Today we're going focus on the positive: what it means to be a political ally of the Obama
White House.
This Green Corruption File is about Silver Spring Networks, whose customers won at least 30 percent of the $4.5 billion stimulus smart-grid grants. And what you'll discover is that this clean-energy firm has “friends” in the White House, and early on, those tied to this company helped craft the energy-sector of the stimulus package, and possibly rigged the process.
As we take a journey down another venture capital firm, Foundation Capital, we'll tell the Silver Spring story, and reveal additional clean-energy dirt, but we'll begin with their shady IPO.
"Silver Spring IPO has more red flags than a Communist Party military parade," PrivCo CEO Sam Hamadeh
As I was covering the Fisker Auto fiasco and their recent Oversight Hearing, I discovered a remarkable report by PrivCo, a non-political organization that is listed as a source for business and financial data on major, non-publicly traded corporations. Not surprising is that PrivCo’s analysis (via The Fisker Papers) charged that the Department of Energy (DOE) [knowingly and willingly] “applied negligent underwriting standards” in granting the $535 million DOE ATVM loan. Worse, the release of incriminating internal emails backs up this claim and produces more evidence of DOE incompetence and or corruption (most likely both) and that “Fisker should have never received taxpayer money.”
PrivCo’s report on Silver Spring Networks' IPO is quite astonishing, and since it's another green energy company propped up with free taxpayer money, I'll be opening up this huge can of worms here at the Green Corruption Files.
Serious "Friends" in the Obama White House, the Hooker, and Crafting the "Green" Recovery
From what I gather, the Silver Spring IPO misdeeds came from the majority shareholder (since 2004), Foundation Capital, who has a “friend” in the White House –– and that’s according to a March 27, 2009 statement by Paul Holland, a general partner at Foundation Capital and at that time, Serious Materials Vice Chairman, who just six days earlier, had a special gig at a White House "green energy event." In a Q&A by the Wall Street Journal, Holland was asked, “How did you receive the honor of introducing President Obama as a representative of the venture capital and cleantech industries?” Holland responded, “My partner Steve Vassallo has a friend in the White House who asked him for help on this event.”
At that event, President Obama gave Serious Materials a "shout out," and just a day later, during a venture capital panel on March 24, 2009, Holland described his feelings when he heard about the billions of stimulus money up for grabs by using the analogy of a "hooker dropped into a prison exercise yard.”
Then a month after this Serious activity (April 2009), Vice President Joe Biden visited Serious Materials’ Chicago windows plant –– formally Republic Windows and Doors, which declared bankruptcy in December 2008, but Serious Materials acquired the assets of the factory in February of 2009, and in early March, just weeks after the stimulus package went through, they re-opened “thanks to spending under the Recovery Act.”
While Biden heralded “Serious Windows as the most energy-efficient in the world" and commended them as the creation of new green jobs, we can confirm that Serious got a special stimulus tax credit, which I highlighted in my 2012 Green Alert list of taxpayer-funded clean-energy failures, in the troubled category, yet with a name change, cronyism, corruption, some drama as well as job losses.
Before we move forward, let's pause and recap some key points: a big backer of clean technology Foundation Capital partner has a friend in the White House, while Mr. Holland had given the maximum legal contribution to Obama and was rewarded with special White House honors and serious endorsements. But the story gets better because Serious is also tied to Cathy Zoi (along with more Obama buddies, which will be divulged later) –– a connection John Stossel made known in 2010, “The interesting twist is that Zoi happens to be the wife of Robin Roy, who happens [ed] to be vice president of policy at Serious Windows."
Zoi served as chief of staff for environmental policy under President Clinton and was CEO of Al Gore’s Alliance for Climate Protection. In April 2009, Zoi became the Assistant Secretary for Energy Efficiency, who oversaw the disbursement of more than $30 billion in renewable energy stimulus funds in her DOE position at the Office of Energy Efficiency and Renewable Energy (EERE).
While we know the funds Zoi oversaw at the EERE, some was for weatherization programs that benefited Serious, we also know that she testified before the Senate Energy and Natural Resources Committee in favor of a HOMESTAR program, also known as cash for caulkers, which became another subsidy for Serious.
Later in 2010, during a series of DOE vacancies, Zoi briefly filled the role of Acting Undersecretary for Energy, and in February 2011, she jumped the DOE ship to work for George Soros –– another friend of Obama and key villain in this Green Corruption scandal.
We’ll be visiting Zoi multiple times in this post and take a peek at Foundation Capital’s entire green energy portfolio a bit later. At this point I’d like to steer the spotlight back to Silver Spring Networks and another key investor, the VC firm Kleiner Perkins Caufield & Byers (KPCB. In 2008 they led a $75-million investment (along with Foundation Capital) into Silver Spring, which was one of the first funded from Kleiner Perkins’ $500 million Green Growth fund (established in May 2008).
In December 2009, Kleiner Perkins, Foundation Capital, and Northgate Capital, as well as President Obama’s other buddy Google (another huge winner of multiple stimulus funds, which I divulged this past January) participated in another round of funding for Silver Spring, dishing out a whopping $100 million.
However, the “red flags” started long before Silver Spring's IPO, and this too is a story that stems from where most of our Green Corruption tales begin, the formation of the 2009 American Recovery and Reinvestment Act –– President Obama’s trillion-dollar taxpayer-funded spending spree which has been proven to be a shameful display of manipulation, whereas we now know that the economic stimulus had nothing to do with jobs or saving our economy.
In fact the $100 billion of taxpayer money earmarked for renewable energy was the Obama administration and his minions' effort to "launch a silent green revolution." And in August 2012, the release of a book by Time senior correspondent Mike Grunwald, whom the Heritage Foundation labels as "a self-proclaimed Recovery Act cheerleader,” collaborated what most of us have known for a long time –– Grunwald "argues in The NEW New Deal: The Hidden Story of Change in the Obama Era that focus on jobs was not the administration’s real intent."
Moreover, in January of this year more proof surfaced in the release of a 57-page, “Sensitive & Confidential” memo written by economist Larry Summers — who eventually became head of President Obama’s National Economic Council (2009 to 2011) — to Obama in December 2008, which confirms that the so-called “Recovery” was used for campaign promises and advancing clean energy.
At the center of this green revolution are two Democrat heavies, also friends of Obama: billionaire John Doerr and his climate multi-millionaire buddy Al Gore –– both friends since the 90's and partners at Kleiner Perkins, with top Kleiner Perkins executives also Democrat and Obama donors.
Obviously, Gore's "climate crisis crusade" and "green" is well documented, and his support for Obama is no secret, but Gore has been known to visit the Obama White House and his acolytes captured plenty of key positions inside Obama's Green Team as well as the Energy Department, including Cathy Zoi (mentioned earlier). Meanwhile, Doerr's politics date back to the Bush administration when "Doerr and his team were responsible for getting the 'end-oil-addiction' wording inserted into President Bush's 2006 state-of-the-union address."
It’s worth repeating that Doerr served as one of the “chosen” of President Obama’s Jobs Council (the ultra-rich Democrat donor panel, whereas I found five that struck green stimulus gold), which stemmed from the 2009 Economic Advisory Board (PERAB), implemented by Executive Order. But the most suspect role of Mr. Doerr was his early access to the Obama White House, of which we know that he ultimately shaped what went into the energy sector of the 2009-Revovery Act –– a trillion-dollar bill that Kleiner Perkins also spent money lobbying for.
Doerr’s “green” persuasion persevered during "meetings with Obama's transition team and leaders in Congress," of which much of it came in the form of "five recommendations to Congress and President-elect Barack Obama to jump start a green-tech revolution and fight global warming." Of course it included a cap-and-trade system (the real pot of gold at the end of the climate rainbow), smart grid, solar, and more federal money to be allocated toward renewable energy –– all of which would benefit his portfolio dramatically.
And so it has…
My recent calculations of Kleiner Perkins' 66 clean energy firms listed, (as one-person researcher) I concluded that over 50 percent (again since 2010) are confirmed stimulus winners (36 of the 66). This means that ultra-rich Doerr and Gore –– through their alternative energy investment firm –– have raked in at least $1 billion in green-government subsidies, the majority through the stimulus package, which does not include their shining green company, Silver Springs Networks, the focus of this file, which is tied to at least $1.3 billion in stimulus smart-grid grants.
(NOTE: As for their Green Growth Fund, which funded Silver Spring, it should be noted that at the time of my investigation, they had fourteen companies, and now we find sixteen. If you factor in Kleiner Perkins collaboration with Al Gore’s London based Generation Investment Management as well as other “green alliances” –– all documented in my January 2013 post, of which full details of their "green energy" transactions can be downloaded here in a PDF file. –– that figure rises dramatically, totaling at least $10 billion from the Green Bank of Obama.)
Moreover, we reported on the wealthy Massachusetts Senator, Climate Hawk John Kerry (now Secretary of State), who also played a key role in crafting portions of the legislation designed to offer federal support for green energy projects. Kerry, had purchased shares (at an opportune time) in a number of Kleiner Perkins investment funds, including their Green Growth Fund. However, Kerry promised “to divest holdings [within 90 days] in dozens of companies in his family's vast financial portfolio to avoid conflicts of interest if he is confirmed.”
We’ll be checking on Kerry, but lets’ get back to the grid…
Was the Smart-Grid Stimulus Process Rigged?
