With help from the allies it funds in Congress and legions of highly paid lobbyists, the U.S. nuclear power industry won billions of dollars in tax breaks and subsidies for its promised “renaissance.” But the biggest winner of all could be a French firm that most Americans have never heard of.
That’s because Areva, an atomic energy giant owned by the French government, appears to be better positioned than any of its competitors to benefit from growth in the U.S. nuclear industry and increased federal spending on it.
With 59,000 employees, facilities in 40 countries, operations in more than 100 and revenue of more than $6.6 billion in the first half of the current fiscal year, the firm brags in its annual report that it is “the only group to be active in every stage of the nuclear cycle,” referring to divisions that cover everything from uranium mining to reactor construction to handling waste.
Areva’s U.S. operations already employ 5,000 people and generate $2 billion in revenue, but the company is hoping to add to that total. One of its largest potential sources of business here would be the sale and operation of a U.S. version of its new “evolutionary power reactor” now under construction in Finland. And as the world’s main player in the reprocessing of spent nuclear fuel, Areva could profit substantially from the Bush administration’s Global Nuclear Energy Partnership.
“Our U.S. facilities and people will contribute significantly to Areva’s international business and, as with all international companies, that growth prospect is important to Areva,” the company said in a statement in response to questions from MSNBC.com.
Areva, which fields an impressive stable of lobbyists in Washington, had strong ties to President Bush’s energy transition team before the administration took office.
Energy task force members land jobs
Later, after the Bush administration hammered out its energy policy in a series of private meetings of a task force led by Vice President Dick Cheney, the company gave top posts to two senior members of the group — former Energy Secretary Spencer Abraham and the task force's executive director. When the task force’s work passed through Congress and was signed by President Bush as the Energy Policy Act of 2005, it contained $13 billion in government subsidies for the nuclear power industry.
Areva told MSNBC.com that neither it “nor any associates participated in any task force work” and that it “did not request any effort to be made on its behalf” by its associates on the transition team. Abraham concurred: “I am personally unaware of any efforts or contacts by Areva or its predecessor companies to me or the task force in general.”
“Areva is a great company with good people who are visionary and who adhere to the highest ethical standards,” Abraham told MSNBC.com in a written response to questions about his work for the firm.
The firm makes no secret of its ambitions to continue the rapid growth it has experienced under its charismatic and capable CEO Anne Lauvergeon.
Led by ‘Atomic Anne’
Called "Atomic Anne" by the French press, the 47-year-old Lauvergeon in recent years become one of the world’s most powerful evangelists for nuclear power, championing it as the answer to global warming. Her success in delivering that message has made her one of the highest-profile businesswomen on the planet, as evidenced by her move from No. 53 on Forbes Magazine’s 2004 list of the “100 Most Powerful Women” in the world to No. 8 last year.
Lauvergeon’s training as a physicist, and experience in government — she served as an aide to the late French President Francois Mitterrand — and industry helped her consolidate France's nuclear interests with breathtaking speed after she was appointed in 1999 as CEO of Cogema, France’s state-owned nuclear fuel reprocessing and services company. By 2001, Lauvergeon had merged Cogema with Framatome, France’s nuclear-engineering and uranium-mining company, to create Areva.
France long ago established its prowess in the nuclear field. While the expansion of the use of nuclear energy stalled in the U.S. in the 1970s and ’80s, France forged ahead and achieved global domination of several key sectors of the industry. Today, France gets nearly 80 percent of its electricity from nuclear power while the United States is far down the list at 20 percent. In its latest annual report, Areva claims to be the world leader in construction and servicing of nuclear reactors, with 30 percent of the market; fuel reprocessing, 80 percent; and spent fuel treatment, 70 percent. It also controls large shares of the world's uranium mining and enrichment operations. The company’s stated goal is to “capture one-third of the world market by 2010” across all sectors of the industry.
While Areva sees potential for growth in Europe and Asia, its most recent annual report is peppered with references to new opportunities in the United States. The 2005 energy bill, which lavished subsidies and tax credits on the nuclear industry, is mentioned frequently. Areva created Unistar, a joint venture with the U.S. firm Constellation Energy to sell and operate new reactors in the United States, soon after the passage of the energy bill, and its sponsors claimed the creation of the new firm was a direct result of the legislation.
Prototype reactor delayed
A prototype of the new reactor, currently under construction in Finland, has run into delays that will bite deeply into the firm's profits this year, but Areva says U.S. customers will only benefit from what it learns there.
