Are the French earning billions off of Lindsey Graham’s nuclear plant?

at 06:00 AM ET, 06/25/2013

“Worse, [Sen. Lindsey] Graham’s pork-barrel project is run by a French company — sending tax-dollars overseas.”

voiceover in television ad placed by Friends of the Earth, released June 19, 2013

This ad by an environmental group, attacking a pet project of Sen. Lindsey Graham (R-S.C.), caught our attention with its claim that the ultimate beneficiary of taxpayer funds spent on a South Carolina nuclear project is “a French company.” The ad even ends with a snorting pig (representing a pork-barrel project) dressed up in a beret, French striped shirt and French-looking mustache.

Last year, conservative groups attacked the Obama administration for supposedly sending American jobs overseas with U.S. taxpayer money. In those ads — which we found worthy of Pinocchios — the bad guys were China, Mexico and even Finland. As we noted:

We live in a globalized world. American companies make products overseas; foreign companies make products in the United States. Sometimes parts are made in a variety of places overseas and then assembled in the United States. That’s a fact of life, and these ads frequently confuse the difference, so that any hint of foreign involvement is depicted as a bad thing.

 

So now a liberal group is throwing similar charges at a conservative senator. Do they have any more grounds to stand on?  We take no position on whether the project is a boondoggle or a waste of taxpayer funds; there are certainly valid questions that could be raised about it.

 

The Facts

The ad concerns the construction of a mixed oxide (MOX) fuel fabrication facility, known as the Savannah River Site in Aiken, S.C. The project — now costing at least $7 billion — is certainly troubled and its costs are soaring.  The Center for Public Integrity published a lengthy and fascinating look Monday at the nuclear nonproliferation diplomacy with Russia that led to the construction of this plant, which is designed to recycle plutonium from weapons into fuel for commercial reactors. The article, part of a four-part series on the project, argues that the United States got the short end of the deal.  

The plant is being designed and constructed by a company called Shaw AREVA MOX Services LLC. That company is in turn 30 percent owned by AREVA Federal Services, which is indeed a subsidiary of a French company, though based in Maryland with a substantial U.S. presence (about 5,000 employees). The design of the South Carolina facility is based on AREVA’s MOX plants in France.

The other 70 percent — the “Shaw” part — is owned by an energy infrastructure company called Chicago Bridge & Iron N.V., which famously now has little to do with Chicago, bridges or iron. CBI completed a deal to buy the Baton Rouge-based Shaw Group for about $3 billion  this year. To make things even more complicated, CBI’s administrative offices are in The Woodlands, Tex., near Houston, but it is actually a Dutch company, though a U.S. subsidiary was created for this project because of restrictions on foreign control. 

As we said, it’s a globalized world.

Tom Clements, the southeastern nuclear campaign coordinator of Friends of the Earth — who also ran for the Senate in 2010 on the Green Party ticket — said that the design of the plant is based on AREVA’s MOX plant in France. “AREVA’s design of the plant, which would include plant layout, placement of components and equipment and operational aspects is, in my opinion, by far the most essential aspect of the management by Shaw AREVA MOX Services,” he said in an e-mail.  “The design of the plant is indeed ‘run by’ AREVA and the construction aspect is not the driver of design and operation of the plant. 

Clements conceded that “I don't know how much money is sent to France.  I have spoken with various French nationals working on the project and U.S. nationals who have worked in France, so even on the employee level there is flow of cash to France.” Ultimately, he said, AREVA could bid on the $543 million operating cost of the plant.

In other words, this is a pretty slim reed on which to claim the project “is run by a French company — sending tax-dollars overseas,”  especially because the line comes right after  the voiceover claims that “Graham’s MOX plant is $6 billion over budget.” The clear implication is that much of this money is being sent to the piggish French.

Dolline Hatchett, a spokeswoman for AREVA North America, said: “AREVA Federal Services is a non-controlling minority partner and the technology provider, while CBI is responsible for the construction of the plant. Funds received from the MOX Project are used for MOX construction, labor costs and activities necessary to complete the project.” About 500 of the 5,000 U.S. employees work for AREVA Federal Services, she said. Since virtually all of the funds stay in the United States, only $9 million from the project a year would be reported as earnings from North America by the parent company in Paris, she said.

Clements also pointed to training that the French company was providing in Europe to selected employees. “Approximately 93 people will be trained at the reference plants in France,” Hatchett said. “In turn, they will train the approximately 500 workers who will ultimately operate the MOX facility in South Carolina.  These workers are all Americans.”

Hatchett said the project has relied on more than 1,300 suppliers spread over 40 states, including $860 million in small-business contracts. The site employs about 2,400 people, she added, with one-third expected to remain as permanent employees when the project is completed.

 

The Pinocchio Test

We assume there must be polling that indicates that jingoism works in attack ads, which is why such claims pop up in ads sponsored either by the left or right.

But the notion the plant is “run” by a French company, or that billions of taxpayer dollars are flowing overseas, is a fallacy and highly misleading, especially when compared to significant sums of money spent in the United States, even if it turns out to be a boondoggle.

Four Pinocchios

 



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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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