arms Dealer: A Buried FBI Investigation

Joseph Trento — Tue, 13 Dec 2011 23:25:17 +0000

Newt Gingrich and second wife Marianne Gingrich.

On October 5, Sarkis Soghanalian, once the world’s largest private arms dealer, died at 82. He had sold weapons to scores of dictators including Saddam Hussein, and he took many secrets with him to his grave. But one secret he did not take involves Newt Gingrich when he was Speaker of the U.S. House of Representatives. DCBureau has learned that Gingrich was at the center of a U.S. Justice Department criminal investigation in the late 1990s for a scheme to shake down the arms dealer for a $10 million bribe in exchange for Gingrich using his influence as Speaker to get the Iraq arms embargo lifted so Soghanalian could collect $54 million from Saddam Hussein’s regime for weapons he had delivered during the Iran-Iraq War.

Soghanalian was an FBI informant and was responsible for launching one of the most sensitive and secret investigations in FBI history involving the former Speaker and his second wife. According to Marianne Gingrich, it took the direct intervention of then FBI Director Louis J. Freeh to “get the investigation called off.” Freeh did not return emails and telephone calls for comment.

Former FBI Director Louis Freeh

A convicted felon with a long history of working with United States intelligence, Soghanalian cooperated with the FBI in the two-year investigation which included secretly taping emissaries with connections to Newt and Marianne Gingrich. The cast of characters include personalities no Hollywood screenwriter could invent. One participant was involved in the Florida SunCruz scandal that resulted in the gangland-style killing of one of the cruise lines owners. Another was a used Rolls Royce salesman who pretended to be part of the international arms trade. A third was a penny stock promoter.

For several years, FBI agents instructed Soghanalian to get beyond the men who claimed to have ties to Gingrich and insist upon meeting with Gingrich and his former wife directly to prove that they could deliver the Speaker. But just before Soghanalian was to meet Gingrich and his former wife at a private Miami Beach fundraiser on June 8, 1997, arranged by one of these men, FBI headquarters called off the investigation. Washington ordered the FBI in Miami not to secretly tape record the fundraiser and to stop Soghanalian from attending. Marianne Gingrich, in a series of telephone interviews from her homes in Georgia and Florida, acknowledges meeting the arms dealer in Paris but insists her participation was to solicit an investment from Soghanalian for her former employer, the Israel Export Development Corporation (IEDC). She says the company was running short on cash and her meetings with the arms dealer had nothing to do with Iraq and arms dealing. Newt Gingrich did not return repeated telephone calls for comment.

Soghanalian said in a series of interviews before his death that men associated with Marianne Gingrich convinced him that Speaker Gingrich would use his influence to lift the embargo and allow Soghanalian to collect the millions of dollars owed to him by Iraq “in exchange for a $10 million payment to Gingrich through his associates.” Soghanalian was to pay the money – not to the Gingriches directly – but through a think tank, The Institute for Advanced Strategic & Political Studies (IASPS), which has offices in the United States and Israel.

Saddam Hussein’s government owed Soghanalian for arms he had delivered – all with the permission and knowledge of the Reagan and George H.W. Bush administrations, but he could not be paid because Iraq was under a U.S. and United Nations embargoes. After his release from prison in the mid-1990s, Soghanalian settled in Paris and started rebuilding his arms business. In the United States he faced a $54 million IRS tax lien for profits he had never received from the Iraq arms sales. He told associates that he was trying to figure out a way to collect the monies owed to him. One of those friends was a London-based Kurdish Iraqi who had close contacts with Israeli intelligence and a car salesman from Miami named Morty Bennett.

Bennett saw Soghanalian’s money problems as an opportunity. He says he passed the information from his Kurdish friend to Howard Ash, a friend from the Rolls Royce dealership in Miami where Bennett worked. Ash was a fundraiser for the IASPS, the think tank, and had worked at the IEDC with Marianne Gingrich.

In May 1995, while visiting his wife, Shirley, and his grandchildren in Palm Springs, California, Soghanalian got a phone call from Bennett. Soghanalian had never heard of him before, but Bennett says he used the name of their mutual acquaintance in London who had experience in the Kurdish arms trade to get Soghanalian to talk to him. Soghanalian said before his death, “My ears perked up when he said he had an arms deal for me in Ecuador. There are a lot of pretenders in the business, but he seemed interesting, and I always need new information for my FBI friends, so I met with him.”

That May 1995 phone call from Bennett to Soghanalian resulted in a two-year FBI investigation so sensitive that details have never before been made public. The goal of the investigation, according to a Justice Department official, “…was to see if Gingrich, through his then wife, was involved in an attempt by political associates to solicit bribes.” One of the team of FBI agents involved in the case says, “The investigation was called off before we were permitted to finish making a case.” Another agent says it was just “too politically sensitive. We got so close and when the target was in sight, we were stopped by Washington.”

According to Bennett, the entire scheme to solicit $10 million dollars from the arms dealer was Howard Ash’s idea. Ash did not return repeated calls for comment left on his answering machine or with a woman who identified herself as his employee.

Soghanalian said of when he and Bennett met, “Bennett claimed that he and a partner named Howard Ash had an ‘in’ with Speaker Newt Gingrich on behalf of the Israelis…They asked me if I would invest with them in the deal.” The “in” that Bennett and Ash had was Gingrich’s then wife Marianne. In addition to being a fundraiser for the IASPS, Ash was also Marianne Gingrich’s boss at the Israel Export Development Corporation (IEDC). Soghanalian said, “Bennett told me they just hired her before Newt was made the Speaker.” In early 1995, Marianne Gingrich says, she was promoted above Ash to Vice President of Marketing. “He resented my promotion,” she says.

Robert Loewenberg, Head of the IASPS.

Marianne Gingrich says her boss at the IEDC, David Yerushalmi, called and asked her to make the trip to Paris. Yerushalmi served as counsel to both the IEDC and the IASPS. She says that by this time the IEDC was running out of money and she was no longer on the payroll. “David told me that Howard Ash and his wife had been at the Parc Monceau Hotel in Paris for days and still did not have an answer from this arms dealer and that Ash said he needed me to come to get an answer. He paid for my expenses and even though it was at an inconvenient time, I made the trip.” She says she thought the meeting was to win Soghanalian over as an investor in the IEDC. When asked why she would be willing to meet Soghanalian, a convicted felon, when she was no longer being paid by the IEDC, she says because her friend, Robert J. Loewenberg, the head of the IASPS, and her former boss at the IEDC, David Yerushalmi, “wanted me to meet with the arms dealer in Paris as a potential investor. …I believed that Robert Loewenberg had good ideas about free trade in Israel and this would help keep it going.”

David Yerushalmi

Marianne Gingrich says she did not have a good relationship with Ash after she was promoted over him. She says, “He (Ash) really wanted me in Paris, and I thought that was a little strange. He just never had been very nice to me…but he was nice in Paris.” David Yerushalmi, who says he hired both Mrs. Gingrich and Ash, disputes Mrs. Gingrich’s allegation that there was tension between them.

As Marianne Gingrich tells it, she did not expect her job back at the IEDC if Soghanalian made the $10 million investment because she was already too busy “working with Newt on his book projects. I let him attend a meeting by himself on one of the book deals, and he left more money in that meeting than I would have made in a year working at the export zone. I decided then and there Newt needed me to handle these things.”

Mrs. Gingrich made clear that throughout their marriage money was an issue. “We were so pressed he could not even set aside money for congressional retirement until 1991. Living on his paycheck was very, very hard… Newt was like a child when it came to handling money,” she says.

Morty Bennett says he was also in Paris for the meetings with Soghanalian, Mrs. Gingrich, Howard Ash and his wife. As Bennett tells it, he began to “feel uncomfortable with what Ash was trying to do with Sarkis. My antennae should have been sharper.”

Hotel Mermoz, Paris

Bennett stayed at the Hotel Mermoz, which is around the corner from the Israeli Embassy in Paris and was a few blocks from Soghanalian’s luxury apartment on one of the most fashionable residential areas in Paris, not far from the Elysees Palace, home of the French president.

Bennett says that while he was at the hotel between meetings with Soghanalian, the Mermoz manager called him saying a man was asking whether Mrs. Gingrich was staying in his room. “I got on the phone and the man was Newt Gingrich. I explained to him she was not staying at my hotel.”

According to Mrs. Gingrich, her interest in Israel began on an eight day trip to Israel she and her then husband took in August 1994, paid for by the American Israel Public Affairs Committee, Israel’s largest Washington, D.C. lobbying organization. Mrs. Gingrich says Robert Loewenberg, the president of IASPS, was impressed with “my knowledge of planning and asked me to attend some meetings in Israel regarding the free trade zone.” She says that led to her being offered the position with IEDC. “Robert Loewenberg was telling me about some of the problems with the Knesset. The head of the Israeli central bank was opposing the free trade zone. I looked on the itinerary, and I went with him to a meeting and asked some good questions and the banker changed his mind. It had nothing to do with Newt. I went to the meeting. The guy kept calling me. He didn’t care about Newt. At one point he asked me to make a trip to Israel with some business people.” After the meetings in Israel with Loewenberg, the IEDC hired Mrs. Gingrich. She says that one of the reasons she took the job was “we did not have enough money. Money was always an issue with Newt…”

According to David Yerushalmi, there was no connection between IASPS, the think tank, and IEDC, the organization working for a free trade zone in Israel. But Mrs. Gingrich tells a different story. She says, “The same American Jewish funders supported both organizations and Howard Ash raised money for IASPS while he worked for the IEDC.”

A group of very wealthy Americans provided the funding for IASPS and IEDC. Both organizations shared some employees. David Yerushalmi, who represented both organizations as general counsel, wrote in an article:

“In June of 1992, a group of leading U.S. Jewish businessmen formed a company that was to become the Israel Export Development Company (IEDC). The founders of IEDC, men like Robert Tishman, Larry Tisch, Sy Syms and Larry Silverstein, were ardent supporters of the State of Israel. But like many Americans, they were leery of investing directly in Israel. However, it was their fears that made them ready to support the rather grandiose proposal embodied in IEDC’s mandate… To contemplate a real direct investment in Israel was not in the cards. The reason was simple: Israel didn’t play by any fixed rules…It was a land without any real legal protections or level playing fields. The horror stories by these men and their friends about ‘doing business’ in Israel were legion. Until IEDC came along, this was a nasty truth better kept under wraps and avoided. Philanthropy – yes; entrepreneurship – no.”

Sarkis Soghanalian and assistant Veronique Paquier the Paris air show.

In Paris, Soghanalian openly and frequently talked about finding a way to get the Iraq embargo lifted. He said he had been approached by “people connected to Newt Gingrich who were setting up a meeting with his wife to talk about what could be done for me.” Tony Khater, who was Soghanalian’s majordomo, confirmed the plans for the meeting with the Speaker’s wife.

Soghanalian said Howard Ash had brought up Mrs. Gingrich’s name “to convince me they were serious.” Soghanalian said he called a number of people to try to find out if the IEDC was a legitimate operation.

