Latest posts by H. Sterling Burnett (see all)
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Many suggestions have been put forward to explain why Sen. Harry Reid (D-NV) is retiring, including that he is getting out of DC in the hopes that if a Republican wins the Presidency in 2016, the new Attorney General would launch an investigation of Reid for possible abuse of power for intervening in the Department of Homeland Security’s issuance of EB-5 visas to investors in a Las Vegas casino and hotel that was represented by his son, Rory Reid.
I don’t know why he is retiring, I’m just glad this particular power hungry Grinch is gone.
He should be known more for changing long-standing Senate filibuster rules to get unqualified political appointees approved and as the “obstructionist in chief” for preventing good legislation from even getting a vote because it conflicted with his parties progressive ideological biases, rather than serving with distinction as a selfless public servant and a wise manager of the upper body of the federal legislature.
One scandal that could haunt Reid for his remaining time in the Senate (and possibly beyond) was reported on recently in the Washington Free Beacon and Courthouse News. It seems the Reid helped the green energy company, Ormat Technologies, a firm that owns and manages geothermal plants in California and Hawaii, secure nearly $136 million in economic stimulus funding from the 2009 American Recovery and Reinvestment Act.
Two former employees are suing the firm, claiming Ormat executives defrauded the United States of more than $130 million by reporting false information about two projects to get government grants, a federal judge ruled Tuesday.
Tina Calilung and Jamie Kell filed the lawsuit against Ormat Industries in 2013 under the False Claims Act to recover money the corporation allegedly obtained illegally from the American Recovery and Reinvestment Act of 2009.
At the center of the complaint are Ormat’s two energy-producing geothermal plants known as North Brawley, in Imperial Valley, Calif., and Puna, in Hawaii.
Calilung, an economist who worked as Ormat’s asset manager, claims the company misrepresented the date the Brawley plant was put into service, intentionally drove up costs, and misrepresented the viability of the plant so that it could qualify for the funds. Indeed, she argues that the Brawley plant is losing money but Ormat is keeping it open and fighting the lawsuit in order to prevent the federal government from taking back the money it has granted the company as allowed under the law. After 2006, when the clawback provision lapses, Calilung believes Ormat will then close the plant rather then suffer decades of losses.
Calilung claims that Ormat misrepresented the Puna project as new, though it was an expansion of an already constructed facility. Only 8 megawatts of capacity was added to the the 30 megawatts of original capacity, yet in its stimulus filings Ormat treated the existing capacity as eligible for the grant.
“But for these purposeful misrepresentations, Ormat would not have received Section 1603 funds to support these projects and such funds could have been invested by the U.S. Treasury into truly viable geothermal projects actually qualified to receive the funds,” Calilung said in the complaint.
Reid’s ties to Ormat are deep. The company runs geothermal plants in Nevada and Reid has been a big booster of the company in D.C. As reported in the Free Beacon, “Reid bragged about securing Ormat a $350 million loan guarantee from the Department of Energy (DOE) and took credit for expanding the Treasury program that the former employees say illicitly provided Ormat with millions more in taxpayer funds.”
By the same token, Ormat executives have generously supported Reid with donations for his election campaigns and causes. For instance Ormat Chairman, Yoram Bronicki, donated the maximum permitted amount to Reid’s 2010 reelection campaign.
The company has also donated to a nonprofit group founded by Reid’s top political operative, the Clean Energy Project (CEP) that employs two of his former aides as lobbyists.
The Nevada-based law firm McDonald Carano Wilson, a CEP donor with a partner on the group’s board, is representing Ormat in its 1603 litigation. One of the attorneys working on the company’s behalf, John Frankovich, a managing partner at McDonald Carano Wilson, has donated $4,500 to Reid. In 2011, Reid, then the Senate majority leader, praised Frankovich on the Senate floor, calling him “an outstanding lawyer.”
It is also worth noting that Ormat’s DOE award came a year after investors sued the company for allegedly inflating its stock price through “fraudulent accounting and overstated financial results.” Ormat settled the allegations in 2012 for $3.1 million.
So far Reid has stood by Ormat. That’s Reid, true to his donors rather then the people of the United States he has sworn to serve.