Former vice president and CFO of Florida-based Holtec International Kevin O’Rourke has filed a whistleblower lawsuit against the company. In his suit O’Rourke claims that he was fired from his leadership role with Holtec as retaliation for his coming forward in August of 2022 about “false and misleading” statements Holtec’s leadership made to investors. O’Rourke’s suit was filed last month on June 1 in the Superior Court of New Jersey’s Law Division in Camden County.

Key factors of the lawsuit are Holtec’s projections about the profitability of the Consolidated Interim Nuclear Storage Facility (HI-STORE CISF) proposed to be built on a 1000-acre former cattle grazing tract of land dotted with oil rigs owned by the Eddy-Lea Energy Alliance (ELEA), an association pioneered by government officials from Eddy and Lea counties and the cities of Hobbs and Carlsbad.

The site is near the border of Lea and Eddy counties. When up and running the facility would be capable of storing more than 100,000 metric tons of radioactive rods that would be shipped by rail to the southeast New Mexico facility from various nuclear sites located throughout the U. S.

Adrian Hedden states in a Carlsbad Current Argus article that Holtec “…has touted [the CISF] as an economic boom for the oil-dependent [southeastern New Mexico] region, joining the federal Waste Isolation Pilot Plant (WIPP) near Carlsbad and the URENCO nuclear enrichment facility in Eunice in providing economic diversity via nuclear development.”

Holtec has stated that the CISF “…would mark a $3 billion capital investment to the [southeastern New Mexico] region, bringing hundreds of jobs both in construction and to sustain the site’s operations.”

Claims of Lawsuit

The lawsuit claims that Holtec’s projections about the profitability of the project are “materially false and/or completely unattainable and unrealistic”.

The lawsuit states that O’Rourke filed the suit after Holtec International’s CEO Krishna Singh wanted O’Rourke to prepare information that would represent to potential investors (Hyundai Engineering and Construction Co.) that the CIFS facility would “break even” in the first five years of operation. 

The lawsuit’s complaint reads, “One example of the misleading projections [is] related to the Consolidated Interim Storage Facility (CISF). According to Defendants’ own internal projection, the CISF would lose $150 million per year for the next five years. However, Singh stated he wanted to represent in the Prospectus that the CISF would ‘break even’ during that period and asked that Plaintiff [O’Rourke] do so.”

Over a five year period the estimated annual $150 million loss totals, “…$750 million in losses – according to the lawsuit,” states a Source NM article.

The lawsuit additionally alleges, according to Source NM, that Holtec International “grossly overstated” the amount of money it annually spent on research and development….

The New Jersey Court has given Holtec’s attorneys an extension until August to respond to the claims alleged in O’Rourke’s lawsuit. However in the interim, Holtec International has not remained silent about the suit’s accusations. In an email statement Holtec company spokesman Patrick O’Brien wrote, “We have thoroughly investigated these allegations and they are entirely without merit. We look forward to our day in court.”

NM Law Bans the Building of the Holtec Facility 

As previously reported by the Lea County Tribune, in May of this year, the U.S. Nuclear Regulatory Commission (NRC) granted a 40-year license for Holtec to build and operate a “temporary” HI-STORE CIFS on the border of Lea and Eddy counties. 

Numerous Lea County government leaders and groups support the building and operation of the facility. These stakeholders see the HI-STORE CISF as bringing economic growth, stability and prosperity to rural southeastern New Mexico in the form of high-paying jobs and unique career opportunities. 

Carlsbad’s Nuclear Task Force chair Jack Volpato is one of the supporters of the project. “He estimated the site itself would bring at least 250 full time jobs, along with hundreds more through subcontractors and other services needed,” states the Carlsbad Current Argus article. Volpato said, “‘There’s a lot of different revenues. It gives a lot of opportunity to people. This is a chance for people to get good jobs and earn a good check.'”

These same community leaders downplay any potential environmental harm and health and safety issues the storage of radioactive nuclear waste may bring to the area.

The New Mexico legislature, however, passed Senate Bill (SB) 53 earlier in the year to address such concerns. Gov. Michelle Lujan Grisham quickly signed the bill into law. The governor has opposed the Holtec project for years, “…calling the facility ‘economic malpractice’ as it risked, she said, the nearby oil and gas and agriculture industries,” states the Current Argus article.

The new law which became effective in June blocks Holtec’s ability “…to build a contentious storage facility in southern New Mexico,” states a Source NM article.

The law “expands the scope and duties for a task force to consult state agencies on nuclear disposal and investigate its impacts on New Mexico.” The law additionally “bans storage of high-level nuclear waste” under two conditions – firstly, until the state agrees to opening such a facility and secondly until the NRC “…has adopted a permanent underground storage site for nuclear waste.”

State Sen. Jeff Steinborn (D. – Dist. 36), who sponsored SB 53, said while being interviewed about storing nuclear waste in the Land of Enchantment, “We do need a permanent solution. But New Mexico can’t just be the convenient sacrifice zone for the country’s contamination.”

Don Hancock, safety program director and administrator for the watchdog group Southwest Research and Information Center located in Albuquerque, said, “This bill is another major obstacle that will prevent this site from ever receiving any nuclear waste.”

Hancock is of the opinion that Holtec’s business plan for the CISF has always been flawed. The Current Argus article quotes Hancock as saying, “‘I don’t think this (Holtec’s CISF) has a business plan that’s going to work. I am not surprised Holtec would misrepresent the financial aspect of it. … Who would want to invest in this? All this discussion in southeast New Mexico they’ve had about economic benefits is for their public relations machine.'”

ELEA and other local supporters of the CISF facility remain confident that Holtec will deliver its CISF as promised. One thing for certain is that ELEA stands to lose significantly if the project is blocked. Holtec and the ELEA have entered into a revenue sharing agreement that provides one- third of the CIFS’ revenue to ELEA.

About O’Rourke’s suit ELEA member John Heaton of Carlsbad, a former member of the New Mexico House of Representatives, says, “These are all just allegations.” Heaton describes Holtec as “a very good company and very innovative”. He summarizes, “New Mexico would be very lucky to have them [Holtec] in the state. We would be very lucky to have them [Holtec] in our part of the state. We have a high degree of confidence.”