Abengoa Solar: Obama’s green energy projects fail, even when they are successful
After a public meeting on Tuesday, April 15 in Palm Desert, California, the California Energy Commission (CEC) will vote, on Wednesday, in Sacramento on whether or not to re-permit a 500-megawatt solar thermal project that has been on hold since December. At that time, the commission indicated that it would deny the proposed BrightSource Energy and Abengoa Solar project based on “visual impacts to a network of trails, petroglyphs and other tribal sites stretching across the desert in eastern Riverside County.”
Since December, the companies have done additional environmental impact studies and proposed mitigation. Apparently believing the votes are there, the companies have pushed for the commission to make a decision. Abengoa insiders have reported that the project is a go.
While the CEC is concerned about visual impacts, and local tribes worry about the project due to potential artifacts that may be present, American taxpayers should be opposed to the cronyism, abuse, mismanagement, and violations involved in one of the companies: Abengoa — which received $2.8 billion in taxpayer funding.
This report will expose one of the largest recipients of Obama’s green energy funding: Abengoa — which if not stopped, will get even more taxpayer dollars. On April 2, 2014, Secretary of Energy Ernest Moniz, said: “the department would probably throw open the door for new applications for renewable energy project loan guarantees during the second quarter of this year.”
Here’s a taste of what you’ll learn about Abengoa and how it operates:
- Crony-connected, Stimulus-funded, Spanish-owned company builds/opens solar generating station—currently producing electricity.
- Brings foreigners to U.S. to fill jobs from welders to administration to engineers to management—often working on tourist visas for as long as 9 months.
- Many Americans, who do have jobs on the project, get fired so expats can have the jobs.
- Health insurance fraud committed by putting expats on plans when they are not on payroll (expats on tourist visas were paid out of accounts payable).
- American vendors/contractors payments are intentionally delayed while U.S. taxpayer funds are in Spain collecting interest—$70 million owned to U.S. vendors.
On October 7, 2013, a giant concentrated-solar plant opened near Gila Bend, AZ. The $2 Billion Solana Generating Station has 32,320 mirrors on 1900 acres (equivalent to 1400 football fields) making it the world’s largest parabolic trough array with thermal storage. The 280 MW generating station is one of the first solar plants that can store thermal power for six hours. The stored thermal power can be used at night or on cloudy days to produce the steam that turns the turbines and creates electricity.
Solana was made possible because of the 2009 stimulus bill and the loan guarantees and grants made available by the American Recovery and Reinvestment Act (ARRA). Plant owner, Abengoa, reports that Solana’s construction employed 2,000 people.
When selling ARRA to the American public, the president said it would create jobs. Abengoa employees, who contributed to this report, were grateful for the jobs. They believed in green energy generally and the project specifically. But that was in the beginning when the sun was shining on Solana and its parent Abengoa.
With the green energy failures (32 failed and 22 circling the drain) being widely exposed by both the mainstream media, through shows like 60 Minutes, and Republicans, who point to the failures in order to embarrass President Obama and stop future green energy spending, one would think that Solana’s success would be something the White House would want to use for a major PR campaign — with pictures of a triumphant Obama cutting the ribbon splashed across the front page of every major newspaper. At the least, you’d expect an appearance by Vice President Joe Biden. Earlier, the White House had promised one or the other would be there, but neither was present for Solana’s October opening.
With the president’s penchant for photo ops, it seems mysterious that the official White House photographer wasn’t present to capture, and capitalize on, the moment.
Why wasn’t Obama waving to the cameras on October 7? Because even though Solana is a technical success, it is still an embarrassing failure. When the details in this report are exposed, as he must have known they inevitably would be, he didn’t want to be anywhere near the project—because, as this report exposes, Solana would have never happened without direct intervention from the President.
Abengoa is a renewable energy company headquartered in Seville, Spain. Its U.S. division received approximately $2.8 billion in stimulus loans (five times more than Solyndra) for two large solar projects (Arizona, Solana — $1.45 billion; and California, Mojave — $1.2 Billion), as well as one biofuel project (Kansas, Hugoton — $132 million), plus $818 million in treasury grants.