Modernize the grid: "As part of the economic stimulus package," Doerr said "Congress should invest in a more efficient electric grid that can deliver solar and wind power to consumers across the country."
On the trail in 2008, "[candidate] Obama had big dreams for a digital smart grid,” and according to Time Magazine, after the election, Obama wanted his economic stimulus package to include the smart grid, of which he suggested pouring in $100 billion: “Let’s just build it!” he told his transition team.
“Ultimately, Obama settled for $11 billion in seed money,” says Grunwald author of The NEW New Deal; however, the president did get $100 billion of clean energy inserted into the 2009-Recovery Act, of which also included Doerr’s smart suggestions. But the grid gets shadier, yet it was a controversy that I had alerted to in 2010.
Just two weeks prior to President Obama signing the 2009-Recovery Act into law (February 2009), USA TODAY reported on a disturbing smart-grid revelation. Some of the nation's largest providers of electricity meters were “crying foul” over the smart-grid standards placed in the stimulus bill.
At issue were the “protocols and standards” that were part of the House version of the legislation for all smart-grid projects, which caused alarm and fueled obvious favoritism. The grievances warned that this measure "could put them out of business and wreak havoc in the new market for smart-grid technology by favoring certain computer network standards.” Meanwhile Ed Gray, vice president of regulatory affairs for smart-meter provider Elster, said "the bill gives a leg up to Silver Spring at the expense of other providers."
Interestingly, in March 2009, Jeff St. John from GreenTechMedia.com, quoted a statement made by Stuart Bush, an alternative energy analyst for RBC Capital Markets, "both Trilliant and Silver Spring (both smart-grid communications companies) could benefit from the way the stimulus plan was structured to require open standards." Bush also added, "Clearly the West Coast VC guys had a lot of lobby pull getting that in there."
Clearly… Gore and Doerr have White House access and influence, and now we can see that Foundation Capital does as well.
However, as the saying goes: "if you can't beat them, join them."
Apparently, some of those that complained about the “standards and protocols” have since joined forces with Silver Spring Networks via their Advanced Metering Partners, along with other stimulus winners such as General Electric, Landis+Gyr, OSIsoft, and others.
Silver Spring Customers Score Big-time: at Least $1.3 Billion of Free Taxpayer Money
With $11 billion of the clean-energy stimulus funds allocated for "Electric Grid Modernization," through SmartGrid.gov, I was able to locate the following financial data:
Another interesting twist is that "PG&E is utilizing Silver Spring's technology for PG&E's SmartMeter™ Program to upgrade more than five million electrical customers in California," of which many California customers aren't happy. According to CBS Sacramento in February 2012, "Critics contend Smart Meters emit harmful levels of radiation." But guess what? PG&E gets to charge residential customers an "opt out fee" –– an initial fee of $75, plus up to $10 per month, which was approved by California Public Utilities Commission.
Exactly, more costs to us ratepayers...
Better yet, PG&E has an invested interest in "six solar projects that will sell power to PG&E, which have received a combined $5.5 billion in taxpayer-backed DOE loans," as exposed by the Washington Free Beacon, however, I found $7.7 billion.
While a more comprehensive post on PG&E's role in this green energy scheme can found in my April 11, 2013 post, here a few highlights...
PG&E maintains a strong political presence in Washington, D.C., and is actively involved in California politics as well. We’ve already highlighted their Democratic "cronyism footprint," of which much of it was exposed by the Beacon last March: “Pacific Gas & Cronyism: Politically connected utility plays corporate bully, makes bank on green energy...”
Furthermore, "former PG&E employees currently hold, or previously held, high-ranking government positions at the state and federal level, furthering the company’s influence," of which we know that Peter Darbee, then-CEO and chairman of PG&E, wasn't shy about using his leverage with his buddy President Obama on at least the $1.6 billion BrightSource Energy shady Energy Department deal.
The most controversial former PG&E employee to hold an influential government post is Cathy Zoi, the "DOE Insider," of which we've already tackled her direct ties to Serious Energy as well as Landis+Gyr, and we've established her as one of the “DOE Dirty Dozen" –– those inside the Energy Department with ties to tens of billions of clean-energy stimulus funds.
Smart Grid, Mixed Reviews
While some environmentalists are skeptical of the smart-grid hype, there are others on the Left labeling the smart grid as the greatest invention since sliced bread. However, we all know that Wonder bread turned out to be nothing but processed food and empty calories bad for your health and a huge detriment to your waistline. And here we are –– the taxpayer –– footing the bill on the front end of this technology ($11 billion for now), yet how much more will Americans have to pay for electricity in the long run?
With Smart grid hits and misses across the country, there are mixed reviews on the success of our government’s huge investment in modernizing the grid –– even with those in the industry "pessimistic about smart grid's future." Needless to say, only time will tell if the billions of taxpayer money the Obama administration funneled out will pay off: “The SGIG projects were launched in early 2010, and all projects are expected to complete equipment installation in the 2013–2014 time frame. Data analysis and reporting is expected to be completed by 2015,” says the Energy Department's July 2012 Progress Report, which seems to the latest DOE smart-grid Recovery Act data.
A November 2012 report by Dr. Timothy Schoechle of Boulder, Colorado –– "Getting Smarter About the Smart Grid" –– published by the National Institute for Science, Law & Public Policy (NISLAPP) in Washington, D.C. came out with some key clams:
Smart Grid Springs Darkness
While my task is following the green energy money, I'll reserve some of my opinion in this section, but there is a darker side to the smart grid that should be noted. In 2010, Jerome Corsi, New York Times bestselling author and senior staff reporter at World Net Daily, penned an indictment of the Smart Grid as the beginning of "energy police," "energy criminals," and a government invasion of privacy driven by a "green ideological agenda," and abetted by Google.
Recently, Marita Noon (my cohort in exposing President Obama's clean energy dirt, posted this last summer...
Let's briefly go back to Landis+Gyr, which brings me to more Intel on Cathy Zoi –– Al Gore's buddy, former "DOE Insider,” and now a partner at George Soros' Silver Lake Kraftwerk, which he formed in 2011.
Zoi's conflicts of interest rang out in 2010, exposing the fact that at the time of her 2009 nomination to her DOE post, "[she] held between $250,000 and $500,000 worth of stock in the company as they profited from her department’s policies." Zoi had also previously served as an Executive Director at Landis+Gyr before joining the Obama administration.
In the summer of 2012, the GOP came out with a scathing summary of "Obamanomics Outsourced," the truth about how President Obama shipped the Recovery overseas, of which they note that the “Swiss-based Landis+Gyr received over $50 million in stimulus contracts for their smart-grid meters."
I can't confirm or deny that $50 million figure, however, in November 2009, Landis gave the United States credit by stating, "most of [their] recent growth has been coming from U.S. business, citing unsurprisingly the stimulus package," wrote Gigaom.com.
During the course of my research I remember a 2010 "announcement" that stated, "Landis+Gyr has recently signed a number of major contracts with leading North American utilities, including Texas-based Oncor, AEP Texas, Pepco Holdings and the Sacramento Municipal Utility District." Additionally, a June 2010 Press Release comes to mind when Landis had signed a huge contract with CPS Energy "to deploy Landis+Gyr's Gridstream™ smart grid solution for its more than one million electric and natural gas customers in San Antonio, Texas."
Remember I hinted about Julian Castro, Obama’s pal, the rising Democrat star and Mayor of San Antonio, Texas? Well Mr. Castro sits (or sat) on the board of CPS Energy, but we'll save that for another time.
More Serious Ties and Trouble
“The story of Serious Energy is a metaphor for Obama’s political career, featuring strong-arm union tactics, corrupt Chicago politicians, crony capitalism, and media propaganda,” claimed Breitbart.com in 2012.
As mentioned at the beginning of this post, in March of 2009 Serious was strongly endorsed by the White House. Then in April 2009, we discovered that the stimulus package included “$8 billion in weatherization and energy efficiency grants for things like new windows in office buildings, as well as tax credits for homeowners who buy new, energy efficient windows.”
It’s hard to say how much of that $8 billion business Serious got, but we do know that they snagged government contracts via their QuietRock products. And in January 2010, “Obama announced a new set of tax credits for so-called green companies. One window company was on the list: Serious Materials for $548,100, and as mentioned earlier, Serious also benefited from the HOMESTAR program, also known as cash for caulkers.
However, by October 2009, Serious was in trouble, and by May 2010, it was clear that Serious Energy was a mess –– one Breitbart.com called the “Weatherization Underground.” It wasn't until February 2012 that Serious finally admitted defeat. According to Greentech Media, “Serious has decided to close its green window factory (in Chicago), which it rescued from closing in 2008. About 46 workers lost their jobs. While Serious said it would keep making its efficient windows at plants in Pennsylvania and Colorado, it also painted a pretty bleak picture of the business at present.”
Serious troubles continued through July 2012, as reported by Green Tech Enterprises as well as the San Francisco Chronicle: "Over the past several months, Serious has been bleeding talent, losing roughly half of its top executives, including key players in its energy efficiency software development team and sales team."
Besides Foundation Capital and Cathy Zoi, there are other Serious ties such as another Sanjay Wagle, another Obama buddy and "DOE Insider.” Wagle was an Obama fundraiser for the 2008 campaign through his Clean Tech for Obama group. After the 2008 election, he joined the Obama administration as a “renewable energy grants advisor” at the Department of Energy under Secretary Chu (reported to be at the ARPA-E program at the DOE).
