Peter Schweizer - Throw Them All Out

A billion dollars in taxpayer money being sent to wealthy investors to bail them out of risky investments—does this sound familiar to anyone?

Another alternative energy company, Abound Solar, cashed in $400 million in grants to increase its production of solar panels. One of the first and largest investors in Abound was billionaire heiress Pat Stryker, who invested through her company, Bohemian. An early financial supporter of the Obama campaign, Stryker has given hundreds of thousands of dollars to Democrats, $87,000 to Obama's Inauguration Committee, and $500,000 to the Coalition for Progress. 19

A company mentioned earlier, First Solar, received a whopping $4.7 billion in loan guarantees for three solar projects. And who is behind First Solar? The biggest investors include billionaire Ted Turner, a big financial backer of Obama's in 2008, and Goldman Sachs. The financial giant's employees gave Obama more than $1 million in campaign contributions in 2008, making it one of his largest contributors. 20And two Goldman executives sat on Obama's 2008 National Finance Committee. As a bonus, perhaps, billionaire investor Paul Tudor Jones, another Obama bundler, also owns a stake in First Solar, whose CEO, Michael Ahearn, gives generously (and exclusively) to Democrats.

When news of the loans to First Solar became public, the company's stock jumped more than 6%. 21For Goldman, it was just one Obama-era payoff. It also raked in another $90 million commitment for a solar site in Colorado, which was being developed by Cogentrix, a wholly owned subsidiary of Goldman Sachs. And U.S. Geothermal, in which Goldman was the second-largest shareholder, was given a $96.8 million guaranteed loan. It was the first geothermal project to complete a loan guarantee from the Department of Energy. 22

The DOE handed over $102 million in loan guarantees to Record Hill Wind to build a wind farm in Maine. And who heads up Record Hill? Former Governor Angus King, along with Robert Gardiner, the former head of the Maine Public Broadcasting System. Neither has a background in energy. King, however, endorsed Obama in 2008 and campaigned for him.

The other top recipients pulled down various amounts, and in almost every case the numbers and the cronyism were notable. In some instances these projects have been delayed because of local politics, but the federal money has been approved:

The U.S. Treasury Department gave a $200 million grant to Peco Energy for a smart-grid network—that is, software and equipment designed to help utilities better monitor energy distribution and use. The company is owned by Exelon. Exelon executive Frank M. Clark (who is CEO of the company's ComEd unit) and board member John Rogers Jr. were both members of the Obama campaign's National Finance Committee. White House adviser David Axelrod was a longtime consultant for Exelon. For that $200 million, according to the same federal government audit, Peco (and Exelon) created a total of 102 jobs by December 2010. 23

On July 1, 2009, the DOE awarded $100 million to the Basin Electric Power Cooperative in tiny Beulah, North Dakota. The money was for a grant to install "smart meters" to monitor energy consumption. The co-op's partner, which is actually overseeing the work, is Powerspan, a small alternative energy company whose largest investors include Daniel Weiss and Zeb Rice of the Angeleno Group. As with Exelon, both of these executives served on President Obama's National Finance Committee. The other major Powerspan investor is billionaire financier George Soros, who was also an early Obama supporter. The timing of their investment and the government grant is interesting. On April 23, 2009, Powerspan revealed that the Angeleno Group and Soros were new investors. Less than two months later, Department of Energy Secretary Steve Chu announced the $100 million grant. It was a big deal for Powerspan, which had raised only half that amount in private capital up to that point. As of December 2010, a year and a half after Chu's announcement, a government audit revealed that this project had created eight jobs.

$200 million went to Duke Energy for a smart-grid project. It also received $90.4 million for its Notress Windpower project in Texas, for which it had already started construction, in May 2008, and which would be finished in April 2009, just two months after the stimulus bill became law. 24That $90 million was delivered in September 2009, after construction was completed. 25For good measure, the Energy Department also granted environmental waivers for both projects. 26Duke Energy CEO Jim Rogers is a major DNC contributor and had reportedly been on President Obama's shortlist for energy secretary in December 2008. In March 2011, as reported by National Public Radio, Rogers took the "unusual step" of committing corporate assets to obtain a $10 million line of credit for the National Democratic Convention in 2012. 27

A commitment of $308 million was made to Hydrogen Energy California, LLC, a joint venture between energy giant BP and the mining company Rio Tinto. BP appears to be the only major oil company that managed to receive substantial government support. According to the Center for Responsive Politics, BP gave more to Obama's political campaigns than to any other candidate over the past twenty years. In 2008, candidate Obama received $71,000 from the company. The project has created a whopping 23 jobs. 28

$115 million in taxpayer money was committed to a company called First Wind, for wind energy projects in Utah and New York. Both projects were already under way when the funds were awarded. The New York project had been started in 2007. 29The largest equity stakeholder in the company is D. E. Shaw, a hedge fund that is one of the top three contributors to Democrats. 30The founder of the fund, David Shaw, was an Obama bundler, raising more than $500,000 for the 2008 presidential run. (And like many of the others mentioned here, he is at work on the 2012 election.) D. E. Shaw also employed Larry Summers, who served as the head of President Obama's National Economic Council. Another 42% of First Wind is owned by Madison Dearborn Partners, an investment firm with close ties to then—White House Chief of Staff Rahm Emanuel. The founder of the firm, David Canning, had been a bundler for George W. Bush. But he switched sides in 2008 and gave heavily to Obama. Madison Dearborn gave more to Emanuel's congressional campaigns than did any other business. "They've been not only supporters of mine, they're friends of mine," Emanuel explained on one occasion. 31In July 2010, First Wind also secured $117 million for a project in Hawaii called Kahuku Wind. It created 125 jobs. The plan was to secure taxpayer money and then go public. But in October 2010 First Wind had to delay its IPO because of weak demand.

$135 million went to Sapphire Energy for an algae biorefinery, which would create "super algae" that could be converted into energy. ARCH Venture Partners is a major investor in Sapphire. Bob Nelsen, the founding partner, served on Obama's National Finance Committee during the 2008 campaign. Before 2007, Nelsen considered himself a Republican, but he switched sides. He was apparently the only Republican on Obama's finance committee. 32

The Treasury Department sent a $60 million stimulus to Vantage Wind Energy, LLC, which is a wholly owned subsidiary of Invenergy, LLC, a Chicago-based company headed by CEO Michael Polsky. Polsky is a major Obama donor and a financial supporter of the DNC who gave more than $30,000 to the 2008 Obama campaign and another $50,000 for the Obama inauguration. Invenergy also pulled in another $68 million in taxpayer money for the Beech Ridge Energy Wind Farm on September 22, 2010. 33

$1.5 billion was approved for Summit Texas Clean Energy, LLC. The company is a subsidiary of Summit Energy, located on Bainbridge Island, Washington. The company's CEO is an attorney named Eric Redman, who is a former staffer for a Democratic senator and a major DNC donor. Like the others mentioned here, his campaign giving appears to be entirely to one party. The project manager for Summit Texas Clean Energy is former Dallas Mayor Laura Miller, a Democrat. A former newspaper reporter and environmental activist, she is perhaps best known as the daughter of the former head of Neiman Marcus. She has never worked in the energy industry. As of this writing, Summit had created 8 jobs.