March 24, 2023

The Trump admin just got caught up in shady $115M Russian-bought uranium contract scandal

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You know that a president’s cabinet is particularly bad when someone like Energy Secretary Rick Perry manages to avoid being considered among the least competent or most corrupt in the bunch for the first two years of the Trump administration.

The former Texas governor now, however, is facing his time in the spotlight with a move that should remind people just how unqualified he has been for the job for which he initially didn’t even understand the responsibilities of when he agreed to assume the role.

With his latest decision, as reported by The Houston Chronicle, regarding the awarding of a no-bid contract worth $115 million to develop an advanced nuclear enrichment facility in Ohio, even congressional Republicans are raising their eyebrows with surprise and concern.

While it is bad enough that such a contract would be issued without a competitive bidding process to evaluate the costs and capabilities of the companies who might be able to perform the specified work, the fact that Perry awarded it to Centrus Energy makes it even more problematic.

Centrus Energy is a former government-owned contractor that was privatized in 1998 but continued to operate uranium enrichment plants in Ohio and Kentucky until 2013. That was the year that the tsunami in Japan destroyed the Fukushima Daiichi Nuclear Power Plant and sent worldwide uranium prices plummeting.

The commodity crash led to Centrus’ revenue dropping from the nearly $2 billion the company earned the prior year to under $200 million and led to a Chapter 11 bankruptcy filing and a withdrawal from the enrichment business.

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Senator John Barrasso (R-WY), the chairman of the Senate Environment and Public Works Committee, was so concerned about the contract with Centrus that he sent a letter to Secretary Perry recently questioning the decision.

Senator Barrasso pointed to the company’s poor performance in fulfilling previous federal contracts for nuclear fuel and to the fact that it sources its uranium from a Russian state-owned company, TENEX, thereby enriching our enemies.

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“This contract appears to use American taxpayer funding to bailout Centrus, an unsuccessful business that relies on commercial relationships with Russian state-owned corporations to stay in business,” Barrasso wrote. “Congress did not authorize or fund this project.”

With the remaining American nuclear reactors, as well as the Pentagon’s weapons systems, dependant on enriched uranium, the problem of sourcing the radioactive element is a crucial reason for developing a domestic supply chain for suitably processed fuel. The largest sources of raw uranium are Canada, Australia, and Russia, with over 90% of the fuel used by American nuclear plants imported from overseas companies.

The problem of having no reliable domestic nuclear fuel source is the primary reason Centrus was able to win the Energy Department contract. According to Everett Redmond, a senior technical adviser at the Nuclear Energy Institute trade group, currently, the only other companies with the capacity to produce enriched uranium are Russian-owned.

“I’ve heard from the Russian companies they can provide it,” he said. “We would like to see a domestic source, for fuel security and national security. With the political tensions worldwide, as you’re trying to get a new market going, it would make sense to have a source in the U.S.”

According to the Houston Chronicle:

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“While there are other enrichment companies with the capability to perform the demonstration project, the Energy Department said in a notice earlier this month that Centrus subsidiary American Centrifuge Operating was the only firm that qualified. The department noted that Centrus is U.S.-owned and controlled, a requirement for enrichment contracts to supply the military, and was the only firm with a current license from the Nuclear Regulatory Commission to perform the work.”

Unfortunately, as Senator Barrasso noted in his letter to Secretary Perry, Centrus Energy never paid the fee to renew its required NRC license last year “as required by law.”

The one question that no one seems to be asking in this controversy over how to source enriched uranium is why the government privatized the energy enrichment firm to begin with if it was such a vital national security concern. Is the right solution to revive a moribund private company to create enriched uranium domestically or to create a federally-controlled facility isolated from foreign influence and the whims of the market if the issue is so important to our nation’s safety?

Perhaps it takes a sharper mind than Rick Perry’s to answer that question or at least someone who doesn’t belong to a Republican party committed to favoring private enterprise over public ownership as a matter of policy.

Follow Vinnie Longobardo on Twitter.

Original reporting by James Osborne at The Houston Chronicle.

Vinnie Longobardo

is the Managing Editor of Washington Press and a 35-year veteran of the TV, mobile, & internet industries, specializing in start-ups and the international media business. His passions are politics, music, and art.

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