Prior to joining the Obama administration, Wagle was a principal at VantagePoint Venture Partners, a cleantech venture capital firm, where Robert F. Kennedy Jr. is a Partner and Senior Advisor. However, according to some Greentech defenders, "Wagle gave up any interests in VantagePoint and the companies it invested in before joining DOE," and left the DOE sometime in 2012.
That may be true (although I'd like to see the proof), but it's not a stretch to surmise that in his new role at the Energy Department that he would help his partners, especially since Wagle was part of the September 22, 2009, Valerie Jarrett "CLEAN ENERGY SUMMIT" held at the White House, whereas "attendees [had] struck gold, cashing in on $5.3 billion in taxpayer funds from the Obama administration." This was as of June 5, 2012, but I found much more.
Part of that "gold rush" included Vantage Point's portfolio, of which the last time I checked six months ago, had nine green firms that snagged green-government subsidies: Telsa Motors, BrightSource Energy and its $1.6B Shady DOE Deal as well as Serious Energy. Meanwhile there others tied to "green allies" that were huge winners of "green" taxpayer money, with four Kleiner Perkins investments as well: Amprius, FloDesign, Mascoma, and MiaSole'.
Foundation Capital, Another Friend of the Obama White House and Big Winner of Green Money: 12 green energy firms, of which 60 percent winners totaling over $175 million of taxpayer money, and that does not take into account Silver Spring Network's $1.3 billion in contracts related to the smart-grid grants.
Like many of Obama's friends –– bundlers, top donors, etc. –– this “Elite Green Group” has one thing in common; they have enjoyed multiple taxpayer-funded stimulus loans, grants and special tax breaks. This list includes Big Venture Capital, Big Energy, Big Wind, as well as high-powered left-wing organizations like the Center for American Progress. Some I've already tackled like Kleiner Perkins, Google Ventures, VantagePoint, Kholsa Ventures, The Westly Group, Perseus, L.L.C, General Electric, Goldman Sachs, Citigroup, BP Alternative, George Soros and so on.
Today we add Foundation Capital to that special club.
#1 through #2)
Silver Spring Networks and its $1.3 billion stimulus contracts as well as Serous Energy ($548,100 stimulus tax credit and possibly more) were not the only stimulus winners from Foundation Capital’s Cleantech Portfolio.
#3 and #4)
Two more that are also Kleiner Perkins investments raked in funds as well: Aquion Energy won a $5 million grant, which was part of the "$1.6 billion package supported by the American Recovery and Reinvestment Act and the private sector to support Smart Grid projects nationwide". Then there is Transphorm Inc (a Foundation Capital investment) and Enphase Energy, Inc., which collectively received over $9 million in grants from ARPA-E program funded by the 2009-Stimulus
#5)
AutoGrid in an October 2012 Press Release, it was noted that they had won more than $5 million from the “ARPA-E, the advanced projects research agency of the U.S. Department of Energy, and the California Energy Commission,” which occurred sometime in October 2011.
#6)
CalStar Products Inc, who develops, manufactures, and sells sustainable building products, in January 2010, was awarded a $2.44M tax credit to open a green brick and paver plan in Wisconsin, which expected “to bring 35 new green jobs to Racine County in the next two years.” This was another stimulus created idea –– the Section 48C program, which provided a 30 percent tax credit for investments in 183 manufacturing facilities for clean energy products across 43 states.
Needless to say, like many of these Green Corruption pieces, CalStar opens more clean-energy dirt, and where we find another Obama buddy and "DOE Insider." Steve Westly, the founder and managing partner of The Westly Group, is a two-time Obama bundler, sat on his campaign’s National Finance Committee, and was a co-chair of the 2012 Technology for Obama group. He was briefly considered for a cabinet level position in the Obama administration, and in August 2010, Westly secured a top advisory role inside the DOE, close to Energy Secretary Chu.
In 2011, Westly was tagged as the "Green bundler with the golden touch" where IWatch points to a trail of [green] loans, grants and tax breaks. However, my latest analysis in January 2013, found more: with 20 firms listed (exited and current), I found that at least 50 percent of The Westly Group portfolio were winners of the Obama green energy giveaway.
#7)
Sentient Energy, Inc. “equips the Smart Grid with Eyes and Ears, making it much more reliable and sustainable,” states their website. And while I can’t locate any direct stimulus funds, it seems they have a partnership with Silver Spring Networks as well as General Electric as part of GE’s Ecomagination program –– both with friends in high places and both huge stimulus winners (John Doerr and Jeffrey Immelt from President Obama’s ultra-rich “retired” Jobs Council).
#8)
SunRun, “the nation's leading residential solar electricity provider,” last December became one of a trio of solar companies under investigation “to determine whether the companies accurately reported the market value of their costs when applying for federal reimbursement, which was calculated at one-third of the costs,” reported the Washington Post.
Ironically, while all three –– SolarCity, SunRun, and Sungevity –– are competitors, they all “boast investors with significant ties to the Obama White House,” noted the Heritage Foundation. Translation: all three have friends in high places, and together the three companies reportedly have claimed more than $500 million in taxpayer support,” while "SolarCity has applied for $341 million in grants," reported Fox News.
Now, I've covered SolarCity a few times, here and most recently in my Citigroup’s Massive 'Green' Money Machine post, and now through research of just the 1603 stimulus grants, I found that SunRun was awarded 21 grants, across 10 states for over $140 million free taxpayer money.
Plus in 2010, SunRun announced a $100 million joint program with major utility Pacific Gas & Electric, which according to Venture Beat, “PG&E will be funding the rooftop systems in question via its subsidiary, Pacific Energy Capital II, a tax equity fund,” of which “In lieu of traditional returns, the investor — PG&E in this case — gets tax benefits in addition to some cash returns.”
Foundation Capital Opens Up a New Can of Worms
Since this story leads us to three DOE Insiders –– Cathy Zoi, Sanjay Wagle, and Steve Westly, and with so many hands in the cookie jar, it's difficult to pinpoint who had the most influence, but I can confirm there are at least twelve DOE Officials (also those from Obama's Green Team) that directly benefited from the Obama administration’s green energy policies and the $100 billion earmarked for renewable energy as well as other clean energy funds from various budgets and departments. And while we've stumbled upon others in various posts like Kristina Johnson, Steve Spinner, and Van Jones as well as the enablers like Steven Chu, Carol Browner, Jonathan Silver and Matt Rogers, there is more of the "DOE Dirty Dozen" Green Corruption file yet to open, and I hope to get it out by next fall.
#9)
But now we get to EnerNOC, which interesting enough, was listed on the Foundation Capital cleantech portfolio when I printed it out over a week ago, but now I find that two are missing from that list: EnerNOC and Ventiva.
Venture Beat describes EnerNOC as “one of the leading players in the demand response space,” which apparently is some sort of fancy technology for the smart grid. The Beat, in 2009 reported, “Foundation Capital was attempting to dial down its ownership in the Boston-based company, of which they had been the lead investor in EnerNOC’s second round of funding in 2005, leading the $7.75 million raised with $5 million.”
It turns out that EnerNOC went public in 2007, and in November 2011 USA Today did an analysis noting that the “Stimulus funds helped some stocks soar,” of which EnerNOC (and others I’m familiar with) was on that list. However, what most don’t know is that just over a year prior that report, the State of Massachusetts proudly announced, “Utilizing $10 million in stimulus funds, the DOER awarded a contract to Boston-based EnerNOC to implement a comprehensive Enterprise Energy Management System (EEMS).”
From this particular renewable energy firm, we find another White House friend, which as usual, leads to more clean-energy dirt: TJ Glauthier, who was an advisor to SunRun, also serves on the Boards of Directors of three companies, including EnerNOC.
Why is he relevant?
Well, Mr. Glauthier is a "Strategic Advisor” for Solayzyme –– you know part of "President Obama’s Algae Racket," which not only includes a firm tied to Bill Gates, another carbon tax pusher in cahoots with Secretary Chu. Gates is an investor in Sapphire Energy that received a $54.4 million loan guarantee from the Department of Agriculture and $50 million grant from the DOE.
But that’s not the bombshell here…we're used to billionaires getting taxpayer money for their pet projects...
In December 2009, South San Francisco-based Solazyme Inc. won $22 million as part the “government’s $600 million advanced biorefinery project stimulus award.” And three years later, December 2012, “The U.S. Navy was forced to buy 450,000 gallons of biofuels from an Obama-connected firm at an outrageous $16 per gallon,” wrote Investors.com.
Besides the absurdity, you should know “Solazyme's ties to the White House and the Democratic establishment in Washington are myriad,” with their “officials including Glauthier having contributed at least $360,000 to Democrats since 2007," noted Michelle Malkin in March of last year.
But it gets better…
Glauthier, whose past includes the Clinton administration, and of all places the Department of Energy, was a member of the Obama presidential transition team, and worked — shock, shock — “on the energy-sector portion of the 2009 stimulus bill." And wait –– Glauthier is tied to more money from the taxpayer-funded Green Bank of Obama.
