Failing Nuclear Project at Center of Ohio Primary Shockers

by Geoffrey Sea


Results of the March 6 primary election in Ohio's sleepy second congressional district have generated explosive national headlines, on both the Republican and Democratic sides. In the most humiliating election loss by an incumbent so far this cycle, congresswoman Jean Schmidt (R-OH) was defeated by six percentage points in a five-way contest for the GOP nomination.

And her long-time nemesis in politics and in the courtroom, David Krikorian, also may have lost his bid for the Democratic nomination, by 59 votes in the unofficial count. A self-styled Super PAC sponsored robocalls just before election day, boosting a politically-unknown Krikorian opponent named Bill Smith of Waverly in Pike County. (About five hundred absentee and provisional Democratic ballots remain uncounted, so the final outcome on that side remains uncertain.)

The robocall entity calling itself "Victory Ohio Super PAC" is not registered either with the Federal Election Commission or the State of Ohio, and it engaged in no known activity beyond the OH-02 congressional race. The originating Cleveland mobile phone number of the robocalls, which inverted reality by implying that Smith, not Krikorian, was endorsed by the Democratic Party, is no longer in service. Tim Burke and Dave Lane, who chair the Democratic Party committees in the district's two largest counties, Hamilton and Clermont -- committees that had endorsed Krikorian after hearing not a word from Mr. Smith -- are reportedly hopping mad.

On March 9, Gregory Korte and an associate at USA Today published an expose of the "MysterySuper PAC," and the mystery Mr. Smith, a story carried front-page in the Cincinnati Enquirer.

Only a day earlier, Mr. Korte published the results of a USA Today investigation into hypocritical attempts by Republican congressmen, led by Jean Schmidt, to accelerate the award of a $2 billion federal loan guarantee to USEC Inc. for its non-starter uranium enrichment project in the OH-02 district. The very same congressmen have been simultaneously attacking the Department of Energy (DOE) for its loan guarantee to Solyndra.

Korte did not connect his back-to-back stories, but indeed they are connected. That the two biggest shockers of the ten-state Super Tuesday primaries and caucuses emerged out of a single congressional race should be no surprise, since that race is seen as determining the fate of a $5 billion phantom nuclear project at the eastern end of the second district, at a government-owned site near Piketon.

William "Butch" Smith, presumptive Democratic nominee for U.S. Congress

(no authentic photograph has yet surfaced)

Schmidt-Canned

Ms. Schmidt has been USEC's most loyal agent in Congress and one of the largest recipients of USEC campaign cash. In the wake of two successive denials of a loan guarantee by DOE and in time for last Christmas, Schmidt introduced a now-defunct bill to bail out USEC with taxpayer dollars. USEC's future survival as a company, by its own account, depends on pending government bailout efforts, which in turn may have depended on Jean Schmidt's reelection.

On the other hand, Mr. Krikorian, who was widely expected to defeat Schmidt in November had she survived her primary, became the most vocal Ohio politician to question the wisdom of further corporate welfare for USEC, a company allegedly privatized in 1998. In September of 2011, before declaring his 2012 candidacy, Krikorian on his personal blog attacked federal support for USEC as a false jobs promise, "political hope-ium."

In 2012, Krikorian's position has prevailed in Congress, as members from both parties have joined to deny USEC any needed bailout package.

Now a "ward of the state," as the nuclear trade publication Fuel Cycle Week puts it, USEC has withheld disclosure of its 2011 fourth quarter earnings and annual report, pending results of the March 6 primary. As the company must weigh bankruptcy options, politicians and investors expect a long-planned May 2012 closure of USEC's remaining uranium enrichment plant in Paducah, Kentucky, and termination of its centrifuge project in Ohio. 

"The American Centrifuge Plant" or ACP was resurrected from an even older government project in 2001, but eleven years later there is virtually nothing to show for the endeavor, except for a stockpile of wasted federal expenditures, about three dozen large centrifuges referred to by workers as "hunks'o'junk" or "cans'o'spam," and private debts that many fear will wind up being born by U.S. taxpayers.

In recent weeks and days, Secretary of Energy Steven Chu has held successive meetings with members of the Ohio and Kentucky congressional delegations, now fighting over scraps of potential federal assistance. That the two most powerful Republicans on Capitol Hill, John Boehner and Mitch McConnell, hail respectively from Ohio and Kentucky, adds fun and hijinks.

