How the Plutonium Settlement is Funding a DOE Contractor

by Don Moniak
February 7, 2023
(updated July 2, 2023)

Following is a timeline of the known funding decisions and discussions (1) surrounding the proposed Department of Energy’s (DOE) Savannah River National Laboratory (SRNL) off-site Workforce Development Center office complex. Lobbying for the facility began in 2020 under the title of an “innovation district” to be situated in tandem with two planned high-tech developments at University of South Carolina at Aiken.

Eventually, in June 2022, a budgetary line item of “SRS/National Lab off-site infrastructure” was finalized that allocated $20 million from the State of South Carolina’s Plutonium Settlement funds to Aiken County for the project, with SRNL having final approval of a site.

The funding represented only one-sixth of a total $120 million sought at the end of 2021 by the South Carolina Governor’s office.

In essence, Governor Henry McMaster sought to return nearly one-quarter of the plaintiff’s settlement to a member of the defense, but the legislature whittled the effort down to $20 million—four percent of the settlement.

The latter figure reflects a previously unreported contractual commitment to a Workforce Development facility within the SRNL contract by the State of South Carolina’s University system.

The Workforce Development facility is tentatively planned on three to four former Project Pascalis properties (Warneke Cleaners, McGhee Building, and Holley House) that will be owned by the City of Aiken once title is transferred from its nearly defunct Municipal Development Commission (AMDC). The proposal involves shifting 80-100 personnel, nearly ten percent of the lab’s nearly 1,100-person workforce, from the lab’s human resources, technology transfer, educational outreach, and public relations departments within the gated and guarded laboratory facilities at the 300-square mile nuclear complex to a mostly unclassified, unguarded downtown facility.

The Plutonium Settlement Announcement

On August 31, 2020, South Carolina Attorney General Alan Wilson announced the largest settlement in history between the State of South Carolina and the federal government. The settlement ended four years of litigation pertaining to the storage of approximately 9.5 metric tons of surplus military plutonium transferred from former nuclear weapons production sites since 2002 for long-term storage (defined as up to 50 years) at DOE’s Savannah River Site (SRS).

A $600 million dollar settlement with the U.S. Department of Energy was reached that involved continued storage until 2037. Attorney General Wilson set aside $75 million for legal fees to two private law firms involved in the litigation. A subsequent appeal of that legal fee award is under review by the South Carolina Supreme Court.

The crux of the legal debate was an amendment to the 2002 Defense Authorization Act requiring that ten percent—one ton—of the surplus plutonium be removed from SRS by 2016. But the core issue motivating the litigation was a general sense of betrayal after DOE abandoned the plutonium fuel fabrication facility at SRS known as the MOX plant—ending a long-sought production mission revered by atoms-for-peace, nuclear power advocates across the two-state Savannah River region of South Carolina and Georgia.

City of Aiken Lobbying Efforts, Round One: Defining Shares

Lobbying in Aiken County for the $525 million in the remaining funds began in earnest within days of the announcement, and the Aiken Municipal Development Commission (AMDC) assumed a lead role on behalf of the City of Aiken.

In a letter to local elected officials dated September 17, 2020, the AMDC argued on behalf of allocating the remaining $525 million to the three SC counties surrounding SRS: Allendale, Barnwell, and Aiken.
The reasoning set forth was contrary to the carefully sanitized, local public image of Savannah River Site as a benign neighbor:

“The risk of SRS operations and shipping/storing plutonium rests squarely within these three counties.” (2)

This statement was inaccurate—plutonium transit routes did not involve Allendale or Barnwell counties; and Aiken County was on the route for only fifteen miles of the 1600 to 2700 mile surplus plutonium journeys of the early 2000s. Still, the admission of high risk was unusual considering that two AMDC members held high level day jobs with DOE contractors that normally downplay the hazards at SRS.

Stuart MacVean is the CEO of Savannah River Nuclear Solutions (SRNS), the consortium with the primary operating contract at SRS. At the time of the letter, the Savannah River National Laboratory (SRNL) remained under the purview of the SRNS contract. AMDC Chair Keith Wood is a Vice-President for Amentum Corporation, a lead contractor in the radioactive waste processing and risk reduction consortium known as Savannah River Mission Completion (SRMC).

Chamber of Commerce President J. David Jameson was also a commissioner. The Chamber had never acknowledged any real dangers at SRS until this letter.