Stay tuned for the next Green Corruption File to be released on our “Gang of Eight” stimulus crafters…
But I’ll close with this…
As I began this long and twisted tale, Mr. Paul Holland of Foundation Capital, whose General Partner Steve Vassallo has an friend in the White House and of their 12 green energy firms that I analyzed, 60 percent received stimulus related green-government subsides, in the form of grants and special tax credits totaling at least $175 million of taxpayer money. Meanwhile the main focus of this post, Silver Spring Networks –– of which Foundation Capital is the majority stakeholder –– was propped up, and it was only possible through Obama’s Recovery Act and $1.3 billion in smart-grid grants.
It's nice to be a friend of the Obama administration –– financial rewards are part of the benefits, but I'd rather leave you with this commercial break, and Mr. Holland's sentiment when he heard about the billions of stimulus dollars up for grabs.
Up Next
Stay tuned for the next Green Corruption File to be unleashed: "The RAT in the Recovery and the Gang of Eight," of which we've already exposed six. This "gang” consists of three very influential groups. General Electric through the 2008, 2009 DOE Electricity Advisory Committee, which includes other green stimulus winners like NextEra Energy and American Electric Power (AEP) –– of which all three have made out like bandits.
Further down the line is the American Council on Renewable Energy (ACORE), which also contains as its member, many winners from the Green Bank of Obama, and we noted in our Citigroup columns.
On our journey, we've exposed John Doerr of Kleiner Perkins and our new Secretary of State, Climate Hawk Senator John Kerry's part in crafting the 2009-Recovery Act –– then ultimately benefiting via Kleiner Perkins.
In March we tackled the Left-wing Billionaire George Soros, Obama’s "Agent of Green," who interesting enough not only heavily backed candidate Kerry in 2004, but also bankrolled Barack Obama’s campaign victories. Soros also funds the Apollo Alliance –– a left-wing organization who exerts powerful influence on the views and policies of the Obama administration, of which I had alerted to in 2010 that boasted of writing Obama's trillion-dollar spending spree.
Since today I gave you a sneak peek into TJ Glauthier, another member of the “gang of eight,” I'll pick up with his part in my next installment. And even though I sounded the alarm on the Apollo Alliance in 2010, I'll be revisiting them along with Obama’ left-wing radical friend and former green jobs Czar Van Jones.
Last but not least, we'll dive into McBee Strategic Consulting, of which Tim Carney of the Washington Examiner, in March of 2011 had this to say, "K Street is the epicenter of this green-industrial complex, and ground zero might be the firm founded by Democratic revolving-door earmark lobbyist Steve McBee, who reportedly wrote key provisions in the stimulus bill to open the spigot of green corporate welfare."
And I'll be busting open those 150 internal e-mails released by the House Oversight last fall, which not only revealed a series of questionable practices, including coercion, cronyism and cover ups at the Department of Energy, but it incriminates McBee Consulting as a major player in the midst of this green-energy scheme.
Two Women (one Citizen & one energy Columnist) join forces on One Mission: to expose one chunk of this Green Corruption scandal at a time.
As we take a journey down another venture capital firm, Foundation Capital, we'll tell the Silver Spring story, and reveal additional clean-energy dirt, but we'll begin with their shady IPO."Silver Spring IPO has more red flags than a Communist Party military parade," PrivCo CEO Sam Hamadeh
As I was covering the Fisker Auto fiasco and their recent Oversight Hearing, I discovered a remarkable report by PrivCo, a non-political organization that is listed as a source for business and financial data on major, non-publicly traded corporations. Not surprising is that PrivCo’s analysis (via The Fisker Papers) charged that the Department of Energy (DOE) [knowingly and willingly] “applied negligent underwriting standards” in granting the $535 million DOE ATVM loan. Worse, the release of incriminating internal emails backs up this claim and produces more evidence of DOE incompetence and or corruption (most likely both) and that “Fisker should have never received taxpayer money.”
PrivCo’s report on Silver Spring Networks' IPO is quite astonishing, and since it's another green energy company propped up with free taxpayer money, I'll be opening up this huge can of worms here at the Green Corruption Files.
In March of 2013, Silver Spring Networks, Inc. (PrivCo Private Company Ticker: SILVRSP), one of the longest waiting IPOs (nearly 21 months since filing in July 2011), has just priced its IPO at $17 per share in an attempt to raise $81 Million. PrivCo analyzes the Silver Spring IPO filing and financials and concludes for IPO investors that this may well be the "poster child" for what to avoid in considering IPO investments. Troubling issues for Silver Spring Networks range from yearly (and quarterly) declines in revenue, hundreds of millions of dollars of losses piled on year after year (-$484 Million over the past 5 years), a loss of key underwriter Morgan Stanley during the extended IPO filing process, and attempting to break into a lifeless cleantech market. PrivCo's fair value/price target for Silver Spring Networks is $4.50 per share, -74% from its IPO price.After this intro, PrivCo lists Silver Spring as a “case study of 7 Key IPO red flags to watch out for,” which mainly deals with debt issues. However, what struck me was the last on: "So how does today's Silver Spring Networks IPO Fair On the Final Pre-IPO Red Flag: #7: Ethics?" –– asks PrivCo CEO Sam Hamadeh.
His answer will surprise you...
There is a troubling smell of possible MISLEADING STOCK PROMOTION BY FOUNDATION CAPITAL, SILVER SPRING NETWORKS' LARGEST (41%) SHAREHOLDER. Foundation Capital has been claiming for months to be an IPO "CORNERSTONE INVESTOR" by committing to invest "$12 Million in Silver Spring Networks at the IPO price 'as a show of our confidence in the company.'" Based on PrivCo's review of the documents, Foundation Capital's public statements are misleading at best, and may be violations of securities regulations including the IPO Quiet Period.
Serious "Friends" in the Obama White House, the Hooker, and Crafting the "Green" Recovery
From what I gather, the Silver Spring IPO misdeeds came from the majority shareholder (since 2004), Foundation Capital, who has a “friend” in the White House –– and that’s according to a March 27, 2009 statement by Paul Holland, a general partner at Foundation Capital and at that time, Serious Materials Vice Chairman, who just six days earlier, had a special gig at a White House "green energy event." In a Q&A by the Wall Street Journal, Holland was asked, “How did you receive the honor of introducing President Obama as a representative of the venture capital and cleantech industries?” Holland responded, “My partner Steve Vassallo has a friend in the White House who asked him for help on this event.”
At that event, President Obama gave Serious Materials a "shout out," and just a day later, during a venture capital panel on March 24, 2009, Holland described his feelings when he heard about the billions of stimulus money up for grabs by using the analogy of a "hooker dropped into a prison exercise yard.”
While Biden heralded “Serious Windows as the most energy-efficient in the world" and commended them as the creation of new green jobs, we can confirm that Serious got a special stimulus tax credit, which I highlighted in my 2012 Green Alert list of taxpayer-funded clean-energy failures, in the troubled category, yet with a name change, cronyism, corruption, some drama as well as job losses.
Before we move forward, let's pause and recap some key points: a big backer of clean technology Foundation Capital partner has a friend in the White House, while Mr. Holland had given the maximum legal contribution to Obama and was rewarded with special White House honors and serious endorsements. But the story gets better because Serious is also tied to Cathy Zoi (along with more Obama buddies, which will be divulged later) –– a connection John Stossel made known in 2010, “The interesting twist is that Zoi happens to be the wife of Robin Roy, who happens [ed] to be vice president of policy at Serious Windows."
Zoi served as chief of staff for environmental policy under President Clinton and was CEO of Al Gore’s Alliance for Climate Protection. In April 2009, Zoi became the Assistant Secretary for Energy Efficiency, who oversaw the disbursement of more than $30 billion in renewable energy stimulus funds in her DOE position at the Office of Energy Efficiency and Renewable Energy (EERE).
While we know the funds Zoi oversaw at the EERE, some was for weatherization programs that benefited Serious, we also know that she testified before the Senate Energy and Natural Resources Committee in favor of a HOMESTAR program, also known as cash for caulkers, which became another subsidy for Serious.
Later in 2010, during a series of DOE vacancies, Zoi briefly filled the role of Acting Undersecretary for Energy, and in February 2011, she jumped the DOE ship to work for George Soros –– another friend of Obama and key villain in this Green Corruption scandal.
We’ll be visiting Zoi multiple times in this post and take a peek at Foundation Capital’s entire green energy portfolio a bit later. At this point I’d like to steer the spotlight back to Silver Spring Networks and another key investor, the VC firm Kleiner Perkins Caufield & Byers (KPCB. In 2008 they led a $75-million investment (along with Foundation Capital) into Silver Spring, which was one of the first funded from Kleiner Perkins’ $500 million Green Growth fund (established in May 2008).
In December 2009, Kleiner Perkins, Foundation Capital, and Northgate Capital, as well as President Obama’s other buddy Google (another huge winner of multiple stimulus funds, which I divulged this past January) participated in another round of funding for Silver Spring, dishing out a whopping $100 million.
However, the “red flags” started long before Silver Spring's IPO, and this too is a story that stems from where most of our Green Corruption tales begin, the formation of the 2009 American Recovery and Reinvestment Act –– President Obama’s trillion-dollar taxpayer-funded spending spree which has been proven to be a shameful display of manipulation, whereas we now know that the economic stimulus had nothing to do with jobs or saving our economy.