New York developer Larry Silverstein, who is best known as the main lease holder on the World Trade Center complex in New York, backed both the IASPS and IEDC. When word got out in 1995 that the IEDC had hired Mrs. Gingrich, Silverstein told The Wall Street Journal that her husband was one of several members of Congress heavily lobbied to support the Israeli free trade zone proposal. Mrs. Gingrich, who had no experience in international trade, said at the time, “If I were going to get a political payoff, it would not be for the amount of money I am making.” She said her salary in August 1994 was $2,500 per month, “plus commissions.” Then Speaker Gingrich told The Baltimore Sun, which broke the story of Marianne’s employment, that his wife had previously owned her “own business.”

In a recent interview, Marianne Gingrich says she got the job at the IEDC because she had impressed her bosses. “I was able to contact a lot of business people, and I started calling them, especially Jewish people. I went to the head of Home Depot, for example. I tried to identify them and say, ‘Here are opportunities.’ The Jewish community is an incredible community…I thought it was a good idea…I thought it would help Israel.”

Calls to Larry Silverstein’s office for comment on this story were not returned.

No one involved with the IASPS or IEDC knew that after that first telephone call from Morty Bennett to Soghanalian, the arms dealer stopped by the Miami FBI office to see his old friend, Richard Gregorie, an assistant U.S. attorney. Gregorie, a veteran public corruption prosecutor in the U.S. Attorney’s office, had used Soghanalian as a source for years.

Sarkis Soghanalian and Tony Khater in a helicopter over Iraq, 1984.

At the time, Soghanalian had been helping the FBI with several investigations that were unrelated to this one. Soghanalian told Gregorie and several FBI agents that he had a “bad feeling” about why he had been approached. The agents advised him “to make arrangements for another meeting and to keep track of all the details.” Tony Khater, Soghanalian’s top aide, says, “The FBI was aware of every contact Sarkis had with these people. The FBI told Sarkis to push for meetings with Gingrich and his wife. The FBI instructed Sarkis to attend the meetings, if they could be arranged.”

Morty Bennett and Soghanalian met with Howard Ash and Marianne Gingrich in Paris in July 1995. Soghanalian was extremely busy with business generated by the recent Paris Air Show, but he tape recorded the conversations with Bennett and Ash and provided copies of those tapes to the FBI.

Mrs. Gingrich says Loewenberg and Yerushalmi sent her on the trip to meet Soghanalian because “Howard Ash has been over there for weeks. His wife is over there. Can we wait it out, can we work it? The company needed money to last. They called me up and asked me to go over there. I didn’t get paid to go to Paris. They paid for my expenses, but the trip came at a bad time for me. I had to rush over for the weekend and come back because my nephew was coming to visit.”

Soghanalian said, “Marianne came one weekend with Ash and met me and Bennett. I took her to clubs and we had several dinners and luncheons.” In interviews in Paris in 1995, Soghanalian said that he was “making arrangements to get the arms embargo lifted” and that is why he was meeting with Mrs. Gingrich.

A frustrated Marianne Gingrich says it became clear to her from her initial conversations with Soghanalian in Paris that he was not interested in investing in the IEDC. “…Howard Ash and his wife had been there a long time, and my bosses wanted an answer from him. My job was to get him to say, ‘Yes,’ or, ‘No,’ and that was not easy.”

Soghanalian, a popular figure in Paris, took Mrs. Gingrich and her associates to legendary places like Regine’s and several famous restaurants where they posed for photographs with the arms dealer. Finally, Mrs. Gingrich got an answer. “The last night all of us went somewhere till two or three in the morning…It was final. He said, ‘No.’ I caught the first flight out in the morning.”

Soghanalian had a different version of events. He said that he told Ash and Mrs. Gingrich that he would talk to the Iraqis about making an investment in the free trade operation but that he would not personally invest. “I told them this may be a way of getting my money out of Iraq and doing something good for Israel…I also told Marianne I wanted to meet her husband so we could discuss a high speed train opportunity in Florida.”

Around this same time in 1995, Bennett and Ash were involved in a bizarre penny stock scheme. According to an article in the Sun Sentinel, their connection to the IEDC was used to drive up investor interest in a penny stock being promoted by a couple who called themselves Eisenhowers and held themselves out to be relatives of former President Dwight Eisenhower. Bennett, the car salesman, was described to the business press and potential investors as an Israeli consultant while Ash verified claims that the penny-stock company, Triangle Technology, had a deal to build in the IEDC’s free trade zone in Israel a $40 million dollar factory to revolutionize military aircraft x-ray inspections. Marianne Gingrich’s – as well as the very rich businessmen like Larry Silverstein’s – involvement in the IEDC was also used to reassure potential investors in the penny stock scheme. These claims and associations caused the penny stock to soar before the entire venture collapsed and many investors were left with worthless stock.

Because of changes in Israeli tax law, the free trade zone effort lost its investment appeal and the IEDC shut down. But, Morty Bennett says, “Ash still wanted me to push Sarkis. He told me to call him again.”

As Bennett tells it, on January 23, 1996, Ash instructed him to call Soghanalian at his Miami horse farm with a surprising bit of news. Bennett said to the arms dealer that Marianne Gingrich had told him the Iraq embargo could now be lifted. According to the FBI memo, “Bennett stated that it would cost the source [Soghanalian] ten million dollars to get the job done.” Bennett confirms that the FBI memo is an accurate description of what he told Soghanalian. Bennett says that Howard Ash promised him $400,000 if Sarkis made the $10 million payment.

According to Tony Khater, that is when the FBI sting operation went into high gear. That week Miami agents began officially taping conversations between Soghanalian and Bennett. The Miami office received approval for the wiretaps from the Justice Department in Washington. In its memo on the case, the FBI says: “…This matter may relate to a member of Congress and is, therefore, a sensitive investigation… [that] requires Department of Justice (DOJ) notification.”

The first official FBI tape captured Bennett telling Soghanalian that “Gingrich wanted ten million dollars to get the job done.” The split would be “$5 million for her, $4 million for unexplained purposes and $1 million for Mr. Bennett,” according to the FBI memo. Bennett asked Soghanalian for $550,000 in advance.

Bennett says, “I was operating under explicit instructions from Howard Ash. He told me exactly what to tell Sarkis in my conversations with him.”

Soghanalian became even more suspicious when Bennett asked him to deposit $250,000 into his bank account as a tax-deductible donation to the IASPS. “I began to think they were getting me involved in some Israeli intelligence operation,” Soghanalian said. He told the FBI that Bennett asked for an additional $300,000 fee, “preferably… in cash.”

Vin Weber

The IASPS was founded in 1984, according to its website, and has strong ties to conservative politicians in Israel and the United States. It is connected to the Likud Party in Israel in much the same way the Heritage Foundation associates with the GOP in the United States. According to Mrs. Gingrich, Robert Loewenberg, who runs IASPS, recommended her for her job at the IEDC. Howard Ash worked with Mrs. Gingrich at the IEDC and as a fundraiser for the IASPS. Washington lobbyist and former Minnesota Congressman Vin Weber was one of Newt Gingrich’s closest associates in Congress and personal friends at the time of some of these events. Weber was a trustee of IASPS, according to IRS 990s, and was mentioned in IASPS newsletters. Weber says his relationship with IASPS ended “many years ago. I never knew I was a trustee.”

Soghanalian, a consummate actor, developed a clever and ironic response to their overtures, with the approval of his FBI contacts. He told Bennett that he would talk to the Iraqi government about financing the entire deal. At the suggestion of the FBI, Soghanalian asked to speak to Mrs. Gingrich in person. Soghanalian said, “Bennett told me not until a week after the deposit was made…It was funny because Bennett said Mrs. Gingrich was very concerned about being caught on tape.”

Bennett says, “Everything I told Sarkis was done under the instructions of Howard Ash. He gave me the words.”

In early February 1996, Bennett told Soghanalian he could not arrange a meeting with Mrs. Gingrich for at least three or four weeks. A few days later Bennett called Soghanalian and asked for another $500,000 to be wired directly into Ash’s account at the IASPS.

Under FBI agents’ instructions, on February 12, 1996, Soghanalian demanded to talk to Mrs. Gingrich. “Bennett was nervous. He said it would scare her, and I should only make small talk and, if I brought up the payments, she would hang up,” Soghanalian said. “Bennett kept putting me off. He told me she had not called him back but he had a better idea. He would get me with both of them once I gave him the deposit. Bennett said that this Institute would hold a fundraiser where we could meet confidentially with Gingrich and his wife.” According to the FBI memo, Soghanalian told Bennett he would not pay $10 million without first talking to Mrs. Gingrich directly “to receive assurances regarding the specifics of this deal.” Another year passed before Bennett called him back.

Marianne Gingrich, 2012

According to Tony Khater, in January 1997, Bennett started calling Soghanalian again at the Miami horse farm. Soghanalian told the FBI, and the Miami field office asked Washington headquarters for an extension of the wiretap, since authorization to continue recording had run out. Section Chief Paul Philip signed the memo along with several other FBI agents. Richard Gregorie, the assistant U.S. Attorney, was a key supporter of the probe. The memo said that Gregorie and the FBI’s Miami lawyer, Martin King, both favored moving ahead with the Gingrich-Bennett investigation. Gregorie, the memo said, “sees no entrapment issues.”

The request was approved and the investigation continued. The FBI recorded the February 2, 1997, conversation between Soghanalian and Bennett. Officials involved in the case, Soghanalian and Khater all confirm that Soghanalian also contacted Ash at the request of the Bureau. “Ash said I should work through him and not Bennett to get to both Gingriches. They were competing for the money,” the arms dealer said. Ash reassured Soghanalian “that Gingrich would send his own man down to Miami to meet with me.”

That man was Ben Waldman, a longtime Republican operative with strong ties to the Christian conservative movement. He was not unknown to the FBI. “His name coming up in the investigation got our attention,” says an official close to the investigation who asked not to be identified. Waldman’s name had surfaced in an earlier federal investigation of bribery and kickbacks during the Reagan administration at the Department of Housing and Urban Development that resulted in the indictment and subsequent plea bargain of former Reagan Interior Secretary James Watt and other top officials – but not Waldman.

What worried Soghanalian about Waldman were not his connections to the Christian Right, but his connections to the Likud Party in Israel. “My friends in Israel told me there was an effort by the Christian Right to join with right-wing political parties around the world,” Soghanalian said. “Reagan’s people had started this in the 1980s. They even tried to use me to make contact with the Baath Party in Iraq in 1983.”

At the time of the FBI probe, Waldman was listed as the chief fundraiser for IASPS, where Ash, through Bennett, had instructed Soghanalian to send the $10 million. David Yerushalmi, who was the IASPS lawyer, confirms that both Waldman and Ash had fundraising roles at the Institute at the time. When Waldman met with Soghanalian, he said he was a Vice President of the Institute.

For the meeting between Waldman and Soghanalian, the FBI rented a luxury, waterfront home on a canal not far from the posh commercial section of downtown Ft. Lauderdale. Tony Khater says, “The meeting would be a luncheon. I had to order in an Orthodox catered lunch for Waldman.”

On cue from the FBI, Soghanalian opened the front door of the luxurious one-story house. Waldman admired the home and asked Soghanalian about the yacht docked at the backyard pier. “As we ate the lunch, Waldman asked me to donate $20,000 to this institute of his. It was the same place that Bennett wanted me to use to pay him off. I kept trying to talk about other things, like the Iraqi arms embargo,” Soghanalian said. “I asked him could Gingrich get the sanctions lifted if I paid that man the money.”