While the AMDC reasoned that the three counties “bear the burden of the decision to delay removal of the plutonium from SRS,” it shifted its larger focus with a two-part contention that Aiken County deserved the largest share of the plutonium settlement pie. First, the commission minimized the downwind and downriver communities by arguing that Aiken County bears the greatest risk:

“There is no debate that due to 70 years of SRS operations, Aiken County and the City of Aiken share the greatest impact and risk in South Carolina. Aiken County serves as the home of virtually all the 35 million gallons of high- level radioactive waste which is a result of the production of nuclear materials such as plutonium. The liquid waste is stored in large carbon steel tanks and serves as the State of South Carolina’s #1 l environmental risk and will impact our community for decades”

Second, the commission argued that the share of of the settlement spoils be divided on the basis of employee distribution; and not on downstream or downwind risk from radiochemical operations or the tons of stored plutonium, writing:

“The distribution of funds should be based on the formula that only includes employee population residence within the three impacted counties.”

Since half the SRS workforce lives in Aiken County and a quarter resides in the City of Aiken, the AMDC formula, if implemented, would have insured that the relatively affluent City of Aiken received a lion’s share of the funds.

City of Aiken Lobbying Efforts, Round Two: Naming Projects

The AMDC’s proposal that the state grant localities the funds, and then allow local elected officials to decide how best to spend the money had a short half-life.

By December of 2020, following three months of discussions, the AMDC set forth a vision for Aiken County’s share of the plutonium funds that involved a generous slice for Department of Energy projects—-essentially returning some of the plaintiff’s funds back to the defendants. The basis for this recommendation was the City of Aiken’s strategic economic development plan more commonly known as the “AECOM Plan.” AECOM was a long-time DOE/SRS contractor whose urban planning division was paid $115,000 by the City of Aiken to complete the plan.

In a December 18, 2020 letter to Mayor Rick Osbon, AMDC Chair Keith Wood outlined the commission’s priorities for the City of Aiken, advocating for $95 million of funding. Topping the list was $50 million for an “innovation ecoystem:”

“Aiken’s ability to conceive, research, develop and commercialize new technologies and business models is based on an interconnected innovation system including the U.S. Department of Energy, the Savannah River National Laboratory, USC Aiken, the U.S. Army Cyber Command and other regional and local businesses.”

The $50 million proposal was divided in four parts:

• $5 million to widen University Parkway to account for the increased traffic. 
• $10 million for U.S. Department of Energy’s already planned, $50 million Advanced Manufacturing Collaborative; for which Savannah River National Laboratory (SRNL) was contractually obligated to operate. 
• $15 million for the already planned South Carolina National Guard cybercommand center known as the “DreamPort,” which involved transferring the guard’s cyber capabilities from an existing, temporary facility in Columbia to a permanent facility in Aiken. 
• $20 million for an “innovatation district” near USC-Aiken, which the commission described in vague terms that did not include SRNL: 
  

“The AECOM study released in December discussed catalytic investments to establish an innovative district near USC–Aiken. This would be an opportunity to foster the clustering of businesses related to advanced manufacturing, software/ information technology and take advantage of synergies in the region. The district would be mixed use in nature, providing access to retail, dining, housing and other amenities, in support of new research and production facilities operated by the private sector/ universities.”

In a December 20, 2020, letter to Aiken County Council Chairman Gary Bunker, City of Aiken Mayor Rick Osbon copied and pasted the AMDC’s $95 million in requests, and then added another $131 million for a total lobbying request of $223 million—-more than forty percent of the available funds.

The Battelle Savannah River Alliance Contract

Also on December 20, 2020, the Department of Energy awarded Battelle Savannah River Alliance (BSRA) a $1.9 billion, five year contract to operate the Savannah River National Laboratory (SRNL) with an option to extend the contract to ten years. The alliance is composed of the Battelle corporation, which operates or assists in operations at numerous other national laboratories; and five regional universities: University of South Carolina, Clemson University, South Carolina State University, Georgia Institute of Technology, and University of Georgia.

The contract scope of work made clear SRNL’s importance to DOE’s decades-old environmental cleanup mission, and the National Nuclear Security Administration’s (NNSA) nuclear weapons program, by providing “ the Department with a combination of infrastructure and capabilities in nuclear science and nuclear chemical processing that is not currently provided anywhere else in the DOE complex.” The lab’s most critical role was identified in traditional “bomb plant” terms:

“SRNL is the only technology provider for the SRS tritium processing and gas transfer system loading and testing; SRNL’s competency is of critical importance to the effectiveness of the U.S. nuclear stockpile.”

