How does Washington work? Here’s how: Take this story of two former Department of Energy (DOE) officials. They once ran a government program that subsidizes solar companies. Today, they work for an investment firm that underwrites and provides lobbying muscle to a company that was first subsidized by this same program when they directed it.
Craig Cornelius sits on the board of directors for Solopower as a representative of Hudson Clean Energy Partners, which invested in the solar company at Cornelius’ recommendation. He first encountered Solopower, however, while leading the Solar America Initiative (SAI) at DOE from 2005 to 2007. President Bush launched SAI in order to make solar electricity “cost-competitive with conventional forms of electricity from the utility grid by 2015.” To that end, DOE provided a variety of services, including “system financing options,” designed to “lower market barriers” that prevented solar electricity from being a viable commercial product.
Cornelius’ Solopower biography notes that, as head of SAI, he “led due diligence on hundreds of companies in the solar photovoltaic and solar thermal industries leading to the deployment of over $500 Million in Federal grant funding and nearly $2 Billion in Federal loans to private companies.” Among those companies was the nascent Solopower, which Cornelius approved for admission into the SAI incubator program in June 2007, after the DOE’s National Renewable Energy Laboratory selected it for the program. In October of that year, according to the Solopower website, Solopower “negotionate[d] a contract with the DOE and initiate[d] work on the prestigious SAI Incubator Program.”
In January 2008, Cornelius joined the investment company Hudson Clean Energy Partners, where he now works as a managing director. The Hudson press release announcing his hire quoted a solar industry executive praising Cornelius for “focus[ing] government investment on accelerating the industry’s evolution into business models that can scale and deliver competitive prices” and lamenting the loss of “a partner and advocate within the government.” Another solar consultant quoted in the Hudson announcement noted that Cornelius “exposure to solar policies, technologies, companies and deals at DOE provides a strong foundation for his jump into the investment sector.”
Cornelius is “involved in all aspects of the portfolio,” a spokesperson for Hudson told The Washington Examiner, including “pitching ideas [and] monitoring portfolio companies.” He does not make the final decision for Hudson to invest in a given company. In September 2008, Hudson provided Solopower with Series C financing (commonly “used to substantially ramp up existing operations and move the company into a significant position in the industry”), and then placed Cornelius and two other Hudson executives on the Solopower board.
Hudson (and thus Solopower) has one other alumnus of the DOE, in addition to Cornelius, named Alexander Karsner. According to his Hudson biography, Karsner — a contemporary and superior of Cornelius’ at DOE — served as “Assistant Secretary for Energy Efficiency and Renewable Energy (“EERE”) from 2005 to 2008 during a period of unprecedented growth in clean energy technologies, investments and policy formulations.” Karsner’s Hudson biography adds that “he distinguished himself as a principal architect and contributor to international climate change deliberations toward achieving a post-2012 global energy framework and as America’s top regulator for energy efficiency.”
In addition to direct financing, the relationship between Hudson and the companies which they support provides those green energy companies with indirect lobbying support. Hudson has paid BlueWater Strategies — whose president, Andrew Lundquist, helped set Bush’s energy policy as a member of Vice President Cheney’s National Energy Policy Development Group — $200,000 since 2009 to lobby green energy issues on behalf of Hudson.
BlueWater lobbied on Hudson’s behalf in regards to the “DOE Loan Program,” among other things, according to lobbying reports filed by BlueWater in the first three quarters of 2011. Solopower received its $197 million loan guarantee in August 2011. That said, both Hudson and BlueWater told The Washington Examiner that neither company lobbied for Solopower to get its loan guarantee or any other benefit, explaining that “BlueWater simply monitors legislative activity for Hudson to effectively advise them on loan guarantee policy.”
Cornelius, Karsner, and Lundquist — all three played a role in devising or implementing an energy policy under President Bush that entailed dramatic government intervention the solar industry. That experience makes them valuable to the solar companies and their financial backers who now depend upon that ongoing government support.
You can see one of the BlueWater lobbying reports below.
