ECOtality Scandal: Green Energy Politics

Jonathon Read

I’m a political beast and playing the political card is something that when the time is right we’re going to play very hard
– Jonathon Read, ECOtality Shareholder Conference Call, 7/24/2007

How does a humble biodegradable cleaning products wholesaler transform itself into President Obama’s darling of the electric car charger industry in just three short years?

Answer: Hire Jonathon Read to play the “political card”.

Until recently Read was CEO of ECOtality, Inc. It is the high-flying $230 million EV Project manager that received special mention by President Obama in his 2010 State of the Union Address. Itself, it got at least $135 million in federal grants.

In an SEC filing in early August 2013 it announced it may go bankrupt and listed 5 reasons why. That filing sparked a legion of stockholder lawsuits.

There is no proof that buying political favors played any roll in selecting a tiny company with just 45 employees for well over $100 million in government grants. The DOE made it exclusive supplier and manager of the public-private EV Project that Energy Secretary Steven Chu called “the largest EV infrastructure deployment in the world”.

The facts as they are known will be laid out. You decide.

Hang on tight. You’ll need a scorecard to keep up!

The Politics

According to the National Legal and Policy Center, Jonathon Read was brought into the ECOtality ownership family and made company President on March 1, 2006 in an arrangement with Harold W. Sciotto – then ECOtality CEO and 2/3rds owner – and ECOtality board member Slade Mead.

It is to be noted, perhaps not coincidentally, that all three men – Read, Sciotto and Mead – are the 1st three of 18 names listed in a SEC ECOtality insider trading probe.

Their plan was to convert the cleaning products company into an “electric power cell technology” empire… a fortuitous decision.

They planned to aggressively pursue government contracts as part of their business strategy.

Parallel with this change, Read and Mead started contributing to local political campaigns for national congressional offices.

Read gave $1,000 to U.S. Rep. Gabrielle Giffords’ 2006 re-election campaign and $3,600 to Harry Mitchell’s successful 2006 bid for another U.S. House of Representatives seat. Giffords and Mitchell represented different districts.

Read’s son, Colin Read, was Mitchell’s assistant finance director in his successful 2006 campaign. Colin was later hired as an ECOtality VP.

In 2006, Read also gave $2,100 to Arizona State Democratic Party leader Jim Peterson in his unsuccessful U.S. Senate race. He gave $5,000 to the Arizona Democratic Party.

Not to be outdone by Read, Slade Mead gave the maximum amount allowed by law, $4,200, to Mitchell’s campaign coffers and $3,915 to Giffords’.

According to investigative reporter Lachlan Markay, Mead also held a fundraiser for Mitchell at the home of none other than governor – now Secretary of Homeland Security – Janet Napolitano!

That fundraiser was organized by Ziemba-Waid Public Affairs (ZWPA) who were hired by ECOtality to help it secure government funding.  Markay says ZWPA later bragged they were the ones that got ECOtality its first big $100 million DOE grant.

That can’t be confirmed since ZWPA’s website is down for “maintenance”. How convenient!

ZWPA is founded by David Waid, former chairman and executive director of the Arizona Democratic Party.

The Mitchell Link

Harry Mitchell served in the U.S. Congress from 2007-2010.

Especially important for ECOtality, he was on both the Democratic controlled U.S. House Science and Technology and Transportation and Infrastructure committees. Both all-important committees played central rolls in obtaining $90 billion for technology funding as part of 2009’s famous “stimulus” package. They connected projects to companies.

The DOE awarded grants out of that funding. ECOtality got $135 million of it.

No surprise, Mitchell voted for the “stimulus” bill in February 2009. Most Congressman did.

Mitchell also lobbied for some of $2 billion to convert all Tempe Arizona city buses to electric vehicles which, conveniently, ECOtality would supply chargers through the EV Project.

Campaign Promise: One Million Electric Vehicles by 2015

We will get 1 million, 150 mile per gallon plug-in hybrids on our roads, made in America, within 6 years time
(wild applause)
– Senator Barack Obama, 2008 Energy Speech, 8/4/2008

In the meantime, during the 2008 presidential campaign, rising star Barack Obama made a campaign promise to put a million electric vehicles on the road by 2015.

It was Jonathon Read and ECOtality’s moment to grab for the brass ring after Barack Obama was elected President in November 2008. ECOtality even dispatched an official congratulatory press release to the President-elect two days after his victory. Ecotality got a $99.8 million DOE grant on 8/5/2009.

President Obama has stuck by his pledge. Billions in federal stimulus and energy department budged funds have been devoted to make that pledge a reality.

Later, ECOtality registered for lobbyist activities with the SEC in 2011. During that time they received another $26.4 million DOE grant despite being under SEC investigation for insider trading.

Conclusions

It’s not what you know, but who you know
– Old Business Adage

That certainly proved true for ECOtality. They cultivated political connections to turn a tiny cleaning products company into a huge DOE grant factory worth $135 million.

Jonathon Read collected a cool $4.1 million right off the top in 2009 for his efforts securing the DOE contracts.

However, you got to know something. ECOtality didn’t have the management skill to wisely spend the $135 million they were entrusted by the DOE. Corporate executives put more into managing their stock options for themselves and favored investors than building a sustainable business.

Just 8 days before DOE cut off its funding on 8/8/2013, ECOtality hired former Energy Secretary Steven Chu’s chief-of-staff, Brandon Hurlbut, onto its board of directors.

But it was to late. Nothing could save ECOtality.

Instead, ECOtality announced on 8/11/2013 it will likely declare bankruptcy after its DOE financing was cut off. Most of its top officers and favored investors are under SEC investigation for insider trading.

Welcome to green energy politics!

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About azleader

Learning to see life more clearly... one image at a time!

Posted on Aug 28, 2013, in Business, Climate, economics, Energy, environment, Government, Jobs, news, Politics, science, technology. Bookmark the permalink. 3 Comments.

  1. Green is the color of putrification, isn’t it?

  1. Pingback: ECOtality Scandal: The Final Chapter | Inform The Pundits!

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