Deval Patrick & Paul Gaynor: Crony Capitalism At First Wind
Taxpayer dollars gone with the wind.
Paul Gaynor CEO of First Wind (left) and Interior Secretary Ken Salazar
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Boston's First Wind Suffers Major Setbacks at Kahuku Project in Hawaii
By Green-Energy Analyst Barbara Durkin
The third fire at First Wind’s Kahuku Wind project since operations began in March of 2011 spewed lead and lasted for three days. The publicly-funded multimillion dollar Xtreme Battery storage facility filled with toxic smoke, and 12,000 batteries were completely destroyed. Hawaii News Now reports some fear this environmental threat will be repeated at First Wind’s other projects.
Hawaii Free Press provides a grim prognosis for Kahuku Wind:
“Recent developments reduce the chances that First Wind will ever be able to repair the defective turbines which were supposed to power the burned batteries at Kahuku.”
Boston-based First Wind CEO Paul Gaynor is Massachusetts Governor Deval Patrick’s appointed green policy advisor under the Global Warming Solutions Act. Gaynor is also appointed co-chair of the Mass Department of Environmental Protection Advisory Committee “Low Carbone Energy Supply Subcommittee.” First Wind has benefitted by a $117 million loan guarantee for (12) Clipper Liberty wind turbines at Kahuku despite a trade secret between Clipper Wind and First Wind executed to obscure from the public information about structural and mechanical problems ongoing with Clipper wind turbines.
Cash-strapped-Clipper, founded by Enron’s James Dehlsen, was recently dumped by the parent company United Technology Corporation UTC to Platinum Equity of CA that expressed no interest in providing remedy to Clipper’s $300 million costs in unscheduled maintenance. First Wind has deployed Clipper Liberty wind turbines in projects across the US according to court documents, with 12 newly installed but idle at Kahuku Wind, by loan of $117 million backed by the public.
First Wind recently sought a writ of attachment from the courts against Clipper Wind for $59.5 million dollars in Cedar Rapids, with arbitration proceeding in Chicago. A similar case has been filed against Clipper under sealed documents in Santa Barbara, CA. The (Iowa) Gazette reported on November 3, 2012: “Clipper has not only ceased production of these turbines, but has wrongfully refused to return the advance payments, even though it has no plans to meet its contractual obligations to produce and deliver the turbines to first wind,” the lawsuit said.”
Massachusetts’ Deval Patrick Administration in May of 2009 identified the long beleaguered Clipper Wind as the Wind Turbine Technology Testing Facility's first customer.
While the Pacific Coast Business Times reported on November 16, 2012, “Clipper Windpower appears ready to implement a plan to eliminate all of its South Coast positions and shutter its Carpinteria headquarters by early next year.”
The Charlestown Wind Turbine Technology Testing Center has received ARRA stimulus of $24.7 million, and $13.2 million in grants and loans from Massachusetts Clean Energy Center (MACEC), with Founding Chairman former MA Executive Secretary of Energy Ian Bowles. MACEC, formed under the Patrick Administration’s Jobs Act, collects ratepayer dollars to invest in green business ventures of questionable public merit. This publicly-funded $40 million dollar Wind Turbine Technology Testing Center, operated by MACEC, has provided 0.00 jobs for the past 1.5 years according to the federal government's recovery tracker.
NECN Boston refers to First Wind as 'New England’s largest wind developer.' And, waving a bright red flag Hawaii Free Press refers to First Wind CEO Paul Gaynor as the ‘Hawaii Wind Developer tied to Largest-ever asset seizure by anti-Mafia police.’ UPC First Wind got its start when Worcester Polytechnic Institute (WPI) alum Paul Gaynor was tapped by UPC Group to bring the success of wind projects in Italy, Italian Vento Power Corporation (IVPC), to the United States according to WPI Summer News 2005.
While multiple news outlets, including the Financial Times, report that the President of Italian Wind Energy Association and Director of the IVPC was arrested on “charges related to fraud involved in obtaining public subsidies to construct wind farms” in November of 2009 during Operation “Gone with the Wind.” Oreste Vigorito of IVPC was convicted in July of 2012.
