Apple's Fuel Cell Project Presents Conflict of Interest for Al Gore
A major project to generate expensive (so-called) renewable energy at Apple, Inc.’s new data center in the North Carolina mountains highlights a conflict of interest for one of its directors, former Vice President Al Gore.
The massive server farm in the small town of Maiden has already been criticized for the large swaths of forest clear-cutting and burning to make way for a 100-acre solar project, and now more acres are being leveled to construct a $30-million fuel cell facility to generate electricity, according to The News & Observer of Raleigh.
Apple is working with Bloom Energy to build the project. Gore is a senior partner with Silicon Valley venture capital firm Kleiner, Perkins, Caufield & Byers, which in 2002 as the first investor helped launch Bloom on its independent mission to “make clean, reliable energy affordable.”
The National Center for Public Policy Research, an investor in Apple which via shareholder proposal has in the past requested that the company investigate Gore’s possible violations of its Business Conduct Policy, condemned the obvious benefit he stands to gain as a leader of both Kleiner Perkins and the personal computing giant. Fox News broke the story earlier today.
“Apple buying technology from Bloom Energy, where Gore has a financial stake, is a clear conflict of interest,” said Dr. Tom Borelli, director of the National Center’s Free Enterprise Project. “Shareholders must question why Apple is choosing to pay a premium for alternative energy when there are many sources of cheaper energy available in North Carolina, such as coal.”
The News & Observer reported the fuel cell facility will be the largest built for a non-utility and they are “exorbitantly expensive.”
“According to a recent report by the U.S. Energy Information Administration,” the newspaper reported, “fuel cells are among the world’s most expensive forms of electricity, costing $6.7 million per megawatt….”
Gore, the global warming alarmism herald known best for his error-filled (un)documentary film “An Inconvenient Truth,” is co-founder and chairman of Generation Investment Management, whose focus is “sustainable investing.” According to the firm’s Web site, GIM “has a strategic alliance with Kleiner Perkins Caufield & Byers to find, fund and accelerate green business, technology and policy solutions with the greatest potential to help solve the climate crisis.”
Besides his investment schemes, Gore has testified several times before Congress about the pending crisis posed by global warming, promoting policies such as cap-and-trade that would enhance the value of the many “Green” energy projects in which he is a stakeholder. His role with Apple is suspect as the company often takes similar positions despite the fact that they counter the economic interests of their stockholders and their customers (and thus their competitiveness), as the cause to fight climate change and promote renewable energy almost always means excessive costs for electricity and transportation fuels.
In February the National Center for Public Policy Research submitted a shareholder proposal at Apple’s annual meeting that asked the company to investigate whether Gore violated its conduct rules by requesting the company to withdraw as a member of the U.S. Chamber of Commerce. The nation’s largest business association came under fire by environmental groups and “sustainability” activists because of its opposition to greenhouse gas regulations.
“Shareholders have a right to know if Gore used his board position to end Apple’s membership in the Chamber as a means to cash-in on his personal investments in clean energy technologies,” Dr. Borelli said at the time. “The dirty little secret in clean energy is you need government action to make money on your investment.”
Kleiner Perkins has also lobbied heavily for government regulations and “green” energy schemes. The firm spent $50,000 per quarter throughout 2009 and 2010 lobbying Congress on legislation that was heavy-laden with renewable energy government incentives, which would benefit the start-up companies in which it is invested.
The ties between Kleiner Perkins and Bloom Energy are tight. Kleiner Perkins and its high-profile partner John Doerr are identified by Bloom as its first investors, and Bloom is also credited as Kleiner Perkins’s “first clean tech investment.” Doerr is a director for Bloom, and Bloom co-founder and CEO K.R. Sridhar is a “strategic limited partner” at Kleiner Perkins. Doerr, who serves on President Obama’s Council on Jobs and Competitiveness, is also a supporter of The Climate Reality Project where Gore “spends the majority of his time” as chairman and has likened climate change “skeptics” to racists. Doerr and his Kleiner Perkins colleagues have donated $2.6 million to candidates and political action committees, favoring Democrats over Republicans by a very wide margin, according to the Center for Responsive Politics. Doerr also hosted a dinner for President Obama at his estate last February with several other high-tech executives, according to ABC News.
Besides Bloom Energy, Kleiner Perkins is also a major investor in troubled electric vehicle company Fisker Automotive, which received a $529 million loan guarantee from President Obama’s Department of Energy. Gore was to be one of the first owners of Fisker's $102,000 luxury EV, the Karma.
And Doerr has his own relationship with Apple. In 2008 he helped lead Kleiner Perkins’s collaboration with Apple on the iFund, a “venture fund for mobile entrepreneurs,” which provides capital for companies that create applications for the iPhone and iPad. And late Apple co-founder and CEO Steve Jobs attended the dinner for President Obama at Doerr’s home.
So clearly Gore and Doerr are in a strong position to influence Apple’s decision makers about the development of renewable energy projects surrounding the massive computer server farms they are building around the country. Apple, and competitors like Google and Facebook, are especially sensitive to criticisms from groups like Greenpeace about the enormous energy demands that are needed for their data centers, which support services like iTunes and cloud computing.
Fox News reported that at least one corporate governance expert saw a potential problem for Apple and Gore.
“The Kleiner Perkins connection could be a potential conflict,” said Ralph Ward, publisher of the Boardroom Insider newsletter. “The key would be what Apple says Al Gore disclosed to the board of directors. Without knowing that, it’s kind of tricky.”
Gore, by virtue of his official position with Apple, had a unique opportunity to see that his ownership of Bloom with Kleiner Perkins would gain a $30 million client. The investment by Apple in some of the most costly electricity you can find makes absolutely no sense otherwise. How did this deal go down?
Paul Chesser is an associate fellow for the National Legal and Policy Center.