Q: Did the Energy Department give a loan to an energy company connected to Nancy Pelosi’s brother-in-law?
A: Yes. The loan was awarded to Tonopah Solar Energy for a project in Nevada. Ron Pelosi was then a board member with a subsidiary of Pacific Corporate Group, an investment partner in Tonopah’s parent company.
This came from a typically unreliable source, any truth to it?
The Solar thing just got a little more interesting…….REALLY!
The Tonopah Solar company in Harry Reid’s Nevada is getting a $737 million loan from Obama’s DOE.
The project will produce a 110 megawatt power system and employ 45 permanent workers.
That’s costing us just $16 million per job.
One of the investment partners in this endeavor is Pacific Corporate Group (PCG).
The PCG executive director is Ron Pelosi who is the brother to Nancy’s husband.
Just move along folks…..nuthin goin on here.
Shortly after the solar energy company Solyndra filed for bankruptcy — after receiving a $535 million loan from the Department of Energy — we received several emails from readers asking us to look into the claims made in the chain email above. It gets some of the basic facts correct.
- It’s true that Tonopah Solar Energy, a subsidiary of SolarReserve, received a $737 million loan from the government to build a new solar facility in Nevada.
- It’s also true that the project is expected to create 45 permanent jobs. However, many construction jobs also would be supported. Furthermore, there’s no indication at present that the loan won’t be repaid. So it’s misleading to claim it is costing taxpayers $16 million per job.
- And Ron Pelosi, Nancy Pelosi’s brother-in-law, had been the executive director with PCG Asset Management, a subsidiary of PCG, until April 2009. But he was only an “independent director” on the company’s board in September 2011 when the loan guarantee for Tonopah was finalized. As an independent director, Pelosi sat on the board of directors, but did not oversee day-to-day management of the company.
What we can’t say one way or the other is whether the loan the company received from the Energy Department had anything to do with Ron Pelosi, as the email suggests. We spoke to company officials for SolarReserve and PCG, and they denied that Pelosi had any influence on the loan. They also stated to us that Ron Pelosi’s compensation agreement does not allow him to benefit personally from the loan, a statement we are not in a position to confirm or dispute.
Update, Feb. 2, 2012: In a statement to FactCheck.org, Ron Pelosi also said that “the loan the company received had nothing to do with me.” He added that he “knew nothing regarding their proposed or actual transactions,” and “did not speak with any person in connection with their plans.” He said that “those who say I did are attempting to smear Nancy Pelosi and me for their own political purposes.”
Pelosi also provided us with email correspondence between him and David Fann, the former president and CEO of PCG Asset Management, indicating that he was only to receive $25,000 annually as a member of the company’s board of directors.
The Department of Energy announced on Sept. 28 that it had “finalized a $737 million loan guarantee to Tonopah Solar Energy LLC to develop the Crescent Dunes Solar Energy Project” in Nevada. The 110 megawatt solar power tower will be the “first of its kind in the United States and the tallest molten salt tower in the world,” according to a press release from the department.
The project, which had the backing of Democratic Senate Majority Leader Harry Reid of Nevada and the state’s former Republican Gov. Jim Gibbons, is expected to generate enough renewable electricity to power up to 75,000 homes at peak hours.
The email claims that the project will “employ 45 permanent workers … costing us just $16 million per job.” But that math is misleading. The project is expected to create 45 permanent jobs, according to figures available on the website of the Energy Department’s Loan Programs Office. But in addition to those permanent positions, the project could create as many as 600 construction jobs over a 30-month period and “more than 4,300 direct, indirect and induced jobs” throughout the country, according to Kevin Smith, the chief executive officer of SolarReserve.
More important, if things go according to plan, the government might actually make money on the deal. SolarReserve anticipates paying back the government’s loan with interest, Smith said.
Smith, Nov. 4: It’s important to stress that this is a loan that earns the government an approximately 4% annual interest rate. This is not an ‘expenditure’ by the government, but rather a loan that has to be fully paid back with interest so it should not cost the tax payers any money at all.
And Smith said that the project, which is just starting the construction phase, already has a 25-year purchase agreement to sell 100 percent of the electricity generated to NV Energy, the largest utility company in Nevada. “This essentially ensures the project has the revenue stream necessary to pay back the loan,” he said.