According to House Budget Committee’s ‘Empty Promise of Green Jobs’ study, “The Costly Consequences of Crony Capitalism” 11/21/11:
First Wind Holdings received a $117 million loan guarantee in March of 2010. First Wind withdrew its initial public offering in October of 2010, due to a lack of investor demand. According to the Boston Globe, investors shied away from the company because “First Wind owes more than $500 million, loses money on a steady basis, and reports a negative cash flow.”
The House Oversight Committee Report of March 20, 2012 titled, 'The Department of Energy’s Disastrous Management of Loan Guarantee Program' provides blistering criticism of green company executives lining their pockets before filing for bankruptcy in MA. First Wind, developer of "Kahuku" is identified as (S&P “Junk” rated) in this report.
The Interior Department photo above was actually used for promotional purposes by DOI for First Wind’s Kawailoa project in Oahu. It’s troubling that Secretary Salazar has ignored the catastrophic and publicly-funded failures of First Wind and Xtreme Battery at Kahuku Wind in Oahu. Awarding public subsidies to "Junk" rated wind companies whose technology has ongoing mechanical and structural problems under "trade secret” is an outrage.
Neither the Obama nor the MA Patrick Administration have picked a winner in First Wind so much as they have sealed the fate of tax and ratepayers funding First Wind, affiliates’ and subsidiaries’, vendors’ and dependents’ failures. If the objectives are low-cost green jobs, reliable and affordable energy sources that are reasonably safe, we’ve not met these with public funding, grants and loan guarantees to the US pioneers of UPC First Wind.
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Barbara Durkin is the green-energy reporter for the Daily Bail. She has spent the past decade interfacing with regulators and stakeholders in the Ad Hoc review of the "world's largest" Cape Wind offshore wind project. Her independent investigation of wind energy cost vs. benefits has expanded beyond the shores of Nantucket Sound to include land-based renewable energy.
Dec 1, 2012 at 7:22 PM
Reader Comments (26)
Nor does the readership here know of the ties between GE and First Wind.
http://bjdurk.newsvine.com/_news/2011/02/21/6099211-enron-gave-birth-to-the-us-wind-energy-industry
Or the ties between Patriot Renewables/GE and Former Governor and Senator elect, Angus King (I, Maine), who is a wind speculator and whose son is a Vice President at First Wind and also sat on the board of directors of a Bermuda based financial concern.
Folks there is a lot more here (I can guarantee it) and Barb will indeed knock this way out of the park.
The taxpayers pockets are not nearly deep enough to fund those supping at the public trough propping up their Ponzi/ pyramid schemes.
Prefiled Direct Testimony February 21, 2006 http://www.sheffieldwind.com/UserFiles/File/regulatory_sheffield/Cowan-Rowland-Vavrik%20-%20Direct%20Testimony.pdf p.8/70
Quoting UPC's own testimony:
"UPC Group is a group of related companies that have developed large scale wind farms in Europe. To date, UPC Group has developed, financed, constructed, owned and operated over 635 MW of large-scale wind turbine generators in southern Italy and the islands of Sicily and Sardinia through a company called Italian Vento Power Company (“IVPC”) (www.ivpc.com). Certain principals of the UPC Group recently sold their ownership interests in holding companies that own the IVPC companies. In conjunction with this sale, a new European subsidiary of UPC Group has been established and is pursuing several hundred megawatts of wind energy projects in Europe and North Africa, including additional projects in Italy".
"The IVPC subsidiaries of the UPC Group achieved an exceptional operating record, with its wind turbines available 98.5% of the time on a fleet-wide basis. An extensive operations and maintenance organization was established for the Italian projects, consisting of over 120 personnel dedicated exclusively to the day-to-day management, operation and maintenance of the IVPC projects."
