Kitzhaber and the Greedy Greens

By John Fund

Sunday, February 15, 2015

Oregon governor John Kitzhaber may have announced that he will resign, but a sweeping FBI investigation of him and his fiancée, Cylvia Hayes, is only getting started. While the story involves personal failings, the green-energy lobbying scandal that brought them down has national lessons and implications. If oil companies and pharmaceutical concerns shouldn’t exercise undue influence in government, the same is true for green energy — which can’t yet survive in the marketplace without giant subsidies or special tax favors.

While Hayes was living in the governor’s mansion with the self-bestowed title of “Oregon’s First Lady,” she collected a series of consulting contracts and “fellowship” money from people with an interest in shaping state energy and environmental policy. She then ordered state employees to help run her private business and take actions in accord with the wishes of the green-energy groups that were paying her.

Some of the groups first identified by Willamette Week were sketchy. The Clean Economy Development Center (CEDC) gave Hayes $118,000 as a “fellow” for “work that Hayes and Kitzhaber’s office have yet to describe in any detail.” The arrangement was made by Dan Carol, a Kitzhaber campaign adviser who was later hired by the governor and his highest-paid aide, at $165,000 a year. CEDC had its tax-exempt status yanked by the IRS in 2014.

Then there was Demos, a New York–based left-wing group normally prominent in attacking voter-ID laws. But in Oregon, Demos persuaded Hayes and Kitzhaber to consider using a “genuine progress indicator” as a substitute for traditional GDP models of growth. In 2013, Governor Kitzhaber and Hayes accepted the invitation of Demos executive Lew Daly to accompany him to the Himalayan nation of Bhutan to study the “genuine progress indicator” concept. The next month, Hayes landed a $25,000 consulting contract with Demos. Within days, in violation of the law, she held a meeting promoting Demos’s concept at the state-owned governor’s mansion.

The San Francisco–based Energy Foundation gave Hayes $40,000 in 2013 to create a green-energy communications strategy. This foundation had also funded almost two-thirds of her $118,000 CDEC fellowship. Although much of its funding is obscure, one of the Energy Foundation’s most prominent backers is Tom Steyer, the California billionaire who last year plowed millions into Democratic campaigns and fighting the Keystone pipeline. Among the recipients of his largesse was the Oregon Democratic party, which netted $100,000 from his NextGen Climate Action group.

More scandals might be waiting in the wings. Last year, the Daily Caller reported that Kitzhaber signed a deal with the governors of Washington and California to implement low-carbon fuel standards that would raise the cost of transportation. But that may have been just the beginning of a much bigger scheme to push green-energy agendas. Chris Horner, of the Energy and Environment Legal Institute, used Freedom of Information Act requests to unearth a ten-page 2014 e-mail thread from the Washington governor’s office to allies working in various other governors’ offices. The thrust was advice on how to launch “a nationally coordinated, multi-year ‘states strategy’ focused on driving outcomes contemplated by the president’s climate action plan,” to “spread climate coordination and collaboration.”

The Kitzhaber aide in the e-mails is Dan Carol, who was so helpful in securing that lucrative green-energy fellowship for the governor’s fiancée. The e-mail participants discuss “Dan’s concept” to use their offices to push the climate agenda. It would be funded by “major environmental donors,” such as Steyer and former New York mayor Michael Bloomberg. A private White House dinner would be arranged “to create buy-in among” the donors. Recipients of the e-mails were assured that Council on Environmental Quality staff at the White House “were interested and felt [the White House’s David] Agnew, [counselor to the president John] Podesta, et al.” would also be interested.

Far from being embarrassed by the green-energy scandals that piled up during its first term, the Obama administration is doubling down on its green agenda. It has dismissed Solyndra, the politically connected solar-panel maker that wasted $535 million of taxpayer money and got President Obama to promote its wares, as an aberration. But the Washington Post reported in 2012 that Solyndra was hardly an anomaly, given that under Obama “$3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama-administration staffers and advisers.”

It’s not that no one raised warning signs. Then–Treasury secretary Timothy Geithner, then–budget director Jacob Lew, and then–National Economic Council director Gene Sperling all opposed many or most of the green-energy schemes that have since failed. But Energy Secretary Steven Chu ignored these voices and handed out the cash anyway. Obama may not have had a Cylvia Hayes advising him, but the conflicts of interest he created were nonetheless major-league.

By now, it must be clear that just because green-energy advocates claim the “cleanest” of motives, they haven’t overcome the all-too-common desire to reap personal profit at the expense of the general public. “The modern green machine is a network of wealthy foundations and consultant groups that finance activists who promote and advise sympathetic politicians,” the Wall Street Journal editorial page observed on Saturday.

Just as with any business lobby, such groups deserve scrutiny about the lengths to which they will go to further their self-interest. As the Kitzhaber scandal in Oregon has shown, green-energy interests can be the most brazen of all because they believe their perceived good intentions will block needed scrutiny. The scandal involving a lone food-supplement owner who corrupted Virginia governor Bob McDonnell and his wife with gifts pales by comparison with what happened in Oregon, and the McDonnell scandal received far greater coverage. It’s time the media woke up and realized that they have a new watchdog role in covering the financial — or “green” — interests of the green lobby.