Tritium gas is a staple in the U.S. nuclear weapons arsenal, with approximately four grams of gas providing a massive explosive boosting power to the primary nuclear explosive called “plutonium pits.” SRNL’s core competency in this specialized field also mandates, without question, a high degree of secrecy.

Contract provisions pertinent to the current proposed Workforce Development Office Complex include:

• A requirement that BSRA assist in the design and construction of,  and subsequently operate, the Advanced Manufacturing Collaborative at USCA. (Section C. 2.2.4) 
• A commitment from the State of South Carolina to “make a substantial investment to support DOE and SRNL,” that included a “possible infrastructure investment colocated with SRNL to support workforce development.” (Section J-14) (4) Such facilities are common at other nuclear weapons production complex national laboratories (see cover photo of the off-site Battelle-University of Tennessee facility miles from the gated and guarded Oak Ridge National Laboratory and Y-12 plant.
• A requirement that all “off-site” research and development work be reviewed and assessed for hazards and risks; and an “integrated management approach for management and utilization of SRNL facilities and infrastructure.” (Section C2.2.6) 

AMDC’s Early Discussions on the “Innovation District”

On February 16, 2021, then USCA Chancellor Sandra Jordan outlined her vision of the Advanced Manufacturing Collaborative (AMC) during the AMDC’s monthly meeting; a meeting where half of the commissioners were absent—including one of Stuart MacVean’s eight absences in 2021. According to meeting minutes, Jordan described the potential of the AMC and the National Guard Dreamport, but there was no reported discussion of the envisioned $20 million “innovation district.”

Jordan described the role of SRNL as being integral to the $50 million manufacturing collaborative:

“Dr. Jordan stated by locating the AMC, the wing of the National Lab, at USC Aiken some of the things they were excited about is that they get to access the campus environment and help recruit new young scientists and engineers.”

While Jordan stated, “this would place all of the benefits of a National Lab in the middle of our town,” the middle of our town in this case was on the USCA campus.

The issue did not arise publicly again until June. Minutes from the June 8, 2021, AMDC meeting describe how the vaguely described “Innovation District” became a vaguely defined SRNL project

“Mr. Jameson. Convenor, stated at the last meeting he had said that he and Mr. MacVean were going to meet with Vahid Majidi, National Lab Director, to begin the conversation about the Innovation District. That meeting took place last week. He noted that Mr. Majidi and Mr. MacVean clearly understand, after the investment of the AMC and the potential investment of DreamPort, why a vision or creating an Innovation District is the next right step. He felt that Mr. Majidi is committed to helping MDC with the task. Mr. MacVean has someone on his staff who has economic development experience, and that person has been tasked with reviewing innovation parks across the country, seeing what has worked effectively and what has not. He will pull a report together for us. The report will be available before the end of July. He said that report will give us another tool to use when we are selling the need for funding the Innovation Park to the decision makers for the settlement funds. There was discussion that Mr. Majidi be invited to a MDC meeting after the report is prepared to give the Commission an update.”

August 2021 to December 2021: Legislative Discussions Begin:

Preliminary discussions for the plutonium settlement funds began during the 2021 legislative session, but more serious negotiations were initiated after the legislative session:

• On August 17, 2021, Representative Bill Clyburn (D-Aiken/Edgefield) was named second in command of an ad-hoc committee working to divide up the funds. 
• An August 20, 2021, summit was hosted in Columbia by Governor Henry McMaster. .  At the meeting North Augusta Mayor Britton Williams lobbied for funding for a cyber center to capitalize on cyber defense developments at nearby Fort Gordon.  
• A September 18, 2021 legislative hearing, during which Senate Minority Leader Brad Hutto (D-Orangeburg) advocated for the largest shares for the counties surrounding SRS and smaller shares for the next “ring of counties” such as Orangeburg, Bamberg, and Edgefield.  In a followup October 4, 2021, letter  to key legislators, Aiken County Council Chair Gary Bunker lobbied for a “majority of these dollars” to be allocated to the three county area for “cyber infrastructure, industrial development, sewer and water upgrades, educational infrastructure, and broadband access.”
• On November 1, 2021, Senate Majority Leader Shane Massey (R-Edgefield) advocated for the regional approach to funding distribution, and described “businesses that are negatively affected because of decisions the federal government has made regarding the storage or the distribution of the plutonium.” His sentiment echoed a long-standing contention made by Barnwell County officials—who also rightfully contend they were the only county to lose access to the Savannah River during the federal land confiscations of the early 1950’s.