At the time the stimulus bill was passed, Spain was in the midst of its own financial crisis. Credit wasn’t available and Abengoa’s stock value had dropped. The House Oversight and Government Reform Committee’s March 2012 report states:
Abengoa’s prospects look dim due to its investments in Europe, particularly Spain, and suffer the risk of declining subsidies as Spain contends with its own declining credit quality and the potential need for a bailout of its own government in the coming months or years. Now that Germany and Spain cut back solar subsidies, this will undoubtedly harm the European renewable investments of Abengoa. Even if Abengoa investments initially appeared attractive to DOE, overinvestment in this single firm will likely cause substantial harm to the taxpayer.
The stimulus must have seemed like a lifesaver. Abengoa had the technological know how that the president’s green energy push needed — and the president was willing to pay for it. However, Abengoa had bad credit ratings from Fitch for each of the three projects the taxpayers funded: Solana — BB+; Mojave — BB; Hugoton—CCC. (Fitch describes the ratings this way: “BB: Speculative. ‘BB’ ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.” And “CCC: Substantial credit risk. Default is a real possibility.”)
While Abengoa didn’t have good credit, it did have, as Christine Lakatos has thoroughly documented, valuable connections.
Most people probably think of Richardson as the former governor of New Mexico or the self-appointed negotiator for issues between the U.S. and North Korea. But before either of those roles, Richardson was the Secretary of Energy under President Bill Clinton. After his two terms as governor, he ran for president against Obama and Hillary Clinton but he dropped out of the race early, and then, despite the Clinton connection, “delivered a forceful endorsement” for Obama and, according to the New York Times, urged “Democrats to unite behind his candidacy.” Richardson’s favor was rewarded with the nomination for Secretary of Commerce — until rumors of personal scandals kept him from passing the vetting. Unencumbered by full-time employment, Richardson sits on both the Abengoa International Advisory Board and serves as a member of the advisory committee for the Ex-Im Bank — from which Abengoa received $150 million.
In 2007, Gore’s UK-based Generation Investment Management (GIM) bought a stake in Abengoa. GIM was started in 2004 by Al Gore and several Goldman Sachs big wigs, including David Blood, Mark Ferguson, and Peter Harris. (Note: Goldman Sachs was a top Obama donor in 2008.) The Weekly Standard reports: “The Spanish company’s stock jumped in November 2007 when an investment fund headed by Gore announced it was acquiring a stake in the company.” In FrontPage Magazine, Daniel Greenfield added, “When Gore made the buy, the stock jumped, not because Gore is a serious investor, but because everyone knows that a Gore buy means that Abengoa can benefit from his political connections.”
Gore has extolled Abengoa for years, visiting “the largest solar platform in Europe” (operated by Abengoa) in October 2008 and delivering a high-powered speech at the company’s Spanish headquarters in October 2010.
Santiago Seage Medela, Chairman and Chief Executive Officer of Solar Business Unit at Abengoa SA
While Gore and Richardson may have the highest name recognition, Seage Medela may be the most important connection.
Abengoa’s website says this about Seage Medela: “Before joining Abengoa in 2005, Santiago was a partner with McKinsey & Company where he served clients in strategy, growth and corporate finance in several regions.” What it doesn’t include is that McKinsey & Company (a 2008 Obama donor) is where Jonathan Silver started his career, and where Matt Rogers is an executive. Silver is important because he went on to become the executive director of the Department of Energy’s loan guarantee program and was directly involved in which loans got approved and which ones didn’t. About Rogers, the McKinsey & Company website offers these details: “Matt recently rejoined McKinsey after serving as the Senior Advisor to the Secretary of Energy for Recovery Act Implementation. In this role, he had responsibility for managing the Department of Energy’s $35.2B in Recovery Act appropriations. The Department of Energy funded more than 5,000 projects through the Recovery Act with a total project value approaching $100B. These projects focused on delivering near term job creation and on accelerating U.S. innovation in energy efficiency, efficient transportation, renewable energy, energy infrastructure, carbon capture, environmental clean-up, and basic and applied science.”