In fact the $100 billion of taxpayer money earmarked for renewable energy was the Obama administration and his minions' effort to "launch a silent green revolution." And in August 2012, the release of a book by Time senior correspondent Mike Grunwald, whom the Heritage Foundation labels as "a self-proclaimed Recovery Act cheerleader,” collaborated what most of us have known for a long time –– Grunwald "argues in The NEW New Deal: The Hidden Story of Change in the Obama Era that focus on jobs was not the administration’s real intent."
Moreover, in January of this year more proof surfaced in the release of a 57-page, “Sensitive & Confidential” memo written by economist Larry Summers — who eventually became head of President Obama’s National Economic Council (2009 to 2011) — to Obama in December 2008, which confirms that the so-called “Recovery” was used for campaign promises and advancing clean energy.
At the center of this green revolution are two Democrat heavies, also friends of Obama: billionaire John Doerr and his climate multi-millionaire buddy Al Gore –– both friends since the 90's and partners at Kleiner Perkins, with top Kleiner Perkins executives also Democrat and Obama donors.
Obviously, Gore's "climate crisis crusade" and "green" is well documented, and his support for Obama is no secret, but Gore has been known to visit the Obama White House and his acolytes captured plenty of key positions inside Obama's Green Team as well as the Energy Department, including Cathy Zoi (mentioned earlier). Meanwhile, Doerr's politics date back to the Bush administration when "Doerr and his team were responsible for getting the 'end-oil-addiction' wording inserted into President Bush's 2006 state-of-the-union address."
It’s worth repeating that Doerr served as one of the “chosen” of President Obama’s Jobs Council (the ultra-rich Democrat donor panel, whereas I found five that struck green stimulus gold), which stemmed from the 2009 Economic Advisory Board (PERAB), implemented by Executive Order. But the most suspect role of Mr. Doerr was his early access to the Obama White House, of which we know that he ultimately shaped what went into the energy sector of the 2009-Revovery Act –– a trillion-dollar bill that Kleiner Perkins also spent money lobbying for.
Doerr’s “green” persuasion persevered during "meetings with Obama's transition team and leaders in Congress," of which much of it came in the form of "five recommendations to Congress and President-elect Barack Obama to jump start a green-tech revolution and fight global warming." Of course it included a cap-and-trade system (the real pot of gold at the end of the climate rainbow), smart grid, solar, and more federal money to be allocated toward renewable energy –– all of which would benefit his portfolio dramatically.
And so it has…
My recent calculations of Kleiner Perkins' 66 clean energy firms listed, (as one-person researcher) I concluded that over 50 percent (again since 2010) are confirmed stimulus winners (36 of the 66). This means that ultra-rich Doerr and Gore –– through their alternative energy investment firm –– have raked in at least $1 billion in green-government subsidies, the majority through the stimulus package, which does not include their shining green company, Silver Springs Networks, the focus of this file, which is tied to at least $1.3 billion in stimulus smart-grid grants.
(NOTE: As for their Green Growth Fund, which funded Silver Spring, it should be noted that at the time of my investigation, they had fourteen companies, and now we find sixteen. If you factor in Kleiner Perkins collaboration with Al Gore’s London based Generation Investment Management as well as other “green alliances” –– all documented in my January 2013 post, of which full details of their "green energy" transactions can be downloaded here in a PDF file. –– that figure rises dramatically, totaling at least $10 billion from the Green Bank of Obama.)
Moreover, we reported on the wealthy Massachusetts Senator, Climate Hawk John Kerry (now Secretary of State), who also played a key role in crafting portions of the legislation designed to offer federal support for green energy projects. Kerry, had purchased shares (at an opportune time) in a number of Kleiner Perkins investment funds, including their Green Growth Fund. However, Kerry promised “to divest holdings [within 90 days] in dozens of companies in his family's vast financial portfolio to avoid conflicts of interest if he is confirmed.”
We’ll be checking on Kerry, but lets’ get back to the grid…
Was the Smart-Grid Stimulus Process Rigged?
Modernize the grid: "As part of the economic stimulus package," Doerr said "Congress should invest in a more efficient electric grid that can deliver solar and wind power to consumers across the country."
On the trail in 2008, "[candidate] Obama had big dreams for a digital smart grid,” and according to Time Magazine, after the election, Obama wanted his economic stimulus package to include the smart grid, of which he suggested pouring in $100 billion: “Let’s just build it!” he told his transition team.
“Ultimately, Obama settled for $11 billion in seed money,” says Grunwald author of The NEW New Deal; however, the president did get $100 billion of clean energy inserted into the 2009-Recovery Act, of which also included Doerr’s smart suggestions. But the grid gets shadier, yet it was a controversy that I had alerted to in 2010.
Just two weeks prior to President Obama signing the 2009-Recovery Act into law (February 2009), USA TODAY reported on a disturbing smart-grid revelation. Some of the nation's largest providers of electricity meters were “crying foul” over the smart-grid standards placed in the stimulus bill.
At issue were the “protocols and standards” that were part of the House version of the legislation for all smart-grid projects, which caused alarm and fueled obvious favoritism. The grievances warned that this measure "could put them out of business and wreak havoc in the new market for smart-grid technology by favoring certain computer network standards.” Meanwhile Ed Gray, vice president of regulatory affairs for smart-meter provider Elster, said "the bill gives a leg up to Silver Spring at the expense of other providers."
Interestingly, in March 2009, Jeff St. John from GreenTechMedia.com, quoted a statement made by Stuart Bush, an alternative energy analyst for RBC Capital Markets, "both Trilliant and Silver Spring (both smart-grid communications companies) could benefit from the way the stimulus plan was structured to require open standards." Bush also added, "Clearly the West Coast VC guys had a lot of lobby pull getting that in there."
Clearly… Gore and Doerr have White House access and influence, and now we can see that Foundation Capital does as well.
However, as the saying goes: "if you can't beat them, join them."
Apparently, some of those that complained about the “standards and protocols” have since joined forces with Silver Spring Networks via their Advanced Metering Partners, along with other stimulus winners such as General Electric, Landis+Gyr, OSIsoft, and others.
Silver Spring Customers Score Big-time: at Least $1.3 Billion of Free Taxpayer Money
With $11 billion of the clean-energy stimulus funds allocated for "Electric Grid Modernization," through SmartGrid.gov, I was able to locate the following financial data:
- Smart Grid Investment Grant Program (SGIG): There are 99 SGIG projects with a total budget of about $8 billion. The federal share is about $3.4 billion.
- Smart Grid Demonstration Program: The total budget for the 32 projects is about $1.6 billion; the federal share is about $600 million.
- Smart Grid Workforce Training and Development: Out of the $4.5 billion allocated for the Smart Grid in the Recovery Act, $100 million was designated for workforce training.
At any rate, here’s how the smart-grid transactions went down. In the summer of 2009, the Energy Department started dishing out $4.5 billion in smart-grid grants, whereas free taxpayer money was awarded to selected utility companies for particular smart-grid projects.
Back in 2010 when I began this Green Corruption journey, Silver Spring had twelve customers, of which at that time seven had received smart-grid grants. Since then, Silver Spring Networks has grown, and my January 2013 analysis of their 26 customers (plus Bluebonnet Electric Cooperative that received $18.8 million), found a new figure. Of their 26 customers listed, half are foreign, while the other thirteen are American, and all but one (PG&E) are confirmed winners –– calculations that find Silver Spring Networks is linked to at least $1.3 billion of stimulus smart-grid grants.
Here is the Breakdown of Silver Spring Networks' Customer List of Winners of Stimulus Smart-Grid Grants:
The OPower Connection
OPower is another Kleiner Perkins "smart green" investment that is indirectly benefiting from the $4.5 billion of smart grid grants that were doled out by the DOE as part of the 2009-stimulus package.
In July 2009, Obama met with OPower President and other energy leaders like two former cabinet members: Secretary of Energy Steven Chu and EPA Administrator Lisa Jackson, on creating green jobs. Then in June 2010, Opower, the energy efficiency and Smart Grid software, became part of AEP Ohio's "Smart Grid customer engagement strategy" (AEP Ohio’s gridSMARTSM Demonstration Project), which was funded with the Energy Department's smart grid money (Obama stimulus grants for advanced electricity-grid projects), and doled out in 2009 –– AEP Ohio's take, $75 million.
While Kleiner Perkins came aboard as an investor in OPower sometime in November 2011, my 2010 research reflects that Silver Spring (see full report above) had already formed a partnership with AEP, on AEP's initiative called gridSMARTSM. Directly from Silver Spring Networks site, it state, "the leader in networking technologies that modernize today’s power grid," states, "Indiana Michigan Power initiated its Smart Meter pilot project in South Bend, Indiana in late 2008. The initial success of that project led AEP Ohio to select Silver Spring for the expansion of its AEP Ohio gridSMARTSM Demonstration Project in northeast central Ohio."
Since then, OPower has made customers out of many of the utility companies that were winners of the smart grid grants, like AES –– Indianapolis Power & Light, Baltimore Gas & Electric, CenterPoint Energy, Commonwealth Edison, PG&E, Progress Energy, Sacramento Municipal Utilities District, and much more. How much stimulus funds OPower is linked to would require further investigation.
Pacific Gas & Electric Packed with Washington Green Cronies: Invested Interest in $7.7 Billion of Energy Department Stimulus Loans
There are many other Green Corruption tales that stem from the Silver Spring’s customer list that we’ve covered such as American Electric Power and ComEd as well as Florida Power & Electric, to name a few. But due to the fact that PrivCo seemed concerned about PG&E in their Silver Spring IPO report, I'll give it some attention here.