The Governor’s Proposal: $120 Million for Battelle/SRNL

In a December 9, 2021, letter, to House speaker Jay Lucas and Senate President Thomas Alexander, Governor Henry McMaster presented his proposal for insuring “the communities surrounding SRS be the prime beneficiaries of these settlement funds.” His proposal, since deleted from the Governor’s website, recommended allocating all the funds to the three county area—- $451.5 million in defined projects and a reserve fund of $73.5 million.

Perhaps referring to the series of high-level hearings and meetings in Augusta and September, the Governor stated that,

“ Public meetings were held with stakeholders from the CSRA to receive input, information, and proposals for how these funds should be invested.”

Governor McMaster did not describe any private meetings with federal contractors that may have contributed to his unusual proposal to allocate nearly one-quarter of the funds, $120 million, to DOE-SRS contractor “Battelle Alliance at Savannah River National Laboratory.” McMaster wrote:

“The one-time investment of $120 million will be used over the next five years by the alliance to hire scientists, grant scholarships, and upgrade equipment at SRNL, as well as for the construction of a new facility to house the alliance at SRNL.”

AMDC-SRNL Planning Goes Into High Gear, Behind Closed Doors.

Prior to any 2022 legislative negotiations, the secretive AMDC resumed its “Innovation District” discussions with the secretive National Laboratory, joined by past and present USCA officials. In December the shift went from an innovation district within the USCA campus to one that included downtown Aiken.

In a December 15, 2021 email to AMDC part-time, $4,000 per month Program Manager Tom Hallman, and AMDC members Douglas Slaughter, Stuart MacVean, Chris Verenes, and Keith Wood, David Jameson wrote:

“I have arranged for (USCA Chancellor) Dan Heimmerman and (SRNL Director) Vahid Majidi to join me for lunch on Friday, January 7 at noon at the Chamber to begin a conversation about an innovation park.” (1)

Tom Hallman replied: “Count me in. I thought you might have someone from the University collaboration w/Battelle, but maybe Vahid speaks for them.”

In a followup December 20th email to AMDC “Executive Committee” members—-David Jameson, Chris Verenes, and Tim O’Briant—Chairman Keith Wood asked:

“Does everyone have some time Wednesday morning for a call to discuss the SRNL/University facility and possible locations for downtown Aiken? I believe we need to be ready to offer up a few alternatives to Vahid and company.”

In his report on the January 7th meeting during the AMDC’s January 11, 2022, public meeting, Jameson provided no indication of a downtown option for any part of the USCA Innovation District. According to meeting minutes, the primary focus of the meeting was on the Advanced Manufacturing Collaborative to be operated by SRNL and the SC National Guard’s cybercommand “Dreamport.”

The 2022 Legislative Negotiations

Also on January 11, 2022, Senate Bill 956, to “Appropriate Settlement Funds Paid to this State by the Federal Government for Storing Plutonium at the Savannah River Site” was read in the Senate. Absent from the spending bill was the Governor’s proposal to return $135 million to DOE projects. A single line item identified only $20 million for “Off-site infrastructure Improvements for SRS/National Lab, including the  Aiken Technology/Innovation Corridor.” The lead sponsor of the bill was State Senator Tom Young (R-Aiken).

The House came back with a proposal led by Representative G. Murrell Smith (R-Sumter), Representative Clyburn, and Representative Lonnie Hosey. (D-Barnwell). While the SRNL funding was intact, notable new funding proposals included $223 million for the Port of Charleston, $31 million in funding for Edgefield County projects, and a combined $8.1 million for the (Clyburn) Rural Health Center, (Beverly Clyburn) Generations Park, and the downtown Aiken train museum.

Missing from the new funding mix were several rural Aiken County projects: upgrade to the county’s vital Horse Creek Wastewater Plant, a new facility for Aiken Technical College’s Nursing program, and $5 million in infrastructure funds for the smallest towns in Aiken County—Jackson, New Ellenton, Salley, Wagener, Monetta, and Burnettown. The changes prompted a letter of concern to the local delegation from Gary Bunker.

The Senate returned with another version, and the differences between the two versions were great enough to send it to a conference committee. For Aiken County, the final bill retained the $20 million for the “Offsite Infrastructure SRS/National Lab.”