Seage Medela was one of a group of close confidants, including Al Gore, who worked together on projects involving Abengoa, Goldman Sachs, McKinsey & Co., and the U.S. Department of Energy’s loan guarantee program, and who were making decisions on who got the ARRA loan guarantees and who didn’t. As many were paid by one or more, a conflict of interest appears to be present.
There are other connections, but these three provide enough context for the crony corruption involved — despite Obama’s claim: “these are decisions, by the way, that are made by the Department of Energy; they have nothing to do with politics.”
While these connections are important, it was the direct involvement from the White House that got Abengoa the cash — and that involvement is documented in a series of emails released by the House Oversight Committee on October 31, 2012. Lakatos has read through the entire batch of 350+ emails exchanged between various decision makers including Silver and DOE Loan Program Credit Advisor James McCrea. She found several that clearly relate to Abengoa and show the direct influence from the White House and “POTUS” (President Of The United States). Reading through the applicable emails, reveals the pressure and growing intensity over approving the Abengoa loan — despite Secretary of Energy Steven Chu’s frequent claims that loans were made on the merits.
The loan guarantee was approved. Obama announced it in a July 3, 2010 speech. An industry report, without the benefit of the leaked emails, got it exactly right: “President Obama and DOE Secretary Steve Chu were busy this past weekend approving massive loan guarantees to solar projects in the U.S. as part of the federal stimulus.” The emails show that, yes, Obama and Chu, were “busy” — as were Silver and McCrea!
The report quotes Seage Medela as saying: “The loan guarantee process was started over a year and a half ago.” According to the CEO, “It has been a long process with lots of work with the DOE. It is expensive and not an easy process but the DOE has been very professional and they have invested enough time to do things very thoroughly.” Yet, the emails show that the approval was rushed and finally approved due to “WH intervention.”
Now, understanding the questionable history of Abengoa’s funding, it should come as no surprise to learn that it operates as if it is above the law — after all, it has friends in high places.
While the DOE looks the other way, Abengoa failed to meet its contractual obligations as spelled out in the federal loan guarantee, collected the taxpayers’ money while pinching U.S. contractors to gain higher profit and holding out on paying others (forcing smaller companies into bankruptcy), and committed insurance fraud — among other grievances.
In November 2012, a call was made to the Citizens’ Alliance for Responsible Energy. The caller had read the earlier exposé: “How Democrats Say ‘Crony Corruption’ in Spanish: ‘Abengoa’” (published in August 2012) — that outlined much of the cronyism involved in Abengoa receiving the $2.8 billion, combined, for the three projects. The caller told tales of abuse and mismanagement at the Abengoa biofuels project, Hugoton, in Kansas. He provided names and emails for others who could corroborate his story — but none of them responded to a request for information. The story was forgotten until a little more than a year later. On January 11, 2014, an email was received with the simple subject line: “Abengoa.” The body bore the request: “Please contact me about Abengoa. I would like to speak with you.” Had it not been for the contact a year earlier, the January email might have been overlooked.
The details the January whistleblower offered were startling — especially understanding the backstory on Abengoa. Someone with no history on the topic might have blown the whole thing off as merely a disgruntled former employee. But this time, many other former Abengoa staffers stepped up and confirmed the story or told a similar tale of rampant governmental and/or contractual violations.
Jobs for Americans
At the peak of the economic crisis, when President Obama was trying to sell the 2009 stimulus bill to a public worried about the growing national debt, his major pitch was about job creation, the fulfillment of his 2008 campaign promise: “I’ll invest $150 billion over the next decade in affordable, renewable sources of energy — wind power, and solar power, and the next generation of biofuels — an investment that will lead to new industries and 5 million new jobs that pay well and can’t be outsourced.”
The American jobs that “can’t be outsourced” theme was frequently repeated in the 2012 presidential campaigns. In a July 10 speech in Cedar Rapids, IA, Obama proclaimed: “As long as I’m president, I will keep fighting to make sure jobs are located here in the United States of America.”