Boehner wanted the USEC earmarks-not-called-earmarks targeted on Ohio, at least on paper, so that neighbor Schmidt could defend her congressional seat against Krikorian. McConnell wanted the same funding diverted to life-extension for the Paducah plant. Thus, national policy and budget allocation decisions depended on the seven-candidate cluster-muck of the OH-02 primary, which has now thrown nuclear futures into glorious disarray.

Adding to the fandango, I write on the first anniversary of USEC's radical turn for the Schmidt-can. The company provided the uranium fuel that began to melt down inside three nuclear reactors at Fukushima following the earthquake and tsunami of March 11, 2011. Not only did that put a damper on happy-talk about USEC, but it deprived USEC of its most reliable market for nuclear fuel. Japanese utilities accounted for between ten and twenty percent of USEC's customer base, and USEC had the misfortune of citing TEPCO -- operator of the Fukushima reactors -- as the lead future customer for uranium to be enriched at Piketon.

Though all seven primary candidates in the OH-02 congressional race resisted touching the USEC hot potato on the stump, all were aware that the low-budget congressional race was penny-ante compared to the many billions of dollars at stake in USEC's fast or slow-motion collapse.

The Obama Administration has continued to indulge USEC, offering the nonsensical promise of a new "Research, Development, and Demonstration" project in the President's 2013 budget proposal, raw meat thrown to the fighting lions of the Boehner-McConnell arena. This is generally understood as another kick-the-can operation, on the premise that a USEC bankruptcy filing, with a suped-up layoff announcement in depressed southern Ohio, can be postponed until after November.

Adding Tom Clancy intrigue and conspiracy-theory potential, federal support and administration of the centrifuge project come not from DOE civilian programs but from the National Nuclear Security Administration (NNSA), a clandestine group in charge of tracking and controlling rogue nuclear weapons. Some federal payments to USEC have been "black budget," and the Administration's proposed new USEC dole would involve transfer of funds from NNSA's other activities to USEC, a transfer that has come under fire from members of Congress and NGOs.

Piketon site contractors have been notorious for meddling in area politics; the current mayor of Piketon gets the greater portion of his income by working as a USEC security guard, for example. In 2006, area Democrats and Republicans were rounded up by contractors to support spent nuclear fuel storage at the Piketon site. In 2009, USEC hosted a shindig at Piketon to announce a "coming nuclear reactor," which turned out to be little more than a 2010 reelection platform for Governor Ted Strickland, a Democrat, and Republican congresswoman Schmidt. USEC was the fifth largest PAC contributor to Jean Schmidt's 2012 congressional campaign.

Jean Schmidt's haunt on the Ohio River

(no offense intended to witches or Greens)

Therefore, it came as little real surprise that two phantom candidates from Pike County entered the 2012 congressional contest in OH-02, one Republican and one Democrat, even though Pike County, with a total population of about 28,000, represents only about 3% of the district's voter base.

The Republican, Joe Green, claimed to be a resident of Piketon and the CEO of an unnamed "successful technical consulting company" for which no website or public record seems to exist. His centerpiece program for bringing more "technical and professional" jobs to the impoverished region appeared to be nothing but a plug for USEC's centrifuge project. Announced in the fall with electronic hoopla, his campaign vanished once it became clear that Schmidt would vigorously defend her seat.

Then came Mr. Smith, referred to in almost all of the newspaper coverage as "the mystery candidate," including even his hometown newspaper, the Pike County News Watchman, which, in the March 11 edition, calls him "a virtual unknown in the political realm." Smith made no campaign appearances and did nothing to identify himself to voters, but nonetheless managed to achieve stratospheric levels of name recognition, even though practically nobody knows the man -- his work as a long-distance trucker leaves him very little time to socialize in Ohio. The News Watchman couldn't track him down for a statement until after his apparent victory in the primary. The statement was: "I haven't even been home since the primary election...I honestly thought some of my friends were messing with me."

Asked about his policy positions, none of which were stated during his non-campaign, Smith told the paper: "I'm not much of a politician, but we'll see what happens." If this Mr. Smith goes to Washington, don't expect a Jimmy Stewart moment. According to the News Watchman, "Smith said he really has no idea how he won, and called his victory 'a miracle.'"

