The Bloom is Off the Rose

Green energy grant recipient fined for paying employees in pesos

Bloom Energy power server / AP
February 11, 2013

A fuel cell manufacturer that received more than $70 million in federal grants has been fined for illegally paying employees in pesos.

The Labor Department announced last week that it was ordering Bloom Energy—the board of which includes former Secretary of State Colin Powell and Democratic mega-donor John Doerr—to pay $70,000 in back wages and fines in a case one labor official called "appalling."

The Mercury News reports:

Authorities said Bloom Energy paid the Mexican workers in pesos by wiring funds back to bank accounts in Chihuahua. Bloom also paid for the men to stay in a Sunnyvale motel and provided each with a meal stipend of $50 a day.

But their pay amounted to less than a third of the minimum wage required under federal law, [Labor Department spokeswoman Deanne] Amaden said. Labor investigators also found the men worked an average of 51 hours a week but were not paid the legally required overtime rate when they worked beyond 40 hours a week.

The men were given a few days of training and then put to work alongside U.S. workers for about three weeks, before being sent back to Mexico in a cycle that was repeated several times, the whistle-blower said. Labor officials said the men moved back and forth between Chihuahua and Sunnyvale as they were needed over the past two years.

Bloom Energy received two awards totaling $15.1 million from the 1603 Treasury Program as part of President Barack Obama’s "green energy initiative."

The Treasury Department has awarded the firm more than $70 million as of October 2012, according to the latest records.

It is unclear if those funds have been fully disbursed or if the Treasury Department has suspended future payments. The department did not respond to multiple requests for comment.

Bloom Energy has close political ties to the Obama administration. Doerr, a prominent venture capitalist whose net worth is upwards of $2 billion, has, along with his wife, contributed more than $2 million to federal-level candidates and committees since 1989, 96 percent of which has gone to Democrats. Doerr sits on the boards of Google and in addition to Bloom Energy.

Obama appointed Doerr to both the President's Council on Jobs and Competitiveness and the President’s Economic Recovery Advisory Board. Obama also listed Doerr as one of the nation’s CEOs he admires.

Bloom Energy used its considerable political connections to lobby for its survival when the future of the 1603 program was in doubt in 2010.

"The extension of this program is critically important," Bloom Energy business director Josh Richman said. "We’re sharing the importance of this with our friends on the Hill, and they’re very sympathetic."

Bloom Energy secured more than $200 million in funding from the state of California in addition to federal handouts.

The Sacramento Bee reports:

In 2009, as Bloom's scientists honed the technology, Bloom's lobbyists shaped legislation at the capital and a key decision at the California Public Utilities Commission.

By the end of 2010, the commission had granted Bloom payments and commitments totaling $210 million to subsidize its fuel cell technology, PUC officials said.

Bloom was so effective that some legislators worried there would be no money left for other companies that might have innovative technology. Earlier this month, Public Utilities Commission president Michael Peevey issued an order suspending the program.

The Free Beacon received an automated response after sending a request for comment to Bloom Energy: "Thank you for your interest in Bloom Energy, we will contact you shortly."