Energy Secretary Steven Chu has just about had it with House Republican accusations about Solyndra and other clean-energy companies that won billions of dollars in federal loan guarantees.
“After hundreds of thousands of pages of documents sent over, there’s not any whiff that this was a politically influenced decision,” Chu told reporters Tuesday shortly after wrapping up House committee testimony on the controversial program. “That’s true of all the loans.”
Chu’s frustration was apparent after spending more than two hours before the Oversight and Government Reform Committee answering pointed GOP questions concerning his handling of more than $14.5 billion in stimulus-funded loan guarantees.
Earlier in the day, Rep. Darrell Issa’s panel released a blistering report claiming Chu had “turned a blind eye to the risks” associated with many of the companies applying for the loan guarantees, putting billions of dollars in taxpayer money in jeopardy.
During the hearing, House Republicans peppered Chu with questions about a “revolving green door” of current and former Obama administration officials and campaign fundraisers who have connections to the stimulus-funded loan guarantee winners.
Rep. Jim Jordan (R-Ohio) asked Chu whether his decisions had been influenced by several specific people tied to the administration, including former National Economic Council Chairman Larry Summers, who before joining the White House worked as a part-time managing director at D.E. Shaw, a New York-based investment firm that has an ownership stake in the Kahuku Wind project.
Chu replied that Summers’s connections to the Hawaii wind farm had nothing to do with it securing a $117 million loan guarantee in July 2010.
The DOE chief also had similar replies when asked about Commerce Secretary John Bryson, who before joining the administration sat on the board of directors at BrightSource, which won a $1.6 billion loan guarantee in April 2011 to support the Ivanpah Solar Energy Generating System in California’s Mojave Desert; Nancy-Ann DeParle, a deputy White House chief of staff for policy who served on the board of directors at Noble Environmental Power, the owner of the Granite Reliable wind energy project that won a partial $168.9 million loan guarantee last September; and Michael Froman, a deputy assistant to Obama and deputy national security adviser who worked at Citigroup, a major investor in SolarReserve, winner last September of a $737 million loan guarantee.
“There seems to be a pattern,” said Rep. Jason Chaffetz (R-Utah). “There’s so many names on this list. I just want to know personally what are you doing to follow through on our concerns that these people are personally financially benefiting from the decisions that they’re in positions to influence people when they have major financial gain on the upside of these loans.”
Chu responded that all of the DOE loan guarantees got greenlights based on their merits and without White House involvement. The DOE chief also said he hadn’t referred any of the specifics to the department’s inspector general, though he said he’d ask the DOE general counsel to review whether any of the officials breached a “firewall” designed to stop such conflict of interest concerns.
“We will look into this,” Chu told reporters after the hearing. “But again it’s easy to raise something and say, ‘Oh, by the way, this person had a connection to that company.’ Then there’s a big leap to say we funded the company because of it.”
Chu noted prominent Republicans and GOP donors have ties to some of the stimulus winners. But he also noted, “It’s not relevant to what we funded and that’s the bottom line.”
This article first appeared on POLITICO Pro at 3:59 p.m. on March 20, 2012.
- CAGW Names Energy Sec. Steven Chu 2011 Porker of the Year (mb50.wordpress.com)
- On Solyndra and Obama’s 2011 SOTU Avoidance, Politico’s Samuelsohn Misses the Big Cahuna: By That Time, Everyone Knew (newsbusters.org)
- Republicans expand complaints of energy loans beyond Solyndra (business.financialpost.com)
- When Wall Street Makes Crap Loans, It’s a Crisis; When DOE’s Steven Chu Does It, It’s Green Energy. (reason.com)
When the paramilitaries of the United Self-Defense Forces of Colombia (AUC) arrived in San Onofre in northern Colombia in the late 1990s, they came after dark, dragging people from their homes and disappearing into the night.
Soon, they did not need the cover of darkness. People were executed in public plazas in broad daylight. Women and young girls were openly raped and abused.
Since the demobilisation of the local AUC bloc in 2005, 42 mass graves have been discovered in the municipality. Locals say about 3000 people disappeared ands tens of thousands fled their homes and abandoned their land to escape what one survivor called a region of “concentration camps”.
Seven years on from the AUC demobilisation, San Onofre is now the site of thousands of hectares of teak trees belonging to one of Colombia’s five biggest companies, Argos S.A.
In February last year, Argos’ commercial monocrop plantation was approved for the United Nations’ Clean Development Mechanism (CDM) carbon trading scheme. This means it can sell carbon credits to industrialised countries trying to meet Kyoto Protocol emission reduction targets.
The company says the plantation will capture 37,000 tones of CO2 a year for 25 years – worth about $12.5 million in the current carbon market. It also plans to use another teak plantation in the nearby municipalities of El Carmen and Ovejas for the CDM.
