Right now, Bellefonte is probably the worst financial boondoggle in the history of the United States of America.
Developer Franklin L. Haney hired Donald Trump's personal lawyer to seek foreign investments from Qatari to help finish an abandoned TVA nuclear power plant, The Wall Street Journal said Tuesday.
Haney reportedly hired Michael Cohen, Trump's personal lawyer whose office files were recently raided by the FBI, to help pitch to the Qatari sovereign wealth fund Haney's plan to complete the Bellefonte Nuclear Power Plant in Hollywood, Ala., which TVA quit building in the 1980s and Haney agreed to buy in October 2016.
The Journal said Haney hired Cohen as a consultant on the Bellefonte project and on April 5 the two met with Sheikh Ahmed bin Jassim bin Mohamed al-Thani, the vice chairman of the Qatar Investment Authority, to seek an investment in Bellefonte. The newspaper said the meeting was at the Four Seasons Hotel at the Surf Club near Miami Beach, just south of where Haney now lives in a former Hearst mansion on the Atlantic Ocean in Manalapan, Fla.
Haney did not return phone calls asking for comment Tuesday and the Journal said there is no indication whether the Qataris have decided to invest in the Bellefonte plant.
Earlier this year, Haney estimated it would cost about $13 billion to finish both of the reactors at the Bellefonte plant, but Haney is also trying to secure up to $5 billion in production tax credits for new nuclear generation to offset some of that expense. That would bring the completion cost of the Bellefonte plant to only half of what the Southern Co. is spending for two comparably sized reactors being added at Plant Vogtle near Waynesboro, Ga.
Foreign investment would raise questions
But any Qatar investment in a U.S. nuclear plant could raise legal questions. The Atomic Energy Act bans the licensing of commercial nuclear power plants in the United States that are "owned, controlled or dominated" by a foreign corporation or government.
The real estate company Haney created to buy Bellefonte, Nuclear Development LLC, agreed in 2016 to pay TVA $111 million to buy Bellefonte by November 2018. Haney, the 77-year-old developer who amassed a fortune building and leasing facilities to government agencies such as TVA, put down 20 percent of the cost, or $22 million, in 2016 and has until Nov. 14 to close the purchase. Haney has declined to discuss any partners that might be involved in the project.
The Wall Street Journal said that Haney and Cohen attended a reception with members of the Qatari delegation last month and Cohen reportedly spent the night on Haney's yacht before leaving Florida. Four days after meeting with Haney and the Qatari investors, the FBI raided Cohen's apartment, hotel and office as part of the ongoing investigation by Special Prosecutor Robert Mueller into possible Russian collusion or other crimes by those involved in the Trump campaign.
Cohen previously solicited the Qatari government in December 2016 for $1 million for his consulting services as part of discussions related to a possible Qatari investment in a U.S. infrastructure project, the Journal said. A spokesman for Qatar told the Journal that the state "has never been a client of Mr. Cohen."
Gaining political influence and tax credits
The hiring of Cohen by Haney is the latest in a series of well-connected lawyers and consultants Haney has employed in pushing the Bellefone project, including former Alabama Congressman Robert "Bud" Cramer, former TVA Chairman Dennis Bottorff, TVA's former chief operating officer Bill McCollum and the former chief of staff to then Senate Majority Leader Trent Lott, Tom Anderson.
Haney, who has another six months to finalize his purchase agreement for the Bellefonte site from TVA, has been trying to arrange some type of a deal — with or without TVA — to finish Bellefonte for more than a decade. TVA abandoned plant construction in 1988 after spending more than $5 billion to build most of the structure.
The Tennessee Valley Authority says it doesn't need the power that Bellefonte would generate, although Haney says it could replace other power TVA purchases from other sources.
When asked why someone like Haney from outside the utility industry would try to buy a nuclear power plant, TVA President Bill Johnson recently quipped, "It beats me."
"We sold the site because we didn't need it and thought we might get some other use for the property — and I actually wish (Haney) well," Johnson recently told the Chattanooga Rotary Club. "I have been directly involved in four nuclear plants and these are among the most difficult activities you can undertake even when they are done by identities that are in the nuclear power business. This is not for the faint of heart."
Haney touts cost advantage from Bellefonte
But earlier this year, Haney said he is convinced he can finish two reactors at the abandoned Alabama site in the next five years and sell electricity at a competitive price if the tax credits are extended and power utilities are open to buying the power Bellefonte would generate.
Haney said in February he had an agreement with prospective customers to buy the power the 1,256-megawatt Bellefonte Unit 1 would generate, and was looking for customers to buy the electricity the second unit at Bellefonte could produce by 2023.
"As I have been preaching for years, it's a crying shame if this plant is never built," Haney told directors of EPB, one of TVA's biggest municipal customers. "If Bellefonte is cheaper, which I'm confident it will be, why wouldn't you take its power?"
TVA abandoned the twin-reactor plant in Hollywood, Ala., after 42 years of construction starts and stops and billions of dollars of construction, engineering and interest expenses. The plant is more than half finished, although TVA did remove some of the equipment from the original design.
Haney said he has talked with engineers who are convinced the completion can be done for less than what TVA thought, and as a private investor, he hopes to tap into up to $5 billion in tax credits for finishing the Babcock & Wilcox-designed reactors.
Haney, a former Chattanooga developer, ran unsuccessfully as a Democrat in Tennessee for both congress and governor. But the long-time Democratic supporter and donor is now looking for some help from the Republican White House for the tax credits to help fund completion of Bellefonte. Haney is lobbying the Trump administration to extend tax credits for new nuclear plants, even though the facility was started nearly a half century ago.
Haney continues to push for the extension of tax credits to revive Bellefonte, which he said would create thousands of jobs and ultimately provide a cheap source of carbon-free power.
Haney, who belongs to Trump's Mar-a-Lago resort not far from his Florida home, says he has talked with Trump and was a major contributor to Trump's inauguration, giving Trump's inaugural fund $1 million through a limited partnership known as HFNWA, according to the Federal Election Commission.
U.S. Rep. Mo Brooks, R-Ala., who represents Northeast Alabama where Bellefonte is located, said he would like to see the plant finished and generating power.
"Right now, Bellefonte is probably the worst financial boondoggle in the history of the United States of America, having cost American citizens literally billions of dollars and nothing but a couple of cooling towers and an abandoned plant to show for it," Brooks told the Times Free Press earlier this year in Jackson County, Ala. "I believe that the federal government ought to treat Bellefonte like every other power generator and allow Bellefonte to compete for the energy incentive programs that are already in existence. I would like to see the federal government allow TVA to purchase power from a privately operated Bellefonte, if TVA wants to."
Brooks said he has talked with Haney and OMB Director Mick Mulvaney and top Department of Energy officials about treating Bellefonte like other new nuclear plants to qualify for nuclear production credits.
Contact Dave Flessner at email@example.com or at 757-6340.