In the summer of 2012, when Marita Noon and I began our collaboration in exposing the entire green corruption scheme, we covered a favored White House Spanish conglomerate in our piece “How Democrats Say ‘Crony Corruption’ in Spanish: Abengoa.”
Early this year, we received bombshell testimony, coupled with substantiated documentation, that Abengoa, at least at one of their three projects funded with billions of U.S. taxpayer money from President Obama’s 2009-Recovery Act, has broken stimulus laws and DOE loan stipulations. Worse, what we uncovered is that this foreign-owned firm has engaged in chilling, unethical and potentially criminal activity, including, but not limited to, a conspiracy between three top Abengoa executives (along with executives at the Spain and Uruguay offices) to break U.S. immigration laws, of which they executed on a big scale. Not to mention the misery that American workers endured at the hands of this Spanish company –– and much more.
While I’ll get to the details of this new and disturbing information later, what’s key is here is that our original post was stirred on by the fact that Abengoa was one of seven DOE loans winners that also received “preferential treatment” from the Department of Interior (DOI) to lease federal land in a no-bid process (meaning that they were approved without adequate vetting).
In case you’re not familiar with this Spanish group and the backstory, here’s a summary: its U.S. divisionAbengoa Solar received approximately $2.8 billion in stimulus loans (five times more than Solyndra) for two large solar projects –– one in Arizona and the other in California. Meanwhile, Abengoa Bioenergy snagged a $132 million DOE stimulus loan for a biofuel project in Kansas.
These loans were part of the Department of Energy’s 1705 section, which was created by the 2009-Recovery act –– the trillion-dollar stimulus bill that was sold as a means to save the U.S. economy from the brink of disaster and create American jobs. Further, these three loans were also part the DOE’s “junk bondportfolio,” which were awarded between the summer of 2010 and the fall of 2011. Plus, it was reported that Abengoa also received $818 million in treasury grants for these three projects that came from another stimulus idea known as the 1603 Program, which as of December 2013 has dished out $19.8 billion of free taxpayer money…and counting.
In addition to the $2.8 billion in loans as well as the free taxpayer cash, Abengoa companies received $150 million from the U.S. Export-Import Bank for green jobs overseas, and more recently, $2 million from theSunShot Initiative.
In our August 2012 reporting, we chronicled the cronyism behind Abengoa that comprises of the following Democrats: former Governor of New Mexico Bill Richardson, former Vice President Al Gore, California Senator Diane Feinstein as well as the energy giant PG&E and various lobbyists. However, since that time we have discovered additional key payers (all documented in my new Abengoa “special report“) such as Citigroup, former “climate czar” Carol Browner, and the former executive director of the DOE’s Loan Guarantee Program Jonathan Silver.
When the treasure trove of Intel on the DOE deal making was unleashed (October 31, 2012) by the House Oversight and Government Reform Committee that included a memorandum as well as Appendix I and the 350+ page Appendix II, proving corruption on many levels, we find that the White House was involved in ensuring that Abengoa received American taxpayer funds.
In January 2013, I unleashed some of the emails related to Abengoa, which contradicted the president’s 2012 public claim, “these are [green energy loan] decisions, by the way, that are made by the Department of Energy, they have nothing to do with politics.”
Moreover, these emails revealed that there was a “fast track process imposed at the POTUS level,” and that DOE loans were rushed and approved for political reasons: visits, speeches, announcements, photo ops, and talking points for the president as well as to help those connected to the companies seeking the loans –– CEO’s, investors, and Democrat politicians, which goes beyond subsidizing Nevada companies in order to help Senate Harry Reid win his 2010 reelection campaign.
There are many emails related to the Solana project in Arizona –– the focus of this scandal –– that received $1.45 billion stimulus loan (plus a potential $455 million Treasury grant), which are all detailed in my new report. This particular set started in May 2010, proving that the White House intervened on behalf of Abengoa. Also, the Solana project was used as a key talking point for President Obama’s July 3, 2010 weekly address.
|Abengoa’s Solana Concentrating Solar Power farm in Gila Bend, AZ.
Photo credit: National Renewable Energy Laboratory
Still, when the October 2013 grand openingof Abengoa’ Solar Solana Project arrived (with the Spanish firm bragging about the jobs –– a project that was reported to be “on time and on budget” –– where was the White House?