Ben Waldman

The man Howard Ash picked to replace Morty Bennett as the man to separate Sarkis Soghanalian from his millions was a former Reagan White House aide with a long history in conservative Republican and Israeli politics. Though Waldman looks like an aging boy scout, by the time he met Soghanalian for a kosher lunch, all arranged by the FBI, he had accumulated an impressive dossier of business and political associates. Waldman was among the young Republicans who grew close during the Reagan administration – men like Grover Norquist, Ralph Reed, Jack Abramoff and Adam Kidan. He was President Ronald Reagan’s liaison to the Jewish community. He also raised funds for the Institute. In an interview in the 1990s, Waldman identified himself to National Public Radio as a Vice President for IASPS.

Waldman played a key role in bringing Jewish conservative voters into the Republican Party as an aide in the Pat Roberson 1988 presidential campaign and as executive director of the National Jewish Coalition, now the Republican Jewish Coalition. He had close business and personal ties to disgraced Washington lobbyist Jack Abramoff. By 2000, Waldman was president and part owner of SunCruz Casinos, a controversial offshore gaming company with organized crime connections. Another owner, Gus Boulis, was battling Abramoff for control of the company. Boulis was shot dead in his car a year later.

Reached for comment, Waldman refused to go on the record, but, prior to that, he did acknowledge he had worked with Howard Ash at the IASPS. When asked specific questions about his meeting with Soghanalian, he says, “First of all, I am not going to go on the record and, second, this happened so long ago, anything I am going to tell you is going to be clouded by my poor memory and lack of specificity. I am not in that business anymore. It is not the right thing to talk about.”

Khater, Soghanalian, and the FBI tapes reveal that at the luncheon Soghanalian insisted to Waldman that he would donate to IASPS only on the condition he could meet with Speaker and Mrs. Gingrich in private. After the luncheon, prosecutors and FBI agents in Miami were convinced that the case should be aggressively pursued.

Working with Ash, Waldman planned a fundraiser for the Institute in Miami for June 8, 1997. Waldman later confirmed to the FBI that it was Ash who gave him Soghanalian’s name as a potential donor. The reception was to feature Marianne Gingrich and “a surprise guest.” FBI agents made plans to bug the fundraiser. In mid-May, the FBI’s Miami field office once again requested permission to tape record the meeting.

According to sources inside the FBI, Neil Gallagher, then the deputy chief of the FBI’s criminal division, after seeking the advice of a half dozen other FBI and Justice Department officials – but not Attorney General Janet Reno – ordered the investigation closed. The Miami field office and prosecutors were dumbfounded. They said Gallagher shut down the investigation just when Soghanalian was to meet Gingrich and his wife at Ben Waldman’s fundraiser.

After his retirement from the FBI, Gallagher said: “We can’t go around encouraging people to offer bribes to elected officials – we don’t do that…” When called recently for comment about the case at his home in Davidson, North Carolina, Gallagher says, “I can’t talk about this. You have to call the Justice Department.”

Another senior FBI official does not believe Gallagher’s explanation: “Do you remember the Abscam case? That is where FBI agents posing as rich Arabs bribed members of Congress. Gallagher did not object then. The truth is the Bureau thought Clinton was through because of the impeachment [proceedings] and they saw Gingrich as the most powerful man in America.”

In one recent interview Mrs. Gingrich says that she was unaware that Soghanalian had been invited to the fundraiser that was held in a private condominium in Miami Beach. She says that Joe Gaylord, her former husband’s political aide, would have handled such events. Gaylord did not return repeated phone calls for comment. A Miami Herald article puts Gingrich in Miami on this date. The fundraiser took place as planned on Sunday, June 8, 1997. Soghanalian, under orders from the FBI, did not attend. Twenty-five guests enjoyed a reception with Marianne Gingrich at an upscale oceanfront condominium in Miami. Her “surprise guest” that morning, her husband, Speaker Newt Gingrich, spoke about and urged support for free-market reform in Israel.

In a later conversation about the event Mrs. Gingrich confirms she and her husband attended the IASPS fundraiser with “about fifty other guests…We stayed about an hour and Newt was a surprise guest.”

After their meetings in Paris in 1995, Marianne Gingrich says she did not hear Soghanalian’s name again for several years. “It was in October of the last election year, 1998, and I get a call from Victoria (Toensing), and I was in Ohio and just found out I had MS, and I had to go into treatment. I was on heavy steroids; I am in the middle of a medical mess, high as a kite on steroids. I had to go to the Cleveland Clinic.” Marianne Gingrich was traveling with her assistant to speak to a conservative group in Ohio. She had scheduled a side trip to see a MS specialist at the Cleveland Clinic. “I get told I have to immediately get treatment. His nurse had MS, and she had the treatments available. Then you have to take pills to come off of it…. I am in the middle of that. I get a call from Victoria, and I said, ‘Just handle it.’ I am drugged up and high as a kite and I was bloating…I wasn’t supposed to be under stress,” she says.

According to Mrs. Gingrich, the entire controversy caught her by surprise. “No hint of this until Victoria called me….to tell me I was being investigated for arms dealing,” she says.

Victoria Toensing, Mrs. Gingrich's private attorney and former Reagan administrative official.

Victoria Toensing, a former Reagan administration official, was Mrs. Gingrich’s private attorney. She and her husband, former U.S. attorney Joseph diGenova, were one of the most prominent political couples in Washington in the 1990s. Mrs. Gingrich says, “She told me the Justice Department suspected I was involved in arms dealing.” Ms. Toensing confirmed to the media in 2002 that her client did meet with Soghanalian in Paris, but she said that Mrs. Gingrich went only to help “Mr. Ash secure funding from Mr. Soghanalian…The only information she was given … was that he was a Mid-Eastern investor.” Toensing said Mrs. Gingrich knew nothing about the arms dealer’s background despite the fact that Soghanalian had been well known in Republican circles for years in Washington and Florida and had attended several Republican fundraisers that the Gingriches had also attended. In addition, Soghanalian had appeared on 60 Minutes and Nightline prior to the meeting in Paris.

According to Mrs. Gingrich, Toensing told the FBI that her client’s conversations with Soghanalian were “limited to obtaining funding for IEDC and trivial social conversation. Nothing more.” In a prepared statement for the media in 2002 Toensing wrote: “Mr. Soghanalian decided not to invest, and Ms. Gingrich never saw or talked with him again.” Mrs. Gingrich says that Toensing’s efforts to kill the investigation went all the way up to FBI Director Louis Freeh, who made the final decision. Toensing did not return several telephone calls for comment.

Soghanalian’s recollection was far different. He said that after Paris “they (Ash and Bennett) were calling me every day to see how I got along with Marianne.”

Soghanalian told the FBI that he said to Mrs. Gingrich “that Iraq owed me $54 million, and I asked her whether she, with the help of her husband, could get the United Nations embargo against Iraq lifted so I could be paid.” Soghanalian said he also asked her if her husband could help him win congressional backing for a scheme to build a high-speed train through Florida. “Ash had told me this is one of the deals I could invest in – she could help us through Newt,” Soghanalian said. The FBI 302s confirm Soghanalian’s account of this part of the conversation. Soghanalian said Mrs. Gingrich told him “that she could get congressional support for the train, but her organization needed money for investment.”

Marianne Gingrich says, “I was just trying to keep the conversation going about his potential investment. I may have been polite, but I don’t remember ever discussing the arms embargo…I would have never suggested he invest in high speed rail. It was something I knew about, and it was impractical and a poor investment.”

This statement contradicts an earlier account by Victoria Toensing, who said in the 2002 statement, “Neither Iraqi sanctions nor a Florida bullet train … were ever brought up.” The lawyer went on: “It is not unusual for con artists to make false claims about well-known people.”

In a recent interview Mrs. Gingrich did recall the discussion about the possible bullet train deal. “I was humoring him, making small talk,” she says. Despite what is on the FBI tapes, Waldman denied in interviews at the time that there was ever a direct discussion of Speaker Gingrich assisting Soghanalian in getting the UN Iraq embargo lifted in return for money. Waldman claimed he was simply trying to humor Soghanalian, since he was a potential donor to the Institute. Newt Gingrich told the FBI that he “only vaguely” recalled Waldman’s name. He said, “To the best of my knowledge, I never sent anyone anywhere on behalf of the Institute.” The investigation took place while Gingrich was under other unrelated congressional ethics investigations and in the middle of the Clinton impeachment proceedings.

Newt Gingrigh and third wife Callista.

A short time later, Newt and Marianne Gingrich separated and went through a contentious divorce. Gingrich resigned as House Speaker and from Congress in January 1999 and married a congressional aide with whom he was having an affair.

On the night of February 6, 2001, Gus Boulis – who had sold most of his interest in the SunCruz gambling ship venture to Adam Kidan, Jack Abramoff and Ben Waldman – was driving home from work when he was gunned down. It was a classic mob hit. Adam Kidan, whom Jack Abramoff had brought into the company with Waldman, had ties to two organized crime families and became an instant suspect. (He denies knowing anything about the death.) While Kidan and Abramoff served prison sentences connected to the SunCruz case, the Miami U.S. Attorney’s office did not bring charges against Waldman, who owned 10 percent of the company. Today he lives in suburban Washington and sells dental equipment. As Abramoff tells it in interviews about his new book, congressional corruption is commonplace. In the book’s acknowledgements, he thanks his “lifelong friend and partner Ben Waldman.”

Howard Ash is still active in penny stock investments and charitable organizations from Miami to South Africa to Croatia. He is involved with a long list of ever-changing companies from a Miami Beach house at 4233 Sheridan Avenue, including Claridge Management, Ashtine Holding Group, Associated Medical Billing, Biocard Corporation, Biorecord Corporation, CMM Consulting Medical Industries, Judaica International, Shesha Holdings Inc. and many others.

On the website Dealmakers, he is described as “a seasoned international businessman with experience in North America, Europe, Asia and Africa. In 1990, Howard co-founded Abrams, Ash & Associates, a Merchant Bank, and sold his shares in 1992. Since 1992 Howard has served as CEO, COO and CFO to a variety of high-profile, international companies, including Israel Export Development Corporation, CITA Americas, BioCard, Inc., and several publicly traded companies. Howard’s leadership provided development of business documents and corporate identity packages, business planning, strategy formation, web presence, operations and implementation, investment banking liaisons, and investor relations. Howard, a silent partner in Tudog Creative Business Consulting, leverages his extensive network of international contacts and international consulting firms to provide clients with the broadest and most effective services available.”

Morty Bennett says he is retired and loves living in West Virginia.

FBI Gingrich Investigation

Areva’s Five-Year Plan

Julia Harbo — Tue, 13 Dec 2011 19:01:57 +0000

After big financial loss this year from Japan’s nuclear disaster in March, Areva has announced plans to suspend their plan for a new uranium plant in Idaho. The French nuclear conglomerate received a U.S. license to build and operate the $3 billion plant in Idaho Falls in October, but after an estimated $2.12 billion in losses for 2011, Areva chief executive Luc Oursel has announced his “Five-Year Turnaround Plan,” which includes the cutting of 1,500 jobs in Germany and a hiring freeze in France. Plans to increase their profits also include new projects in the Central African Republic and South Africa.