Argos claims the teak plantation is helping fight climate change and contributing to the sustainable development of a conflict scarred region, but the project has proved controversial.
Survivors from the paramilitary era and land restitution campaigners claim the plantation and its CDM status is not only an attempt to cash in on the lucrative carbon credits market, but also legitimise a mass land grab that followed paramilitary violence, and prevent land restitution to a displaced population.
The municipalities of San Onofre, El Carmen and Ovejas are in the Caribbean region Montes de Maria. A heavy guerilla presence in the area led to the creation of AUC bloc, the “Heroes of Montes de Maria” in 1997. The paramilitaries soon gained complete social and economic control of the region by murdering, torturing and displacing local farmers with the support of local state security forces.
Between 1995 and 2005, 54 massacres were reported in the three municipalities of San Onofre, Ovejas and El Carmen and, says government agency Accion Social, 117,097 people have been displaced there since the paramilitaries first arrived.
The AUC era ended with demobilisation in 2005. However, in 2008 El Espectacor reported a new invasion, of “strange personalities” in bulletproof Hummers.
A land grab ensued, in which desperate, indebted or frightened people were pressured into selling property. Abandoned land was snapped up by speculators.
Next came big business. What had previously been an area of smallholder and subsistence farming rapidly became dominated by large-scale agro-industrial enterprises ― dairy, timber, African palm and teak.
As the land became more concentrated in fewer hands, the landscape of Montes de Maria began to change. Most of Montes de Maria is now owned by just a handful of large businesses, among them Argos, which owns an estimated 12,500 hectares.
Argos claims it bought its land in San Onofre directly from the owners in 2005, after the paramilitaries had left. However, the CDM validation report indicates it first bought land in 2003 and continued to do so until 2008.
Camilo Abello, the vice-president of corporate affairs at Argos, claims the company entered “a completely peaceful zone. The Argos representative who made the purchases was able to go into the zone because there were no paramilitaries, there was no violence.”
“Juan Carlos”, a San Onofre local whose family sold their land to Argos, disagrees.
Juan Carlos’ family owned land close to the El Palmar ranch, headquarters of the infamous local AUC leader known as “Cadena” and site of a mass grave containing 72 tortured and mutilated bodies.
“We had to sell the land because we were in an unbearable situation,” he said, “Our lives were in danger.”
Juan Carlos said his family had to ask Cadena permission to sell to Argos. He said that although he knew of no formal contact between the AUC and Argos, paramilitaries visited the farm while the Argos representative was measuring the land.
Government statistics show that nearly 2000 people were forcibly displaced in San Onofre in 2005, more than in the previous two years. More than 1000 people were also displaced in 2006 and again in 2007.
Murder and displacement rates have dropped sharply since, but government risk reports on San Onofre show a renewed and growing paramilitary presence in the area.
In El Carmen de Bolivar and Ovejas, Argos bought land from the speculators who flooded the region in the wake of the paramilitaries.
One of the main sources was a group of powerful businesspeople and ranchers called the Amigos de Montes de Maria. Locals say they pressured campesinos into selling their land and evicted families from land bought for agro-industrial projects.
Testimonies collected for two NGO reports said that in at least one case Argos bought land acquired by Amigos de Montes de Maria from demobilised AUC members who had displaced its owners.
Residents also report how one alleged demobilised AUC member, Silvio Flores, went to work for the company after it bought the land he managed on behalf of a member of the group. Locals claim Flores then began pressuring other campesinos to sell; abusing and threatening them, killing their animals and burning down houses.
In the report, residents of Ovejas also describe being threatened by heavily armed camouflaged men who claimed to be the company’s security.
Argos denies any involvement in pressuring people to sell or buying from displaced people. “What we did was buy from people who wanted to sell,” said Camilo Abello, “without any coercion or pressure”.
Abello also denied any links to paramilitary groups and claimed the company does not use any type of security at the plantations. According to Abello, the company is helping the region by creating jobs.
“We don’t think that we are taking advantage, on the contrary we are supporting the reconstruction of the fabric of society, we are investing in a post-conflict zone,” he said.
The issue of land ownership in Montes de Maria has been complicated further by Colombian President Juan Manuel Santos’ new flagship policy ― the Victims and Land Restitution Law.
The law is designed to address the desperate plight of the estimated 3-5 million Colombians forced from their lands into city slums and squatter camps by conflict and violence. Its main focus is the restitution of lands to the displaced.
Critics of Argos claim the company is using the teak plantations and their CDM status to ward off the danger of losing their lands because of the Victims Law. If Argos faces claims on its Montes de Maria land, it can retain the plantations by exploiting a loophole in the restitution process.
The Victims Law says land will not be taken from companies that are using it for agro-industrial enterprises if the company can prove it bought the land in good faith. Instead, the authorities will try to negotiate a financial agreement between company and claimant.