Areva is “dedicated to supporting the U.S. nuclear industry,” which can benefit greatly from its years of experience at building scores of reactors elsewhere, it said. That experience has led to a proven, standardized reactor, which “features four separate, redundant safety systems,” costs 10 percent less to operate than other modern nuclear plants and uses 15 percent less uranium to generate the same amount of electricity.
Critics, however, have long questioned Areva's record on a number of fronts. And some find it unseemly for a firm owned by the French government to be competing for billions of dollars in subsidies offered by the U.S. government.
“Just like any of the others (Areva is) ... basically trying to get their nose in that trough of money ... in that energy bill,” said Jim Riccio, a nuclear policy analyst with the anti-nuclear environmental group Greenpeace. But this case also is special, he said: “They’re trying to get a federal government subsidy handed over to a French (government-owned) corporation to build reactors here in the United States.”
As the world’s top player in nuclear fuel reprocessing, Areva warmly embraces the new U.S. initiative on that front, the Global Nuclear Energy Partnership, or GNEP, which it also sees as an opportunity for new business.
That support, coupled with the secrecy surrounding the work of Cheney's energy task force, has led some critics, including Michelle Boyd of the staunchly anti-nuclear group Public Citizen to conclude that Areva lobbying “is behind this new push by the Bush administration to start reprocessing nuclear waste.”
Company denies role in GNEP
Areva denies that. “The administration developed and announced the GNEP program without input from Areva,” the company said. “However, Areva believes that recycling will ultimately be the correct approach for reasons of resource conservation and waste management.”
Areva is not a new player on U.S. soil. For years, the company has provided fuel for U.S. reactors and serviced them, and it says it currently derives 15 to 20 percent of its revenue from U.S. sales.
One of Areva’s largest customers is the U.S. Department of Energy, which has awarded the company and its subsidiaries contracts worth millions of dollars to perform work on fuel fabrication, nuclear waste and site cleanup. Areva also has a five-year standing contract with the General Services Administration to perform a long list of services for many federal agencies.
The firm also has shown American savvy in Washington. An MSNBC.com examination of Senate lobbying disclosure forms shows that from 1998 through 2005, Areva used no fewer than eight Washington lobbying firms to push its interests. In addition, the company ran its own well-staffed in-house lobbying departments.
All told, at least 24 men and women were registered to lobby on Areva’s behalf from 1998 through 2005 at a cost of more than $4.5 million, according to Senate records. Among them were former Sens. J. Bennett Johnston and Alan Simpson, and key former executive and legislative staffers.
The company's lobbying expenses have kept pace with action on nuclear issues in Washington, topping $1 million in 2005.
“They spent twice as much lobbying in 2005 as in 2004 and the reason for that is because of this interest in starting reprocessing,” said Boyd. “They looked across the pond and saw … tons of spent nuclear fuel and wanted a piece of that action.”
Areva said its lobbying expenses have increased in recent years because, “although our affiliates have a long U.S. history, we opened our Bethesda, Md., office in 2002 and have since increased our commitment to appropriate participation in the federal public policy arena.”
Campaign contributions for key players
Areva also has ramped up its campaign donations, with employees and its political action committee doling out more than four times as much to federal candidates in the 2006 election cycle — $116,227 — as it did in 2004. Among the beneficiaries of its largesse were lawmakers who were instrumental in the energy bill’s passage.
The company stated that “we did not form a PAC until 2003, and the support of our employees for this transparent participation in the political process has gradually increased since then.”
In lobbying and campaign donations, Areva has lots of company. Since 1998, two dozen firms involved in efforts to build the first new, subsidized reactors in the United States have spent over $330 million trying to influence federal candidates, lawmakers and bureaucrats.
In addition to lobbying lawmakers and donating to their campaigns, Areva employs Potomac Communications, a high-powered Washington, D.C., public relations firm, to spread its message. Potomac, which does work for a host of nuclear industry concerns and the Department of Energy, was caught in 2004 ghost-writing pro-nuclear op-ed pieces in newspapers that were signed and submitted as if they were written by the academics beneath whose bylines they appeared.
But perhaps Areva’s greatest coup was attracting a troika of Washington’s most influential energy policy players — two men who were present when the Bush administration's energy policy was forged by the Cheney energy task force and another who helped push it through Congress as the 2005 energy bill.