Uranium Mining – The Virginia Battleground – Environmental Concerns vs. Corporate Interests Part Three

Rose Ellen O'Connor — Thu, 01 Dec 2011 01:15:27 +0000

Chatham Courthouse

Frank’s Pizza and Subs is in an area known as Tightsqueeze, named after a narrow dirt road 120 years ago. It is just outside the town of Chatham, seat of government for Pittsylvania County, in south central Virginia, an area known as Southside. Frank’s is especially popular for pizza and steak-and-cheese and boasts a loyal following. There is nothing fancy here. Customers drink out of hard blue plastic cups that advertise a variety of businesses: a towing company, O.K. Mobile Home Park, Virginia Uranium, Inc.

Virginia Uranium has left nothing to chance in its quest to get permission to mine a 119-million-pound uranium ore deposit near the Coles Hill area of the county. Most of its efforts have been far more costly than cups at a pizza shop. The company has spread money around to politicians, professors, lobbyists and influential Virginians in what is shaping up to be one of the biggest battles in the Virginia General Assembly next year. A long awaited study by the National Academy of Sciences on the health and safety impacts of uranium mining is due out in December, just before the legislature convenes in January.

A Coles Hill deposit was discovered in 1978 by the now defunct Canadian company, Marline Uranium Corp. When the company approached the General Assembly for permission to mine the deposit in 1982, the legislature agreed to study the issue but put a moratorium on mining until a decision could be reached. A bill establishing the framework for mining was drafted in 1985 but never voted on. In the meantime the uranium market tanked and Marline lost interest.

The Coles Hill site is surrounded by rolling hills, grazing cattle, and rivers and streams that eventually drain into the Roanoke River. It includes the historic farmhouse where Walt and Alice Coles live and the home of the Henry Bowles family. Walt Coles Sr. is president of Virginia Uranium, heavily financed by huge Canadian firms. His son, Walt Coles Jr., is vice president.

Virginia Uranium began exploratory drilling at Coles Hill in Pittsylvania County on December 14, 2007.

Virginia Uranium hopes to persuade legislators that mining can be done safely with modern technology and strict regulation. It says that the mine will create 324 jobs in this area that has been ravaged by the demise of the tobacco, textile and furniture industries. The company also says the mine will pour $140 million a year into the local economy. And the company says that uranium, used for nuclear energy, contributes to a cleaner environment.

Opponents argue that mining will leave tons of toxic waste materials that will remain radioactive for thousands of years. Uranium mining has so far been done out West, where the climate is arid. Opponents say Virginia’s heavy rains and hurricanes increase the risk that waste will seep into groundwater or contaminate surface rivers and streams, including the Roanoke. And they point to studies that have linked uranium mining to cancer.

As for strict regulation of mining, opponents ask how the state will pay for enforcement. In 2010, Virginia said it could not afford the National Academy’s study, which the uranium panel of the state Coal and Energy Commission recommended, and asked Virginia Uranium to put up the $1.1 million.

The Academy’s guidelines bar a private company from paying more than 50 percent of the cost of a study. Because Virginia said it had no money to pay for the review, the Academy and the state came up with a way Virginia Uranium could pay for the study without violating the guidelines, Academy spokeswoman Jennifer Walsh says. The company paid for the report, but the Academy did not accept the funding directly from Virginia Uranium.

In order to avoid contact with Virginia Uranium, the Academy asked that the company give the money to the state and that the state then give it to Virginia Polytechnic Institute and State University. Virginia Tech was named a “sponsor” of the study so that it could handle the money, which it then paid to the Academy. Virginia Uranium paid Virginia Tech $300,000 for administering the study.

Some mine opponents have criticized the study because it will review mining generally but will not look directly at the proposed mine in Coles Hill. The Academy followed the state Coal and Energy Commission’s directives in establishing the parameters for its study, Walsh says.

Virginia Uranium has paid just over $1 million to Virginia Tech, including the money to oversee the study and $723,000 in two grants to geochemistry professor Robert Bodnar, an outspoken supporter of lifting the moratorium on mining. The professor solicited a grant in 2008, records show, asking for funding to cover tuition and a stipend for a student and the cost of experiments, as well as a summer salary for himself and his expenses to travel to a conference to present his findings.

Bodnar says college professors are only paid nine months of the year and that he always asks for a summer salary, which is standard in grant applications. He says faculty members are expected to find research work in the summer. Grants are considered prestigious in academia and Bodnar says he lists the grants he has received from Virginia Uranium on his curriculum vitae.

Professor Robert Bodnar with Governor Robert McDonnell

Bodnar frequently talks with the news media about his support for mining and appeared at a November forum in Richmond as a geochemistry professor whose research has led him to believe that uranium mining can be done safely. He told the group that the state moratorium should “absolutely” be lifted.

Bodnar says he sees no reason to disclose his funding from Virginia Uranium, arguing that it is a matter of public record. Told information about one of the grants was obtained under a Freedom of Information request, a complicated and sometimes costly legal process that forces a public entity to turn over information, he says that it is, therefore, accessible to the public. He says he sees no conflict in speaking out as an expert for permitting mining in Virginia while he is receiving funding from Virginia Uranium. Bodnar says he has supported mining throughout his 35-year career.

“I’m pro-mining but that has nothing to do with me supporting Virginia Uranium’s efforts,” Bodnar says. “I’ve never talked on behalf of Virginia Uranium’s efforts – never, ever.”

Money to the General Assembly has flowed freely from both sides of the mining debate.

The Virginia League of Conservation Voters, which has lobbied the legislature on scores of issues since 2008, including mining, has made $250,756 in political contributions over the last four years, according to the Virginia Public Access Project, which tracks money and politics in the state. Most of the contributions have been “in-kind” rather than cash. They have made phone calls, hired canvassers to go door-to-door and printed and mailed campaign material, for example, says Lisa Guthrie, Executive Director of the League.

“We do a lot of voter outreach to engage voters in the process,” she says. “We’re spreading the word and engaging the electorate in the process.”

The League contributed a substantial $50,317 worth of in-kind contributions, including phone calls and other campaign help, to Sen. David Marsden (D-Burke) who serves on the Agriculture, Conservation and Natural Resources Committee. The panel is expected to play a key role in the mining debate. The League gave in-kind contributions of $46,725 in mailing and other on-the-ground campaign support to newcomer Shawn Mitchell, a Democrat who lost his bid to represent the new 13th district in Loudoun and Prince William counties.

Since 2008, Virginia Uranium has made $151,650 in cash donations to political action committees, a celebration for Republican Gov. Robert McDonnell and the campaigns of 72 current or former legislators. That is more than half the 140 members of the General Assembly.

The company has given more than twice as much to Republicans as it has to Democrats in the last four years, but Democrats have also enjoyed the company’s largesse. Virginia Uranium gave the state Republican Party $17,000 and the state Democratic Party $11,500.

Former Senate Democratic Majority Leader Richard Saslaw (Fairfax), who has made an issue of refusing the company’s offers of a trip to France to see a mine and a helicopter ride to Coles Hill, received $13,000 in campaign donations, the most the company gave to a single legislator. It is unclear what position Saslaw will hold in next year’s session because Democrats and Republicans in the senate are split 20 to 20 with Republican Lt. Gov. Bill Bolling able to break any tie votes.

Virginia General Assembly

Saslaw has not taken a position on the proposed mine. That, coupled with his leadership role among Democrats, has made him an important player to Virginia Uranium.

House Speaker Bill Howell ( R-Stafford) came in second among the legislators for contributions from the company, receiving $7,000.

The company also gave Gov. McDonnell $2,000 for his election campaign, $1000 for his inaugural party and $10,000 for his political action committee. McDonnell has lobbied the federal government to permit oil and gas drilling off the coast of Virginia and says he supports uranium mining as long as it is safe.

“It will be a tremendous number of jobs, tax revenues and opportunities,” McDonnell said in July on WNIS, a Norfolk radio station. The governor added that the state stood to “gain a lot by a safe and vibrant nuclear industry.”

Coles Jr. boasted of the governor’s support to a group of potential investors in London, England, according to a transcript of the February meeting.

“We have a new Republican governor in Virginia who has stated that he wants Virginia to be the energy producing capital of the East Coast,” Coles Jr. said in London “We have a big supporter in the state government there with Gov. McDonnell.”

Coles Sr. said in an interview that Virginia Uranium is awaiting the outcome of the study by the National Academy of Sciences. He adamantly denied to the Natural Resources News Service that anyone connected with the company had discussed sponsoring a bill to authorize mining with legislators. That is not what Coles Jr. told a group of potential investors on Wall Street in February.

“We went to the state legislature and said we’ve got to get these regulations adopted. The state said, ‘OK.’ So the state engaged the National Academy of Sciences to do a fresh study,” the younger Coles said. “We’re not sitting still while the NAS study is going on. In January of 2012, we will have a bill in the state legislature that directs the Department of Mineral, Mines and Energy to develop the regulations of uranium mining.”

When asked who would introduce the bill, Coles Jr. said, “We have a number of legislators who have offered.”

Last year, Virginia Uranium was the second largest gift giver to members of the General Assembly, spending $27,488. Executives took a senator out to lunch and flew three legislators to Bessines, France, to see a closed uranium mine that operated from 1948 to 1995. The company says it wanted the legislators to see it because it was a successful mining operation in an area with similar rainfall and population to Pittsylvania County.

On the trip were Sen. John C. Watkins (R-Chesterfield); Del. Onzlee Ware (D-Roanoke); and Sen. Frank Wagner (R-Va. Beach). All three serve on the Coal and Energy Commission’s subcommittee on uranium mining, which voted to move forward with a study of uranium mining in May 2009.

Virginia Uranium invited almost all 140 members of the General Assembly to visit Bessines in June, at a potential cost of about $10,000 each. The stay included three days in Paris with nothing on the agenda, according to The Washington Post. The 14 legislators who accepted went in two groups on two separate trips.

In September, a group 15 legislators, local officials and residents went to Saskatchewan, Canada, to visit a working mine and mill, at the company’s expense. The cost was $3,000 each. All of the legislators were facing reelection battles in early November and many said they felt uncomfortable accepting lavish trips.

State Sen. Frank M. Ruff (R-Mecklenberg), who opposes the mine, declined the trip to France. Ruff says that he thought it was extravagant and that he would be uncomfortable with the appearance. Ruff says he wanted to feel free to review the report from the National Academy of Sciences independently and come to his own conclusions.

“I would not want to appear compromised,” Ruff says.

House Democratic caucus chairman Kenneth Plum (Fairfax) also declined the company’s offer. He says he went on a family vacation to France and visited Bessines on his own.

“When I looked at the agenda for the trip it seemed to be heavily weighted toward entertainment as opposed to education,” Plum says. “I didn’t want to be in a position where I was accepting a gift from someone who might be trying to influence my decision.”

Larry Campbell, a Danville City Council member, accepted the company’s offer of a trip to Canada but then declined after talking to a constituent who opposes mining.

