For the past four years, the Snake River Alliance has helped Idahoans stand against Alternate Energy Holdings’s proposal to build a nuclear reactor here. The proposal—from its inauspicious beginnings to its spectacular flameout—is pure Nuclear Burlesque.

It was December 2006 when Virginian Don Gillispie announced with great fanfare that he was moving  his Alternate Energy Holdings to Idaho to build a nuclear reactor in Owyhee County and, while he was at it, rescue the county’s farmers from high energy costs.

It was December 2010 when the U.S. Securities and Exchange Commission (SEC), the nation’s stock market police, shut down Gillispie’s operation to spare more Idahoans from losing their savings to his allegedly fraudulent investment scam.

The intervening four years of Gillispie’s wild ride in Idaho, from his inauspicious arrival to his spectacular flameout, is pure Nuclear Burlesque. He never planned to build a nuclear reactor in Owyhee, Elmore, Payette or any other Idaho county, federal investigators said in the SEC charges. Furthermore, even if he wanted to build one, the big-time investors he would have needed wouldn’t have touched him.

The Snake River Alliance has been on the AEHI case ever since Gillispie hung out his shingle at an Eagle strip mall, a startlingly nondescript “international headquarters” except for the $100,000 sports cars parked out front. To appreciate how AEHI, Gillispie and Gillispie’s girlfriend and AEHI vice president, Jennifer Ransom,hauled in millions of dollars in investor funds only to have the house of cards collapse, the Alliance decided it would be useful to review the case as it enters its final—we hope— phase. So let’s go back in time and recall the almost non-stop cavalcade of AEHI’s falsehoods, exaggerations, broken promises and self-serving, stock-pumping promotions it foisted on Idahoans over the years.

Appreciation is extended to the Securities and Exchange Commission for helping us put the events of this saga in their proper context.

To set the stage, and according to the SEC’s complaint: AEHI was actually founded and incorporated in Nevada in 2001 with its principal place of business in Eagle. The company went public in September 2006 and registered its securities on October 8, 2008.

The Cast

Protagonist Don Gillispie, 67, has been president and CEO and Chairman of AEHI at least since the company went public in 2006.

Co-protagonist  Jennifer Ransom, 36, has been senior vice president of administration and secretary of AEHI since 2008. “She also has a personal relationship with Donald Gillispie and is the beneficiary of his IRA account,” the SEC notes.

Bosco Financial LLC is a company based in Boise and owned by Ransom and Brian Webb. “Bosco received financial distributions to which it was not entitled,” the SEC notes.

Energy Executive Consulting is based in Eagle and owned by Gillispie. “Energy Executive received financial distributions to which it was not entitled,” the SEC notes.

Act I: Idaho’s Best Reactor Site – at Least for a While

It was the Holiday Season 2006 when Don Gillispie of Thaxton, Va, arrived at the door of Owyhee County with all kinds of gifts. His story and his promises seemed almost unbelievable, for what would later become obvious reasons. Gillispie and AEHI’s attempted ventures over the previous four years included harvesting lightning, developing fuel additives to reduce natural gas production costs by 40 percent, and using nuclear-powered desalination reactors to provide the third world with clean water. None of those bore fruit.

Almost immediately after he got to Idaho, according to the SEC, Gillispie recruited “stock promoters” to help him manipulate AEHI’s stock price.

Gillispie’s first version of “why I came to Idaho” was that he was drawn by a group of Owyhee County ranchers and farmers who were fed up with their lowest-in-the-country electric prices and wanted power generation from the likes of AEHI’s phantom nuclear reactor instead. But that wasn’t all: Gillispie claimed his reactor would produce a buffet of useful byproducts: distiller’s grains for livestock, electricity-generating methane from animal waste, warm reactor cooling water to irrigate crops and extend their growing seasons, and new biofuels, to name a few. All this in his nuclear-powered “Integrated Biorefinery Ag Park Complex.” The Nuclear Regulatory Commission had never heard of such a thing, mostly because it didn’t exist.

As he settled into Owyhee County and the Bruneau reactor site he called the best he could imagine, Gillispie began what would be a nonstop barrage of news releases aimed at jacking up AEHI’s stock prices, the SEC asserts. In February 2007, Gillispie claimed he was considering a reactor design by French-owned Areva, but that relationship quickly soured. In June, Gillispie announced the first of what he described as a major cash commitment , boasting of “a letter of intent to fund 100 percent of AEHI’s proposed Idaho Energy Complex, estimated at $3.5 billion.” This commitment, allegedly from Cobblestone Financial Group of New York, a firm with no reactor or large-scale industrial experience, never materialized. For those keeping score, that’s one failed financial investment.