Also, in December 2009, PG&E became part of $50 million smart-grid project "with neighboring utilities and the Western Electricity Coordinating Council." Coincidentally, the "WECC has sought $25 million in grants for one half of PG&E’s portion of the project from the Department of Energy under the American Recovery and Reinvestment Act of 2009."
Back in 2010 when I began this Green Corruption journey, Silver Spring had twelve customers, of which at that time seven had received smart-grid grants. Since then, Silver Spring Networks has grown, and my January 2013 analysis of their 26 customers (plus Bluebonnet Electric Cooperative that received $18.8 million), found a new figure. Of their 26 customers listed, half are foreign, while the other thirteen are American, and all but one (PG&E) are confirmed winners –– calculations that find Silver Spring Networks is linked to at least $1.3 billion of stimulus smart-grid grants.
- American Electric Power (AEP): $75 million for AEP Ohio gridSMARTSM Demonstration Project
- Baltimore Gas & Electric: $200 million to deploy a smart meter network and advanced customer control system for 1.1 million residential customers
- ComEd: $175 million for smart meters
- Florida Power & Electric was awarded $200 million for Energy Smart Florida
- Indianapolis Power & Light Company: $20 million to install more than 28,000 meters, including commercial, industrial and residential customers
- Maui Smart Grid Project: a “smart grid” renewable energy demonstration project, formed in June 2011, and is supported by the DOE through federal stimulus funding, of which I found $7 million, and in November 2011, Silver Spring Networks was selected to be part of this project.
- Modesto Irrigation District (MID): $1.5 million federal stimulus grant
- Oklahoma Gas and Electric Co. received a $130 million stimulus grant for a 771,000 smart meter deployment
- Pepco Holdings Inc.: contracts for three ARRA grants totaling $168.1 million to advance smart-grid projects
- Progress Energy: $200 million to build a green Smart Grid virtual power plant through conservation, efficiency and advanced load shaping technologies,
- Public Service Company of Oklahoma (PSO) is a unit of American Electric Power (AEP), which in March 2011, Silver Spring Networks rolled out the introduction of the gridSMART initiative program at Public Service Company of Oklahoma. PSO gridSMART®, where "the total cost of the project is estimated at $17.88 million. PSO was awarded an $8.7 million low-interest loan from the Oklahoma Department of Commerce’s federal stimulus fund, and $2 million is collected annually through base rates to support the project."
- Sacramento Municipal Utility District (SMUD): $127.5 million stimulus grant for a comprehensive regional smart-grid system.
OPower is another Kleiner Perkins "smart green" investment that is indirectly benefiting from the $4.5 billion of smart grid grants that were doled out by the DOE as part of the 2009-stimulus package.
In July 2009, Obama met with OPower President and other energy leaders like two former cabinet members: Secretary of Energy Steven Chu and EPA Administrator Lisa Jackson, on creating green jobs. Then in June 2010, Opower, the energy efficiency and Smart Grid software, became part of AEP Ohio's "Smart Grid customer engagement strategy" (AEP Ohio’s gridSMARTSM Demonstration Project), which was funded with the Energy Department's smart grid money (Obama stimulus grants for advanced electricity-grid projects), and doled out in 2009 –– AEP Ohio's take, $75 million.
While Kleiner Perkins came aboard as an investor in OPower sometime in November 2011, my 2010 research reflects that Silver Spring (see full report above) had already formed a partnership with AEP, on AEP's initiative called gridSMARTSM. Directly from Silver Spring Networks site, it state, "the leader in networking technologies that modernize today’s power grid," states, "Indiana Michigan Power initiated its Smart Meter pilot project in South Bend, Indiana in late 2008. The initial success of that project led AEP Ohio to select Silver Spring for the expansion of its AEP Ohio gridSMARTSM Demonstration Project in northeast central Ohio."
Since then, OPower has made customers out of many of the utility companies that were winners of the smart grid grants, like AES –– Indianapolis Power & Light, Baltimore Gas & Electric, CenterPoint Energy, Commonwealth Edison, PG&E, Progress Energy, Sacramento Municipal Utilities District, and much more. How much stimulus funds OPower is linked to would require further investigation.
Pacific Gas & Electric Packed with Washington Green Cronies: Invested Interest in $7.7 Billion of Energy Department Stimulus Loans
There are many other Green Corruption tales that stem from the Silver Spring’s customer list that we’ve covered such as American Electric Power and ComEd as well as Florida Power & Electric, to name a few. But due to the fact that PrivCo seemed concerned about PG&E in their Silver Spring IPO report, I'll give it some attention here.
Red Flag #6, PrivCo states, “Silver Spring has significant customer concentration issues. Over 79% of the company's revenues last year were from just 3 customers (see excerpt below). This business model is extremely unstable and could result in huge fluctuations in revenue going forward should any one or more customers cancel.”It turns out that PG&E is the top customer for Silver Spring, yet I had reported that PG&E got the "cold shoulder" on the their smart-grid grant requests. However, with their high-powered connections all the way up to the president and inside the DOE, PG&E won a significant amount of stimulus money: at least sixteen to date and over $55 million.
Also, in December 2009, PG&E became part of $50 million smart-grid project "with neighboring utilities and the Western Electricity Coordinating Council." Coincidentally, the "WECC has sought $25 million in grants for one half of PG&E’s portion of the project from the Department of Energy under the American Recovery and Reinvestment Act of 2009."
Exactly, more costs to us ratepayers...
Better yet, PG&E has an invested interest in "six solar projects that will sell power to PG&E, which have received a combined $5.5 billion in taxpayer-backed DOE loans," as exposed by the Washington Free Beacon, however, I found $7.7 billion.
While a more comprehensive post on PG&E's role in this green energy scheme can found in my April 11, 2013 post, here a few highlights...
PG&E maintains a strong political presence in Washington, D.C., and is actively involved in California politics as well. We’ve already highlighted their Democratic "cronyism footprint," of which much of it was exposed by the Beacon last March: “Pacific Gas & Cronyism: Politically connected utility plays corporate bully, makes bank on green energy...”
Furthermore, "former PG&E employees currently hold, or previously held, high-ranking government positions at the state and federal level, furthering the company’s influence," of which we know that Peter Darbee, then-CEO and chairman of PG&E, wasn't shy about using his leverage with his buddy President Obama on at least the $1.6 billion BrightSource Energy shady Energy Department deal.
The most controversial former PG&E employee to hold an influential government post is Cathy Zoi, the "DOE Insider," of which we've already tackled her direct ties to Serious Energy as well as Landis+Gyr, and we've established her as one of the “DOE Dirty Dozen" –– those inside the Energy Department with ties to tens of billions of clean-energy stimulus funds.
Smart Grid, Mixed Reviews
While some environmentalists are skeptical of the smart-grid hype, there are others on the Left labeling the smart grid as the greatest invention since sliced bread. However, we all know that Wonder bread turned out to be nothing but processed food and empty calories bad for your health and a huge detriment to your waistline. And here we are –– the taxpayer –– footing the bill on the front end of this technology ($11 billion for now), yet how much more will Americans have to pay for electricity in the long run?With Smart grid hits and misses across the country, there are mixed reviews on the success of our government’s huge investment in modernizing the grid –– even with those in the industry "pessimistic about smart grid's future." Needless to say, only time will tell if the billions of taxpayer money the Obama administration funneled out will pay off: “The SGIG projects were launched in early 2010, and all projects are expected to complete equipment installation in the 2013–2014 time frame. Data analysis and reporting is expected to be completed by 2015,” says the Energy Department's July 2012 Progress Report, which seems to the latest DOE smart-grid Recovery Act data.
A November 2012 report by Dr. Timothy Schoechle of Boulder, Colorado –– "Getting Smarter About the Smart Grid" –– published by the National Institute for Science, Law & Public Policy (NISLAPP) in Washington, D.C. came out with some key clams:
- Smart meters do NOT contribute to a more reliable grid
- Congress and ratepayers have been deliberately misled about the benefits of smart meters
- The President's National Science and Technology Council "evidences a fundamental lack of understanding of… electricity and energy"
- The decision by a few ratepayers in a few locations to opt out of smart meters heralds "and epochal transformation of the political economy of energy."
- Investor-owned utilities (IOUs) are "unsustainable" and may eventually require a government bailout
Smart Grid Springs Darkness
While my task is following the green energy money, I'll reserve some of my opinion in this section, but there is a darker side to the smart grid that should be noted. In 2010, Jerome Corsi, New York Times bestselling author and senior staff reporter at World Net Daily, penned an indictment of the Smart Grid as the beginning of "energy police," "energy criminals," and a government invasion of privacy driven by a "green ideological agenda," and abetted by Google.
Recently, Marita Noon (my cohort in exposing President Obama's clean energy dirt, posted this last summer...
If you are not familiar with the Smart Grid, Brian Sussman’s book Eco-Tyranny offers an overview which includes this: “President Obama cleverly sold it like this: ‘We want to invest in the next-generation of high-speed wireless coverage for 98 percent of Americans. This isn’t just about a faster Internet or being able to friend someone on Facebook. It’s about connecting every corner of America to the digital age.’ The digital age Obama spoke of is the age of Big Brother monitoring your carbon footprint. The Smart Grid’s interactive broadband capability will enable your home’s PCT, HAN, and smart meter to be connected and communicating with your utility provider. Once complete, the utility company will be your government-sponsored Big Brother, constantly monitoring and regulating your carbon footprint. With a bureaucratic keystroke any electrical device in your home could be selectively turned off—or on—without your approval.In case you don't buy into the darkness, consider this...
