A group of wealthy investors is backing President Barack Obama’s new program to increase green energy use around the world, including one billionaire Democratic donor who presided over multiple green energy failures.
Vinod Khosla made headlines years ago for his ambitious efforts to replace gasoline with biofuels made from wood chips, but now the billionaire’s biofuel venture is bankrupt and he and other company executives are being sued for fraud.
Khosla’s company KiOR “was once a symbol of the promise of the next generation of biofuels and the role that Silicon Valley and government could play in incubating clean-energy technology,” according to an in-depth investigation of the company’s failure by Fortune magazine. “All told, the company spent more than $600 million. In its brief time in operation, it generated $2.3 million in revenue; when it filed for bankruptcy it listed assets of $58.3 million.”
KiOR is now being investigated by the Securities and Exchange Commission to see “whether the company made false statements, including on a critical point: the yield of its biofuel,” according to Fortune. Khosla and two company executives are facing a class action lawsuit alleging they misled investors about company operations.
The state of Mississippi is also suing Khosla and company executives, arguing it was deceived by KiOR leadership so the company could get a generous $75 million loan from taxpayers. The state only got $6 million back before KiOR went under, and the state’s attorney general says KiOR is “one of the largest frauds ever perpetrated on the State of Mississippi.”
Khosla argues the stakes for the planet are so high when it comes to energy that the potential benefits easily justify the costs of flops (which, as with all venture investments, are numerous). In one blog post in 2014, he writes that “to get to the energy-independent future we need, we must continue to try and sometimes fail, but the consequence for not trying is guaranteed failure. We will keep accepting intelligent and selective failure.”
Despite his green energy failures, Khosla is now apart of the Breakthrough Energy Coalition — a group of wealthy businessmen pledging to use their money to invest in green energy technology. The group was hailed by Obama as helping drive green energy innovation.
BEC was launched simultaneously as Obama’s “Mission Innovation” program — a joint effort by governments in rich countries to increase funding for green energy around the world through public and private efforts.
Obama said the U.S. would double its spending on green technology research and development over the next five years as part of “Mission Innovation.” The president also mentioned partnering with BEC to accelerate green private sector spending.
“And by taking this approach on a global scale — with unprecedented investment in public research, an unprecedented pool of private capital — Mission Innovation will help deliver affordable clean energy and new jobs and opportunities to people around the world for decades to come. This is how we’re going to solve this challenge — together,” Obama said in Paris last month before heading over to United Nations climate talks.
BEC is led by Microsoft founder and philanthropist Bill Gates who has partnered with wealthy Republicans and Democrats to fund green technologies. BEC includes wealthy Democratic donors, like George Soros, Tom Steyer and Khosla himself.
Khosla gave $1 million to Obama super PAC Priorities Action USA in 2012, according to the Center for Responsive Politics.
Khosla was once called “the most successful venture capitalist of all time” by Fortune, and has stated many times over the years his belief that green energy will conquer fossil fuels in the near future.
In 2006, Khosla wrote “I believe we can replace most of our gasoline needs in 25 years with biomass.” Khosla has also been a major proponent of green energy subsidies, even grilling CBS’ “60 Minutes” for questioning government green subsidies.
“We’ve been looking for a cure for cancer for a long time,” Khosla told CBS last year. “How much money has the U.S. government spent? Billions and billions of dollars. Should we stop looking for a cure for cancer because we haven’t found a cure?”
But even with the $90 billion in funding from Obama’s stimulus program, Khosla’s biofuel company failed.
Fortune notes that “many of the other biofuel startups that Khosla Ventures backed over the years have either shut down, been sold for small sums, diversified, or migrated to making bio-based materials and specialty chemicals.”
Neither BEC nor KiOR immediately responded to The Daily Caller News Foundation’s request for comment.
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