By now, the Snake River Alliance and others were seeing through Gillispie’s nuclear vaudeville act and supplying state and federal securities investigators with a steady stream of documents, supporting documents, and other information that belied the increasingly fanciful yarn Gillispie was weaving in Owyhee County.

In December 2007, while Gillispie was still trying to navigate around skeptical Owyhee County officials, he issued a news release touting a $150-million commitment letter from Silverleaf Capital Partners of Salt Lake. The Silverleaf deal not only didn’t pan out, the company’s president would eventually face securities fraud charges of his own. For those keeping score, that’s two failed financial investments.

Entering 2008, Gillispie thought he was on a roll. He issued another news release claiming a signed agreement with Maryland-based UniStar Nuclear Energy under which UniStar would invest in the Idaho project and maybe operate the plant. That deal fell through almost immediately. For those keeping score, that’s three failed financial investments.

And then, in February 2008, Gillispie’s smooth sail in Owyhee County hit the shoals. Armed with a letter from the county to AEHI obtained through a public records request, the Alliance reported that AEHI had ignored three requests by county officials to make a payment on the mounting costs of processing the power plant application.

In the Feb. 1 letter from Owyhee County Planning and Zoning Administrator Mary Huff to officials at the Idaho Energy Complex, Ms. Huff noted that on Dec. 13, she and county consultant Fred Grant met with Gillispie and his associate, Doug McConnaughey, “to negotiate a preliminary fee to process the county conditional use permit for the Idaho Energy Complex.

“When I had not heard from you, or received the initial $50,000 which was mutually agreed to, I sent an email on Thursday, January 10th, asking for a status update,” Ms. Huff wrote. When she still hadn’t received a response by the end of Jan. 14, Ms. Huff wrote a second e-mail with a greater sense of urgency.

“Please contact me to let me know when the county can expect to receive the preliminary $50,000 fee for the nuclear power plant conditional use permit application,” she wrote. “If there is any confusion, please let me know so that we can get this cleared up quickly. If there is not any confusion, please remit….”

Still nothing from AEHI, according to Ms. Huff’s letter, which continued:
“I never received a response to that email and did not receive payment of any fees. This letter serves as a third request for the negotiated $50,000 to be submitted to Owyhee County so that the tax payers are not left paying the bill for all of time and expense invested in this project both since the date of the application which was over six months ago, and going forward.” She asked the company to contact her “so any issues can be cleared up as quickly as possible.”

In July 2008, in the face of growing skepticism in Idaho, Gillispie announced a “participation agreement” with Houston-based Powered Corporation to develop nuclear reactors worldwide, including in Idaho. Powered was basically a shell of a company that had been kicked out of Yemen because the Yemenese doubted Powered’s ability to put together a nuclear reactor complex in that troubled country. Powered also quickly fell by the wayside with no money coming to AEHI. For those keeping score, that’s four failed financial investments. But the press releases kept flowing from AEHI touting its bright future and the potential for windfall profits for would-be investors.

The final days of AEHI in Owyhee County saw  Gillispie battling allegations that he illegally erected meteorological towers to collect environmental data required by the NRC. The county requires a conditional use permit for the towers, a requirement AEHI flouted, further straining the county’s patience with him.

Act II: Hightailing it from Bruneau to Second Best Reactor Site in Hammett

In May 2008 it became clear Gillispie was wearing out his welcome in Owyhee County.

On June 3, 2008, Gillispie announced he was pulling up stakes and moving 15 miles up the Snake River to a 1,400-acre site above the Snake River at Hammett in Elmore County. “When you add it all up, the Elmore site has pretty much all the advantages of the Owyhee site, none of the disadvantages and a number of extra advantages that will simplify construction of what is arguably the most complex single land-based structure humans typically build,” Gillispie said. “No one single reason prompted the move to the Elmore site, which is currently farmed for hay. Preliminary geologic studies a year ago found old underground faults at the Owyhee site but they were not serious enough to stall the project. However, they are adding significantly to analytical and construction expense. This fact, coupled with the high land costs makes the Owyhee site less attractive.”

Summer 2008 wasn’t the best of times for AEHI and Gillispie. Furious over the facts and proven allegations against the company coming from the Snake River Alliance, Gillispie sued the Alliance on Aug. 22, 2008, claiming we libeled him by referring to him and AEHI as “scammers.”

