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CO: Conflict-ridden congressman spawns legacy of ‘green banking’

By   /   November 15, 2012  /   No Comments

By Tori Richards and Earl Glynn | Colorado Watchdog

LAKEWOOD, Colo. – Throughout his most recent campaign, as in three campaigns past, Congressman Ed Perlmutter sold himself as a defender of the average citizen, exemplified by his monthly grocery store mingles, where constituents bring the Lakewood Democrat problems — from medical issues to the inability to obtain small business loans — and maybe leave with a head of lettuce.

Ed Perlmutter

The three-term Democrat beat GOP challenger Joe Coors, working hard to distinguish himself from wealthy Americans and their network of lobbyists and special interests.

In reality, Perlmutter’s personal life is intertwined with the emerging class of entrepreneurs who have jumped into the government-subsidized financial and energy markets.

A Watchdog.org investigation reveals that Perlmutter has secured untold millions in loans for a bank in which he is an investor, accepted campaign funds from energy companies in which he served — and his father continues to serve — as a trustee, and was married to a lobbyist who obtained a $535-million loan from the Obama administration for Solyndra, the infamous Silicon Valley-based solar-panel company that went bankrupt soon after.

ENERGETIC MONEY SPENDER

Perlmutter’s 7th Congressional District encompasses Golden, Lakewood and the northern part of metropolitan Denver. It’s also home to the National Renewable Energy Laboratory (NREL), which has supported Perlmutter’s campaigns from the beginning.

“As a member of Congress, I have worked hard to promote measures that will increase energy efficiency and incentivize Americans to make their homes and businesses more sustainable for the future,” Perlmutter says on his website. “Promoting energy efficiency is the easiest, most immediate course to saving consumers and small businesses money, and it will create jobs that can’t be outsourced.”

It’s difficult to argue with any policy proposal containing such warm and fuzzy buzzwords as “green,” “saving consumers,” “efficiency” and “environment.” But Perlmutter’s preferred strategy of achieving those goals has been to work with the Obama administration to shift billions of taxpayer dollars to high-paid private-sector firms that produce little.

“The problem with many of these green-energy companies is that we’ve given billions of dollars to them and they are a miniscule part of our grid,” said Amy Oliver Cooke, director of the Energy Policy Center at the Independence Institute, a free-market think tank. “They are inefficient and not economical and at some point we have to stop pouring good money into glorified science projects.

Amy Oliver Cooke

“What has happened under the Obama administration is that they have put bad green-energy projects on steroids,” Cooke continued.  “It’s not clean, it’s not green and they love to say wind and solar is free. The sun shines for free and the wind blows, but it’s not the resource that costs the money, it’s the capturing and transmission of wind and solar that makes it wildly expensive.”

Despite this, Perlmutter has found his niche and promotes it every chance he gets.

“He is always talking about the environment, he is Mr. Green Energy,” Cooke said. “Politically well connected green-energy programs get funded. These entities got $90 billion from the stimulus bill.”

As we’ll find out, Perlmutter is well connected indeed.

A POWERFUL LOBBYIST

Now 59, Perlmutter made his first foray into politics in 1995, serving as chairman of the bipartisan Renewable Energy Caucus in the Colorado Senate. He also served on the Water and Oil and Gas committees.

When his last term ended in 2003, Perlmutter went back to his commercial law practice. That same year his wife, Deanna Perlmutter, registered as the director of the political action committee Environment2004 Inc. “an organization dedicated to informing the American public about the linkages between federal environmental policy and local health and quality of life,” according to the environment investing firm EKO.

In 2006, when Perlmutter won his seat in Congress, he told the Denver Post his wife would not lobby him or any member of Congress.

But two years later, Deana Perlmutter registered as a lobbyist for Solyndra, a solar panel manufacturing company. Her lobbyist disclosure statement shows she earned her employer $140,000.

Then on March 20, 2009, U.S. Energy Secretary Steven Chu offered Solyndra a $535-million loan guarantee. The money was used to build a new factory six months later in Northern California. President Obama was on hand for the groundbreaking and returned for a visit the following year.

Despite the taxpayer handout, Solyndra filed for Chapter 11 bankruptcy in 2011 and laid off all employees. The next month the FBI raided the company’s headquarters to determine whether top officials lied to the Department of Energy regarding its financial status to get the loan. Solyndra’s website is still up and running; with the last entry from a year ago saying it has suspended operations. To date, no one has been prosecuted.

Solyndra stands vacant in Fremont, Calif., the building for sale.

In a lawsuit filed last month, Solyndra blamed its woes on Chinese solar panel manufacturers that have flooded the market with cheap goods.

The Perlmutters filed for divorce in 2008, but Deana continued as a big player in Washington. Public records show she attended four meetings at the White House last year, including one with Sally Ericsson, an energy director with the Office of Management and Budget, and another with Ginger Lew, senior adviser to the National Economic Council.