The allegations of collecting subsidies for defective turbines and for power not getting on the grid sounds very similar to UPC projects here; i.e. Steelwinds project in Lackawanna,NY, Cohocton, NY, and Steson, ME..
http://www.bostonherald.com/business/general/view.bg?articleid=1212055&format=comments&sort=newest&cnum=2
Ex-partner of Boston wind exec charged
Italians nab soccer club president in energy fraud
By Christine McConville | Sunday, November 15, 2009 | http://www.bostonherald.com | Business & Markets
The Massachusetts native who helped found controversial wind-energy developers Cape Wind and First Wind expressed surprise late last week at news that his one-time partner in a separate wind-energy company in Italy has been arrested and charged with fraud.
“I read about it in the papers, and I was very surprised,” Brian Caffyn said from Hong Kong, where he is now building wind-energy farms in China and the Philipines.
“I know of no fraud with (former partners) Oreste (Vigorito) and IVPC,” said Caffyn, a Cape Cod native and Babson College graduate.
IVPC is Italian Vento Power Corp., a company that Caffyn, 50, once owned with Vigorito, a well-known Italian soccer club president. The pair worked together for seven years in Italy and even lived next door to each other for a time.
Last week, the Italian finance police arrested Vigorito, his Sicilian business associate Vito Nicastri and two others, according to the Financial Times. Eleven others were charged in a probe dubbed “Gone with the Wind” that began in 2007, the Financial Times said.
The group is accused of committing fraud by obtaining millions in public subsidies to build wind farms that either never worked properly or did not supply the promised amounts of energy, the Financial Times reported.
Vigorito has no connection to Cape Wind or First Wind.
Caffyn, who has amassed a fortune starting wind-energy companies, sold his interest in Cape Wind in 2002. He sold his interest in IVPC in 2005, according to First Wind spokesman John Lamontagne. Caffyn remains a shareholder and director with First Wind, Lamontagne wrote in an e-mail statement.
Last February, as part of a parallel probe, Italy’s anti-Mafia police arrested eight others, including an alleged Mafia boss, and accused them of corruption in a wind farm project, the Financial Times reported.
According to corporate filings, Caffyn was a founding partner in Cape Wind, the wind-energy turbine project slated for Nantucket Sound. He went on to establish UPC Wind Management LLC, now known as First Wind.
In the United States, where the Department of Energy has recently set aside $100 billion in cash grants for the clean-energy sector, both Cape Wind and First Wind have been accused by critics of taking advantage of pro-alternative energy programs for financial gain.
In 2006, the Beacon Hill Institute at Suffolk University undertook the most comprehensive review yet of Cape Wind’s public subsidies.
“What we found was quite remarkable,” David Tuerck, the institute’s executive director, said at the time. “Cape Wind stands to receive subsidies worth $731 million, or 77 percent of the cost of installing the project and 48 percent of the revenues it would generate. The policy question that this amount of subsidy raises is whether the project’s benefit is worth the huge public subsidies that the developer gets.”
Cape Wind spokesman Mark Rogers said the wind farm would only receive government monies after it is up and working, and meeting certain production criteria.
“It’s all performance-based,“ he said.
In September, after First Wind affiliates received $115 million in federal stimulus money, U.S. Rep. Eric J. Massa (D-N.Y.) wrote to President Barack Obama, calling the grants “very alarming” and saying the company “abused the public trust.
“No electricity has been produced for sale out of the projects,” but the company “has already collected production rewards for non-existent energy,” Massa told Obama.
First Wind CEO Paul Gaynor responded in a letter to Obama, saying that First Wind’s New York wind farms have produced 133,370 megawatt hours of clean, renewable energy. “We are proud of our work in New York and appreciate the grants we received,” he wrote.
Caffyn, whose 2007 divorce records show he amassed an $82 million fortune building wind farms around the world, said late last week that all the completed projects he has been involved with were properly constructed and met the promised performance standards.
Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1212055
It would be interesting to find out what those assets were and where they were held.
Brian Caffyn is the owner of First Wind/UPC
Brian Caffyn's ex-wife is defending her view of Nantucket Sound
Fri Mar 18, 2011 10:18 am (PDT)
Mashpee Selectmen Approve Shellfish Grant Off Popponesset Island
By: Brian Kehrl
Published: 03/18/11
The Mashpee Board of Selectmen on Monday night approved a one-acre shellfish grant just off the northeastern tip of Popponesset Island despite strong opposition from about a dozen property owners nearby.