“Someone has to hold them accountable,” Gillispie bellowed in one of his thickening catalog of news releases. The Alliance fought back, filing a motion to dismiss the case. We prevailed when the judge ruled: “Judgment is entered in favor of the Defendants and against the Plaintiff, and that the Plaintiff’s claims are dismissed on the merits, that the Plaintiff take nothing by way of the complaint.

Almost immediately, Gillispie began to grate on Elmore County residents. For instance, he cavalierly suggested at one public meeting that he might simply buy the property of an adjacent farmer-landowner who opposed the reactor in the heart of Elmore County’s most productive farmland. She and other residents quickly united to form a wall of opposition to his project.

At a September 2008 public meeting on Gillispie’s Elmore rezoning request for the reactor, AEHI held an impromptu “job fair” soliciting resumes and names of those who wanted to work at the AEHI nuclear site…some day. All they had to do in order to get preferred treatment in the “job hiring process” was agree to testify that night in favor of AEHI’s project.

In June 2009, AEHI announced an agreement “to utilize Source Capital Group, Inc., to raise capital for the Idaho nuclear plant site project.…” It said the funds would cover land, water rights and engineering services needed for an NRC permit. It didn’t happen. For those keeping track, that’s five failed financial investments.

At various times during 2009, AEHI issued “at least four private placement memoranda [PPMs]” soliciting investors to purchase huge quantities of AEHI securities, according to the SEC. The promotional bait included, among other things, Gillispie’s false claims that “the project is funded and seeking NRC approval.” The project was not funded, and Gillispie was more than a year away from submitting anything to the NRC.

In an over-the-top news release in September 2009, AEHI said its reactor would help solve the world’s shortage of invaluable medical isotopes and help modern medicine perform “lifesaving imaging tests for cancer.” Gillispie suggested his reactor could be equipped with a special device to produce the isotopes, although that technology is nonexistent for commercial nuclear reactors.

In August 2009, AEHI hinted in another news release that it was growing impatient with Elmore County’s unwillingness to comply with its demands for quick approval and was looking for greener pastures.

“AEHI is pleased to announce several Idaho counties and the state have recently offered lands for AEHI’s nuclear plant following delays in local approval at the current site in Elmore County,” the company said in a blatantly false statement. “Elmore County’s delay has created a friendly competition for our plant. We are now looking at two additional sites outside of the current county that may actually receive local approval before the existing site.” Idaho officials denied making such a commitment of state lands to Gillispie or anyone else for a reactor.  A week after that false statement, AEHI issued another one, claiming falsely that Idaho Sen. Mike Crapo supported the nuclear project in Elmore County. Sen. Crapo’s staff denied the claim.  But it was clear AEHI’s withdrawal from Elmore County was imminent, in no small measure because county officials had the temerity to recommend denial of a rezoning request that would violate the county’s comprehensive plan.

The final scenes in Elmore County echoed those in Owyhee. County residents had had it up to here with AEHI and Gillispie and insisted on a review of the reactor scheme with all diligence – something AEHI clearly hadn’t anticipated. AEHI was dropping hints – or threats, depending on how they were interpreted – that it might pack up its reactor and go elsewhere if Elmore County didn’t go along.

Act III: Goodbye Elmore . . . Hello Payette!

In October 2009, AEHI announced its plan to move back downstream and purchase about 5,000 acres in Payette County, its third choice – but one the company said nonetheless was the perfect site. Again. As with Owyhee County more than a year earlier, Elmore County was fading in the rear-view mirror.

By the time AEHI put down roots in Payette, it was claiming an impressive product line—nuclear reactors in Idaho, Colorado and elsewhere being only one. Others included its “Energy Neutral” enterprise, which AEHI claimed “removes energy demands from homes and businesses,” as well as its “Green World Water” enterprise, which “assists developing countries with nuclear reactors for power generation, production of potable water and other suitable applications.” The company claimed to have offices in Beijing, China, and Lagos, Nigeria. Like a supernova before collapsing, AEHI continued to puff itself up, looking bigger and bigger and attempting to show its global reach.

In January 2010, AEHI alleged it was on the verge of cutting a deal with the South Korean government to import the APR-1400 reactor to use in Payette County and market elsewhere in the United States. Local papers described the AEHI-Korean negotiations as a sign of AEHI’s strength – until Korean government officials told Korean media that no deals were in the works and that they probably wouldn’t be because the government doesn’t normally do business with companies as small as AEHI.