After all they intervened on behalf of Abengoa’s loan as well as the fact that during the president’s July 03, 2010 weekly address, he touted that this billion-dollar Spanish deal as an American jobs creator.
“After years of watching companies build things and create jobs overseas, it’s good news that we’ve attracted a company to our shores to build a plant and create jobs here in America,” said President Obama.
While still employed at Abengoa, this informant had shared concerns over certain unethical practices within the company directly to what was deemed the appropriate channels: Abengoa’s CEO, COO and CFO –– only to be told, “They were sick of the drama,” and claimed it was “exaggeration.”
In January 2013, our source reached out to the Energy Department, who then was in contact with Stacey Ford –– supposedly Abengoa’s compliance office. She did nothing.
Contacting the ARRA whistleblower hot line (American Recovery and Reinvestment Act) was the next attempt in being heard, which resulted in some ongoing interaction. Eventually, this scandal ended up on the desk of Energy Department staff (attorney) Stephanie Peters. This informant provided Ms. Peters with enough data to warrant at least an audit, but the DOE failed horribly. After many inspections of Abengoa that focused only on Davis Bacon compliance (an issue important to the president), the DOE remained oblivious to the myriad of violations –– even though they were provided evidence on an array of other issues.
After a series of dead ends, while forced to continue observing (and experiencing) the fraud and abuse, the decision to leave the company was the only course of action, yet the desire to get the story told lingered on. So, the next step was to alert state elected officials: both Arizona Senators Jeff Flake and John McCain were contacted. Regrettably (but not surprisingly), this source went unnoticed by McCain.
It turns out that other Arizonans (employees and vendors) complained to Senator Flake as well. Ultimately, Flake, on May 1, 2013, wrote a letter to the Inspector General Gregory Freidman, warning about the “concerns regarding certain of the company’s [Abengoa] practices.”
Because of the tenacity of this whistleblower, these interactions seemed to get things moving, and unbeknownst to all, the Energy Department had forwarded the case to Immigration and Customs Enforcement (ICE) –– eventually an investigation ensued.
Finally, on January 29, 2014, news hit that ICE was “investigating subsidiaries of the Spanish company that took a $1.45 billion federal loan to build a massive solar power plant near Gila Bend,” wrote the The Arizona Republic. Of which at that time, ICE confiscated employee forms and visa paperwork.
Also, it was reported by The Republic, “The Labor Department has been investigating the power plant and Abengoa subsidiary Abeinsa EPC since .” Additionally, “Abengoa also faces complaints from more than 20 subcontractors who say they were not paid promptly for their work in building the plant. About $40 million in disputed payments is outstanding.”
But where’s the rest of the press?
Other than Ryan Randazzo, reporter for the newspaper The Arizona Republic, it’s non-existent. Thus here we are today to alert the masses that because of one brave informant, at least we have an ICE and DOL investigation going forward. However, there are more atrocities that this foreign firm has committed against American taxpayers, workers and vendors –– all proving that at the end of the day (or loan), “We got screwed!”
Since our first encounter with this informant, we have had many conversations (they met with Marita Noon as well) about the chilling, unethical and potentially criminal activity that occurred at the Solana project in Arizona. I personally, on February 3, March 29 and March 30, 2014 (today), spoke with our source. The verbal testimony, accompanied by extensive documentation, proves that Abengoa took billions of American taxpayer money, while committing the following violations –– some of which could be continuing at the Solana site and possibly at their other two taxpayer-funded projects here in the United States of America: the Mojave Solar Project in California and their biofuel project located in Kansas.
Abengoa’s Stimulus & DOE Violations
- Abengoa broke at least, the spirit of the 2009-stimulus law, which was sold as an American jobs creator –– as President Obama claimed: “good paying jobs that can’t be outsourced…” Instead, Abengoa brought employees into the U.S. from Spain and Uruguay. Americans often lost their jobs so the expats could fill them.
- Abengoa broke DOE loan stipulations by not hiring locally first. Abengoa’s loan guarantees with the DOE require “local to global hiring”— hiring efforts were to be focused on getting unemployed Americans back to work. Abengoa routinely brought employees from Spain and Uruguay into the country for jobs Americans could have filled.