Miracles have some history in Pike County, related like everything else to the federal site south of Piketon. In the 1970s, politicians and developers hawked a project called "Miracle City" to be built on the edge of the "atomic reservation," as a commercial/residential spinoff, utilizing waste heat from the old uranium enrichment plant. Now, as the local joke goes, the miracle is that the whole city is invisible!

Let's return to the miracle of the mystery candidate after paying homage to the passing of Ms. Schmidt from the American political landscape.

Enough of this Schmidt

With all precincts reporting, Jean Schmidt took less than 43% of the GOP primary vote, to 49% for Brad Wenstrup, a medical doctor and Iraq War veteran who has never held elective office. Wenstrup is expected to win the general election handily, regardless of his Democratic opponent.

Schmidt's departure from Congress will remove a landmark of imbecility and shamefulness. After the OH-02 congressional district had been gerrymandered to include the Piketon site for its pork production capabilities, Schmidt inherited the congressional seat from Rob Portman in 2005, as he began his ascent to environmental insult stardom. Schmidt's debut on the floor of the House, dressed in a Captain America suit, was to attack ex-Marine congressman Jack Murtha as a "coward." She did display real courage in backing a constitutional amendment against flag desecration, since the measure as proposed might have landed her in jail as a felon, just for her wardrobe.

In 2006, Schmidt set a record of sorts by becoming the first House member in U.S. history to invite high-level nuclear waste into her district, albeit ninety miles from her posh suburban home. Schmidt supported a USEC-backed insider proposal to move all or most of the country's spent nuclear fuel to Piketon for indefinite "interim" storage.

I confess to having exposed the scheme, after I conducted a bushwhack interview of Schmidt at the 2006 Scioto County Fair. Her admission that she knew of the plan, and her characterization of it as "complex" and requiring study (she had already signed secret letters of support) told area residents all they needed to know about the congresswoman's veracity.

On Halloween of that year, the Cincinnati Enquirer published a cartoon by Jim Borgman, lampooning Schmidt as a nuclear ghoul on the doorstep of unsuspecting homeowners, with a trick-or-treat bag of nuclear waste. That started a trend of depicting Schmidt as a "wicked witch," for which I feel I may owe some apology -- to witches.

Things slowed down for the congresswoman, after she was banned from some area newspapers when they discovered that an op-ed piece submitted under her own name had actually been plagiarized from a police officer. But business picked up after the 2008 election campaign, when Schmidt spread the lie that candidate Barack Obama had "promised" USEC a $2 billion loan guarantee if he would be elected president, a promise that would have been unethical and illegal if it had been made, which it hadn't. Schmidt even organized the busing of USEC's Ohio employees to Washington, so they could lobby for the loan guarantee, on the basis of the fictitious "Obama promise."

Jean Schmidt in her infamous assault on a U.S. marine

In 2009, Jean Schmidt sent letters to her Pike County constituents, asking us to pardon the traffic and other disruption caused by construction of a nuclear reactor complex at Piketon, an accomplishment for which she claimed credit. On planet Earth, there was not even a nuclear reactor proposal -- no preliminary site permit was submitted, no site was ever specified, and, most importantly, no company offered to pay to build one. Schmidt has taken the Ohio motto "Birthplace of Invention" a bit too literally.

After the spent fuel storage and nuclear reactor fiascoes, Schmidt returned to lobbying for a loan guarantee for her corporate sponsor USEC, essentially for doing nothing. For six years, USEC failed to complete a test-cascade that would prove the viability of its uranium enrichment centrifuge technology. As a result, DOE denied the USEC loan guarantee application twice, in 2009 and 2011. Undeterred, Ms. Schmidt introduced a bill offering $300 million of federal assistance to pay for the viability demonstration that USEC had failed to accomplish.

Hearings and mark-up on the Schmidt bill were scheduled for January, but were canceled abruptly after protest from both parties. House Republicans worried that Schmidt was spoiling their partisan Solyndra narrative. On the Democratic side, according to one congressional aide who prefers not to be identified, the Schmidt bill "failed the stupid test -- it was just too stupid for committee consideration."

While Wenstrup has not advertised a position on USEC, his principled opposition to government bailouts suggests he will be a less compliant agent of the company. Though making regular donations to Schmidt, the USEC PAC made no donations to Wenstrup or any other candidates in the congressional race.