Colombian Congressperson Ivan Cepeda campaigns on land rights and has raised the issue of Montes de Maria land grabs to Congress.
“The operation [Argos] has done in Montes de Maria is a clear example of how the government’s proposed restitution with the Victims Laws is going to work,” he said. “All of this is a big, sophisticated operation to legalize the lands they have robbed from the campesinos.”
Cepeda is scathing of Argos’ claims to have acted in good faith when it bought the lands.
“[Paramilitary violence] did not happen in isolation,” he said. “It is a fact of public knowledge and frankly it is illogical and incomprehensible that these businesses did not know which land they were dealing with and who had lived on that land.”
He added: “[Argos’ project is] a business that it is presenting as clean when in reality it is a business drenched in blood ― the blood of campesinos that were the victims of massacres.”
The company itself says it welcomes the Victims Law and would cooperate fully with any claims on land owned by the company.
In October, Cepeda wrote to UN Secretary General Ban Ki-Moon urging him to expel Argos from the CDM program and enforce the UN Global Compact, which commits associated companies to human rights, labour, environment and anti-corruption principles.
Ban did not publicly respond, but the CDM board chair Martin Hession said responsibility for the matter lay with the Colombian government.
“Primarily, it is for (them) to resolve issues like this as they certified the sustainable development of the project,” he said in an interview with Point Carbon News.
A spokesperson for the Colombian Ministry of Environment and Sustainable Development said, “Only the CDM Executive Board can take this decision [to remove Argos’ approval].”
Compared with the horrors of the turn of the century, life for the campesinos of Montes de Maria is quiet. But with growing tensions over landownership and the resurgence of paramilitarism, violence and conflict still lurk beneath the surface.
“We believe that it is not going to stay calm,” said “Andres”, a campesino from Ovejas.
“It is going to continue, we are going to see deaths here, we are going to see pressure, we are going to see evictions and displacement because they are going to try to reclaim the land like a debt and we are not going to let them.”
[The names of the campesinos interviewed for this article have been changed to protect their identities.]
- Colombia emerald tsar faces probe (bbc.co.uk)
- Colombian paramilitary surrenders (bbc.co.uk)
- Colombia’s former paramilitaries: Criminals with attitude (economist.com)
- Colombia chief prosecutor quits (bbc.co.uk)
- Former Colombia rebels lured into crime rings (seattletimes.nwsource.com)
- Colombia’s former paramilitaries: Criminals with attitude (economist.com)
Published: 15 February, 2012, 04:26
A number of prominent US politicians, including President Barack Obama, are refusing to comply with a federal court order that they return donations from a known Ponzi scheme. The funds amount to $1.8 million in losses for the bilked investors.
The then-freshly inaugurated President Obama had received $4,600 for his campaign from Stanford Financial Services. Obama’s campaign then donated the sum to charity in February 2009, just days after Stanford was taken over by the US government following charges of massive fraud. Republican and Democratic national fundraising committees, along with the campaign funds of various Senators, Representatives and the President himself, all received donations from the Houston financier Allan Stanford, who is currently facing charges of masterminding the second-largest Ponzi scheme in history – totaling $7 billion, second only to Bernard Madoff‘s estimated $50 billion fraud.
Obama is now catching criticism for refusing the court’s demand that the recipients return the donated money to the defrauded investors. Kevin Sadler, a lead counsel for the investors entitled to repayment, compared the move by Obama’s campaign to taking money from “a guy who goes into a Seven Eleven and robs the store.”
Following Stanford’s arrest in 2009, his Stanford Financial Group was placed under the management of a receiver. The receiver was charged with compensating investors – some of whom lost over half a million dollars in savings. The problem was that a large portion of the money had been donated to the campaign funds of high-profile politicians.
Other notable politicians owing money to the receivership include Representative Pete Sessions (R-TX) and Senator John Cornyn (R-TX). The total amount of money owed by party committees on both sides of the aisle is over $1.5 million that, so far, these committees have refused to pay back.
But some Senators and Representatives complied with the demands and returned the money they had received from Stanford. These include Speaker John Boehner (R-OH), Senate Majority Leader Harry Reid (D-NV), Senator John McCain (R-AZ), Senator Chris Dodd (D-CT) and Senator Richard Shelby (R-AL). However, the $154,000 recovered from these politicians is a mere fraction of the $1.8 million owed to Stanford’s investors.
A scarcity of legal precedents and the difficulty to prove that the money received by a campaign was known to be illicit remain major hurdles in recovering the money.
- Obama To Alleged Ponzi Schemer: You’re Not Getting This Money Back (huffingtonpost.com)
- Mitt Romney Entwined with Players In Stanford Ponzi Scheme (crooksandliars.com)