- There was a conspiracy (and execution thereof) led by Abengoa’s CEO Leonardo Maccio; Santiago Duran the COO and CFO; and Maria Eliset Techera, the Legal Director and the Corporate Secretary that most assuredly included executives at the Spain and Uruguay offices, to break immigration laws in the hiring process and paying employees under-the-table, evading payroll taxes. Over 200 individuals were brought into the country (via planes) on tourist visas and began working — routinely for three months and often as long as nine months — before receiving the proper visa to work in the U.S. They were paid out of the finance department (accounts payable) not out of Human Resources or the payroll department — thus not paying U.S. taxes.
- Abengoa played favorites with their Spanish employees who received better pay for the same job/qualifications. For example: Tanner Potterf, an activity manager at Solana and a U.S. citizen, was paid approximately $80K. Pelayo Domingo from Uruguay, also an activity manager at Solana, was paid $155K for the same job. Additional perks were also part of this favoritism; such as the fact that the CFO demanded employer-covered baby
- Abengoa took it a step further by mistreating American workers. Spanish was the language used on the job sites and in the offices. American managers where given non-English speaking staff and non-English speaking supervisors were often brought in from Spain or Uruguay. When Americans complained about the gap in communication — with either supervisors or subordinates — they were told to go take Spanish lessons. After an employee lawsuit, Abengoa put an English teacher on staff to teach the foreigners English.
FIRMS IN VIOLATION OF IMMIGRATION LAWS
—No loan guarantee may be made under this section for a loan to any
entity found, based on a determination by the Secretary of
Homeland Security or the Attorney General to have engaged
in a pattern or practice of hiring, recruiting or referring for
a fee, for employment in the United States an alien knowing
the person is an unauthorized alien.
I wonder what the punishment (repercussion) is when a firm violates our immigration laws after they got a stimulus loan, which seems to be the case here.
Abengoa Insurance Fraud
- Abengoa committed insurance fraud for the Spanish staff. They received health insurance coverage before they were legal employees, which is in violation of the contracts Abengoa signed with the insurance companies. It seems that Blue Cross and Blue Shield is investigating this issue.
Abengoa Shorted U.S. Vendors
- Abengoa has been charged with shorting U.S. vendors, many of which are either struggling or have gone bankrupt, while awaiting payment for services rendered. Many vendors have filed liens and/or are involved in lawsuits against Abengoa. In fact, according to The Republic this part of “the heist” began in 2012, however, as of January 2014, “… Abengoa also faces complaints from more than 20 subcontractors who say they were not paid promptly for their work in building the plant. About $40 million in disputed payments is outstanding.”
While most of these offenses, which demonstrate blatant disregard for our country, occurred under Energy Secretary’s Steven Chu’s watch, Dr. Ernest Moniz, during his April 2013 confirmation hearing, while being reminded of the scrutiny surrounding the entire loan guarantee program, was questioned by Senator Flake –– specifically, what he would do to “enhance oversight.” Flake also, citing Abengoa as a prime example, asked how Moniz would “protect local contractors.”
Moniz responded to Flake, “if confirmed, I will make the monitoring and oversight of the Loan Program’s portfolio of loan guarantees a top priority.”
Moniz was confirmed in May of 2013, and as documented by The Republic’s January 2014 newsflash, “The Energy Department did not respond to several requests for comment on Abengoa.” In fact, to add insult to American taxpayers (employees and vendors), the Energy Department has turned a blind eye to the various loan violations committed by Abengoa at the Solana plant. The measly inquiries thus far have accomplished zilch. And who knows what the heck is going on in California and Kansas.
Thus these investigations (ICE and the Labor Department) have the potential to disappear into the abyss, holding no one accountable –– no reprimand, no punishment, no prosecution.
While Marita Noon will, at a later date, be publishing more on this “Abengoa scandal,” stay tuned, because this is a developing story that should enrage all who value our country and its laws.
UPDATE: Just after I published this post, our source informed us that they were contacted by ICE, noting that “because of the serious violations at the Solana Project in Arizona, ICE is now diving into the Mojave Project in California.”
Wake up folks: this is not a “left” or “right” issue, this is an American one!