Corporate Integrity Project

Harry Reid’s ‘Pay-to-Play’ Green Energy Project

Lachlan Markay of the Washington Free Beacon website today details the saga of something called the Clean Energy Project. Founded and staffed by for former aides to Senate Minority Leader Harry Reid (D-NV), the nonprofit collected donations from corporations which received hundreds of millions in federal grants and loan guarantees at Reid’s urging. From the article:

Their donations to the CEP suggest “a vehicle to promote pay-to-play politics,” says Ken Boehm, chairman of the National Legal and Policy Center, an ethics watchdog group.

“It is run by Reid insiders, funded by those who want Reid’s political favors, and there’s a track record of Reid dispensing favors to those who fund it,” Boehm said in an email. “As the late Senator [Sam] Ervin said, sometimes things are what they look like.”

GM Ignores Steering Defect on Chevy Malibu and Cruze

A Consumer Watchdog is trying to expose another unaddressed safety issue with some General Motors’ vehicles. The problem, once again, involves loss of steering and occurs on later model year Chevy Malibus, Chevy Cruzes and Buick Veranos. Also, once again, GM and NHTSA (National Highway Traffic Safety Administration) are aware of the dangerous defect and choose to issue a “service bulletin” instead of recalling the vehicles with safety problems.

WSJ Confirms Earlier NLPC Story on Plummeting Chevy Volt Resale Values

The Wall Street Journal recently reported that electric car resale values are plunging. The report confirms what I had reported back in August of last year when I examined auction sales for the rapidly depreciating Chevy Volt. The resale values of cars like the Chevy Volt continue to suffer, further bringing in to question the wisdom of government subsidies for green vehicles that are unable to succeed in the free marketplace without the taxpayers' support.

Apple Accused of Poaching Chinese Know-How Paid for by US Taxpayers

Lu GuanqiuSince 2011 NLPC has tracked the stimulus-funded fiascoes that were/are battery-maker A123 Systems and luxury electric automaker Fisker Automotive, who at one point were business partners (or stuck with each other, depending on your perspective). Both eventually went bankrupt, and cost taxpayers millions of dollars from Department of Energy awards that were never paid back. Chinese company Wanxiang Group ended up with both failed enterprises, buying their assets for cheap.

Bad Earnings and Subsidy Controversy Hound Musk, Tesla

Elon Musk ModelSLast time NLPC checked on Tesla Motors – as 2014 closed – we noted a growing skepticism largely due to CEO Elon Musk’s consistent habit of overpromising production and results, without delivering.

Then ten days ago he reported year-end earnings, and matters have worsened, although you wouldn’t know it from most of the undeterred “rah-rah” media and Wall Street fanboys. But there are exceptions.

ComEd Steers Contributions to Illinois Politicians' Charities

Today’s Chicago Tribune spotlights Commonwealth Edison’s “charitable” contributions to activist groups that might be expected to oppose electricity rate increases. From the article by Julie Wernau:

Ken Boehm, chairman of the National Legal and Policy Center just outside Washington, D.C., called the practice of making such donations a "double cheat" on ratepayers.

"Why should ratepayers have to pay increased rates so the utility can go out and give money to groups that might otherwise criticize their increase request?" Boehm said.

The article also detailed contributions to foundations and groups associated with Illinois politicians:

Harry Wilson’s Teamsters Connection and the Return of Government Motors

Harry WilsonIs the fix in? General Motors is acting like it faces a major decision in responding to the self-nomination of Harry Wilson for its board of directors. Wilson was one of the key members of President Obama's Auto Task Force, and purports to be acting at the behest of hedge funds who want GM to spend the "cash hoard" that was made possible by US taxpayers.

Ironically, Wilson was one of the people who determined how much of a "hoard" GM would accumulate, an amount he now criticizes as being excessive. During, and just prior to, GM's bankruptcy process, taxpayers supplied about $50 billion to "invest" in the company. Canadian taxpayers chipped in about $10 billion while GM had its balance sheet cleared of about $30 billion of debt. The liabilities owed to the politically-favored UAW remained intact.

Watchdog Criticizes Harry Wilson GM Buyback Plan as Favor to UAW

NLPC Associate Fellow Mark Modica was a guest on Closing Bell today on CNBC. He was joined by Kevin O'Leary of Shark Tank.

Harry Wilson to the Rescue of GM— or UAW?

Harry WilsonHarry Wilson, the nemesis of General Motors bondholders who were wiped out in the government-orchestrated GM bankruptcy, is back on the scene. On the front page of today's Wall Street Journal, Wilson is portrayed as an "activist" investor, who seeks to maximize shareholder value. While his suggestion that GM buy back $8 billion of common shares would give a temporary boost to share price, Wilson's motivations may not be entirely pure. His real agenda could be to expand the already-favored position of UAW shareholders, and to bolster the political fortunes of unions in general.

Wilson was a retired banker elected to serve on President Obama's Auto Task Force and was the driving force behind preventing old GM bondholders from receiving due process during the GM bankruptcy process. His involvement led to his current status as a "restructuring expert" and CEO of the MAEVA Group. It now seems that our friend Harry is back to make lots of money for hedge funds, as well as for himself.

GM Earnings Not as Rosy as Portrayed

General MotorsThe trumpets sounded this morning as General Motors reported its 2014 fourth quarter earnings. GM's bottom line earnings exceeded expectations (although revenue missed and was down from last year) and the pre-market share price of GM immediately jumped over a dollar a share. Despite the victory laps being taken by GM and its friends in the media, it would be wise for individual investors to think twice before jumping on the GM bandwagon.

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