The approval for Richard J. Cook Jr. to grow oysters in 3,000, four-foot-by-four-foot wire mesh cages for 10 years sets up a likely court battle over the grant.
Mr. Cook, though, still has several additional steps in the permitting process before he obtains final approval to begin growing oysters 30 feet offshore from the sandbar that curves around off the end of the island.
In response to concerns from residents, selectmen downplayed the magnitude of the operation and on several occasions pointed out that the town has heard no complaints from abutters to a separate, much larger shellfish grant that Mr. Cook has operated for nearly two decades in Ockway Bay.
“I personally have not heard anything that, to me, causes us to do anything but approve this,” Selectman Wayne E. Taylor said. “I just don’t see this as an industrial thing.”
With the selectmen’s approval, Mr. Cook must next go through standard permitting procedures with the state Division of Marine Fisheries and the US Army Corps of Engineers. He also must go through another public hearing process with the Mashpee Conservation Commission.
Opposition to the grant was led at the public hearing this week by Brian J. Wall, an attorney for Leslie A. Caffyn, who purchased the 1.2-acre property at the end of the island last fall for $4.15 million.
Mr. Wall said Ms. Caffyn was against the aquaculture grant because it would spoil her views of the water; the noise and activity related to the operation would amount to a nuisance in an otherwise secluded area; and it would make her property less valuable.
“She bought this property specifically because of the beautiful views it has of Popponesset Bay and Nantucket Sound,” Mr. Wall said.. “She paid a premium for this property, and she pays taxes based on that.”
Ms. Caffyn did not speak at the public hearing, but when asked what her next move will be after the selectmen’s decision, she said simply, “We take them to court.”
In a subsequent interview, Mr. Caffyn said she thought the decision was “very unfair,” but declined to elaborate or comment further, referring questions to Mr. Wall.
Ms. Caffyn’s ex-husband, Brian Caffyn, is a son of former Mashpee select
man and state representative Nancy J. Caffyn. Mr. Caffyn was involved with James Gordon early in the formation of Cape Wind, the company permitted to install 130 wind turbines in Nantucket Sound.
Leslie Caffyn, a Wellesley resident, said in a previous interview that her family has been coming to the Popponesset area during summers for several decades. She said the little cottage at the end of Popponesset Island was her “dream house,” in large part due to its privacy.
Ms. Caffyn solicited letters from two local real estates agents testifying that the grant will diminish her property value.
“The proposed grant is against the public interest because it will result in a flood of tax abatements by all affected property owners,”
Read more: http://www.capenews.net/communities/mashpee/news/942
'Mafia Invests in Sicilian Wind Farms'
Tuesday, May 05, 2009 'The Mafia may be going green'.
Sicilian prosecutors are cracking down on Cosa Nostra involvement in the numerous small firms that build wind farms on the Mediterranean island, the Financial Times reports. What's the attraction for organized crime? The best of intentions, of course. The European Union and the Italian government heavily subsidize the construction of alternative-energy facilities, and the operators are guaranteed high rates to maximize their profits. A few wind farms that broke down because of lousy construction still received subsidies, prosecutor Roberto Scarpinato told the Financial Times.
"This is the amazing thing -- that developers got public money to build wind farms that did not produce electricity," he said.
Furthermore, locally-built wind farms are often bought up by multinational energy firms from other parts of Europe, none of which know the true identities of the original owners. "A handful of people control the wind sector," said Scarpinato. "Many companies exist, but it is the same people behind them." Eight arrests have already been made."
http://www.foxnews.com/story/0,2933,519000,00.html
I followed the shell corporations to see if there were LLC connections between NY state wind developers and developers in Italy also said to be buiding wind projects.
I warned the Patrick Administration about UPC First Wind IVPC connections confirmed by their testimony. I citied a complaint to Executive Office of Energy and Environmental Affairs by 94 US citizens against UPC First Wind under the Sherman Antitrust Act. I also provided evidence to the Patrick Administraton that the spokesman for AG Andrew Cuomo said complaints from all over the state, from Franklin to Erie, were coming in on First Wind.