For his part, Perlmutter was sitting on the powerful House Financial Services and Rules committees, positioned to vote on key legislation involving spending money on massive energy projects.

FRIEND TO BANKS

Many of Perlmutter’s most ardent supporters are the institutions with the cash — banks and bankers. Watchdog.org discovered that banking entities have donated $378,232 to Perlmutter’s campaign since 2005, when he first ran for Congress.

The trifecta of Perlmutter’s environmental stance, committee assignments and close relationship with banks created the perfect storm in the early morning of June 26, 2009. That was when he inserted language into a hotly contested bill that created an entirely new banking system favoring green-energy companies and users.

The American Clean Energy and Security Act of 2009 — a massive, 1,437-page bill — was designed to reduce global warming pollution, achieve U.S. energy independence and create jobs. Largely divided along party lines, and with the Democrats still in charge, the House Rules Committee added 310 pages to the bill at 3:40 a.m. House Speaker Nancy Pelosi scheduled a vote the next day, giving detractors little chance to study the changes.

One of the additions was section 299E: Green Banking Centers. Authored by Perlmutter, this section was similar to language he had used in crafting two previous, failed stand-alone efforts — the GREEN Act to develop renewable energy sources of 2008 and of 2009.

Specifically, it said in part:

“Federal banking agencies shall prescribe guidelines encouraging the establishment and maintenance of ‘green banking’ centers by insured depository institutions to provide any consumer…

“Information…that permit lenders to provide more favorable terms by allowing lenders to increase the ratio on debt-to-income requirements or to use the projected utility savings as a compensating factor;

and

“(O)btaining beneficial terms for any mortgage or loan, or qualifying for a larger mortgage or loan, secured by a residence which meets or will meet energy efficiency standards…”

This means that banks can loan extra money to equal the amount in energy savings. But the language “beneficial terms” is vague and could have bad consequences, said Todd Cuffaro, a San Diego banking expert who has testified in court on more than 60 cases. He is CEO of banking consultant firm Atlantic Pacific Bancorp.

“When ACORN first started years ago, it sounded good but morphed into unintended consequences,” Cuffaro said. “In terms of recognizing alternative energy sources as a benefit, it is just good lending. But to add another dimension that says, ‘OK, you are a borrower that believes in solar, we are going to give you a cheaper loan or not charge you as many points.’ Obviously that has a good intention, but when you say ‘beneficial terms,’ nothing has been defined.”

Solyndra grabbed federal tax dollars and then went bankrupt.

Neither of Perlmutter’s earlier energy bills made it to the Senate, suggesting that it took the smoke and mirrors of a much larger bill to mask his otherwise unpopular effort. As a modest footnote in the vast American Clean Energy and Security Act of 2009, Perlmutter’s banking and energy legislation escaped scrutiny, and was signed into law by President Obama.

“In order to save green, we must go green,” Perlmutter crowed on his website. “By prioritizing energy efficiency practices, we can ease the woes of homeowners, lenders, financial markets, builders and our environment. This bill is another tool to move our country toward energy conservation and sustainable development.”

What Perlmutter didn’t say was that his Green Banking Center legislation benefited a bank in which he owned stock and which contributed to his campaign.

New Resource Bank, in San Francisco, opened its doors in 2006 with the vision of becoming “the bank for people who are leading the way to a more sustainable world,” according to its website. “A group of successful entrepreneurs, bankers and business leaders founded the bank … with a vision of bringing new resources to sustainable businesses. …” Two of those successful founders were Deana Perlmutter and Ed Perlmutter’s father, who helped the bank get off the ground by providing “seed capital and effort,” according to news reports. The link to that page on the site has since been taken down.

Before the bill passed, New Resource executives gave Perlmutter a total of $4,500 in contributions. Bank co-founder Daniel Yohannes donated $8,800, according to opensecrets.org.  Perlmutter himself invested between $1,000 and $15,000 according to disclosure forms, but in a debate last month with Coors he said that this amount has since been liquidated.

That may be true. What remains, however, is a $50,000 trust account with stock in the same bank for his grandchildren.

UP NEXT: We look at Perlmutter’s ties to huge federal and nonprofit energy conglomerates and their skyrocketing budgets.

Tori Richards can be reached at tori@coloradowatchdog.org

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Tori Richards is a Pulitzer Prize-nominated reporter who has covered some of the biggest news in the world during her 25 years in the business. She has also won a dozen national and local writing awards for her coverage of the judicial system. Richards has worked for CBS News, Bloomberg, Reuters. Agence-France Presse, the NY Post, the NY Times and The Daily among others. Her work has also appeared on CNN.com, FoxNews.com and US News & World Report. Some of her biggest stories included the cases of OJ Simpson, Michael Jackson, the Aryan Brotherhood and the Night Stalker.

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