Earlier, in 2010, San Diego’s Union Tribune reported this exchange with Sen. Charles Schumer (D-NY):
In a letter, Schumer asked Energy Secretary Steven Chu to reject requests for stimulus grants from companies that buy key components abroad.
“In all due respect, I remind the secretary there is a four-letter word associated with the stimulus — J-O-B-S,” Schumer told ABC News. “Very few jobs here, lots of jobs in China. That is not what I intended or any other legislator who voted for the stimulus intended.”
Chu responded on Facebook: “But manufacturers will not build plants here and grow their production capacity here unless there is domestic demand; and, until recently, that was not the case.”
The Union Tribune, and many other news outlets, listed numerous instances of companies that received stimulus funds for jobs overseas. But none addressed stimulus funds that went to foreign-owned companies, such as Abengoa, that created jobs in the U.S. — but for the company’s fellow countrymen rather than American citizens who were promised the jobs.
Local to Global Hiring
Abengoa’s ARRA loan guarantee stipulates “local to global hiring” — which means that a company receiving stimulus funds had to try to fill all the jobs with locals first. Companies had to prove that they’d posted the jobs locally. If the positions couldn’t be filled by locals, human resources could reach out to surrounding states, then from coast-to-coast, then globally.
The whistleblower reports that at Abengoa, time-and-time again, over a period of several years, foreigners (usually from Spain or Uruguay) were brought into the U.S. to fill routine jobs such as data entry — that could have easily been filled by locals. Even jobs as basic as “welder” were brought in from Spain. Those jobs were never even advertised and were often given to friends with no prior experience or to executive’s spouses. Yes, specialists were required for some positions and those might have fit the local-to-global requirement had they been brought in on the right visas. Had the DOE audited Abengoa’s hiring practices, it would have been found in violation of the contract, but despite repeated attempts to bring the discrepancies to the attention of the DOE, it looked the other way.
For example, the mirror assembly required steel tubing and welded parts. American companies wanted to bid on the multi-million dollar contract. But, Abengoa wouldn’t even entertain bids. It owned a subsidiary in Mexico — Comensa — that guaranteed the contract. The parts were produced in Mexico where the environmental regulations are far more lax. Also, those dealing with assembly reported that the parts from Mexico were not as high quality as U.S. standards demand.
One source, an activities manager (like a site supervisor), revealed that not only did Abengoa give job preference to the expats, but Americans were actually fired to provide jobs for them.
When expats and Americans held similar jobs with comparable experience and/or education, the expats typically received nearly double pay. For example, Tanner Potterf, an activity manager at Abengoa’s Solana construction site, a U.S. citizen, was paid approximately $80K. Pelayo Domingo from Spain, also an activity manager at Solana, was paid $155K for the same basic job. U.S. taxpayers must have been paying dearly for this work if the company could afford to pay $155,000 for an activities manager when they could hire one for half as much.
Must be those well-paying jobs Obama talked about — just not for Americans.
One source reported: “There had been some discussion by management about bonuses at the end of the project, and there was speculation among the employees as to who would be receiving bonuses. About the same time, water cooler gossip indicated only activity managers and above would be receiving bonuses.” A short time later at least two American activity manager job titles had been downgraded — without notification — from activity manager to field engineer. Job responsibilities did not change. The source says: “By this time I was one of only a few performing activity managers that wasn’t an expat.” He left the company before the bonuses would have been paid.
Additionally, the expats received benefits that the Americans didn’t get. An early-hire, one of the first Americans, reported that the benefits manual listed different benefits based on the country from which the employee hailed. Expats had company cars and company-provided baby formula (untaxed, of course). Plus, the expats, only, received automatic raises upon having children — as was a common practice in Uruguay. Needless to say, there were a lot of pregnancies — despite the fact that HR was told not to hire women with little kids as they’d not be able to work late.
Equal Employment Opportunity Act Violations
Sources confirm that CFO/COO Santiago Duran violated the Equal Employment Opportunity Act by directing HR not to schedule interviews with “old people” — anyone over 35 — and “no fat people.”