Campbell says he told her he was going to Canada with Virginia Uranium as a representative of the county, to which she replied, “’You have been bought.’” He says he told her that he had not been bought but decided immediately not to go.

“You have helped me make my decision,” he says he told his constituent.

But state Del. David Englin (D-Alexandria) says he and his wife took the trip to France because he thinks Virginia Uranium has a right to put its best case forward. As a leading environmentalist who opposes the mine, he says he wants to have all the information from both sides.

“I feel the information that I, as an environmentalist, was able to gain from the trip to help the environmentalist side of the discussion far outweighed any concerns about what my constituents would think,” Englin says.

Virginia Uranium spent $279,000 on lobbyists for the last four sessions of the General Assembly, according to state lobby disclosure records. The company now has 15 lobbyists from some of the state’s most powerful firms, including Heidi Abbott, Philip Boykin, Myles Louria and Whitt Clement from Hunton & Williams.

The law and lobbying firm was founded in Richmond in 1901 and has offices around the country and in Europe and Asia. Hunton & Williams boasts on its website that it is “the legal adviser of choice for business and industry on six continents.”

Clement is Walt Coles Sr.’s brother-in-law and got the ball rolling for Virginia Uranium in 2007 by getting a call for a study of uranium mining attached to an energy bill.

Sen. Wagner authored the bill and told The Virginian-Pilot he agreed to amend it because Clement, a former state delegate, was an old friend and colleague. The bill was enacted and signed by then Democratic Gov. Tim Kaine.

Clement was named one of the most influential political players in Virginia by Campaign and Elections magazine this year, according to the Hunton & Williams website.

Coles scoffs when asked whether the money Virginia Uranium has spent on lobbyists and legislators could give the impression that executives are trying to buy the results they want.

“Have you asked our opponents why they have lobbyists and why they raise money and pay money to the same people? Have you talked to any of these environmental groups that are against us like the Southern Environmental Law Center?” Coles asks. “They’re down there big. The Sierra Club — they’re down at the legislature every year. So is the Environmental Law Center. And they’re doing it year round. I don’t know anybody in the state of Virginia that doesn’t have a lobbyist.”

Four environmental groups — the Piedmont Environmental Council, the Southern Environmental Law Center, the Virginia Chapter of the Sierra Club and the Virginia League of Conservation Voters — are lobbying against the proposed mine. Together they have six staffers and one outside lobbyist who are working to defeat the mining proposal, according to interviews with the groups.

“My experience says their lobbyists have a lot more resources being thrown at them than we do,” J.R. Tolbert, assistant director of the Sierra Club, says. “You won’t find any of our folks taking people to France or Canada.”

Patrick Wales, project director for Virginia Uranium, conceded at the November forum in Richmond that the company’s 15 lobbyists are a strong presence at the General Assembly.

“We do have lobbyists and quite a few of them,” Wales said. “This is, unfortunately, — and I don’t like it anymore than anyone else — the way a lot of things are accomplished in Richmond.”

Virginia Uranium displays photos of Bessines, France, on its website. One shows rolling hills and lush forests running from an area that used to be a mine site, and a caption hails the “safe mining of Bessines.” Virginia Uranium executives say they wanted their guests to see how careful mining can leave the land intact. But mining in the Limousin area of France, which includes the small hamlet of Bessines, landed Cogema, then a huge French mining company, in criminal court.

Virginia Uranium executives say that Bessines has no environmental problems after 50 years of mining. Pittsylvania County, company executives say, is very similar to Bessines. The areas have similar temperatures and rainfall, and they even share the same primary agriculture products: dairy and beef cattle. Bessines is more heavily populated, the company says. The French hamlet has 171 people per square mile and Pittsylvania County has 64.

There is a starker difference, however, between the two sites. Bessines is not subject to the brutal weather that pummels Virginia. Between 1950 and 2006, more than 370 tornadoes and 29 hurricanes have struck Virginia, according to the state Department of Emergency Management. Another 29 nor’easters, intense winter storms that the department says are sometimes “explosive,” have hit the state.

Virginia Uranium showed legislators a lovely lake near Bessines and arranged for them to meet local residents and officials. Lawmakers say the mayor told them she thought uranium mining had been good for the area and some local residents, whose relatives had worked in the mine, said they would like to have the industry back.

"Bessines, in France’s Limousin region, is a former uranium extraction site. Having ceased operations, it underwent an amazing rehabilitation through a quality initiative." Areva

Del. Plum, who visited Bessines without Virginia Uranium, says he wanted to avoid a “staged presentation.” Plum says he was struck by a lake in the area that surrounds the closed mine. It was fenced in and access was limited, he says. A guide told him that pieces of old mining equipment are stored at the bottom of lakes in Bessines.

“When the mine is closed up, that’s the way they dispose of the mining equipment. That’s my understanding from visiting there,” Plum says. “What it said to me is that uranium mining is not a one-time or a one-year or a couple-year concern. It’s a concern for decades and maybe centuries.”

In 1994, Cogema was shutting down its operations in Limousin. It had run 40 mines and two mills in the area for decades and the mines had been exhausted. The company would later merge and become Areva, a state-owned multinational conglomerate that is the world’s largest nuclear power company.

Local authorities asked for an assessment of the environmental impact of Coegma’s mining and milling on Limousin. They hired the Commission for Independent Research and Information about Radiation, a French anti-nuclear research group formed in the wake of the Chernobyl disaster in 1986. The group’s scientific laboratories are certified by France’s health minister.

The commission found that Cogema had failed to monitor the radioactive contamination of soils, rivers and air adequately. Radon, a carcinogen and byproduct of uranium, was in the air in public spaces at 30 times the normal level, the commission found. The study found that radioactive rocks and deposits were dumped into rivers and streams, and that river sediments and aquatic plants downstream of the mines were “seriously contaminated.”

The commission also found that 6 million tons of waste had been dumped into an open-pit mine near Bessines and another 8 million piled on slopes. The radioactivity in the area was 70 times that allowed in the most dangerous nuclear installations, according to the review.

It accused Cogema of “pollution, abandonment and dumping.”

In August 2002, a court magistrate in the Limoges Court brought a criminal case, although a public prosecutor fought to have it thrown out. In a case of numerous twist and turns, an appeals court ruled in March 2004 that the case could stand, issuing a 20-page ruling that found Cogema “did not adequately manage radioactive material” and used “only rudimentary techniques to prevent the dispersal of radioactive substances into the environment.” The court called the company’s actions “deliberate” because “it ignored reports of environmental pollution.”

European environmental groups hailed the decision, saying the French government had been lax in regulation of the uranium industry and had a vested interest in its growth. In October 2004, the court reversed itself and threw out the findings against Cogema.

Virginia Uranium also brought legislators, local officials and residents to visit the Eagle Point mine and Rabbit Lake mill in northern Saskatchewan, Canada, both among a group of mills and mines run by Cameco. The Canadian firm is the world’s largest publicly traded uranium company, and Eagle Point and Rabbit Lake are among the world’s largest mines and mills.

Virginia Uranium said the area is similar to Pittsylvania County and stands as an example of how good mining practices can leave an environment unscathed. Eagle Point mine is bordered by the 100-mile-long Wollaston Lake, a resort destination that boasts trophy-sized northern pike, lake trout, Arctic grayling and walleye.

The area around Eagle Point mine, however, is far more remote than Pittsylvania County and gets only a third of the rainfall. The Eagle Lake area gets 13.5 inches of rain a year, according to the Canadian weather service. Pittsylvania County averages 45 inches annually, according to the University of Virginia Climatology Office.

“Canadian operations appear to be a complete success,” Larry Aaron, a Pittsylvania County teacher who accepted Virginia Uranium’s trip to Saskatchewan, writes in a column for the local newspaper. “It is safer to work in a uranium mine than a Saskatoon government office,” Aaron says he was told by a mining regulator. Saskatoon is the most populous city in Saskatchewan, with an estimated population of 265,000.

Virginia Uranium’s guests were not briefed, however, on Cameco’s near disasters.

Among the close calls, in April 2003 the MacArthur River mine in Saskatchewan had a cave-in. A flood of radioactive waste threatened to swamp two of the lower floors. Employees worked to clean up the mess for three months until the mine reopened in July, according to news accounts.

In September the Canadian Nuclear Safety Commission upbraided Cameco at a hearing on renewal of the mine’s license. Commission staffers said consultants had warned Cameco executives of the possibility of a cave-in due to the mine’s inadequate pumps. The Canadian Broadcasting Corp. reported that the company knew for months, if not years, that a cave-in was possible and that employees worked without proper ventilation while they cleaned up the mine. Steel emergency doors needed to secure the mine were left at another site and never put in, according to the CBC. Waste water was accidentally pumped into the clean-water line and workers were exposed to high levels of radon when they washed their hands or cleaned the floor.

Three years later, Cameco’s Cigar Lake mine suffered a massive flood. The company initially blamed the October 2006 flood on falling rocks but nuclear regulators concluded it was caused by blasting and, once again, the company’s failure to live up to promises to install adequate pumps.

Cigar Lake contains the world’s largest deposit of untapped high-grade uranium. The massive flood of 2006 delayed its opening until 2013.

On Oct. 23, 2006, miners blasting into the ground expected ice but hit ice water, and a short while later groundwater poured in at 396,000 gallons an hour, three times what the mine could handle, according to a Bloomberg report. It rose above the workers knees and with the water, came radiation. Workers were given respirators and were eventually evacuated.

Meanwhile in Virginia, the battle over uranium mining continues.

Coles Hill deposit

Medal of Honor Winner Fights New Battle

Susan Trento — Wed, 30 Nov 2011 23:35:21 +0000

The Medal of Honor is the highest military decoration our country can bestow. It is given to members of the Armed Forces who act beyond the call of duty on the battlefield. Today, a recent Medal of Honor recipient is fighting on another front in his homeland. According to The Wall Street Journal, Dakota Meyer has sued BAE Systems, a British defense contractor with extensive U.S. contracts and lobbyists, for preventing him from getting a job with another defense contractor after he complained about BAE’s plans to sell high-tech sniper scopes to the Pakistani military. The United States and Great Britain’s defense industries arm both sides for profit. Perhaps the recent deaths of Pakistani soldiers by the U.S. military punctuate the story.

Uranium Mining – The Virginia Battleground – Environmental Concerns vs. Corporate Interests Part Two

Rose Ellen O'Connor — Wed, 23 Nov 2011 11:53:45 +0000

Virginia is the home of many historic Revolutionary and Civil War battlefields. But today, conflicts are being fought in a different forum. The question of whether to lift Virginia’s moratorium on uranium mining is shaping up to be one of the biggest battles in the General Assembly next year.

Virginia Uranium, Inc. wants to mine a 119-pound uranium ore deposit called Coles Hill. It is in Pittsylvania County in south central Virginia, often referred to as Southside. The company, flush with Canadian investments, has hired 15 lobbyists to push their cause in Richmond. It has also contributed cash to the campaigns of more than 70 legislators and taken lawmakers on all-expense-paid trips to see mining areas in France and Canada.