The Pelosi Connection
On Sept. 29, the conservative Weekly Standard called the loan an example of “crony capitalism” in a blog post, citing, in part, Ron Pelosi’s connection to SolarReserve through PCG. That blog item was then featured temporarily on the Drudge Report under the heading: “Crony Capitalism: Massive Solar Loan Benefits Pelosi’s Kin.”
Ron Pelosi worked for PCG Asset Management as the executive director from March 2008 until April 2009, when he resigned. SolarReserve’s CEO said the company didn’t apply for the loan guarantee until the fall of 2009. And when the loan for the project was finalized in September 2011, Pelosi was only serving as an “independent director” on the board of PCG Asset Management. But did he have anything to do with the loan going through?
Fortune.com called this “the next fake solar scandal” on its website. And the San Francisco Chronicle labeled the claims of “crony capitalism” erroneous, reporting that the Energy Department officials and Rep. Nancy Pelosi had called the claims “absurd.”
We can’t say definitively whether Ron Pelosi had anything to do with the loan or not. But, for what it’s worth, officials for SolarReserve and PCG deny that he did.
Smith, SolarReserve’s CEO, told FactCheck.org in an email that PCG “does not have a seat on our Board and have had no direct activity in any project and have done no lobbying on our behalf.” He even went so far as to say that he “never met or talked to Ron Pelosi and did not even know he existed” until after the project’s final financing was announced in September.
Smith also said that PCG has just a 2 percent investment in SolarReserve (through some New York pension funds). He didn’t provide us with any documentation to that effect, however.
PCG spokesman Brian Maddox also denied that Pelosi, or anyone else from the company, had lobbied for the Energy Department to make the loan to SolarReserve. In an exchange of emails with FactCheck.org, Maddox said that Pelosi was employed at the time the loan was finalized, but that PCG’s investment in SolarReserve “substantially antecedes” the time when Pelosi joined the company.
More to the point, he also said that Pelosi “is not compensated on the performance” of that investment. But even though we asked, Maddox didn’t provide us with any documentation of the basis for Pelosi’s compensation.
Update, Feb. 2, 2012: As we previously noted, Ron Pelosi was not actually “employed” by PCG at the time the loan guarantee was finalized. He was on the board of a subsidiary of the company. And Pelosi provided us with email correspondence between him and the former president and CEO of PCG Asset Management, indicating that he was only to receive $25,000 annually as a member of the company’s board of directors.
— Dave Bloom, with D’Angelo Gore
Correction, Feb. 2, 2012: The original Ask FactCheck incorrectly stated that “Ron Pelosi is an executive with Pacific Corporate Group” and that he had been employed there when the loan was finalized. Pelosi was the executive director with PCG Asset Management, a subsidiary of Pacific Corporate Group, from March 31, 2008, until April 13, 2009. And he was an “independent director” on that company’s board from March 16, 2011, until November 10, 2011. The Energy Department finally approved the loan guarantee for Tonopah Solar Energy’s project in September 2011. We have corrected this article accordingly.
Smith, Kevin, CEO SolarReserve. Email Sent to FactCheck.org. 4 Nov 2011.
Maddox, Brian, PCG Spokesman. Email Sent to FactCheck.org. 9 Nov 2011.
Department of Energy. “DOE Finalizes $737 Million Loan Guarantee to Tonopah Solar Energy for Nevada Project.” Press release. 28 Sep 2011.
SolarReserve. “SolarReserve Completes Financing for Advanced Technology Solar Power Project in Nevada.” Press release. 28 Sep 2011.
SolarReserve. “SolarReserve Signs Power Contract with NV Energy for Utility Scale Solar Power Project in Nevada.” Press release. 22 Dec 2009.
Hemingway, Mark. “Crony Capitalism: $737 Million Green Jobs Loan Given to Nancy Pelosi’s Brother-In-Law.” WeeklyStandard.com. 29 Sep 2011.
Garofoli, Joe. “Pelosi brother-in-law not tied to solar project.” San Francisco Chronicle. 30 Sep 2011.
Primack, Dan. “The next fake solar scandal.” Fortune.com. 29 Sep 2011.