The Angus King Federal Bailout
Add former Maine Governor and current Independent candidate for Senate Angus King to the long list of Obama administration cronies who have personally made money off the $800 billion Obama Stimulus program. King's personal bailout came in the form of a $407,000 "success fee" he received in 2011 from a wind energy project that remains in business today only because it received a $102 million federal loan King played a major role in securing.
On Monday, Breitbart News spoke with Crystal Canney, Communications Director for the Angus King for Senate campaign, about charges that Mr. King benefited financially from Obama administration crony capitalism. Specifically, newspapers in Maine have reported that Mr. King received a $407,000 "success fee" from Record Hill Wind, a Maine wind turbine project that was initiated by Mr. King and his business partner in 2007, and was about to fail until it received a $102 million federal loan in 2011 from the $800 billion Obama Stimulus package passed in 2009.
Ms. Canney began the conversation by stating: "We've followed Breitbart. We know the angle you're coming from."
Ms. Canney politely listened to our questions, and offered no response to any of them:
Q. There was a report over the weekend that Mr. King made a profit of $212,000 for the six years he spent on the Record Hill Wind project. In calculating that profit, did Mr. King include the $407,000 'success fee' it was reported he received for securing the Department of Energy loan for the Record Hill Wind project?
A. I will get back you.
Q. When did Mr. King receive his $407,000 'success fee' from the Record Hill Wind project?
A. I will get back to you.
Q. Can you confirm or deny that he Mr. King received his $407,000 'success fee' for securing the $102 million energy loan for the Record Hill Wind project from the Department of Energy as was reported at Maine Today?
A. I will get back to you.
When asked if she would be able to provide a response prior to Monday's deadline at Breitbart for this story, Ms. Canney responded:
“I have a debate tonight to prepare for and we also have our own deadlines.”
As of publication time, neither Ms. Canney nor anyone else from the King campaign has "gotten back to us" with answers to our questions.
On Sunday, Maine Today reported that:
Maine Today went on to report that King made an unusual claim about this $407,000 "success fee." Though he acknowledged that he received the money as a direct result of his successful efforts to secure the $102 million loan for the Record Hill Wind project, he claims that he didn't receive a penny of federal money. This despite the near certainty that had not the Record Hill Wind project owners received this federal loan Mr. King would never have received a penny in "success fees," much less $407,000:
In 2007, four years after King left the governor's office, he and Rob Gardiner, former president of the Maine Public Broadcasting Network, formed a new company, Brunswick-based Independence Wind. . .
Independence Wind's first project was Record Hill, a 22-turbine, 50-megawatt wind farm in the Oxford County community of Roxbury.
Independence Wind became a partner in a new company, Record Hill Wind, along with Wagner Forest Management and other investors. King and Gardiner held a combined 10 percent share of Record Hill Wind.
Independence Wind also earned $50,000 a year in management fees to move the project through local and state permitting process, they said. . .
In 2009, the so-called federal stimulus law created new incentives for stalled 'green' energy projects to proceed. . . In 2010, Record Hill applied for a $120 million loan guarantee. Its private investors included the wealthy Yale University Endowment, but the project would not have moved forward with private financing, given the poor market conditions, according to King and Gardiner.
The energy department eventually approved the application based on Record's Hill use of a technology intended to prevent turbulence, which can shut turbines down and reduce efficiency. . .
In January 2011 -- seven months before the loan was approved -- the majority investors bought out King and Gardiner, according to documents provided by King's campaign. The purchase price was settled at the time -- more than $400,000 for King -- but it would not be paid until the project was complete.
The buyout payment, known as a "success fee," meant that King and Gardiner would continue to promote and represent Record Hill Wind even though they no longer owned a share or received a management fee.
Had the loan guarantee not come through, King and Gardiner would have had to wait for their payment until the market rebounded and the investors could get private financing, Gardiner said.
King received his $407,000 share early this year after Record Hill was officially complete. . .
King maintains that the money he made on Record Hill was not based on the federal subsidies, although he acknowledged the investors used it to reimburse him. (emphasis added)
But the rationalization offered by King's business partner, Gardiner, that King would have pocketed the $407,000 at some later date had not the federal loan come through is not supported by marketplace realities. No private investors are putting their money in wind power projects these days--with the exception of those projects that are heavily subsidized by the federal government where any potential private losses will be covered by taxpayer bailouts--because wind power is simply not a viable business. As billionaire T. Boone Pickens, for many years an enthusiastic supporter of government backed wind power, told Joe Scarborough in April of this year: "I'm in the wind business...I've lost my ass in the business."
Even King's own explanation of his wind power experience confirms that without the $407,000 taxpayer funded bailout he received, his five years of work would have resulted in a personal loss of $195,000, instead of a profit of $212,000:
"Taking into account all expenses and income, King earned $212,000 from Independence Wind," he said."That was based on an investment of almost $600,000 and five years of work," he said. "And not a dollar of that $212,000 came from the federal government." (emphasis added)
Mr. King may claim "not a dollar of that $212,000 came from the federal government," but he would not have received a penny of his personal $407,000 in bailout funds had not the Record Hill Wind project received the 102 million dollars he secured for the project from the federal government.
Voters in Maine may soon conclude that Mr. King's statement is a distinction without a difference.