Environmental groups, who have seven lobbyists, are also gearing up for the fight and do not plan to be outgunned. Some are predicting the vote will be close. At the center of the debate is the question of whether modern technology and stricter regulations can avoid the catastrophes of uranium mining’s past.

Virginia Uranium would operate a mine and milling plant on the Coles Hill site. After uranium is mined, the ore is taken to a mill where the stone is crushed to free up the uranium oxide or “yellow cake.” The waste materials, radioactive sand-like “tailings,” are mixed with water and chemicals, creating toxic slurry.

Tailings remain radioactive for thousands of years and have poisoned live stock, contaminated waterways and destroyed farms and pastures. Chemicals in the tailings have been linked to cancer. Virginia Uranium says it plans to place some of the tailings in underground holding compartments and some back in the mine.

Opponents say they fear the tailings will leach into groundwater or run off into surface rivers and streams. Virginia’s hurricanes and heavy storms increase the risk of contamination, they say.

Company project director Patrick Wales said during a question and answer session at a Richmond mining forum this month that the waste holding cells would be state-of-the-art, lined with rock, clay and tough synthetic strong enough to prevent leaching. Wales offered the assurance that the Nuclear Regulatory Commission would be involved and would monitor tailings management “in perpetuity.”

Olga Kolutoshkina, a legislative adviser to the Roanoke River Basin Association, says she is worried rather than reassured by Wales’ comments.

“I’m concerned about the cost to the taxpayers and communities of monitoring and containing these wastes essentially forever,” Kolutoshkina says. “We’re talking about thousands of years. We have a short and dirty history with uranium and it’s filled with disasters. It spans 40 or 50 years and there’s nothing we can be proud of.”

Wales also said that modern engineering permits the company to build mining and milling facilities to precise specifications. The project will be built to withstand more than a 5.8 earthquake – which shook Virginia last summer — and more than the state’s biggest storm on record.

“If it’s 27 inches (the project will withstand) 28 inches,” Wales said. “The very idea that these aren’t being included in our plans is a misnomer.”

In August 1969, Hurricane Camille dumped more than 28 inches of rain on central Virginia in eight hours. It left 150 people dead, uprooted whole stands of trees and swept away more than 100 bridges. It changed forever the way residents thought of hurricanes, according to one news account.

“I think it’s commendable that they acknowledge that the standards should be based on worst-case scenarios,” says Chris Miller, executive director of the Piedmont Environmental Council, adding that the company’s position is a switch from the past. But Miller says he is not convinced any design can withstand the challenges in Virginia.

“In theory, I’m sure there’s an engineering solution. What we worry about is that engineered facilities for solid waste facilities and toxic waste facilities have failed with far less environmental and geologic stresses than found in Virginia. So you’re putting a lot of faith in an engineering design that may not be warranted.”

“Talk is cheap,” says Kolutoshkina. “Where are the detailed plans of the system they’re going to build? We want to see technical documents. The only documents this company has produced are press releases. The company will always do what is minimally required and the most profitable.”

The Coles Hill site borders the Bannister River and is drained by the Whitehorn and Mill Creeks, which feed into the Roanoke River. The Roanoke supplies drinking water to 1.2 million people in Virginia and North Carolina.

American Rivers, an environmental group headquartered in Washington, named the Roanoke the third most endangered river in America last spring because of the proposed uranium mine. The group noted that the Roanoke sustains $300 million in agriculture annually and attracts thousands of tourists a year for fishing, boating, bird-watching and other outdoor activities.

Roanoke River

In August, the Board of Supervisors for Orange County passed a resolution urging the General Assembly not to authorize the Coles Hill project until it can be proved that it will not endanger the water supply. The Halifax County Board of Supervisors and the town councils of Halifax and South Boston followed suit in October.

Virginia Beach is one of three eastern Virginia cities that pump their drinking water via pipeline from Lake Gaston, downstream of the Coles Hill deposit. An engineering study done for the city in February concludes that toxic radioactive waste could contaminate Lake Gaston in a catastrophic rain storm. The study says that the Kerr Reservoir upstream from the lake would trap about 90 percent of the toxic waste but that the rest would flow into Lake Gaston. Flushing out the radioactive contaminants would take from two months to two years depending on the weather, the study says.

Michael Baker Corp., author of the study, looked at powerful hurricanes that struck in Nelson County in 1969 and Madison County in 1995, causing more than 25 inches of rainfall, to assess the potential damage of a catastrophic storm near the uranium mines. Pittsylvania County has never had such large rainfalls.

Virginia Uranium officials reacted far differently to the threat of heavy rain than Wales did in Richmond, when he promised reporters the company would design its facilities to withstand huge rainfalls.

Wales dismissed the Virginia Beach report as an “expensive exercise in fantasy,” saying many of the reports’ assumptions were wrong. At a hearing before the Virginia Beach City Council Aug. 24, Alan Kuhn, a Virginia Uranium consultant said the chances of a massive flood like that in the study was one in 10 million, which he said amounted to “zero.”

Some of the council members, who felt a rare 5.8 earthquake shake through the state a few hours earlier and were awaiting a hurricane that weekend, were not won over by the assurances, according to a report in The Virginian-Pilot.

“The gulf oil spill and the earthquake and tsunami in Japan have shown you can’t always predict it based on history,” Councilwoman Rosemary Wilson said.

Dr. Thomas Burbey, a geology professor with Virginia Polytechnic and State University in Blacksburg, Va., conducted a study of a small portion of the land atop the deposits. He says he found very little groundwater because there are very few fractures in the rocks. Less water at the site would reduce the risk of mining, he says.

“I think the water flows would be easily manageable,” Burbey says. “It would probably reduce the risks of groundwater contamination.”

But the Blue Ridge Environmental Defense League said in a report that the Coles Hill site is surrounded by flood zones, citing a map from the Federal Emergency Management Agency. The map shows several creeks next to the site, which are marked as flood zones. Kuhn said in a letter to a local paper that the environmental group misread the map.

Pittsylvania County has been hit by storms, hurricanes, tornadoes and an earthquake, according to weather records. It has also been subject to intense flooding. The Federal Emergency Management Agency designated Pittsylvania County a disaster area when Hurricane Fran hit in September 1996, according to agency records.

The area around the Coles Hill site also has a high water table – groundwater used for drinking is only 36 feet below the surface. Environmentalists say that makes it easier for radioactive waste to leech into the water supply.

A preliminary economic report for the company recommends that radioactive slurry be blended with cement to stiffen it. The 2010 report by Lyntek, Inc., a mining engineering firm in Lakewood, Colo. recommends that 10 tons of the waste be buried back in the mine. The other 19 tons of radioactive waste would be stored in eight lined containment cells five feet under the ground and covered with top soil and vegetation. Each holding compartment would encompass as much as 40 acres, according to the Lyntek Study.

If Virginia Uranium mines the full 119 pounds of uranium ore, as it says it will, rather than the 63 pounds projected in the Lyntek report, the company would have many more tons of toxic waste to handle. Walt Coles Sr. says he believes the company can reduce the waste, noting that the Lyntek report is a preliminary study.

“We’re not going to know that until the final mill design takes place,” Coles says. “There’s all sorts of new technology being studied.”

Environmentalists say Virginia Uranium will have trouble placing the storage cells below ground because the high water table leaves very little earth above the groundwater. And even if they could, they say, it would not be a solution.

“They’re leaving behind tons and tons of waste that is toxic and radioactive,” Nathan Lott, executive director of Virginia Conservation Network, says. “We have no confidence that Virginia or anyone else has the ability to keep this contamination contained for thousands of years. We’re worried about a toxic legacy that will put peoples’ lives and livelihoods at risk.”

Walter Coles Sr.

Coles dismisses concerns that Virginia’s wet climate increases the risks of waste leeching into groundwater or toxic runoff leaking into creeks and streams.

“That’s absolutely absurd and a lot of people that are anti-mining make that statement, but the fact is mining has taken place all over the world in wet climates just like in Southside,” Coles says. “In fact, they argue that it’s never been mined east of the Mississippi. In fact, mining for uranium has taken place in Louisiana and Florida. You know that’s a wet two states subject to hurricanes. In fact, Katrina went right over the mine sights.”

Neither Florida nor Louisiana ever had uranium mining, according to the Florida Industrial and Phosphate Research Institute. In Florida, corporations mine and mill phosphate, a key ingredient in fertilizer and pesticide, and in Louisiana, companies mill phosphate. Companies in both states extracted uranium from phosphate until the mid-1990s. Hurricane Gloria struck both states but did not pass over the mining areas or milling plants in either state, according to environmentalists there. And wet climates in both Louisiana and Florida have exacerbated the environmental damage done by the phosphate industry, interviews, state records and news accounts indicate.

Neither state has an environmental record that Virginia would likely want to emulate. Phosphate mining and milling have caused huge environmental problems in Florida and Louisiana, according to records at the Environmental Protection Agency, press accounts and interviews with state officials and environmentalists.

Freeport McMoran Headquarters

In 1987, Freeport McMoran, Inc., a phosphate fertilizer company, said it was producing so much waste that the soil underneath its waste piles, known as gypsum stacks, was becoming unstable. It asked the state of Louisiana to let it dump 12.5 million tons a year of slightly radioactive toxic phosphoric acid into the Mississippi River.

New Orleans, one of several cities that get their drinking water from the river, led the fight against the proposal. Thousands of angry protestors said the gypsum would poison their water and increase the risk of cancer, already high in the area. State environmental officials turned the company down, citing the risk of tainted drinking water and potential harm to fish and wildlife.

Fertilizer plants, still looking for ways to get rid of their waste, were allowed to use their gypsum stacks to fill in wetlands being primed for a roadway. “Everything died,” Wilma Subra, a chemist who consults for Louisiana Environmental Action Network, says.

In the late 1980s, Gov. Buddy Roemer required the companies to cover the gypsum stacks with soil and grass because when rainwater came, the gypsum leached into groundwater and flowed into wetlands and waterways, Subra also says.

With its toxic stew of oil and gas, chemical plants and gypsum stacks, Louisiana’s environment has ranked high for poison, EPA records show. In 1988, the federal agency started requiring companies to report the toxic chemicals they emit into the air, water and land in each state. Louisiana came in first place with 985 million pounds of pollution, according to EPA records. It remained among the top three for 10 years. It dropped to ninth place in 1998 after the phosphate industry successfully sued to have phosphoric acid, a byproduct of phosphate, removed from the list of toxic chemicals that had to be reported.

In central Florida, phosphate mining has long been raising health and environmental alarms. A 1985 report in the Journal of the American Medical Association found that acute leukemia was twice the normal rate in 27 counties with or near phosphate mining and milling. The report said further study was needed.

Charlotte, Lee and Sarasota counties spent $12 million in court battles between 2001 and 2007 to try to stop expansions of the mining industry that would endanger the health of land and water, Charlotte County Assistant Attorney Martha Burton says. They were fighting their own state Department of Environmental Protection, which, county officials claim, allowed mining companies to destroy wetlands and streams.

Department of Environmental Protection officials, who argued for the mining companies in court, said they were trying to be fair and make decisions based on science. Among the permits the counties were fighting was a proposed 2,067-acre mine near the town of Ona, owned by the country’s largest phosphate producer, Mosaic Co., based in Plymouth, Minn.