The Smart Grid is rolling out lickety split because all the right interest groups love it: Utilities like the idea of cutting labor costs and being able to manage electricity usage; environmentalists want to integrate renewables onto the grid while stimulating energy efficiency; manufacturers want to sell appliances; regulators are trying to forestall the electrical outages that already cost our economy $119 billion a year; Congress and the DOE wanted to throw money at such an eminently popular, modern, "smart," concept. This enthusiasm covers up the fact that there is no coherent ideology there at all, never mind a green one. And that's the problem: Nobody has bothered to explain why the Smart Grid is good for you and me and then turn that into a policy.
Lisa Margonelli, the Atlantic November 19, 2010Besides Big Energy on the list of "big winners" in modernizing the American electric grid, in the midst there is another key special interest group profiting: "green" Venture Capitalists, and all with friends in the White House.
Landis+Gyr, Plus More Cathy Zoi Intel
Soros –– another Obama buddy –– is another "Recovery-Act author" who benefited tremendously from the stimulus package, which is well-documented in my March 23, 2013 post: Left-wing Billionaire George Soros: Obama’s "Agent of Green."
That's where I chronicled his dark money, his funding of an array of powerful left-wing groups who are also friendly with the Obama White House, and how he has bankrolled Obama victories since 2004. Inside his Green Corruption File is where we find that Soros' green tab exceeds $11 billion of stimulus money, and "we the taxpayer" footed the bill.
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| In August 2009, Las Vegas Hosted the National Clean Energy Summit from Left to Right: John Podesta, Al Gore, Senator Harry Reid, T. Boone Pickens, and Cathy Zoi |
In the summer of 2012, the GOP came out with a scathing summary of "Obamanomics Outsourced," the truth about how President Obama shipped the Recovery overseas, of which they note that the “Swiss-based Landis+Gyr received over $50 million in stimulus contracts for their smart-grid meters."
I can't confirm or deny that $50 million figure, however, in November 2009, Landis gave the United States credit by stating, "most of [their] recent growth has been coming from U.S. business, citing unsurprisingly the stimulus package," wrote Gigaom.com.
Remember I hinted about Julian Castro, Obama’s pal, the rising Democrat star and Mayor of San Antonio, Texas? Well Mr. Castro sits (or sat) on the board of CPS Energy, but we'll save that for another time.
Also, we know that both CPS and Landis are in cahoots with Silver Spring, and I can confirm that the aforementioned utility companies received stimulus funds, but I would have to dig deeper to unravel what the money was for and how it connects to Landis and/or CPS Energy. Interesting enough, in 2011 Landis+Gyr was acquired by the Toshiba Corporation for $2.3 billion in cash.
Zoi's conflicts seem even deeper, and go beyond her connection to Al Gore and her invested interest in Landis and Serious Energy. According the Washington Examiner, there could have been another scandal that I missed, of which Tim Carney had this to say, "The pedigree of Zoi's former special assistant focused on giving out stimulus money, Peter Roehrig, also deserves scrutiny." From what I gather it boils down to this, "Her former special assistant, Roehrig, joined DOE's renewable energy office from the U.S. Renewable Energy Group. The latter is a company founded by lobbyists who saw they could pocket taxpayer dollars by acting as cutouts for Chinese windmill barons trying to get their hands on stimulus money."
Zoi's conflicts seem even deeper, and go beyond her connection to Al Gore and her invested interest in Landis and Serious Energy. According the Washington Examiner, there could have been another scandal that I missed, of which Tim Carney had this to say, "The pedigree of Zoi's former special assistant focused on giving out stimulus money, Peter Roehrig, also deserves scrutiny." From what I gather it boils down to this, "Her former special assistant, Roehrig, joined DOE's renewable energy office from the U.S. Renewable Energy Group. The latter is a company founded by lobbyists who saw they could pocket taxpayer dollars by acting as cutouts for Chinese windmill barons trying to get their hands on stimulus money."
More Serious Ties and Trouble
“The story of Serious Energy is a metaphor for Obama’s political career, featuring strong-arm union tactics, corrupt Chicago politicians, crony capitalism, and media propaganda,” claimed Breitbart.com in 2012.
As mentioned at the beginning of this post, in March of 2009 Serious was strongly endorsed by the White House. Then in April 2009, we discovered that the stimulus package included “$8 billion in weatherization and energy efficiency grants for things like new windows in office buildings, as well as tax credits for homeowners who buy new, energy efficient windows.”
It’s hard to say how much of that $8 billion business Serious got, but we do know that they snagged government contracts via their QuietRock products. And in January 2010, “Obama announced a new set of tax credits for so-called green companies. One window company was on the list: Serious Materials for $548,100, and as mentioned earlier, Serious also benefited from the HOMESTAR program, also known as cash for caulkers.
However, by October 2009, Serious was in trouble, and by May 2010, it was clear that Serious Energy was a mess –– one Breitbart.com called the “Weatherization Underground.” It wasn't until February 2012 that Serious finally admitted defeat. According to Greentech Media, “Serious has decided to close its green window factory (in Chicago), which it rescued from closing in 2008. About 46 workers lost their jobs. While Serious said it would keep making its efficient windows at plants in Pennsylvania and Colorado, it also painted a pretty bleak picture of the business at present.”
Serious troubles continued through July 2012, as reported by Green Tech Enterprises as well as the San Francisco Chronicle: "Over the past several months, Serious has been bleeding talent, losing roughly half of its top executives, including key players in its energy efficiency software development team and sales team."
Besides Foundation Capital and Cathy Zoi, there are other Serious ties such as another Sanjay Wagle, another Obama buddy and "DOE Insider.” Wagle was an Obama fundraiser for the 2008 campaign through his Clean Tech for Obama group. After the 2008 election, he joined the Obama administration as a “renewable energy grants advisor” at the Department of Energy under Secretary Chu (reported to be at the ARPA-E program at the DOE).
Prior to joining the Obama administration, Wagle was a principal at VantagePoint Venture Partners, a cleantech venture capital firm, where Robert F. Kennedy Jr. is a Partner and Senior Advisor. However, according to some Greentech defenders, "Wagle gave up any interests in VantagePoint and the companies it invested in before joining DOE," and left the DOE sometime in 2012.
That may be true (although I'd like to see the proof), but it's not a stretch to surmise that in his new role at the Energy Department that he would help his partners, especially since Wagle was part of the September 22, 2009, Valerie Jarrett "CLEAN ENERGY SUMMIT" held at the White House, whereas "attendees [had] struck gold, cashing in on $5.3 billion in taxpayer funds from the Obama administration." This was as of June 5, 2012, but I found much more.
Part of that "gold rush" included Vantage Point's portfolio, of which the last time I checked six months ago, had nine green firms that snagged green-government subsidies: Telsa Motors, BrightSource Energy and its $1.6B Shady DOE Deal as well as Serious Energy. Meanwhile there others tied to "green allies" that were huge winners of "green" taxpayer money, with four Kleiner Perkins investments as well: Amprius, FloDesign, Mascoma, and MiaSole'.
Foundation Capital, Another Friend of the Obama White House and Big Winner of Green Money: 12 green energy firms, of which 60 percent winners totaling over $175 million of taxpayer money, and that does not take into account Silver Spring Network's $1.3 billion in contracts related to the smart-grid grants.
Like many of Obama's friends –– bundlers, top donors, etc. –– this “Elite Green Group” has one thing in common; they have enjoyed multiple taxpayer-funded stimulus loans, grants and special tax breaks. This list includes Big Venture Capital, Big Energy, Big Wind, as well as high-powered left-wing organizations like the Center for American Progress. Some I've already tackled like Kleiner Perkins, Google Ventures, VantagePoint, Kholsa Ventures, The Westly Group, Perseus, L.L.C, General Electric, Goldman Sachs, Citigroup, BP Alternative, George Soros and so on.
Today we add Foundation Capital to that special club.
#1 through #2)
Silver Spring Networks and its $1.3 billion stimulus contracts as well as Serous Energy ($548,100 stimulus tax credit and possibly more) were not the only stimulus winners from Foundation Capital’s Cleantech Portfolio.
#3 and #4)
Two more that are also Kleiner Perkins investments raked in funds as well: Aquion Energy won a $5 million grant, which was part of the "$1.6 billion package supported by the American Recovery and Reinvestment Act and the private sector to support Smart Grid projects nationwide". Then there is Transphorm Inc (a Foundation Capital investment) and Enphase Energy, Inc., which collectively received over $9 million in grants from ARPA-E program funded by the 2009-Stimulus
#5)
AutoGrid in an October 2012 Press Release, it was noted that they had won more than $5 million from the “ARPA-E, the advanced projects research agency of the U.S. Department of Energy, and the California Energy Commission,” which occurred sometime in October 2011.
#6)
CalStar Products Inc, who develops, manufactures, and sells sustainable building products, in January 2010, was awarded a $2.44M tax credit to open a green brick and paver plan in Wisconsin, which expected “to bring 35 new green jobs to Racine County in the next two years.” This was another stimulus created idea –– the Section 48C program, which provided a 30 percent tax credit for investments in 183 manufacturing facilities for clean energy products across 43 states.