The final stickiness, best referred to as Turkish Taffy, came in a flurry of ethics charges related to unpaid legal services provided to Schmidt by attorneys with direct ties to the government of Turkey. Meanwhile, Schmidt has served as co-chair of the Turkish Caucus in Congress, though neither she nor any appreciable community in southwest Ohio is Turkish. In 2011, the House Ethics Committee ordered Schmidt to reimburse the lawyers for nearly a half million dollars in work, but area newspapers tracking the story have so far found no evidence of payment. Now that Schmidt will be out of Congress, the chances of repayment might be considered as equal to the chances that USEC will build a centrifuge plant or a nuclear reactor.

On election day, Schmidt was so confident of victory, she spent the day at a private luncheon with the Turkish ambassador in Washington DC, according to Politico. Indeed, it was her Turkey Day.

Now with ten months in Congress as a lame turkey ahead of her, Schmidt still can do substantial damage. Other GOP members of the Ohio House delegation announced on March 8, two days after the primary, that they will attempt to attach a new USEC bailout provision to the already-mucked-up transportation bill. Non-coincidentally, Schmidt sits on the Transportation Committee, where she can now trade quids for quos free of likely consequence. Her political capital, however, is spent, and titular leadership of the rump USEC forces in Congress has been turned over to the Republican congressman from northeast Ohio Steve LaTourette.

An article in the March 8 Roll Call says that Schmidt's defeat should serve as a warning to all incumbents in a Schmidt-like position, but I can't imagine whom that might include. The Jean Schmidt embarrassment remains in a class by itself.

Mystery Man Demystified

Unable to contact William "Butch" Smith directly, USA Today reporter Gregory Korte found a spokesman for the mystery candidate, Pike County Commissioner Blaine Beekman. “If you had to produce a prototype for the absolute common man," Beekman told Korte, "that’s what you get. He drives a truck. He lives with his mother.” 

Beekman should know, because, in fact, Blaine Beekman produced the Smith candidacy. Records at the Pike County Board of Elections show that Beekman circulated the majority of petitions to place Bill Smith on the ballot. Friends of Mr. Smith confirm he would not have entered the race of his own accord -- he was "volunteered" for the job. Victory came as a shock to Smith, whose one statement to the media afterward thanks "the man upstairs" for the surprising turn of events. All indications are that "the man upstairs" was Beekman. Who then is Blaine Beekman and why did he recruit a man who lives with his mother as a nominal candidate for the U.S. Congress?

Before being elected County Commissioner in 2008, Blaine Beekman served as Executive Director of the Pike County Chamber of Commerce. In that position, Beekman led the drive to demonstrate "local support" for USEC's American Centrifuge Plant and subsequently falsified local support for the storage of spent nuclear fuel in 2006.


Beekman was a founding board member of the misnamed Southern Ohio Diversification Inititiative (SODI), which was funded by the Department of Energy with initial grants of $10 million to find new nuclear projects to locate on the Piketon site, stoking what had become the drive train of the bipartisan south Ohio political machine. When privatized in 1998, USEC was given a seat on the SODI board.

Along with other Pike County Democrats, Blaine Beekman pressured presidential candidate John Kerry to endorse the USEC project before a large campaign rally near the Piketon site in September, 2004 -- the year that Kerry was infamously betrayed by south Ohio Democrats, resulting in the narrow loss of Ohio's electoral votes, and therefore the national election.

I recall a conversation I had with Blaine at the time, in his office at the Chamber of Commerce. I asked him why he appeared to be backing Kerry, when Beekman had to know that Kerry's policies on energy and nuclear nonproliferation would kill USEC's centrifuge project. Beekman turned sheepish and didn't answer me.

After that, Blaine Beekman claimed credit for producing six thousand postcards from Ohio residents supporting USEC's decision to site its centrifuge plant in Ohio, instead of Kentucky. At a DOE public hearing in March, 2007, Beekman publicly stated that the postcards supporting USEC should be taken by the government as also supporting a nuclear waste facility at Piketon. About three hundred area residents in attendance disagreed.

                                                                   

Blaine Beekman, the Wizard behind the curtain

of the mysterious Mr. Smith campaign (above)

and actor Frank Morgan in the title role as the Wizard of Oz (below)

In 2009, it was Blaine Beekman who facilitated the hoax of a nuclear reactor at Piketon by recruiting Governor Strickland to the scheme, and though he is a Democrat, Republican Jean Schmidt personally thanked Blaine Beekman for his work from the stage at the reactor promotional event hosted by USEC. Beekman became the chief local huckster of the reactor fraud, telling area residents that the nonexistent project would be "BIG! REALLY BIG!"