The counties presented written expert testimony that phosphate mining ruined soil, reduced fish species, harmed wildlife and destroyed the quality of untold streams and waterways. A certified senior ecologist estimated that cleaning up after the Ona mine and restoring wetlands, woodlands and habitat would cost $643 million for which Mosaic was not prepared.

The counties are still fighting the proposed Ona mine. Last April, they asked the federal Army Corp of Engineers to step in and do an environmental impact study of Central Florida.

In September 2004, Hurricane Frances whipped up waves in a waste water holding pond that stood atop a 180-foot-high gypsum stack. The dike broke, spilling 65 million pounds into a creek and bay that drain into the Tampa Bay. Officials said many crabs, shrimp and fish were destroyed. Phosphate waste is highly acidic and, as one state environmental official described it to a local newspaper, similar to Draino.

In 1995, a 15-story-deep sinkhole opened up in an 80-million-ton gypsum stack, dumping at least 4 million cubic feet of toxic waste into the Floridan aquifer. It supplies 90 percent of the state’s drinking water.

U.S. News and World Report, which wrote about Florida’s phosphate problems in the mid-1990s, noted the industry’s political clout. Between 1971 and 1995, mining firms paid $1 billion in state severance tax on the phosphate they retrieved and provided 8,000 jobs. They also contributed campaign money to state and local officials. Even environmental groups were not particularly vocal, having received $109,000 in 1994.

“I would say to the people of Virginia: Be very afraid. I can’t imagine how uranium mining would turn out well. All the waterways around here are polluted,” Linda Young, director of the Clean Water Network of Florida, says of central Florida.

“Don’t let them get a foothold. They take over the politics. They take over the land. They take over the courts. They take over the environment. They’re like a cancer and can’t be stopped.”

Coming Next Week: Part Three – Uranium Mining – The Virginia Battleground

Uranium Mining – The Virginia Battleground – Environmental Concerns vs. Corporate Interests

Rose Ellen O'Connor — Fri, 18 Nov 2011 15:05:27 +0000

The Virginia General Assembly is expected to vote next year on whether to lift a 30-year moratorium on uranium mining in the state.

The issue has prompted an expensive lobbying campaign by the company that wants to mine a huge deposit known as Coles Hill in Pittsylvania County and an intense fight by environmentalists who want to stop it. The battle has pitted neighbor against neighbor in the county, in south central Virginia, an area known as Southside.

Two Virginians, each offered money to allow uranium mining on their land, personify the debate that is raging through the state. One accepted. The other declined.

Connie Crider, a housewife, lives with her husband in Pittsylvania County, close to 119 million pounds of uranium ore, the largest deposit in the country and one of the largest in the world. Its worth has been estimated at $10 billion.

She is a neighbor of Walter Coles Sr., president of Virginia Uranium, Inc., which wants to mine the deposit. Crider and her husband have agreed to allow the company to mine on their property and plan to sell their home to it. They have already bought a new house a couple of miles away.

Crider says she took college classes in Richmond “that explained a lot of stuff about uranium.” She is not worried about pollution or health risks and is convinced that mining can be done safely. Considering the depressed economy in Pittsylvania County, she says she is heartened by the jobs the mine will offer. The average pay will be $65,000 a year, according to the company, and annual pay will range from $39,000 to $163,000.

“I think it’s going to be a good impact because it will mean jobs for this part of the country. We’re in bad need of jobs around here,” Crider says. “I have 10 grandchildren and they all live in this area. I just think it’s a good thing for them.”

Crider says she trusts that Coles will take care of the land because this is his home and community. She is not concerned, she says, that almost 50 percent of the company is owned by Canadian interests. She refers to Coles by his nickname “Red.”

“I know Red,” she says. “I know he wants to protect the land and the places here.”

Crider dismisses arguments from environmentalists that the tons and tons of toxic radioactive waste produced by mining could contaminate their water, air and land. “I just don’t think they know,” she says. “They won’t listen. They have just set their minds that this is a bad thing and they won’t listen.”

Coles Hill

Bill Speiden, a legislative director for the Orange County Farm Bureau, ran a dairy farm on his land for forty years. He was approached in 1979 by the now defunct Marline Uranium Corp., the Canadian company that lobbied the General Assembly for uranium mining approval in the early to mid 1980s. Marline was primarily interested in Coles Hill but explored uranium deposits throughout the state.

Speiden says the company offered him and his wife a signing bonus and royalties on the uranium his land produced. When he did not say yes, Marline offered him a partnership in the company, he says. He did not understand the intense interest until he saw a map of uranium hot spots in Northern Virginia. Each was marked with one to four bars.

“There was only one four-bar radioactive hot spot in Northern Virginia and that was on my land,” Speiden says. “That explained why they were putting pressure on.”

Speiden says he found the money tempting and he and his wife took a trip to Colorado and Utah, hoping to find some success stories. They talked to ranchers and mill and mine supervisors from a half dozen western states.

“We found a litany of environmental disasters,” he says.

Speiden says they heard about ranchers throughout the West whose water wells had been contaminated and cattle poisoned by radioactive mine waste. Some of the cows lost their hair.

He says he is unimpressed by assurances that the proposed mine is being designed with the latest technology and that stricter regulation will protect Pittsylvania County residents. Newspapers out West touted a “new era in dam design” when describing facilities at United Nuclear Corp.’s uranium mine in Church Rock, New Mexico, he says.

But in July 1979, the dam collapsed, spilling 90 million gallons of liquid radioactive toxin and 1,100 tons of uranium waste into the Puerco River. Foul smelling poisonous yellow water gushed 50 miles downstream, crossing Navaho ranches and farmland and spreading 50 miles into Arizona.

“It would be nice to become a millionaire off of the deal,” Speiden says, “but I couldn’t in good conscience risk my neighbors’ downstream water supply and clean air.”

Virginia Uranium executives argue that the company is owned by locals who care deeply about their community and would never risk polluting it.

But behind Virginia Uranium Inc. is a complex web of Canadian corporations, including an executive from the former Canadian company that failed in the 1980s to win approval for uranium mining, according to public and private documents reviewed by Natural Resources News Service. Corporate executives are expecting to win the battle in Virginia this time, transcripts and other records show.

The National Academy of Sciences will release a long-awaited study in December on the environmental, health and safety effects of uranium mining. The academy will review mining in areas similar in geology, climate and population to Virginia but will not study the proposed mine in Pittsylvania County. It will provide research to help the legislature decide but will not say whether the state should allow mining. The $1.4 million study was commissioned by the state but paid for by Virginia Uranium.

The 3,500-acre site of the proposed uranium mining and milling project is surrounded by homes, farms, cattle pastures and bucolic rivers and streams that eventually feed into the Roanoke River. What is referred to as the Coles Hill deposit is actually two deposits that are very close together.

Local opponents, who have been assisted by environmentalists around the state, say they fear radiation contamination, air and water pollution and an increase in cancer. They say Virginia’s rainy climate and susceptibility to storms, hurricanes and even tornadoes make it especially unsafe.

Numerous localities that get drinking water downstream from the proposed mine have also opposed it.

After uranium ore is mined, it is taken to a mill, where the stone is crushed to free up uranium oxide or “yellow cake.” The waste materials, radioactive sand-like “tailings” are mixed with water and chemicals, creating toxic slurry. Virginia Uranium plans to put some of the radioactive slurry in underground holding cells and some back in the mine.

The tailings hold onto 85 percent of the radioactivity from the initial uranium ore, according to the Environmental Protection Agency. They contain thorium-230, which remains radioactive for 80,000 years and increases the risk of lung, pancreatic and bone cancer.

They also contain radium-226, which remains radioactive for 1,600 years and increases the risk of leukemia and bone cancer. Radon, another carcinogen, is continually produced by radium. The sludge produced in the milling process contains heavy metals, including lead and arsenic.

Coles Hill Historic Mansion

Virginia Uranium says it plans to mine all 119 million pounds of uranium ore, which have an average grade of .06 percent. At that low grade, for every six pounds of uranium recovered, five tons of radioactive waste would be produced. A preliminary economic assessment done for the company recommended mining 63 million pounds of higher grade uranium because it would cost too much to mine the lower grade. Even that smaller amount – 63 million pounds – would leave 29 million tons of waste, according to the preliminary report done by Lyntek, Inc., a mining engineering firm in Lakewood, Colo.

Virginia Uranium says strict state and federal laws will regulate mining at Coles Hill and that company executives “looks forward to meeting or exceeding those standards.” The Nuclear Regulatory Commission would regulate the milling and handling of the wastes. The state would monitor the mining. Officials are awaiting a vote by the General Assembly and any directives it may pass before establishing regulations.

“As Virginia Uranium’s name suggests, our roots are in Virginia,” the company says on its website. “Concern for the community’s progress and respect for the environment are deeply ingrained in the company’s values.”

Virginia Uranium says mining at Coles Hill could provide the state’s nuclear energy needs for 65 years or the entire nuclear power needs of the United State for two years and reduce the country’s dependence on foreign uranium. Company executives say the project will provide 324 jobs and pour $140 million a year into the local economy, which has been hard hit by the demise of the tobacco, textile and furniture industries.

Virginia Uranium, Inc. is in Chatham, Va., and says on its website that 78 percent of the firm is owned by Walt Coles Sr. and his wife, Alice, and the Bowen family, whose properties sit on the mining site. The rest of the company is owned by employees, management and investors, according to its website. The company notes that 31 of the investors are Virginians.

To point out the firm’s community ties further, it notes that the Coles and Bowen families have held their properties for several generations – in the Coles’ case, as far back as the 1780s. The Coles still live in the family’s historic home.

Walter Coles Sr.

Coles is Virginia Uranium’s president and his son, Walt Coles Jr., is vice president. But when the company was first formed in 2007, Norm Reynolds, a native of Canada, was the president. Reynolds was also president of Marline Uranium Corp., the Canadian firm that discovered the Coles Hill deposit in 1978. Marline failed to win approval for mining before the market tanked in the mid 1980s and abandoned the project in 1990, but Reynolds stayed on in Virginia.

The Virginia company’s web of complex Canadian ties starts with the company “Holdco.”

Virginia Uranium is owned by Virginia Holdings, Inc., or “Holdco,” a private Yukon corporation, according to papers filed with the Toronto Stock Exchange. The Coles and Bowen families and all the other investors get their interests through Holdco. Virginia Uranium officials have been reluctant to name the principals of Holdco and the company has often changed leadership. Reynolds was the first president of Holdco.

Coles Sr. said in an interview that Holdco was formed for tax purposes and that his son was an executive and Reynolds was on the board but that he could not remember who else was in the company.

Coles himself is listed as an executive officer of Holdco, according to papers filed in February with the Security and Exchange Commission. Henry Bowen, Coles’ daughter, two other locals and a New Yorker are also listed as officers. Peter Grosskopf, president of Sprott Asset Management, a resource-based hedge fund in Toronto, which has a huge interest in Virginia Uranium, is an executive officer, too, according to the filing. Reynolds is no longer listed as part of the company.