Needless to say, like many of these Green Corruption pieces, CalStar opens more clean-energy dirt, and where we find another Obama buddy and "DOE Insider." Steve Westly, the founder and managing partner of The Westly Group, is a two-time Obama bundler, sat on his campaign’s National Finance Committee, and was a co-chair of the 2012 Technology for Obama group. He was briefly considered for a cabinet level position in the Obama administration, and in August 2010, Westly secured a top advisory role inside the DOE, close to Energy Secretary Chu.
In 2011, Westly was tagged as the "Green bundler with the golden touch" where IWatch points to a trail of [green] loans, grants and tax breaks. However, my latest analysis in January 2013, found more: with 20 firms listed (exited and current), I found that at least 50 percent of The Westly Group portfolio were winners of the Obama green energy giveaway.
#7)
Sentient Energy, Inc. “equips the Smart Grid with Eyes and Ears, making it much more reliable and sustainable,” states their website. And while I can’t locate any direct stimulus funds, it seems they have a partnership with Silver Spring Networks as well as General Electric as part of GE’s Ecomagination program –– both with friends in high places and both huge stimulus winners (John Doerr and Jeffrey Immelt from President Obama’s ultra-rich “retired” Jobs Council).
#8)
SunRun, “the nation's leading residential solar electricity provider,” last December became one of a trio of solar companies under investigation “to determine whether the companies accurately reported the market value of their costs when applying for federal reimbursement, which was calculated at one-third of the costs,” reported the Washington Post.
Ironically, while all three –– SolarCity, SunRun, and Sungevity –– are competitors, they all “boast investors with significant ties to the Obama White House,” noted the Heritage Foundation. Translation: all three have friends in high places, and together the three companies reportedly have claimed more than $500 million in taxpayer support,” while "SolarCity has applied for $341 million in grants," reported Fox News.
Now, I've covered SolarCity a few times, here and most recently in my Citigroup’s Massive 'Green' Money Machine post, and now through research of just the 1603 stimulus grants, I found that SunRun was awarded 21 grants, across 10 states for over $140 million free taxpayer money.
Plus in 2010, SunRun announced a $100 million joint program with major utility Pacific Gas & Electric, which according to Venture Beat, “PG&E will be funding the rooftop systems in question via its subsidiary, Pacific Energy Capital II, a tax equity fund,” of which “In lieu of traditional returns, the investor — PG&E in this case — gets tax benefits in addition to some cash returns.”
Foundation Capital Opens Up a New Can of Worms
Since this story leads us to three DOE Insiders –– Cathy Zoi, Sanjay Wagle, and Steve Westly, and with so many hands in the cookie jar, it's difficult to pinpoint who had the most influence, but I can confirm there are at least twelve DOE Officials (also those from Obama's Green Team) that directly benefited from the Obama administration’s green energy policies and the $100 billion earmarked for renewable energy as well as other clean energy funds from various budgets and departments. And while we've stumbled upon others in various posts like Kristina Johnson, Steve Spinner, and Van Jones as well as the enablers like Steven Chu, Carol Browner, Jonathan Silver and Matt Rogers, there is more of the "DOE Dirty Dozen" Green Corruption file yet to open, and I hope to get it out by next fall.
#9)
But now we get to EnerNOC, which interesting enough, was listed on the Foundation Capital cleantech portfolio when I printed it out over a week ago, but now I find that two are missing from that list: EnerNOC and Ventiva.
Venture Beat describes EnerNOC as “one of the leading players in the demand response space,” which apparently is some sort of fancy technology for the smart grid. The Beat, in 2009 reported, “Foundation Capital was attempting to dial down its ownership in the Boston-based company, of which they had been the lead investor in EnerNOC’s second round of funding in 2005, leading the $7.75 million raised with $5 million.”
It turns out that EnerNOC went public in 2007, and in November 2011 USA Today did an analysis noting that the “Stimulus funds helped some stocks soar,” of which EnerNOC (and others I’m familiar with) was on that list. However, what most don’t know is that just over a year prior that report, the State of Massachusetts proudly announced, “Utilizing $10 million in stimulus funds, the DOER awarded a contract to Boston-based EnerNOC to implement a comprehensive Enterprise Energy Management System (EEMS).”
From this particular renewable energy firm, we find another White House friend, which as usual, leads to more clean-energy dirt: TJ Glauthier, who was an advisor to SunRun, also serves on the Boards of Directors of three companies, including EnerNOC.
Why is he relevant?
Well, Mr. Glauthier is a "Strategic Advisor” for Solayzyme –– you know part of "President Obama’s Algae Racket," which not only includes a firm tied to Bill Gates, another carbon tax pusher in cahoots with Secretary Chu. Gates is an investor in Sapphire Energy that received a $54.4 million loan guarantee from the Department of Agriculture and $50 million grant from the DOE.
But that’s not the bombshell here…we're used to billionaires getting taxpayer money for their pet projects...
In December 2009, South San Francisco-based Solazyme Inc. won $22 million as part the “government’s $600 million advanced biorefinery project stimulus award.” And three years later, December 2012, “The U.S. Navy was forced to buy 450,000 gallons of biofuels from an Obama-connected firm at an outrageous $16 per gallon,” wrote Investors.com.
Besides the absurdity, you should know “Solazyme's ties to the White House and the Democratic establishment in Washington are myriad,” with their “officials including Glauthier having contributed at least $360,000 to Democrats since 2007," noted Michelle Malkin in March of last year.
But it gets better…
Glauthier, whose past includes the Clinton administration, and of all places the Department of Energy, was a member of the Obama presidential transition team, and worked — shock, shock — “on the energy-sector portion of the 2009 stimulus bill." And wait –– Glauthier is tied to more money from the taxpayer-funded Green Bank of Obama.
Stay tuned for the next Green Corruption File to be released on our “Gang of Eight” stimulus crafters…
But I’ll close with this…
As I began this long and twisted tale, Mr. Paul Holland of Foundation Capital, whose General Partner Steve Vassallo has an friend in the White House and of their 12 green energy firms that I analyzed, 60 percent received stimulus related green-government subsides, in the form of grants and special tax credits totaling at least $175 million of taxpayer money. Meanwhile the main focus of this post, Silver Spring Networks –– of which Foundation Capital is the majority stakeholder –– was propped up, and it was only possible through Obama’s Recovery Act and $1.3 billion in smart-grid grants.
It's nice to be a friend of the Obama administration –– financial rewards are part of the benefits, but I'd rather leave you with this commercial break, and Mr. Holland's sentiment when he heard about the billions of stimulus dollars up for grabs.
When asked, “how can we all make some money off of that?" Holland responds...
Crude? Yes, but sadly I think this is the mentality behind our government officials and those partaking in corporate welfare. Worse, they think it’s funny. Oh and by the way, Steve Westly was there too, laughing....Yeah, that's big question. So I guess I would just peel it back to a couple of weeks before I was at the Wall Street Journal's Economics Conference and Matt Rogers who probably a number of you know came in and was doing a talk and this is going to be a little off collar so I don't want to get in trouble for this. He came in to do his talk and opened his talk with, 'I'm Matt Rogers I am the Special Assistant to the Secretary of Energy and I have $134 billion that I have to disperse between now and the end of December.' So upon hearing that I sent an email to my partners that said Matt Rogers is about to get treated like a hooker dropped into a prison exercise yard.
Up Next
Stay tuned for the next Green Corruption File to be unleashed: "The RAT in the Recovery and the Gang of Eight," of which we've already exposed six. This "gang” consists of three very influential groups. General Electric through the 2008, 2009 DOE Electricity Advisory Committee, which includes other green stimulus winners like NextEra Energy and American Electric Power (AEP) –– of which all three have made out like bandits.
Further down the line is the American Council on Renewable Energy (ACORE), which also contains as its member, many winners from the Green Bank of Obama, and we noted in our Citigroup columns.
On our journey, we've exposed John Doerr of Kleiner Perkins and our new Secretary of State, Climate Hawk Senator John Kerry's part in crafting the 2009-Recovery Act –– then ultimately benefiting via Kleiner Perkins.
In March we tackled the Left-wing Billionaire George Soros, Obama’s "Agent of Green," who interesting enough not only heavily backed candidate Kerry in 2004, but also bankrolled Barack Obama’s campaign victories. Soros also funds the Apollo Alliance –– a left-wing organization who exerts powerful influence on the views and policies of the Obama administration, of which I had alerted to in 2010 that boasted of writing Obama's trillion-dollar spending spree.
Since today I gave you a sneak peek into TJ Glauthier, another member of the “gang of eight,” I'll pick up with his part in my next installment. And even though I sounded the alarm on the Apollo Alliance in 2010, I'll be revisiting them along with Obama’ left-wing radical friend and former green jobs Czar Van Jones.
Last but not least, we'll dive into McBee Strategic Consulting, of which Tim Carney of the Washington Examiner, in March of 2011 had this to say, "K Street is the epicenter of this green-industrial complex, and ground zero might be the firm founded by Democratic revolving-door earmark lobbyist Steve McBee, who reportedly wrote key provisions in the stimulus bill to open the spigot of green corporate welfare."
Two Women (one Citizen & one energy Columnist) join forces on One Mission: to expose one chunk of this Green Corruption scandal at a time.