"DAs from eight counties, public officials and citizens", bombarding Albany with complaints about First Wind.
My MA Gov online comments of June 25, 2009 about First Wind remain online--
http://www.mass.gov/eea/docs/doer/renewables/wind/public-comments-listening-session-2-barbara-durkin.pdf
It is confirmed that anti-Mob prosecutor Roberto Scarpinato (Fox News Report) was chasing down Italian Vento Power Corporation IVPC Oreste Vigorito who was arrested in Italy that November of 2009, as a subsidiary and affiliate of UPC First Wind, (UPC testimony above shows this relationship).
It doesn't seem to phase Governor Patrick that his appointed Advisor 'n affiliates 'n subsidiaries build failing wind projects where developers continue to collect public subsidies and are accused of having Mob ties.
Thank You,
Barbara
http://veracityvoice.com/?p=7033
http://veracityvoice.com/?p=7033
Spot on.
Thank you for independent, investigative reporting helping to expose the wolf in green wool clothing!
A who's who list of Barack Obama contributors and recipients of his $787 billion stimulus program.
http://www.whiteoutpress.com/articles/q12012/obama-contributors-and-the-stimulus-scandal-page-244/
[snip]
First Wind – Received $232 million in stimulus funds. An audit revealed the money only created 125 jobs.
David Shaw: Founder of DE Shaw. Obama bundler and one of the top 3 donors to the Democratic Party. Largest shareholder of First Wind.
Larry Summers: Part owner of First Wind. Obama’s Chief Economic Advisor.
Keeping the above in mind, I now present this video.
http://www.necn.com/Boston/Business/2009/09/27/TWIB-Paul-Gaynor-CEO-of/1254084174.html
Counting DOE $54 mil for (First Wind) "Canandaigua"; and $74.7 mil for Canandaigua Cohocton II. (just NY).; add First Wind Kahuku ($117 million) that's $245.7 to First Wind in ARRA stimulus.
Your snip, John, "First Wind – Received $232 million in stimulus funds. An audit revealed the money only created 125 jobs.", is bad enough, but just (3) First Wind projects total $245.7 in stimulus?
There's more here..did First Wind get a third bite of the apple at their Canandaigua projects, $61.8 million?
Source American University School Investigative Reporting Workshop ‘wind energy funds going overseas wind farms built before stimulus’
October 10, 2010
"...In western New York, for example, in the hills near the economically hard-hit cities of Syracuse, Rochester and Buffalo, the Canandaigua Wind Farm could have created the sort of green-collar jobs that the Obama administration promised would be generated by the stimulus package. The feathery blades of the farm’s 88 gigantic turbines reach more than 400 feet in the air. Each turbine contains 8,000 components and is almost as sophisticated as a jet engine. Hundreds of construction workers were needed to haul and erect the steel towers, each weighing hundreds of tons.
The wind farm was built in two phases. The developer, First Wind, received a total of $61.8 million in stimulus grants on Sept. 1, 2009, when the administration began rolling out money for the program. But FAA records indicate both were completed at least 15 months earlier -- by May 20, 2008..."
http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas/story/wind-farms-built-before-stimulus/
Investigative reporter Ira Stoll writes in Future of Capitalism on Mar 8, 2010 :
"First Wind Holdings LLC will get a $117 million loan guarantee from federal "stimulus" funds to finance the construction and start-up of a wind energy project in Kahuku, Hawaii, the federal Department of Energy announced Friday. Once complete, the project will create "six to ten" jobs, according to the Department of Energy. At $117 million, works out to a federally guaranteed loan of between $19.5 million and $11.7 million for each job created...."
http://www.futureofcapitalism.com/2010/03/another-117-million-for-first-wind
Enter a First Wind Washington, D.C., office heavy-weight, Julia Bovey, the former Director of External Affairs at the Federal Energy Regulatory Commission who admits First Wind has been turned down by 20 banks!
Not the bank of the public though! We assume the risks that 20 banks rejected. No wonder Paul Gaynor brags on NECN video about how easy it is to fleece us.