There was an American woman who applied for a job as financial analyst. She was qualified for the job and based on her resume Duran had an interview scheduled with her. When she showed up, she was overweight. Duran stormed into HR, berated the manager for sending him a “fat person,” and made it clear that she was not the kind of person he wanted in his office. Later, when Abengoa was opening up the Mojave project, the person in charge of hiring contacted HR and asked if there were any qualified applicants. The woman was contacted and asked if she was still looking for a job and asked if she’d relocate. The response? “Yes! I just need a job!” She is the kind of person ARRA was written for. She was hired and moved. Later, Duran was on site at Mojave and saw this woman. He was outraged. She is still working there today and according to her supervisor, is doing a great job.
Other sources reported having supervisors who only spoke Spanish. Another source talked about being given staffers who didn’t speak English.
About Those Visas
A certain number of work visas are allotted to companies wishing to bring in talent from outside the U.S. — a policy aimed at protecting American workers. Abengoa was bringing in so many expats it maxed out the allotment early each year. Abengoa brought hundreds of expats in to work on a “tourist visa” designed to allow future workers to investigate the area, house hunt, and check out the schools, etc. Yet, each day these “tourists,” using their ID cards, badged in each morning and left the site at a consistent time — as the security records show. These tourist/workers often worked without appropriate documentation, for as long as nine months. They were not on the payroll and were, instead, being paid out of accounts payable — thus paying no income taxes.
Sources confirmed that an American quality director did the herculean job of getting all three projects and the central office ISO (International Organization for Standardization) certified in time for Abengoa’s initial public offering. The quality director achieved ISO certification in 9 months instead of the usual 2-3 years. Once he completed the task, he was fired. Due to his excellent work, and the fact there were no documented performance issues in his file, HR was reluctant to sign off on his termination paperwork — but was ordered to anyway. His open position was never posted — allowing no Americans to apply — and he was replaced with an expat who had been working in the U.S. for nine months without the proper visa.
Apparently, the operations were so corrupt they didn’t trust any outsiders who might not play by their rules. Most everyone had to sign non-disclosure agreements. It has been reported that even the mirror design was stolen from an American company.
Despite repeated reports, the DOE didn’t seem interested in any of these violations. Even after receiving complaints from many Abengoa employees through the whistleblower hotline, the DOE gave Abengoa more money — a $2 million research grant.
After the whistleblower left the company, she again contacted the DOE, to no avail. She reached out to her senators: Jeff Flake (R-AZ) and John McCain (R-AZ). On May 1, 2013, Sen. Flake wrote a letter to Gregory H. Friedman, Inspector General at the DOE. Finally, something started to happen. But, the wheels of government bureaucracy turn slowly. In mid January 2014, the Immigration and Customs Enforcement officers (ICE) swooped into Abengoa’s offices and confiscated cases of records — including hundreds of visa applications with Duran’s signature. Shortly thereafter, it was announced that Duran was leaving to take a position in Uruguay. Despite having recently purchased a lavish home in the Phoenix area, he is no longer in the country. (Duran is the executive who, when the whistleblower brought employment violations to his attention, told her that they were “sick of the drama” and accused her of exaggeration.)
Four ICE investigators have been working full time on Abengoa since October 2013.
We’ll see how this all shakes out. Having sorted through the records at Solana, ICE clearly found items of interest. On March 30, 2014, a Sunday, they advised the whistleblower that they were moving on to the Mojave employment documentation.
A source, who was at Mojave, is skeptical about the ICE investigation. In great detail, he told them about immigration violations — yet, ICE agents never asked for names or dates.
While the DOE didn’t seem to care about the myriad violations mentioned here, it did regularly do Davis Bacon audits to guarantee that the prevailing union wages were paid — something that was important to the Obama administration. Sources were shocked that while investigating Davis Bacon compliance, there was no concern shown toward the number of foreigners on site — which was obvious as the majority were speaking Spanish.
Stacy Ford was the DOE loan portfolio manager who was on site quarterly. Her name, phone number, and email were printed on the required Davis Bacon posters at the site. The loan guarantee required the DOE contact info to be on the posters. Because of the prominence of her contact information, employees reached out to her with concerns about the visa situation and other issues. She turned them away saying that she only did Davis Bacon—but didn’t report the violations nor direct the employees to another contact.
