Gore and the Democrats' Green Graft Machine
With the Solyndra, First Solar, Sunpower, Fisker, and related Obama administration Department of Energy scandals, President Obama is following a trail blazed by Vice President Al Gore in the mid-1990s. Similar scandals -- failed (or failing) green technology companies intertwined with Democratic Party fundraising -- will continue to arise until we understand their genesis.
Doubtless there are sincere entrepreneurs and enthusiasts in the green technology industry. Nonetheless, I suspect that these green ventures fail so frequently because their political backers have about as much stake in their success as did Bialystock and Bloom in the success of Springtime for Hitler. Perhaps these ill-starred ventures appear so often with substantial DOE funding precisely because they are successful in their primary surreptitious purpose of providing a Wall Street "pump and dump" vehicle for channeling cash to Democratic Party insiders. Considering that until recently insider trading was actually legal for congressmen, the insidious nature of such scandals is particularly compelling.
To begin to understand these phenomena, it is illuminating to review the record of the original, the prototypical failed green technology scandal. It began in 1995 when Vice President Al Gore visited Fall River, Massachusetts to offer an Earth Day speech touting Molten Metals Inc. This company failed soon thereafter.
[T]he stock plunged from $28 to $14 in a single day in October 1996 when the company lost Department of Energy funding for a research contract. Doubts were raised about the commercial viability of Molten Metal's waste disposal system.
In the aftermath of this collapse, there was a congressional investigation. However, House Republicans could not prove that Peter Knight -- who was Al Gore's senatorial aide and chairman of the Clinton-Gore election campaign -- had used his connections to the vice president when lobbying very successfully on behalf of MMT. In addition, there was a suspicious grant of stock to Mr. Knight's son -- perhaps an inept attempt to conceal the ownership of these shares. One can only wonder whether other "insiders" successfully concealed their ownership in MMT. According to a lengthy article in the New York Times, Nov. 4, 1997:
The Republicans want to know why Zachary Knight, the son of a lobbyist, Peter S. Knight, was given nearly $20,000 in stock by William M. Haney 3d, the chairman of Molten Metal Technology Inc., a Massachusettes [sic] environmental-technology company. The gift from Mr. Haney and his wife came just two weeks after Mr. Knight was named chairman of the Clinton-Gore re-election campaign in May 1996.
Republican investigators say they believe the gift was a form of payment to Mr. Knight, who had worked as a $7,000-a-month lobbyist for Molten Metal before becoming campaign chairman. Before voluntarily giving up his job as a lobbyist, Mr. Knight had helped the company win $32 million in Federal grants while urging its executives to contribute and raise $132,000 for the Democrats and President Clinton's re-election effort.
The Republicans plan to argue that Molten Metal won most of its grants because Mr. Knight used his ties to Mr. Gore and because the firm and its employees contributed heavily to the Democratic Party. Mr. Haney is a longtime supporter of Mr. Gore.
Indeed, the Republicans will try to show that Mr. Knight helped arrange for Mr. Gore to visit Molten Metal's plant in Fall River, Mass., to commemorate Earth Day in April 1995. At the ceremony, Mr. Gore described the company's hazardous waste cleanup technology as ''a shining example of American ingenuity, hard work and business know-how.''
We see here the outlines of what is driving these cynical scandals. It is the opportunity for insiders to be given shares in these companies prior to (vice) presidential speeches touting their DOE-funded technologies. According to a Forbes April 21, 1997 account of the scandal:
Al Gore helped send the stock flying when he called Molten Metal "a shining example of American ingenuity."
Sound familiar? Who can forget President Obama's iconic May 2010 speech touting Solyndra? He uses language nearly identical to Gore's. I'm led to the conclusion that Al Gore perfected a 7-step fundraising formula that has been repeated by Democrats ever since:
Al Gore's Formula for DOE Green Technology-Scandal
- Form a political partnership with insiders at Company A developing "Green Technology."
- Distribute cheap stock in Company A to political insiders -- with ownership concealed.
- Shower Company A with insider-directed DOE grants, contracts, and loans to artificially pump up its financials and Potemkin-prospects for success.
- Tout the ingenuity of Company A in major political speeches -- even if you have to manufacture a global warming "crisis" to justify the company's product.