'Storage Coming of Age' http://energy.aol.com/2012/05/08/storage-coming-of-age/
"Bovey said her company built the 30-MW Kahuku wind project "on the knife's edge of a mountain" on Oahu, adding in 15 MW of Xtreme Power's batteries and software. The key to success, she said, was less the battery chemistry chosen than the software that ensured millisecond reactions.
But even in Hawaii's high price environment, and with a DOE loan guarantee, cashable investment tax credits and a 20-year PPA from Hawaiian Electric in hand, First Wind was turned down for financing by 20 banks, Bovey said."
For the record, the Kahuku project is shut down so there is no "key to success" held by First Wind.
Two senators in Hawaii are voicing public safety concerns about First Wind's Kahuku Hawaii project.
"State senators pressed the developers of a North Shore wind farm on Tuesday about the safety of their technology in light of a major fire that destroyed their battery storage facility and sent toxic fumes into the air."
http://www.civilbeat.com/articles/2012/12/04/17819-after-fire-kahuku-wind-farm-fends-off-safety-concerns/
Now come First Wind finger pointing at the fire department for their Kahuku inferno of infamy-publicly-funded-for $117 million-with a Trade Secret-the Clipper Wind turbines used fail structurally and mechanically.
'Fire at Wind Farm Blamed on the Fire Department's Lack of Responsiveness'
KITV News
http://www.kitv.com/news/hawaii/Fire-at-wind-farm-blamed-on-fire-department-s-lack-of-response/-/8905354/17660398/-/j5hg73/-/index.html
The Fire Department did not have the proper equipment to even look at that fire let alone fight it. I saw pictures of the interior and will say that the battery banks were scary enough but the numerous capacitors associated with the banks made me cringe. Most any power-lineman who has ever worked with those can attest to how dangerous those are and almost every fire dept. I know of does not have the training nor capability to fight such a fire. I note that FW will sometimes throw a little money at the departments but that does not replace the extensive training and specialized equipment needed to fight such a fire.
As a former Fire Chief (and Lineman) myself, I would not (for liability reasons among others) send my crew in for safety reasons. FW did NOT have appropriate fire protection inside that to deal with such an inferno and again that facility was experimental. Try telling that to your insurance company.
One interesting note is how many projects FW/UPC has outside of the US and their ties to China. This cropped up today and I hope UPC gets a real hard look as does Brian Caffyn.
http://online.wsj.com/article/SB10001424127887324355904578157252180759338.html
Wall Street finds a foreign detour around U.S. derivatives rules
http://www.reuters.com/article/2012/12/02/us-banks-regulation-derivatives-idUSBRE8B10F220121202
[snip]
U.S. banks such as Morgan Stanley (MS.N) and Goldman Sachs (GS.N) have been explaining to their foreign customers that they can for now avoid the new rules, due to take effect next month, by routing trades via the banks' overseas units, according to industry sources and presentation materials obtained by Reuters.
REC Prices
http://apps3.eere.energy.gov/greenpower/markets/certificates.shtml?page=5
http://www.levin.senate.gov/newsroom/press/release/remembering-enron/?section=alltypes
http://en.wikipedia.org/wiki/Mike_Capuano
and todays story at the Boston Globe.
http://bostonglobe.com/metro/2012/12/21/with-kerry-nomination-imminent-scramble-replace-him-senate-begins/svafV5UKk3lTIdYBONySEN/story.html
I still expect that Gov. Deval Patrick will be getting a cabinet post and would be the most likely candidate to replace Eric Holder.
http://www.reuters.com/article/2012/12/21/usa-kerry-climate-idUSL1E8NLCXO20121221
[snip]
President Barack Obama nominated Kerry on Friday for Hillary Clinton's job and the senator is expected to win swift Senate confirmation.
Kerry has been a dedicated, long-time campaigner for action on climate change. In 1992 he attended the first Rio Summit on climate, which formed the framework of U.N. climate talks. In 2010, he and Senator Joe Lieberman authored a sweeping climate bill that ultimately failed.
http://bostonglobe.com/metro/2013/01/18/new-details-show-that-patrick-plan-would-raise-taxes-for-percent/5Qjotxeqm4WsOLVXM36CfL/story.html