There are two major Canadian investors in Holdco and thus Virginia Uranium, Inc. The first investor is a complex combination of Canadian companies, according to various filings with Canadian stock exchanges. In August 2007, Reynolds started Virginia Uranium Ltd. in the Yukon, which solicited investors for the Coles Hill project. Reynolds’ Yukon company held a 12 percent interest in Virginia Uranium, Inc., granted through Holdco.

Then Santoy Resources Ltd., a uranium mining company in Canada, took an interest in the Coles Hill project. In July 2009, Santoy bought out Reynolds’ firm for 1 million Canadian dollars (approximately $822,000) and acquired its 12 percent interest in Virginia Uranium. Santoy also paid Holdco 6.5 million Canadian dollars (approximately $6.1 million) and traded stock with Holdco to increase its interest in Virginia Uranium to 29.9 percent. Santoy immediately changed its name to Virginia Energy Resources, Inc., although it remains in Vancouver, British Columbia, Canada.

It installed Coles, who has no experience in the industry, as chairman and his son, a financial analyst, as chief executive officer, but all seven of the directors represent Canadian corporations with diverse mining interests in Canada, the United States, Peru, Zambia and Mongolia.

The second major Canadian investor in Virginia Uranium is Sprott. In November 2010, Sprott paid 6 million Canadian dollars (approximately $5.9 million) to get a 19.9 percent interest in the firm and become a “strategic partner,” according to a report filed with the Toronto Stock Exchange and a press release.

That means that two Canadian corporations – Virginia Energy Resources and Sprott –now hold a 49.8 percent interest in Virginia Uranium, Inc. Contrary to claims on the Virginia Uranium, Inc., website, the Bowens and the Coles, whose properties sit on the uranium deposit, could not own 78 percent of the firm. At best, they own about half.

Coles Jr. told a group of potential investors on Wall Street last February, according to a transcript of the meeting, that Ron Netolitzky, a board member at Virginia Energy Resources and the former chief executive officer of Santoy, is expert at investing in small companies, developing them for two years and then selling them for a profit to a larger group. He did not say whether that was an option for Virginia Uranium.

Walter Coles Jr.

He also said that Virginia Uranium and Virginia Energy Resources plan to merge, which would further reduce Virginia Uranium’s local control on mining decisions. Virginia Energy Resources already has “the right of first refusal” under its contract with Holdco, which gives Virginia Energy control over Virginia Uranium’s finances. When Virginia Uranium sets out to raise the money needed to build the mining and milling facilities, for example, Virginia Energy gets to decide first whether it wants to step in with the money in exchange for a greater share of the company.

Coles noted the powerful outside interests in Virginia Energy Resources in his talk on Wall Street. He said Lucas Lundin, of Vancouver, who chairs seven Canadian mining companies, is the largest individual shareholder in the company. Other prominent investors include Pinetree Capital Limited, a resource-based investment firm in Ontario, which increased its share of Virginia Energy Resources to 12 percent in mid November (after the election); Sprott; Dundee Resource Ltd., a Toronto mining company; and Cormack Securities, an investment banking firm, formerly part of Sprott, in Calgary and Toronto.

“They said, ‘We’re a local company,’ and they’re not a local company. If they can’t even tell the truth about that, how are we supposed to believe them about anything else?” asks Karen Maute, who lives about 15 miles from the proposed mine and heads Piedmont Residents in Defense of the Environment.

“They’re not a local company. Who are they? Who are we going to be dealing with? Who’s accountable here? And if we can’t trust the people that are supposedly local that are supposedly looking out for our best interests, how are we going to be able to trust people somewhere else that we don’t even know.”

Patrick Wales, Virginia Uranium project manager, said at a mining forum in Richmond this month that company executives have been to Canada to get advice from the country’s mining experts and to solicit investments but that the company is not interested in selling out to a larger corporation.

“We are a Virginia company. Yes, we have outside investors, but that’s the nature of these endeavors,” Wales says, adding that Canadian corporations have offered to buy Virginia Uranium. “These offers have been refused.”

In the late 1970s and early 1980s, Marline, the Canadian firm that failed to win approval for mining from the Virginia General Assembly before the market tanked in 1985, had workers crisscross the state with Geiger counters, hopping out of their cars when an area seemed promising. Marline bought up leases on 16,000 uranium-rich acres in Fauquier, Madison, Culpeper and Orange counties, which have since expired. Opponents of lifting the moratorium say they fear that Virginia Uranium will seek to mine the sites that Marline found and that the state will be overrun by uranium mines.

Virginia Uranium executives insist publicly that they have no interest in other mines.

“We’ve made it clear we’re only interested in Coles Hill,” Wales said at the Richmond forum.

But Coles Jr. seemed to suggest that the company is, indeed, interested in other mining possibilities at a meeting with potential investors in London in February. Coles said the geologist who discovered uranium at Coles Hill has long believed that more deposits will be found. Virginia could be another “Athabasca Basin” Coles said, referring to an area in Saskatchewan, Canada, where 41 companies mine one third of the world’s uranium supply.

“Talking to the lead geologist,” Coles said, “he’s insistent to this day that Coles Hill is the first of more major discoveries in Virginia that might lead to another Athabasca-style resource play.”

Virginia Uranium says the mine will provide jobs for a generation. It is scheduled to remain open for 35 years. The cost of extracting uranium is estimated at $30 per pound for the first 10 years, $37.52 for the next 10 years, and $51.30 for the last 15, according to the Lyntek report done for the company. Mining becomes more costly in the later years because the higher-grade uranium ore is gone and the lower grade is much more difficult to extract.

The long-term contract price for uranium is hovering around $60 to $62 dollars per pound and the short-term spot price is running between $50 and $52 per pound. Mining opponents question how Virginia Uranium could operate with expenses of $51.30 per pound in that kind of market. They say the company is promising jobs that will last for 35 years only to win support from this economically depressed community.

Virginia Uranium says figures in the Lyntek report are only estimates and the company’s project director Wales says the company can make money as long as prices for long term contracts remain at $60 per pound.

Patrick Wales

In 2007, when efforts began again to lift the Virginia moratorium, the industry was touting a “nuclear renaissance.” But the uranium market hit a tailspin after an earthquake and tsunami struck Japan’s Fukushima power plant in February, causing three nuclear reactors to meltdown, spewing the most ever radioactive waste in the ocean and contaminating tap water 170 miles away in Tokyo. The spot price of uranium plummeted from $67.75 per pound to $48.75 per pound.

Germany, Switzerland and Italy have announced they will phase out or curtail nuclear power. Japanese officials have sent mixed signals. They have said both that they will continue to build plants and that they may phase out nuclear power. French nuclear giant Areva said this month that it will suspend work on the Bakouma mine in the Central African Republic for two years because of the low price of uranium.

“There has been some good news,” says Rob Chang, a widely quoted analyst with the Versant Partners, a Canadian investment bank. “Looking at it from a global standpoint, the number of nuclear reactors under construction, planned or proposed has significantly increased.”

Chang blames the low price of uranium on the worldwide depression and predicts prices will increase in six months to a year. Nuclear power plants demand about 180 million pounds of uranium, 45 million pounds less than is produced, he says. The shortage has been partially mitigated by the Highly Enriched Uranium Agreement, which downgrades Russian nuclear warheads for use in power plants. The agreement expires in 2013.

There are 440 nuclear reactors around the world and another 565 under construction, called for or proposed, according to the World Nuclear Association. China, India and Russia are pursuing nuclear energy the most aggressively.

“Even if only half are built, that’s another significant demand for uranium when we already have a 45 million pound shortfall,” Chang says. “They’re going to need the energy to turn on the lights.”

The United States has 104 nuclear reactors and the Nuclear Regulatory Commission is reviewing applications for another 18. Nuclear power is making a comeback, energy experts say. No new reactors have been built for three decades.

President Obama has been strongly supportive of nuclear energy, seeing it as a way to avoid the greenhouse gases of coal and oil. In his State of the Union address this year, the president proposed giving the nuclear construction industry a quota for clean energy. The proposal, however, has not gotten far.

In February, Obama’s Energy Department approved $8 billion in conditional loan guarantees for construction of two new reactors near Waynesboro, Ga. Georgia Power and a group of utilities is preparing the site while awaiting permits to begin construction. Site work has also begun for two new reactors in South Carolina and one in Tennessee. An EPA spokesman says the agency hopes to decide on the applications by the end of the year or early next year.

On the international front, Energy Secretary Steven Chu touted the Obama administration’s commitment to nuclear energy at a September meeting of the International Atomic Energy Agency in Vienna.

“The United States supports expanded and reliable access to fuel supplies, working through the commercial marketplace and public private partnerships for peaceful nuclear programs,” Chu said.

Uranium mining appears headed for revival out West. Several states are planning to bring back mining or expand what they already have. Even in the southwest corner of Colorado, once home to the extinct town of Uravan, most residents are eager to see uranium mining and milling return. Residents of Paradox Valley either believe the government overreacted when it tore down Uravan and dismiss the miners’ high rate of cancer or do not care as long as mining means jobs.

They say tougher regulations will protect them.

Energy Fuels Resources Inc.

Energy Fuels Resources Inc., headed by a local rancher with a parent company in Canada, plans to reopen mines for 100 miles and build a mill in the town of Naturita, about 15 miles from where Uruvan stood. It will be the first new mill in the country in 30 years.

Sheep Mountain Alliance and two other environmental groups are opposing the mining project. So are residents of Telluride, a ski resort town about 50 miles away. It gets its drinking water from the Delores River, seven miles from the planned mill.

Environmentalists say the 90-acre radioactive waste impoundments that the mining company is planning could leach into groundwater or spread contamination through air, land or wildlife. Every mill on the Western Slope of Colorado has a history of contamination, according to Sheep Mountain Alliance.

Colorado, the Alliance warns on its website, is “on track to repeat mistakes of the past.”

The mill in Uravan processed radium for Madam Curie in the 1920s. It switched to milling vanadium, used to strengthen steel, and then to uranium in the 1940s for the Manhattan Project. Eventually it milled uranium for nuclear power.

Life in Uravan, a town of 800 at its peak, revolved around the mill. Even the town’s name came from the minerals it milled: uranium and vanadium. Most men worked at the plant or in the mine, and kids waited on the street in the early evening to hear the whistle blow and welcome Dad home. Jobs outside the uranium industry were scarce and lives were planned around the income earned at the mill or in the mines.

In 1984, the mill shut down. Two years later the Environmental Protection Agency, declared the mill a Superfund site. The EPA found 13 million cubic yards of radioactive tailings and other debris and 380 million gallons of liquid toxic waste. There was so much radioactive toxin that it took 20 years and $120 million to clean it up.

And the radiation had spread so far that the entire town of Uravan had to be torn down. Just like that. Erased from the map. Everything had to be cut apart and entombed, even the trees.

The Uravan theater that doubled as a roller-skating rink was ripped apart board by board and buried. The swimming pool where kids hung out in the summertime is gone. So is the town center where residents got together to square dance. The rock forts that boys built were pulverized and the pebbles hidden under ground.

“I have a lot of fond memories of that area,” Ralph Hurd writes on a website dedicated to the memory of Uravan. “I was sorry to see the town disappear.”

NEXT WEEK: Part Two: Uranium Mining – The Virginia Battleground – Environmental Concerns vs. Corporate Interests