At the end of March 2014, it was revealed that Abengoa’s Mojave project was four months behind in its Davis Bacon reporting. The Davis Bacon Act requires that applicable companies submit a weekly certified payroll report to the prime contractor. In the case of Mojave, the Abengoa-owned company, Abacus, is supposed to do the reporting to the prime contractor, which is another Abengoa-owned company, Abeinesa. In this case the fox is guarding the henhouse. The Department of Labor has been notified and at the time of this writing, nothing appears to have been done about the violations.
Abengoa employees’ health insurance is covered by BlueCross BlueShield of Arizona — a healthcare plan that is for “employees” and specified dependents. Employees are defined as being on the company payroll. Yet, over a period of several years, hundreds of people who were not on the payroll were enrolled in violation of the plan. These were the expats who were in the country and working on tourist visas and being paid through accounts receivable.
Because Abengoa broke the BlueCross BlueShield contract, BlueCross BlueShield could terminate the entire contract and hurt all legal employees — Americans and expats alike. This could result in all paid claims having to be reimbursed by either the company or the individuals. Or, due to plan violations, the IRS could remove the tax-free benefit status and every employee could owe taxes on the benefits they received.
The tourist-visa expats could have been covered on travel insurance.
ICE officials have met with BlueCross BlueShield. Sources report that the investigation is “continuing to move forward.”
A project the size of Solana, and the upcoming Mojave, doesn’t happen without the support of dozens of local contractors — contractors who pay their employees while waiting for the funds to come to them from Abengoa. The Arizona Republic reported that construction of the Solana Generating Station “included about 400 contractors.” Many of them were “mom and pop” operations that almost went bankrupt.
Many of the contractors have subcontractors. As a result of nonpayment, at least eight contractors have filed construction liens. One of those contractors is one of Arizona’s biggest construction companies, Kitchell. According to the Arizona Republic, “because Kitchell has not been paid, its subcontractors have not been paid.” One of those subcontractors is Interstate Mechanical Corporation (IMCOR) — which pulled all of its employees off the job in January 2013 for nonpayment. Bob Karber, an attorney representing IMCOR, said “It would be an understatement to say the lack of payment is causing a significant financial burden on IMCOR.”
In another case, at Mojave, three different bids came in for land preparation. One company proposed a unique technique and had the lowest bid. Instead of going with the innovative company, Abengoa took the proposal and gave it to the other companies asking them to rebid using the competitor’s design.
A former employee talked about Abengoa’s method of paying its vendors that it called PPB (Pay Per Bank) — which is such a convoluted system, Abengoa gave the managers official course classes on the subject to explain the purpose. Simply put, by putting very tight complex rules on the way they shall be invoiced allows them to make excuses not to pay the invoices for as long as six months or more. The terms were intentionally hidden in the fine print and Abengoa management viewed the delays as the contractors fault because they were too stupid to read the whole contract.
There was a woman employed at the Solana project who proudly referred to herself as Tammy the Rejecter. Her job was to reject invoices for just about anything imaginable. If a vendor messed up an invoice, they would have to wait a whole month just to be able to resubmit for payment.
The Spanish management thought that Americans were stupid because they had not yet figured out this system of delayed payments. Remember, this was in the midst of Spain’s banking crisis. This allowed Abengoa to collect interest on the funds and use the U.S. taxpayer dollars to fund foreign operations. The money was then tied up and unavailable when it was needed to pay U.S. contractors.
The Arizona Republic reached out to Abengoa officials in Arizona and Spain for comment on the claims disputes but they did not respond. A New York public relations firm, speaking on behalf of Abengoa, provided the following: “In a project as big as Solana, there is always a chance that incidents arise and lead to situations such as this or there are some sort of disputes,” it said. “Abengoa always acts thoroughly in accordance with the law and is working towards their resolution.” Yet, the combined total liens on the Solana and Mojave projects are close to $70 million.