Beekman himself will be on the ballot in November, running for reelection as County Commissioner. Unopposed in the primary, he will be unopposed in the general election as well. Tellingly, Pike County Republicans chose not to run any candidates this year, not only for the two commissioner slots on the ballot, but for any county office, validating the old saw that the most loyal Republicans in southern Ohio are Democrats.

Beekman has made no secret of his cozy relationship with Republican lawmakers. He has regularly arranged photo ops with Congresswoman Schmidt, and on February 17 of this year, he co-hosted a "roundtable" on support for USEC's centrifuge plant at the Piketon site with U.S. Senator Rob Portman, who of course is a Republican.


Bill Smith's victorious candidacy, in other words, is a miracle only by the grace of his mouthpiece, Blaine Beekman. But why would Beekman recruit Smith, whose candidacy had to be considered too unlikely to be effectual?

The answer to that is a seldom-studied chapter in the south-central Ohio political history. During the 1980s, when Pike County was part of the old sixth congressional district, Republicans and conservative Democrats colluded in getting a man named Bob Smith to run for the Democratic nomination. This Bob Smith was also a mystery man, and like the latter-day Bill Smith (relation unknown), Bob Smith would make no campaign appearances, and he refused to circulate his photograph.

With no visual image or biographical information to go on, ill-prepared primary voters of the 1980s would often imagine that Bob Smith was either a Bob Smith they knew, or a close relation. Thus, Bob Smith repeatedly won the OH-06 congressional nomination, preventing a more effectual Democrat from challenging the consensus Republican in the general election. That scheme continued until Ted Strickland, who had been recruited into politics by a group of Pike County Democrats, including Blaine Beekman, returned from an earlier defeat to run for Congress as their boy.

Banking on no one remembering the Mr. Smith of the 1980s, Blaine Beekman simply replayed the scam. Of the 2012 Bill Smith, Beekman told USA Today: “People call him the ‘mystery candidate.’ He’s really the impossible candidate.” That must get a chuckle at the clubhouse. And of the mysterious Victory Ohio Super PAC, Beekman says: “ it clearly exists somewhere, because it spent a lot of money,” But, as quoted by USAToday, he denies knowing who is behind it. “To be frank with you, there’s no one in Pike County that would have the money to do these things. We have the highest unemployment rate in Ohio.”

Now that is what folks in these parts call a lie. Who in Pike County would have the money to tamper with a federal election by funding untraceable robocalls? Well, how about the private technology corporation that has received hundreds of millions of dollars in federal subsidies so far, to putz around on the Piketon site with no actual product to show for it?

But ne'er would I suggest that USEC is the only likely suspect. Bill Sloat, on his popular DailyBellwether blog about Ohio politics, thinks something fishy is going on, since not only has "William R. Smith" campaigned incognito, but false photographs and false biographical information have been circulated about him. Specifically, a bio of candidate Smith has been circulated, falsely suggesting that he is a member of the Steelworkers Union, the union that represents workers at the Piketon atomic site. Sloat tracked the origin of the robocalls to an out-of-service Verizon mobile phone number in Cleveland, at the other end of the state.

Cleveland, Mr. Beekman, and Ms. Schmidt, all have a definite connection. A Cleveland "entrepreneur," who is also a former USEC board member and former maverick candidate for mayor of Cleveland, has founded a company called "the Piketon Initiative for Nuclear Independence." It was this company, ePIFNI as they call it, that submitted the formal proposal for spent nuclear fuel storage at Piketon in 2006, a proposal endorsed by Congresswoman Schmidt and Chamber of Commerce Director Blaine Beekman. ePIFNI continues to submit bids for contract work at the Piketon site.

Investigation of just which wealthy entities were behind the illegal robocalls that tampered with a federal election will be referred to the Justice Department.

But for now, the little people of southern Ohio rejoice. Last week's tornadoes appear to have done some good. The house was brought down on Jeannette Marie Hoffman Schmidt. The Wicked Witch is dead!

Wicked Witch of the East from The Wizard of Oz (1939)

For more on USEC's American Centrifuge Plant see Geoffrey Sea's series at Ecowatch.org