Hiring a troika of energy stars
In addition to Abraham, they are Andrew Lundquist, who served as the executive director of Cheney’s task force, and Alex Flint, a protégé of Congress’ chief nuclear cheerleader, Sen. Pete Domenici, R-N.M.
After helping to draft the energy policy with its plums for the nuclear industry, Abraham, who received thousands of dollars in campaign contributions from nuclear interests while serving as a U.S. senator representing Michigan from 1995 to 2001, left the administration in early 2005. A little over a year later, he signed on as the chairman of Areva’s U.S. board of directors, a position he still holds. He declined to tell MSNBC.com how much he is paid in that role but called it “very modest by industry standards.”
Abraham is not troubled by possible appearances of conflict over having helped formulate policies that could benefit a firm for which he now works. “The federal government has strict guidelines regarding post-employment restrictions for Cabinet members. I have followed those guidelines to the letter of the law,” he said.
Lundquist, who left the White House in 2002, also served on Areva’s U.S. board after his work on the energy plan, but has since left the post. He did not respond to requests for comment.
Flint, a member of the Bush-Cheney energy transition advisory team along with fellow Areva lobbyist Johnston, Areva lobbyist-to-be William Martin and Areva executive Steve Kadner, book-ended his lobbying for Areva with two stints as a staffer for Domenici. The six-term senator, who has been honored by the French and lauded by Lauvergeon as a champion of nuclear power, credits Flint with pushing him nearly a decade ago to call for a U.S. nuclear expansion.
Ex-lobbyist helped shepherd energy bill
Flint parlayed his clerkship of Domenici’s appropriations subcommittee into a $400,000-a-year lobbying gig in which he represented Areva predecessor, Cogema, among other clients. He returned to the Senate, at a drastic cut in pay, to work as Domenici’s staff director on the Energy Committee in 2003 and remained until after the energy bill became law. Last year, he took a job as the top lobbyist with the Nuclear Energy Institute, which counts Areva as a prominent member.
Flint declined a request for an interview through an NEI spokesman.
Areva said it had no particular strategy to attract such high-profile players. “We respect the knowledge, talent and integrity of each individual you named, and are proud that they worked with us,” the company said, adding that “we follow the letter and spirit of the law in the area of government ethics.”
Boyd said she has no objection to a foreign-owned company playing the Washington lobbying game so skillfully, but she takes exception to Areva because of its involvement in the reprocessing of spent nuclear fuel.
“They are interfering with our foreign policy," she said. "… Reprocessing has a huge impact on our foreign policy because it sends the wrong message internationally.”
Seeing reprocessing as a threat to spread nuclear weapons, the U.S. banned it for years to set an example to other nations. Anti-nuclear activists believe that policy should still be followed despite the fact that France and other nations have long engaged in reprocessing.
French nuclear work draws criticism on other fronts as well. In 2005, a top French court ruled that Areva was illegally storing nuclear fuel at its La Hague plant. In 2000, Greenpeace alleged that the same plant was discharging more radiation than permitted by law into the sea, which the company denied.
Indiscretions in Iraq
In the 1970s, the company's predecessors in the French state-owned nuclear industry also helped Saddam Hussein’s effort to acquire nuclear weapons by supplying highly enriched uranium and the Osiraq reactor near Baghdad, which was bombed in a pre-emptive strike in 1981 by Israel.
Such efforts were not confined to the French. The Bush administration’s energy point man, Vice President Dick Cheney, was at the helm of Halliburton while it did business through French subsidiaries with Iraq, Libya and Iran despite U.S. anti-terror sanctions in place at the time against those nations. (General Electric, a big player in the nuclear industry and the parent of NBC, which is a partner in MSNBC.com, also did business with Iraq during the sanction period through French companies.)
The French today distance themselves from such past indiscretions, shying away, for instance, from proposals to help Iran gain world acceptance of elements of its nuclear program. And Areva says that it has become the leading global player in the nuclear industry simply by being a well-run international business.
"Our U.S. facilities and people will contribute significantly to Areva’s international business and, as with all international companies, that growth prospect is important to Areva," the company told MSNBC.com.
But Greenpeace’s Riccio says he’s not certain that the company's U.S. prospects are so hot, given the problems with the reactor in Finland and what he vows will be a tough fight against reprocessing by environmentalists.
“I think they’ve positioned themselves well,” Riccio said of Areva’s groundwork in Washington. “I don’t necessarily think it’s going to pan out for them.”