A similar story caused the Davis Bacon compliance issues at the Mojave project. Hundreds of unpaid workers walked off the job. In a panic to get people to complete the project, the Abengoa-owned company Abacus — which was originally a project management company — suddenly became a construction company, too. Abacus had to quickly hire hundreds of replacement workers and the rush to hire made it impossible to do all of the Davis Bacon documentation. All of this happened concurrent with ICE dropping subpoenas and the payroll manager handling Davis Bacon-certified payrolls quitting with no notice.
This Abengoa story has been years in the making. You might be wondering, why now — especially when the ultimate project has been a technical success? The Solano Generating Station is a success in that it is producing power — albeit at a much higher cost than electricity generated from conventional sources. But it has taken advantage of American workers in the process. In the course of researching this report, Tanner Potterf said: “While I, too, am grateful for the employment I had during my time with Abeinsa EPC [an Abengoa Company], it was a miserable two years.”
We were contacted in January 2014. It takes time to research the story and corroborate the details. Lakatos, my cohort in Obama’s Green Energy Crony Corruption Scandal, posted an earlier version of the story in her blog on March 30. Since then, she’s been contacted by engineers reaching out to discuss OSHA (Occupational Safety and Health Act) concerns. Apparently major systems for California’s Mojave project were designed in Spain by engineers who are not familiar with California’s safety standards or California’s earthquakes. An American engineer reported that the errors will cost the state of California $10-15 million to repair if an earthquake hits the plant. When concerns were brought up, he was told not to discuss the flaws with anyone — they’d take care of the problems. But they never did.
In validating the details here, additional sources have come forward. Most don’t want to be quoted by name because of litigation in which they are involved or due to severance terms they signed. Yet, they are willing to testify in Congress about the abuses they endured and the fraud perpetrated on American taxpayers. They are outraged that this could happen here. One specifically stated: “I am an Independent and a staunch supporter of the renewable energy sector, however, I was deeply concerned by what I saw at Abengoa, which is why I’m willing to put my two cents towards the accuracy of your reporting which, in my view, barely scratches the surface. It’s a story that needs to be told.”
But, even worse, if this is not exposed, it could continue. On April 2, 2014, the current Secretary of Energy Ernest Moniz, according to the National Journal, said: “the department would probably throw open the door for new applications for renewable energy project loan guarantees during the second quarter of this year [now], a somewhat more precise forecast than his previous estimate of ‘relatively soon.’”
During Moniz’s May 16, 2013 confirmation hearing, Sen. Flake stated: “I do not believe the loan guarantee program is prudent or effective. If, however, the Department of Energy continues down that path, what will you do to enhance the Department’s oversight of these loan programs?” He asked: “Relatedly, what if anything would you recommend the Department do to protect local contractors and subcontractors when performing work for entities that receive federal backing?”
Moniz replied: “If confirmed, I will make the monitoring and oversight of the Loan Program’s portfolio of loan guarantees a top priority. … I look forward to getting a better understanding of the mechanics of the Loan Program Office to understand what can and should be done to protect local contractors and subcontractors.”
Moniz was confirmed more than a year ago. But he has failed to look into Abengoa — despite numerous desperate pleas from its American employees. Instead, he is now ready to “throw open the doors” to welcome in more corruption. Moniz may have meant what he said in his confirmation hearing, but he has now been in DC long enough to have fallen under the spell that believes it can stop climate change regardless of the cost to American taxpayers and the increased cost of electricity to consumers. Or, perhaps he doesn’t want to look into the promised “monitoring and oversight” because he knows what he will find and it won’t be good for the Obama Administration.
Abengoa is just one stimulus-funds recipient. There are thousands of projects that U.S. taxpayers have funded. Instead of throwing open the doors, such programs have got to stop until a complete examination of abuse, mismanagement, and contract violations are conducted by the DOE, ICE, and the Department of Labor.
Unless something is done, corruption such as Abengoa’s standard operating procedure could continue and the American taxpayer will be left carrying the load.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc. and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). Together they work to educate the public and influence policy makers regarding energy, its role in freedom, and the American way of life. Combining energy, news, politics, and, the environment through public events, speaking engagements, and media, the organizations’ combined efforts serve as America’s voice for energy.