Bloomberg News

Republican Donor Simmons Seeks Rule to Fill Texas Dump

April 05, 2012

Waste Control Specialists LCC's concrete-reinforced compact disposal facility in Texas. Source: Waste Control Specialists

Waste Control Specialists LCC's concrete-reinforced compact disposal facility in Texas. Source: Waste Control Specialists

Harold Simmons built a West Texas dump for radioactive waste that is bigger than 1,000 football fields and he can’t fill it.

To turn it into a profitable enterprise, the Texas billionaire hired lobbyists to urge the Obama administration to expand the types of nuclear waste, including depleted uranium, the dump can accept and award his company disposal contracts. If the Nuclear Regulatory Commission changes the rule, it could open access to a market worth billions. The deadline for a decision is in 2014.

Simmons now is spending money in a new way that could improve his business prospects: He’s invested $15.9 million this election cycle in various groups to help elect Republicans, who advocate easing regulations on the nuclear industry.

The largest chunk of Simmons’s campaign cash -- $12 million -- has gone to American Crossroads, a so-called super political action committee that takes unlimited donations and has a stated mission of defeating President Barack Obama. He has given at least $700,000 to Restore Our Future, a super-PAC backing Mitt Romney, the front-runner for the Republican presidential nomination whose call for a fast-tracked permitting process for new nuclear plants could benefit Simmons’s Waste Control Specialists LLC.

“Whatever federal switch has to be thrown to get uranium into the hole, believe me, it will be thrown; that’s how Harold Simmons works,” said Glenn Lewis, a former Texas environmental employee who retired in protest to Simmons’s influence in the state permitting process for his dump.

Million-Dollar Donors

Eighteen people have given at least $1 million to Republican super-PACs so far this election cycle, according to the Center for Responsive Politics, a Washington group that tracks political spending. Before 2010 U.S. Supreme Court rulings and regulatory changes allowing unlimited donations, those individuals would have been confined to contributions of $2,500 to candidates and $5,000 to PACs.

Those wealthy backers have said they give because they share Republican Party policies for a less active federal government or on national security issues.

“What scares me is the continuation of the socialist-style economy we’ve been experiencing for almost four years,” Sheldon Adelson, a casino owner, told Forbes in a Feb. 21 article, explaining why he gives money to Republicans.

Federal Business Interests

The donors also have business and financial interests that could be influenced by who wins the 2012 presidential race.

Adelson, a Las Vegas billionaire whose family has underwritten Newt Gingrich’s presidential bid with $16.5 million, is facing Justice Department and Securities and Exchange Commission investigations.

William Doré has given $1.5 million through his Louisiana oil and gas exploration company to the Red, White and Blue Fund, which backs former Pennsylvania Senator Rick Santorum in the Republican race. “Drill, baby, drill. Mine, baby, mine,” said Santorum, the grandson of a coal miner, March 21 in Mandeville, Louisiana.

In the elite donor pool, Simmons stands out because of the amounts he’s given, the number of entities he’s backed, and his history of donating large sums to Texas politicians who oversee his businesses.

Simmons, who declined an interview request, was quoted in a March 22 Wall Street Journal article saying he contributes to Republicans who would help “block that crap,” a reference to what he said is the overregulation of business.

No Strings Attached

Chuck McDonald, a spokesman for Waste Control Specialists, said “there really is no connection between Mr. Simmons’s personal political giving, which he has said he is doing because he believes very strongly in pro-business and free enterprise, and anything WCS is doing.”

A native of Golden, Texas, Simmons, 80, built his fortune - - Bloomberg estimates his net worth as at least $6.5 billion -- by investing in struggling companies and making them profitable. Through his Contran Corp. (CTRW:US) holding company, he is chairman of publicly-traded Valhi Inc. (VHI:US), which made $2 billion in net sales last year, according to its annual report. Waste Control Specialists is the most unprofitable Valhi entity, registering a $38 million operating loss last year, part of at least five consecutive years of red ink, the report shows.

Government’s Role

Valhi’s report lays bare to stockholders the extent to which the federal government impacts its waste-disposal earnings potential:

“While we attempt to monitor and anticipate regulatory, political and legal developments that affect the industry, we cannot assure you we will be able to do so,” it says. “Nor can we predict the extent to which legislation or regulations that may be enacted, or any failure of legislation or regulations to be enacted, may affect our operations in the future.”

In 1995, Simmons invested in Waste Control Specialists, founded by former Texas U.S. Representative Kent Hance, a Democrat who in 1985 became a Republican. The company got its start accepting hazardous wastes, and in 2003 sought state permission to dispose of radioactive materials. The Texas Commission on Environmental Quality, whose three commissioners were appointed by Texas Governor Rick Perry, a Republican, issued the permits in 2009.

Resignations

During the commission’s deliberations, at least three of its employees resigned over what they said was a biased licensing process. Among their chief complaints was the use of an assessment by company-hired university scientists of the location of the Ogallala Aquifer, which provides water for drinking and agriculture for much of the plains, to overcome objections from environmentalists.

