The United States Enrichment Corp., the nuclear enrichment company that has drained billions of dollars from federal coffers and churned through investors’ money with a series of failing business plans propped up by extensive political connections, lobbying and campaign connections, will file for bankruptcy, it announced Monday.
But that will not be the end of the Solyndra-like taxpayer-subsidized project detailed in a Washington Examiner series last month: After asking not to have to repay more than $500 million in debt, it plans to reborrow hundreds of millions from elsewhere and move forward, asking investors to place their bets on a never-before-mentioned $750 million from the Department of Energy that the company says may be coming.
“USEC Inc. expects to file a prearranged and voluntary Chapter 11 petition for relief in the United States Bankruptcy Court for the District of Delaware in the first quarter of 2014,” it said in a press release.
If the government doesn’t cough up more cash, the project will fail again, it said.
Enrichment at the public till
How Republicans - and some Democrats - steered billions to a failing privatized arm of the government many times the size of Solyndra, executives profited, and taxpayers lost.Part One: Feds invested billions in energy firm virtually sure to fail
Part Two: Privatizing energy project led to rich bureaucrats, drained federal coffers
Part Three: Republican leaders steered billions in pork to failing company in home states
“DOE’s ongoing support for the project is a condition to implementing the company’s agreement with its noteholders. The company is currently in ongoing discussions with DOE officials regarding the American Centrifuge project and the proposed restructuring.”
It borrowed more than half a billion dollars — a loan which is due imminently — for a plant that was supposed to have opened by now, but for which ground has not even been broken. The arrangement would give those creditors stock in the company in lieu of repaying it. Its stock is worth less than one-thousandth of what it once was.
The company will remain run by a slew of executives, many of them former Republican government officials, who have kept the company on life support — and at the federal trough — while paying themselves millions of dollars.
The company started as a governmental entity that was spun off into the private sector in 1998.
“We are pleased to reach agreement with a significant number of our noteholders on a plan to improve our capital structure and enhance our ability to be a stronger sponsor of the American Centrifuge project,” said John K. Welch, USEC president and chief executive officer, who earned nearly $7 million in 2011 for heading a company that has debts of $640 million and assets of $130 million.
Not mentioned in the release, but buried deep in a simultaneous filing to the Securities and Exchange Commission, is the fact that this plan relies on $750 million in new government money for which there is no indication it has any assurances.
The plan depends on “the implementation and deployment of a National Security Train Program utilizing American Centrifuge technology with an expected total program cost to be funded by the government of not less than $750 million.” A Google search for "National Security Train Program" pulls up no results.
Despite the writing on the wall that the bankruptcy was imminent, Republicans, including House Speaker John Boehner, pushed aggressively for DOE to give a loan guarantee to the company, even around the time that they attacked DOE for giving one to Solyndra, the solar panel company that went bankrupt and left taxpayers holding the bag.
“This is Boehner's boondoggle,” said Geoffrey Sea, a historian who has studied energy and whose property abuts the Ohio facility where the proposed $4 billion plant would be built.
But it would be President Obama’s DOE to keep the private company afloat if the $750 million materializes. The White House and USEC did not respond to inquiries about the money.