The Paducah Sun
The Paducah Sun
Saturday, June 24, 2000
Paducah, Kentucky

Swiss suits seek Russia's USEC payments

By Joe Walker jwalker@paducahsun.com--270.575.8650
A court battle between the executive and judicial branches of the U.S. government could be brewing over Russian uranium stored at the Paducah Gaseous Diffusion Plant.

On Wednesday the same day USEC Inc. announced it would close Paducah's sister plant near Portsmouth, Ohio President Clinton signed an order barring anyone else in the United States from taking legal action to secure Russian uranium.

The executive order declared a "national emergency" dealing with the "unusual and extraordinary threat" of nuclear proliferation that mounting Russian uranium in the United States poses to national security and foreign policy.

Lexington lawyer Eugene Mooney, who learned of the order when contacted Friday by the Sun, said Clinton's action is a direct result of lawsuits he has filed in U.S. District Court in Paducah and New York. He represents a Swiss trading firm pursuing some of the hundreds of millions of dollars USEC is paying Russia for uranium blended from dismantled nuclear warheads.

"I'll want to research if an executive order can nullify an attachment of any judicial order of a federal court," Mooney said. "That involves whether the president has the authority to override an ordinary judicial process."

On Jan. 27, he filed suit in Paducah for Compagnie NOGA of Geneva to recover an international arbitration award against Russia in Stockholm, Sweden. The suit seeks to convert the judgment more than $64 million mounting at $9,500 in daily interest into a lien enforceable in the United States.

The claim says an unspecified amount of Russian uranium is stored at the Paducah plant. USEC initially receives the material at Portsmouth, where it is shipped to fuel fabrication plants.

Mooney said the other suit was filed in New York because he suspects there is Russian money in banks there. The federal judge in New York is considering merging the suit with the one in Paducah, Mooney said.

Russian lawyers want Russell to dismiss the case. Mooney has objected and has sought a hearing on the merits later this year.

NOGA, which mainly deals in such farm products as fertilizer, is seeking a separate arbitration award of several hundred million dollars in Stockholm. Mooney's suit alleges Russia did not fulfill all its obligations under a $1.5 million contract to provide oil for durable consumer goods. The case began in Sweden in 1993.

There are similar proceedings to attach Russian assets in France and Luxembourg, Mooney said.

"I hear the Russians owe a mountain of money all over the globe ...," he said. "What separates this case is that the old U.S.S.R., which entered into the loan agreements, waived its sovereign immunity, which I understand has never been done before or since."

Russian uranium has huge implications for USEC, which is buying the material 500 tons or the same as 20,000 weapons at prices higher than its plants' production costs. The imported amount has displaced one plant's production, which was a huge factor in the decision to close Portsmouth. Paducah's plant will stay open, with about 1,300 employees, as the sole enrichment facility in the United States.

Also, the Russian deal and a glutted market are threatening to close the 330-employee Honeywell plant in Metropolis, Ill. It is this country's sole supplier of raw material to USEC.

The Russians, who periodically stop sending uranium to USEC, have done so again, reportedly because of the Paducah and New York suits. Mooney said he heard it was a topic of discussion when Clinton visited new Russian President Vladimir Putin late last month.

"I don't know if that's true, but I've been hearing for two or three weeks that this (executive order) might happen," he said. "The Russians have scared him (Clinton), saying if they don't get paid, it's going to scuttle the agreement. It's ridiculous. It's immoral for us to get caught up in something like this."

Mooney said Russia is one of the largest exporters of oil, whose prices are soaring as reflected in gas pumps all over the United States.

"The Russians, I'm sure, are making two oceans full of money," he said. "I can't believe they don't have currency reserves that are staggering."