BY: Follow @lachlan
A controversial federal agency that finances the purchases of U.S. exports is beefing up its ties to green energy, bringing on board two big names in that industry and a former senior federal environmental regulator.
The U.S. Export Import Bank has come under fire recently for its close ties to the industries that benefit from its financing. Hires since the New Year have placed politically connected green energy executives at positions of influence at the agency.
The most senior of those hires is Michael Whalen, who will serve as Ex-Im’s vice president of structured finance. Whalen was previously an executive of SolarReserve, which received millions in taxpayer financing after investors with deep ties to the Obama White House backed the company.
"Michael's deep experience in both the private and public sector will allow Ex-Im Bank to better serve U.S. exporters and equip them with the tools they need to win large deals overseas that support jobs here at home," Ex-Im said in a press release announcing the move.
Whalen’s public sector experience consists primarily of a stint at the U.S. Overseas Private Investment Corporation (OPIC), where he served as director of structured finance. OPIC, which finances investments by U.S. companies in foreign nations, is, like Ex-Im, described by critics as a corporate welfare slush fund.
Whalen “spearheaded that company’s financing activities” at SolarReserve, according to his OPIC bio. The company secured significant venture capital backing, including support from firms headed by major donors to President Barack Obama’s 2008 presidential campaign, and a number of his personal friends and top White House aides.
The House Committee on Oversight and Government Reform singled out SolarReserve in a 2012 report on “The Department of Energy’s Disastrous Mismanagement of Loan Guarantee Programs,” noting that SolarReserve received $737 million in taxpayer-backed financing from DOE despite its “junk bond” rating at the time.
The report also criticized what it described as “a revolving door of persons who worked at green energy investment groups only to later be hired by the administration.” The practice, the committee said, “raise[s] the specter of undue influence over the loan guarantee process.”
Among the officials passing through that revolving door was Michael Froman. A college friend of Obama who helped him raise money from Wall Street in 2008, Froman is currently the U.S. Trade Representative, and previously served as the president’s deputy assistant.
Prior to joining the administration, Froman led Citibank’s “alternative investments” division, which participated in a $140 million round of financing for SolarReserve in 2008 before Froman left for the White House the following year.
Another SolarReserve investor, Argonaut Private Equity, is owned by high-dollar Obama bundler George Kaiser. Argonaut also invested in now-defunct solar firm Solyndra, which set off controversy over the administration’s green energy subsidy programs after it went bankrupt in 2011.
Whalen’s move to Ex-Im comes as SolarReserve is expanding into emerging markets, making Ex-Im financing of potential interest to the company.
According to a 2012 Associated Press report, it was a candidate for a $2 billion chunk of Ex-Im financing for projects in South Africa, though it is not clear whether it ever took advantage of that financing. The company is currently working on two photovoltaic projects in South Africa, according to Baker & McKenzie, a law firm specializing in export finance that represents SolarReserve and advises clients to take advantage of Ex-Im financing.
Ex-Im financing for renewable energy projects has skyrocketed under the Obama administration. According to agency data, it has increased almost ten-fold since Obama took office, from $210 million 2002 to 2008 to nearly $2 billion from 2009 to 2014.
“Ex-Im Bank has a unique role to play in helping clean energy exporters to win deals in rising renewable markets such as India and Central America,” according to the agency’s fiscal year 2014 annual report.
That dramatic increase in renewable energy financing makes the agency’s work of particular importance to Tom Kiernan, the chief executive of the American Wind Energy Association and, as of last Tuesday, a member of Ex-Im’s advisory committee.
The committee “advises Ex-Im Bank on its policies and programs, in particular on the extent to which the Bank provides competitive financing to support American jobs through exports,” according to the agency, and includes representatives of various industry segments whose work Ex-Im affects.
Kiernan is a vocal supporter of the Ex-Im Bank, which has financed numerous ventures by AWEA members. During a recent fight over the reauthorization of the agency, Kiernan wrote a letter to members of Congress saying Ex-Im had “helped create high-quality American manufacturing jobs.”
Kiernan is also a board member and treasurer of the League of Conservation Voters, an environmental activist group that pushes for federal policies that would benefit the wind industry. LCV’s political arm spent $4.5 million last year in an unsuccessful attempt to re-elect former Sen. Mark Udall (D., Colo.), another vocal supporter of Ex-Im, and of its financing for wind projects in particular.
“For my entire career, I’ve sought to strengthen the ties between conservation and the American business community, because a strong environment and a strong economy go hand in hand,” Kiernan wrote at the Huffington Post in 2013. His perch at Ex-Im will provide another avenue to advance that goal.
As Kiernan pushes stronger ties between environmentalists and the business community, Ex-Im’s advisory committee will also receive input from a former top environmental regulator who used his post at the Environmental Protection Agency (EPA) to advance the policy goals of environmental activist groups.
As the EPA solicited public comments in 2012 on a proposed rule to crack down on carbon emissions by coal-fired power plants—a rule that critics say will devastate the coal industry—then-deputy EPA administrator Bob Perciasepe met with 24 leading environmental activist groups.
The purpose of the meeting, according to Perciasepe’s assistant, was to coordinate efforts with those groups in order to promote their efforts to gather comments supportive of the power plant rule.
“The purpose is to create a photo-op and narrative beat for the comment-gathering efforts on the issue,” Perciasepe’s assistant wrote in an email later revealed through a Freedom of Information Act request. “Groups will use materials from the event to communicate with supporters and recruit additional comment-signers via newsletters, emails, and social media.”
Perciasepe is now the president of the Center for Energy and Climate Solutions. Like Kiernan, he was appointed to Ex-Im’s advisory committee last Tuesday.