Wednesday, December 22, 2010

Alleged nuke fraud proves need for power plant siting law

Until the Securities Exchange Commission stepped in last week to shut down an alleged full-throated fraud involving a nuclear power plant fantasy, the flamboyant promoter of the project was trying to bowl over gullible rural politicians with conventional tools of a con—visions of an industrial bonanza.

The episode immediately revived the obvious: Idaho needs a centralized state authority for approving power plant sites.

Rural counties have no technological, environmental or economic expertise in deciding whether to locate a major generating facility in their bailiwicks. Small counties are sitting ducks for con men.

Unfortunately, the SEC charges filed in federal district court in Boise come a bit late: Alternate Energy Holdings Inc. and its chief, Don Gillespie, are accused of fleecing investors in Idaho and as far away as Asia.

Payette County officials already had been sucked in by Gillespie's pitch. In October, they tentatively rezoned agricultural land for a nuclear plant after Gillespie found his spiel failing in Owyhee and Elmore counties.

Gillespie rolled over Payette politicians with claims that the company would build a $10 billion nuclear plant; that he operated an office in China; that he met with top South Korean officials about buying South Korean nuclear machinery; and, absurdly, that his Idaho nuclear plant would yield income equal to oil giant Exxon Mobil's worldwide annual revenues, last year about $275 billion!

This drivel was packed into more than 80 flamboyant press releases this year by Gillespie to entice investors.

The SEC pulls no punches: Gillespie and Senior Vice President Jennifer Ransom raised millions of dollars "while fraudulently manipulating [Alternate Energy Holdings] stock price through misleading public statements that conceal the secret profits" the two pocketed.

An old scam seemed to be Gillespie's model. In the 1960s, swindlers in Arizona and New Mexico bought cheap desert land, convinced small-town politicians to rezone it, then produced colorful brochures with illustrations of nonexistent lakes, roads and golf courses and waited for suckers to send in their money by mail.

Gillespie's company is a "penny stock." Only once has it risen above $1, and it's been as low as 5 cents per share. How could anyone with an elementary grasp of math believe that Gillespie could build a $10 billion nuclear plant in the wilds of Idaho with his "penny stock" resources?

The other essential question that no one seemed to ask: If Gillespie's promise of such fortunes to be made in Idaho with nuclear power were real, why hadn't major power firms begun the building process?

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