Simmons has made an estimated $6.8 million in campaign contributions to Texas politicians, Republicans and Democrats, since 2000, according to Texans for Public Justice, an Austin- based nonprofit that tracks state political donations. That includes more than $1 million for Perry’s three gubernatorial campaigns.

Texas environmental and political-spending watchdogs who have followed the trajectory of Waste Control Specialists said Simmons is trying to replicate on a federal level the success he’s found investing in Texas politics over the past decade.

“The money is so huge, and the political pressure is so strong -- that’s what we’re dealing with here,’ said Karen Hadden, executive director of the Austin-based Texas SEED Coalition that opposes the site. “Harold Simmons wants it to be a nuclear mega-mall.”

Federal Contributions

For the 2012 federal elections, Simmons gave $1.1 million to support Perry’s failed presidential primary bid. Through personal donations and Contran, Simmons has given at least $12 million to American Crossroads. He and his wife, Annette Simmons, donated $1.1 million to Winning Our Future, a pro- Gingrich super-PAC and, in February, $1 million to the super-PAC backing Santorum.

As Romney solidified his front-runner status in the race, the super-PAC backing him, Restore Our Future, began collecting more of the Simmons money. Romney won primary contests Feb. 28 in Michigan and Arizona, and Simmons wrote a $100,000 check, adding to $100,000 he’d given a month earlier. The Wall Street Journal reported March 22 that he’d chipped in another $500,000 that week. A Simmons spokesman couldn’t confirm the sum.

One Democrat, Gene Green, a Texas congressman who sits on the House Energy and Commerce Committee, got $1,000 during the 2012 cycle, records show. No Democratic super-PACs have received Simmons’s donations.

Waste Dump

Simmons’s 1,338-acre dump, located near the West Texas town of Andrews, includes a three-part facility for radioactive byproducts, low-level commercial nuclear waste such as that from power plants, and low-level federal nuclear waste. The commercial side is licensed to take as much as 2.3 million cubic feet of waste and can begin importing it from at least 36 states this year, according to McDonald.

Construction of the federal side -- 10 times as large -- is about a month from completion, he said. Still to be determined is how much government waste will be available for storage in it.

Changing Policy

About the time Simmons’s company began applying for a license in 2003 to take radioactive waste, the U.S. Department of Energy had a robust forecast for what would be available, said a person familiar with the department’s policy deliberations. About nine years later, department policy is to bury waste onsite, or at another federal site. The third option is to sell it to vendors like Waste Control Specialists. That leaves the company with a smaller-than-expected market.

That would change if the Nuclear Regulatory Commission expands its rule on low-level nuclear waste to allow disposal of depleted uranium, leftover from weapons manufacturing during the Cold War and from the production of fuel at nuclear power plants.

The NRC in 2006 began examining whether such non-government entities as Waste Control Specialists could safely dispose of depleted uranium. Public hearings on the topic have been going on since 2009, with a final rule due by mid-2014.

Texas has told Waste Control Specialists that it won’t revise the license to include depleted uranium until the NRC acts, McDonald said.

The market for disposal of that waste “would easily be in the billions of dollars,” said Arjun Makhijani, president of the Institute for Energy and Environmental Research, a nonprofit science group based in Takoma Park, Maryland.

One Competitor

Waste Control Specialists has a single competitor, the Salt Lake City-based EnergySolutions Inc. (ES:US), said Makhijani.

In addition to spending $885,000 to lobby the Obama administration from 2009 to 2011 on waste disposal issues, according to disclosure reports, Simmons’s representatives have been involved in the NRC’s working group on the rule change.

Waste Control officials have spoken at the public meetings, as have executives from EnergySolutions and leaders of interest groups opposed to depleted uranium disposal, such as Heal Utah.

At a March 2 hearing in Phoenix, William Dornsife, an executive with the waste company, asked several times about how quickly the commission would act.

“Well, when are you going to have something on paper?” he said, according to a transcript.

High-Level Waste

There’s an even bigger potential jackpot for Simmons’ waste company: high-level nuclear disposal.

Obama’s Blue Ribbon Commission on nuclear policy recommended that the government start looking for an alternative to Nevada’s Yucca Mountain for long-term storage of spent fuel from nuclear plants and weapons-grade plutonium.

As the commission began studying the issue in 2010, a Waste Control Specialists official invited members to visit the West Texas site, which he said has “ideal” geology for nuclear waste disposal, as well as the support of local and regional leaders.

“You should come explore the values and the opinions of our local leaders as well as the citizens and understand why they embrace nuclear technology and nuclear energy,” Scott Kirk said at a March 26, 2010, commission hearing in Washington.

To contact the reporter on this story: Julie Bykowicz in Washington at jbykowicz@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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Companies Mentioned

  • VHI
    (Valhi Inc)
    • $7.27 USD
    • -0.33
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