In Payette, AEHI first filed to amend the county’s comprehensive plan as a predicate for the eventual rezoning request. The plan change was needed to make the rezoning request legal, and Payette County officials quickly got on board with Gillispie.

On Nov. 12, 2010, Gillispie boasted in an interview that over time, AEHI “could rival Exxon Mobil in profitability.” On Nov. 1, another in the now-interminable parade of AEHI press releases proclaimed that AEHI had signed a $150-million “equity funding facility” with Georgia-based Roswell Capital Partners to “fund the initial phase of a nuclear power plant in Payette County.…” Terms of that agreement included that it would be void if stock sales were halted. That’s exactly what eventually happened, and Roswell has since distanced itself from Gillispie. For those keeping score, that’s six failed financial investments – baseball’s equivalent of two strike-outs or the tennis equivalent of game, set, match.

But in the meantime, the Payette Planning and Zoning Commission held a public hearing on AEHI’s rezoning request on Dec. 2 that stretched on for five hours. The hearing was carried over to Dec. 9, when AEHI was given a chance to respond to earlier testimony, including lengthy testimony from opposing nearby property owners, the Snake River Alliance and its supporters, and others. Voting 10-1, the P&Z recommended that the County Commission approve the rezoning application.

The very next day, Dec. 10, 2010, Gillispie issued yet another news release breathlessly announcing that “former Speaker of the House and General Chairman of American Solutions Newt Gingrich, recently honored AEHI C EO Donald Gillispie as American Solutions’ 2010 Businessman of the Year. Speaker Gingrich recognized Donald Gillispie at the American Solutions Election Night Dinner held Nov. 2 at the Ronald Reagan Building in Washington, D.C. ‘Led by leaders like Donald Gillispie, who has succeeded in the face of adversity and economic turmoil, our victory on Nov. 2 was just the start to what will prove to be an historic Conservative movement to reject the left and provide common sense Center-Right Leadership,’” Gillispie’s release quoted Gingrich as saying. Actually, Gillispie was simply one of countless “businessmen of the year” and other professions “of the year” honored by Gingrich – so long as the honorees ponied up the thousands of dollars in contributions to the national Republican Party as the price of the award.

The Payette County scene was suspended, but not before Gillispie and AEHI glowingly predicted easy approval by County Commissioners and property values for the reactor land ballooning to $1.5 billion.

Act IV: Newt Gingrich’s Businessman of the Year Meets the Feds

On December 14, 2010, after AEHI had issued a stunning 166 press releases since arriving in Idaho and 87 dubious releases in 2010 alone, the SEC issued a one single press release of its own. The SEC announced it had shut down trading of AEHI stock on the “pink sheets” Over the Counter stock exchange due to myriad questions about stock sales, executive compensation, and, of course, the ability of AEHI to actually build a nuclear reactor and attract the money to pull it off. AEHI swiftly downplayed the drastic SEC action by saying federal investigators had been hoodwinked by “anti-nuke activists” and that the stock market suspension was a tempest in a teapot that would quickly blow over.

AEHI and Gillispie were right: The stock suspension did blow over—or up, as the case may be— as two days later the SEC dropped the hammer on AEHI in the form of a 17-page civil complaint that alleges wide-spread securities fraud on the part of Gillispie and Ransom. The complaint is a devastating Stock Swindle 101, charging Gillispie and Ransom with conspiring to manipulate stock prices through inaccurate news releases, unusually timed stock transactions, and other practices. The SEC complaint describes a breathtaking compendium of AEHI’s and Gillispie’s and Ransom’s years of alleged stock price manipulation, hidden stock sales and other transactions, accumulation of fancy cars, jewelry and other ill-gotten bling, and general outlandish behavior. The enterprise hauled in at least $5 million from investors in 2010 alone, but never nailed down the massive cash infusion needed to move the project beyond Payette County approval.

A federal judge granted the SEC’s request to freeze AEHI’s assets and restrain Gillispie and Ransom “from further violations of the securities laws.”

The scene today is Gillispie and Ransom huddling with their attorneys.

Epilogue: Gillispie and Ransom Have a Date

The AEHI saga next turns to U.S. District Court in Boise before District Judge Edward J. Lodge. Judge Lodge has set Jan. 10 as the deadline to answer the SEC complaints by defendants AEHI, Gillispie, Ransom, Bosco Financial and Energy Executive Consulting, LLC.

The next day in court is a show cause hearing set for Feb. 3 at 9:30 a.m. It will be the first time the defendants face Judge Lodge as well as their SEC accusers.