The AMDC Hints at the Future.

No other progress was reported by the AMDC on the “Innovation District” proposal until its last public meeting on June 13th. Because the commission stopped meeting after the July 5, 2022, Blake et al vs City of Aiken et al lawsuit to stop Project Pascalis, the minutes were not publicly disclosed until a week before the commission’s special September 29, 2022, meeting where elements of Project Pascalis were nullified.

The meeting minutes described downtown as more of an option for a still vaguely defined facility, but no decisions were forthcoming:

““Mr. Jameson stated he is the chairman of the Innovation District Committee. In the last few months the committee has met several times. It was to do research about what an Innovation District could and should look like and to understand how to move forward. He pointed out a request had been made for funds from the Plutonium Settlement to support the Innovation District and $20 million had been allocated for it. He said the committee began the conversations with where should we begin. Where should a building be located? What would make it the most successful? What would be the best location? They talked about the University area and downtown. The conclusion was that downtown Aiken would be the best location for the building. In collaboration with the center at USC-Aiken and the Site, there could be some permanent crew or revolving office crew in the downtown.”

(There is no indication in the Project Pascalis record that “downtown” equalled the Project Pascalis properties currently under consideration for the SRNL off-site facility. As late as June 23, 2022, the Pascalis project developers were presenting design drawings of apartments and a parking garage on the properties currently proposed for the SRNL facility, suggesting the criteria for site selection changed after the collapse of the Pascalis project in September 2022).

The Closed Door City Council Meetings and Tight Lips

As reported in Pascalis Properties on Aiken City Council’s Closed Door Agenda, Aiken City Council met in a closed-door, Executive Session on December 12, 2022, in part to discuss “a proposed contractual arrangement to lease property in downtown Aiken.” Even though the AMDC officially held title to the Pascalis properties, City Council discussed a lease arrangment with SRNL Director Dr. Vahid Majidi and Deputy Director Sharon Marra. A second closed door session was held on January 9, 2023.

During the regular January 9th meeting, City Council postponed the reading of an ordinance to alter the composition of the AMDC, and then three days later announced a special meeting for the first reading of an amended AMDC ordinance involving City Council assuming control of the commission. During the special meeting, the Mayor and Council members declined to provide details of any future plans, referring the audience to Mayor Osbon’s upcoming State of the City address.

After two years, A Public Announcement

As reported in There’s A Joke in There Somewhere, some details of a “Workforce Development Center” on three to four of the Pascalis project properties were introduced during the “State of the City” public relations extravaganza on January 23rd. Although saying it was not final, Councilman Ed Woltz described a 45,0000 square foot facility and identified two properties to be demolished with an air of finality.

On the evening of February 6th, a City of Aiken sponsored public forum was held at the city’s Center for African American Arts, History and Culture. The announcement stated it would be “facilitated by project consultants from the architectural firm of McMillan Pazdan Smith. City staff will also attend to answer questions and hear feedback.”

More than thirty people commented and asked questions during the two-hour event, and were told by moderator K.J. Jacobs that “what was said (two weeks prior) is not necessarily what is going to happen.” The outlined plan is to conduct a feasibility study involving an historical survey and needs assessment prior to returning for a second public forum in mid April.

Two weeks after speaking on the topic for nearly ten minutes during the State of the City address, SRNL’s Director Dr. Vahid Majidi opted against addressing any of the dozens of citizen questions the feasibility study team could not answer—most common were questions regarding alternative locations such as the old Aiken Hospital.

Footnotes:

(1) Informational gaps in the project planning process are the result of a lack of records disclosure by City of Aiken and AMDC officials coupled with an institutional propensity for secrecy within the former AMDC. Until the full records of the AMDC is released, including two years of committee meeting minutes detailing the SRNL project, gaps in knowledge will remain.

(2) Obtained via the Freedom of Information Act.

(3) Obtained via the Freedom of Information Act.

(4) Section J-14, Part 4 of the BSRA contract states:

“The State of South Carolina intends to make a substantial investment to support DOE and SRNL. This investment is subject to the State’s annual appropriations process.

The state’s investment will be in direct support of SRNL through Clemson University, South Carolina State University, and the University of South Carolina as well as a possible infrastructure investment colocated with SRNL to support workforce development. This investment will focus on the expansion of workforce development programs, joint appointments for research, university laboratory upgrades, student scholarships, and improved cyber security with high speed data links to SRNL.”