ECOtality Scandal: The Final Chapter

President Barack Obama

Jonathon Read

$4.335 million defines the ignominious ending to President Barack Obama’s star of the electric car charger industry tasked to help fulfill a 2008 presidential campaign promise.

$4.335M is the amount bankrupt ECOtality sold piecemeal for at auction, on 10/9/2013.

American taxpayers lost at least $142 million on the deal. Investors and private companies, like Nissan North America, may have lost upwards of $500 million more on top of that, according to court filings.

Nobody knows for sure how much was lost.

President Barack Obama and Johnathon Read are the two men responsible for this misdirected waste of fiscal resources, technical ingenuity and human blood, sweat and tears.

A nagging question remains… will America learn from this massive taxpayer boondoggle?

The Men of Blame

President Obama has a dream to transform the U.S. economy into a 21st century green energy bonanza. Barack Obama perceives himself as saving the Earth from the ravages of a looming global warming catastrophe.

He’s directed well over $100 billion to the cause. ECOtality got at least $135 million of it.

ECOtality was enlisted to help fulfill a 2008 presidential campaign promise to put a million plug-in hybrid electric cars on the road by 2015.

Jonathon Read, on the other hand, is a political opportunist; a scoundrel.

Read converted a tiny industrial cleaning fluids company into President Obama’s flagship of the electric car charger industry.

He did it through campaign donations to Democratic candidates, lobbying in Washington DC, and schmoozing politicians.

Read wanted to cash in on government green energy contracts. He snagged $143 million in government investments and put millions of those dollars into his own pocket.

Read absconded with $5 million or so for himself.

Read left ECOtality well before its implosion. But Read isn’t off Scott-free just yet. He and most of the top officers and some favored investors at ECOtality are still under investigation by the SEC for insider trading.

At the end of this article are links recounting ECOtalitiy’s whole sordid story.

The Smoldering Remains

ECOtality filed for bankruptcy on 9/16/2013.

The U.S. Bankruptcy Court, District of Arizona, liquidated remaining ECOtality assets at auction.

ECOtality was sold in three chunks:

Asset Price Buyer
Blink Network $3.335 million CarCharging Group
eTec Labs $750 thousand Intertek
Minit-Changer $250 thousand Access Control Group
Total =  $4.335 million  

$4.335 million was salvaged on court filed estimated debt between $100 and $500 million!!!

All DOE taxpayer money given to ECOtality were grants that don’t have to paid back!!

The Blink Network

The DOE gave ECOtality $115 million in grants to build a nationwide network of 15,000 electric car charger ‘filling stations’.
There were about 12,000 chargers distributed before DOE… welll… pulled the plug.

Called the Blink Network, it was sold to CarCharging Group for $3.335 million.

It’s the world’s largest network of electric car chargers. It was intended to be a testbed for car charging technologies. DOE was to collect usage data from all the chargers to assist companies all over America in making charging stations more pervasive than gasoline stations.

About 8,000 of the charging stations are at the homes of Nissan Leaf and Chevy Volt owners who participated in the project… at taxpayer expense, of course.

Before their purchase, CarCharging Group had an existing network of about 1,100 chargers of its own.

It’s unclear what The Blink Network’s ultimate fate will be. All 12,000 chargers have a manufacturing defect that can melt a car’s plug-in!! A temporary fix reduces the charger capacity by half, but that makes an already slow charger take twice as long to fully recharge a car’s battery.

Blink chargers are not only the slowest in existence, but downright dangerous.

eTec Labs

eTec Labs got about $35 million in DOE grants. It was sold for a paltry $750 thousand to Intertek.

This subsidiary of ECOtality is a bit of a mystery. It has an exclusive contract with the DOE for “advanced vehicle testing” at the Idaho National Laboratories.

The mystery is, given the sparse amount published testing data, how was the $35 million taxpayer dollars spent? Nobody knows!

Intertek, though, probably got the best deal of all. DOE will no doubt continue contracting for “advanced vehicle testing” and Intertek will start off with a clean slate and fat new federal contracts.

Minit-Charger

Minit-Charger was sold to Access Control Group for $250,000.

Mini-Charger is an advanced very fast, half-hour car charger that ECOtality never finished. Blink Network chargers are slow, but the Minit-Charger was to be the wave of the future.

Minit-Chargers were already supposed to be in mass production, but just before ECOtality filed for bankruptcy it was announced that Minit-Chargers would not be installed this year because it failed “quality control” testing.

Access Control Group probably bought it for any patents that might have some value.

Conclusions

ECOtality probably burned through more than $200 million in less than 4 years and had little more than 12,000 defective and excessively slow car chargers to show for it. They are scattered all over the United States.

The company was plagued with allegations of insider trading and corporate mismanagement of taxpayer and private funds. The SEC is still investigating.

ECOtality politicking even evolved into hiring Brandon Hurlbut, former Energy Secretary Steven Chu’s chief of staff, onto its board of directors.

Jonathon Read is still out there somewhere, but appears to have dropped off the face of the Earth. Read unexpectedly left ECOtality on 9/12/20012. Upon exit it was announced that Read was “leaving to explore new development opportunities”. That is pretty much the last the Internet heard from him.

President Obama will keep grimly informing us that when pioneering new technologies to save the world, not all companies will succeed; even those like ECOtality that he featured in his 2010 State of the Union.

Will America learn from this massive taxpayer boondoggle?

Naaaaa… not a chance!  Not with President Obama at the helm.

——————————————————————————-

The Sad Saga of ECOtality…

ECOtality Scandal: Corrupt Bankruptcy!” – azleader, Inform the Pundits!, 8/22/2013

ECOtality: Blink Network Down!” – azleader, Inform the Pundits!, 8/22/2013

ECOtality Scandal: Insider Trading” – azleader, Inform the Pundits!, 8/27/2013

ECOtality Scandal: Green Energy Politics” – azleader, Inform the Pundits!, 8/28/2013

ECOtality Scandal: The Audit” – azleader, Inform the Pundits!, 8/29/2013

ECOtality Scandal: Just About Done!” – azleader, Inform the Pundits!, 9/17/2013

ECOtality Scandal: The Bankruptcy!!” – azleader, Inform the Pundits!, 9/18/2013

ECOtality Scandal: Cost/Benefit” – azleader, Inform the Pundits!, 9/19/2013

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About azleader

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

Posted on Oct 17, 2013, in Business, Climate, economics, Energy, Government, Jobs, news, Politics, science, technology. Bookmark the permalink. 1 Comment.

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