Don’t Get Me Started: LameSolutions Arena
It's a smiley face on the nuke waste facility formerly known as Envirocare.
You know Larry H. Miller needs the money. You know EnergySolutions needs the positive image. Miller needs the money to pay one (or two if he’s lucky) of his overpaid NBA players. EnergySolutions (formerly Envirocare), the virtual nuclear waste disposal monopoly built by Khosrow Semnani and recently purchased by Steve “Put it where the sun don’t shine” Creamer, needs a public relations boost as much as a polygamist patriarch does.
Of course, Creamer has the money. Semnani built Envirocare into a virtual nuclear waste monopoly by backing politicians at the county and state level. Most of the Tooele County Commission and many legislators on the hill received “campaign contributions” from Semnani. What better way to maximize profits than to get the Utah state legislature and the Tooele county commission to give you a virtual monopoly? The “campaign contributions” Semnani generously doled out were nothing more than a very wise investment. He spread a couple hundred thousand dollars of “free speech” around Tooele County and the Capitol and walked away with, by some estimates, $100 million when he sold Envirocare to Steve Creamer two years ago.
In the newspapers, estimates of what Creamer paid for the arena naming rights run to $1 million, but I doubt if Larry got half that. Not too many NBA viewers nationwide are looking for a place to put their nuclear waste. All Creamer cares about is his image in Utah, a relatively small— and therefore cheap—market to cover. Still, half a million bucks for cosmetics isn’t chump change.
Okay, Creamer probably doesn’t give a damn about his image with Utahns. What he’s interested in is keeping the Utah legislature on his side. The legislature could reverse itself in a Salt Lake minute and allow a second corporation to dispose of nuclear waste in Utah. Imagine the advantage Creamer’s lobbyists will have trying to maintain or expand their monopoly when they take legislators to Jazz games at the EnergySolutions Arena, in the EnergySolutions VIP skybox.
Imagine what could happen if EnergySolutions’ image on the hill really shines—Steve Creamer has. With a pliable majority on the hill, Creamer could make his facility into a mid- or high-level nuclear waste suppository. Then he could really get into positive cash flow. He might even have enough money to really start making charitable contributions to the community, not just self-serving public relations gestures.
Not to worry
When the sale of Envirocare to Creamer was announced last February, local officials tried to assure the public that it meant no change in the type of nuclear waste buried at the Clive facility, 80 miles west of Salt Lake City, now limited to Class A low-level nuclear waste, the lowest classification. Sen. Curtis Bramble, R-Provo, the Utah State House majority leader, said then that Class B and C waste is illegal in Utah, “and it will be illegal tomorrow.” Yeah, but what about the day after tomorrow? Two years ago, the Utah Division of Radiation Control rubberstamped Envirocare’s permit for B and C waste. It was all ready for the legislature’s rubber stamp and the governor’s approval. Governor Huntsman indicated that he would not go along, so Semnani didn’t push it.
But with what Stever Creamer is paying for a year of naming rights to the EnergySolutions Arena, he could probably get himself elected governor or just buy his own candidate. He wouldn’t have to worry about the legislature as long as he kept them on the same feeding schedule as Khosrow Semnani did.
Cornering the market
If there’s a buck to be made off of nuclear waste, Steve Creamer is in a great position to make it. Last February, Creamer and his money people announced the acquisition of both the Duratek Corporation for $396 million and BNG America, a subsidiary of British Nuclear Fuels, for $89 million. Along with Envirocare’s purchase of Scientech in 2005, this makes EnergySolutions the one-stop solution for all your nuclear waste disposal needs.
And what a lucrative business. EnergySolutions’s newly acquired subsidiary BNG was paid $21 million to remove 36,000 pounds of highly contaminated steel from the Rocky Flats nuclear trigger plant just outside Denver. That sounds great until you do the math and realize that’s only 18 tons. There must be tens of thousands of tons of contaminated steel in the nuclear power and nuclear bomb making infrastructure. The cost of cleaning up after the nuclear industry’s mess will only be trumped by the costs of cleaning up the mess left over from the military’s bomb-happy days. The cost for cleaning up both could run into hundreds and hundreds of billions of dollars.
The only hint this runaway gravy train could slow down is a banner across the top of a job-finding web site for nuclear industry workers. It said “Dems in power = fewer DOE cleanups.” The implication is that Democrats will be less willing to let lucrative contracts to the likes of EnergySolutions. Incoming Senate majority leader Harry Reid, D. Nevada has said as much. Promising to defund development of the Yucca Mountain nuclear waste suppository, in favor of storing nuclear wastes on site.
Keeping profits private
Did I mention that EnergySolutions is privately owned? What that means is that the profits from Creamer’s virtual monopoly on Class A nuclear waste aren’t available to those of us who might like to invest in such a lucrative deal.
A small thing maybe, but what’s the point of an ownership society if the vast majority of potential owners are precluded from owning shares of the most lucrative corporations?
It’s a recurring pattern. When a corporation’s profits become obscene, the owners and managers take the corporation private. This is usually done with what’s called a leveraged buyout. A large amount of money— often a major portion of the buyout price—is borrowed against the the future obscene profits. Banks are particularly eager to loan money for leveraged buyouts when the corporation enjoys a partial or complete monopoly. Not only are the profits to repay the debt obscene but they are guaranteed. As long as you keep local elected officials on your side.
There are a couple of possible reasons for Steve Creamer and his investment partners to take EnergySolutions private: They don’t want to share the obscene profits with anyone but their investment bankers, plus the internal workings and the return on investment of a private corporation are less visible to regulators, legislators and the public.
Rising demand—shrinking supply
The only phrase that can conjure the bogey man as quickly as “terrorist” is “nuclear waste.” That works two ways for Steve Creamer. Nuclear communities across the country are desperate to rid themselves of the albatrosses of shut-down nuclear power plants and nuclear bomb-making facilities in their back yards. They are willing to pay amounts that were unfathomable when nuclear power was being touted as “too cheap to meter.” On the other hand, the number of states willing to bury all those albatrosses in their own back yard is shrinking. Steve Creamer owns one of the few remaining disposal sites in the nation. You do the math. Steve Creamer has.