Around the time that Democratic leaders were secretly negotiating the details of President Joe Biden's landmark Inflation Reduction Act (IRA), Democratic Party megadonor James Simons's hedge fund substantially upped its financial stake in several solar energy companies, which reaped windfalls from the bill.
According to federal elections filings, eight days before Senate majority leader Chuck Schumer (D., N.Y.) and Sen. Joe Manchin (D., W.Va.) publicly unveiled the IRA on July 27, 2022, Simons wired $2.5 million to Schumer's Senate Majority PAC. Then, in August, one week after President Joe Biden signed the bill into law, Simons sent another $2.5 million check to the same PAC.
Simons's trading activity, coupled with his aptly timed donations to the Senate Majority PAC, raises questions about whether he had advance knowledge of the IRA negotiations, which were supposedly kept private until Schumer and Manchin's announcement in late July.
At the very least, it suggests Simons sought to take advantage of the solar industry handouts earmarked in the IRA by increasing his exposure to various solar companies, some of which are based in China, including one tied to forced labor. The fund was far less bullish on those companies prior to the IRA negotiations.
Among its most significant provisions, the $739 billion climate and tax package expanded generous tax credits for solar manufacturing and both residential and commercial solar projects. The lead solar industry association in the United States called the tax credits "one of the most important federal policy mechanisms to support the growth of solar energy."
Simons, who died in May, had a close personal relationship with Schumer. Simons once said he helped Schumer craft legislation, the Associated Press reported, and the Senate majority leader characterized Simons as a "dear friend and mentor."
"More and more, it appears the 'green' in much of the green agenda has a lot less to do with the environment than it does with transferring taxpayer funds to preferred special interest bank accounts," said Michael Chamberlain, the director of government watchdog group Protect the Public's Trust.
"Investigations and public records requests continue to reveal disturbing overlaps between recipients and beneficiaries of green programs with the administration's political allies, donors, and former appointees," Chamberlain continued. "And people wonder why the public's trust in its government keeps plummeting."
Financial data reviewed by the Washington Free Beacon show that Simons's hedge fund, Renaissance Technologies, increased its stakes in First Solar, Daqo New Energy, Canadian Solar, and Maxeon Solar Technologies between July and September of 2022, the same time period when the IRA was negotiated, announced, passed, and signed into law.
Under federal law, hedge funds are only required to report their holdings with the Securities and Exchange Commission on a quarterly basis, meaning that the exact date of Renaissance Technologies' trades are unknown.
During that three-month period in 2022, the hedge fund purchased 132,489 shares worth approximately $17.5 million in First Solar, a U.S.-based solar panel maker. It eventually increased that stake, which was worth $312.3 million in early 2023, before selling it between April and June of 2023 as the company's share price surged.
"It is incredibly concerning that some of President Biden's largest donors financially benefited from his marquee legislation," said Caitlin Sutherland, the executive director of Americans for Public Trust.
"First Solar's investors profiting from the Inflation Reduction Act serves as a stark reminder of the intertwined relationship between President Biden's climate politics and the liberal dark money network," Sutherland added. "Sadly, this has become par for the course for this administration."
Also in the third quarter of 2022, Renaissance Technologies upped its stake in the Chinese firm Daqo New Energy, from 263,200 shares worth $18.8 million to 923,117 shares worth $49 million. The fund eventually dumped its shares in the company late last year.
Daqo New Energy is one of the world's largest manufacturers of polysilicon, a base material for solar wafers. The Department of Commerce placed the company's subsidiary Xinjiang Daqo New Energy on an entity list in June 2021 over alleged ties to forced labor in China, though the company later denied the allegations.
Renaissance Technologies also upped its position in Chinese solar panel maker Canadian Solar in the third quarter of 2022. The fund went from owning zero shares in the company one quarter earlier to reporting a position of 374,102 shares worth $13.9 million. It then sold the stake over the course of 2023.
And the hedge fund further increased its position in solar panel maker Maxeon Solar Technologies from less than $1 million to $3 million in the third quarter of 2022. That stake swelled to 369,700 shares worth $10.4 million last year, but the fund sold it as the company's share price peaked. Maxeon's share price has since plummeted more than 90 percent.
While Maxeon is based in Singapore, the Chinese energy firm TCL Zhonghuan owns a controlling stake of the company.
Broadly, solar stocks surged in value after Schumer and Manchin unveiled the IRA with its solar tax credits. The Invesco Solar exchange-traded fund, which tracks a wide variety of solar companies, hit a peak in late July 2022 before steadily declining months later and, eventually, plummeting late last year.
Renaissance Technologies and spokespeople for Schumer, Manchin, and the White House didn't respond to requests for comment.
The Associated Press first reported Renaissance Technologies' investments in First Solar and Simons's campaign contributions to the Senate Majority PAC during the IRA negotiations in 2022.