- Advise political insiders to discreetly dump their overpriced stock a little at a time to avoid a run in the market but well before the inevitable collapse. This gradual insider-trading will not trigger alarm in the market or scrutiny from the SEC, which is normally on the hunt for large stock-trades suspiciously timed to specific events.|
- Collect campaign contributions from gratified and newly enriched political insiders.
- Wash, rinse, and repeat the fleecing cycle with Company B.
The deviousness of this formula is that Treasury funds are not stolen directly. Such stealing is very difficult to conceal because Treasury funds are closely tracked and subject to audit precisely to avoid massive misappropriation. For example, today's GSA scandal is marked by not only brazenness, but also stupidity, since there is doubtless a paper-trail leading directly to the perpetrators.
Instead, with Gore-style green scandals, ostensibly legitimate but actually politically (mis)directed flows of government "investment" are suborned to puff up companies; the actual payoff is taken from untraceable Wall Street capital transactions unconnected to the Treasury. OWS-types take note: such scandals are particularly cynical since the victims of the fraud (in addition to taxpayers) are the very Gaia-worshiping, Earth Day-celebrating Trustafarians (i.e., Al Gore's fawning base) who actually buy into the confidence-game concerning our future "Green Economy" and who then invest their trust funds in these hoax green companies. Many of these folks would, I'm sure, further emulate Max Bialystock's little old lady investors and forgive their prince even if they became aware of his fraudulent conduct.
Al Gore was rewarded by the Democrats for inventing this winning fundraising formula by being nominated as their presidential candidate. If not for the election of 2000, we would not have had to wait until 2010 to see so many repeats of the MMT scandal scenario. As it turned out, Al Gore landed at Kleiner Perkins, one of the leading Silicon Valley venture-capital firms, where he is perfectly positioned to carry out steps 1 and 2 of the formula above. Concealing political-insider ownership of shareholdings is the work of but a moment if you can rely on investment services from someone in your "crew" like Jon Corzine of Goldman-Sachs, who, it is worth noting, is still a reliable "campaign bundler" for President Obama even amid the unfolding MF Global scandal.
Am I being hyperbolic in detailing Step 4 above with the phrase "even if you have to manufacture a global warming 'crisis' to justify the company's product"? Perhaps not, if you consider that Al Gore's close confidant, Maurice Strong, was on the MMT board of corporate directors. Forbes has this note from Jan. 12, 1998:
A member of Molten's board, Strong sold some shares at around $31 apiece a month prior to the stock's October 1996 collapse. Today the stock is at 13 cents a share and Strong is being sued by San Diego class-action shark Milberg Weiss.
What was Strong's reward for his part in the MMT fiasco? During the Bush interregnum, the Democrats decided that he was eminently well-qualified to be bumped upstairs to the U.N., where he eventually founded the Intergovernmental Panel on Climate Change.
Connecting the dots from the green technology scandals of the Clinton-Gore administration to those of today may help illuminate the Obama era. Not only are the DOE and other government agencies corrupting science with grants to buy academic "research" that supports the "scientific consensus" over global warming hysteria, and not only is the DOE using the false "crisis" to block commonsense energy initiatives like the Keystone Pipeline, but the DOE is also using the "crisis" to justify vast "investments" of taxpayer funds, a gigantic green thumb on the financial scales that distorts Wall Street's normal ability to finance economically sustainable new enterprises instead of this era's continuing series of politically correct yet rapid failures. No wonder we're in a prolonged depression.
One begins to understand the scope of the problem. With vast tranches of Wall Street cash being manipulated very profitably by well-connected greens, the enormous financial interests propelling the continuing "global warming" hoax will fund continued political resistance to any reform effort targeting enactment of a traditional American common-sense approach to energy and investment. These greens will whip up their eco-fanatic storm-troopers and OWS types if there is any attempt at reform. Wall Street wins regardless, so there is no help to be expected from that quarter, although it explains the growing divide between the financial industry and Main Street. While understanding the problem can be the first step in solving it, Tea Party patriots and other reformers have our work cut out for us.
Acknowledgement: Michael Bellacosa assisted with the citation research for this article.
Jerome J. Schmitt is a high technology entrepreneur.
(Photo by Erik Charlton from Menlo Park, USA [Will Al Run Again?] [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons)