All posts by Rob Galbraith

CPV: A Private Equity Fracking Play

Competitive Power Ventures (CPV), an energy company behind nine planned or operational natural gas power plants across the US and Canada, has faced strident local opposition to several of its east coast projects. Proposed plants in New York and Connecticut have highlighted how CPV uses political influence, including the hiring of well-connected lobbyists and political operators, to override opposition to the projects. In New York, construction of CPV’s Valley natural gas plant continues, though Governor Andrew Cuomo has ordered state agencies to suspend all communication and regulatory proceedings with CPV amid a federal law enforcement investigation of the company’s dealings with a top Cuomo aide.

Behind CPV are Wall Street interests – including alumni of Credit Suisse and General Electric – that have invested in the company through a private equity firm called Global Infrastructure Partners (GIP). This post highlights the private equity backers seeking profit from CPV’s business. Future posts will explore how CPV has pushed its gas projects forward, even in the face of grassroots protest and carbon reduction goals.

Continue reading CPV: A Private Equity Fracking Play

Who’s profiting from drilling Los Angeles?

by Rob Galbraith and Gin Armstrong

Freeport-McMoRan is far and away the largest oil and gas producer in Los Angeles, with 1,311 active wells in Los Angeles County according California’s Division of Oil, Gas, and Geothermal Resources. The corporation, a multinational mining giant, acquired most of its Los Angeles wells in its 2012 purchase of Plains Exploration and Production, which brought the Inglewood oil field, the largest urban oilfield in the United States, into Freeport-McMoRan’s portfolio. The Inglewood oil field is home to 911 wells, 16% of all wells in Los Angeles County.

At Freeport’s annual meeting on June 8, the shareholder advocacy group As You Sow introduced a resolution requesting that the company report on its enhanced oil recovery operations, including steps it is taking to mitigate negative environmental and health effects. The proposal noted that “oil operations have the potential to contaminate water supplies, release toxic fumes, and harm communities.”

The board of directors urged shareholders to vote against the resolution.

Freeport’s board – primarily wealthy white men – are unlikely to directly face the health impacts of their company’s drilling. A 2014 Natural Resources Defense Council report found that the impacts of drilling in California are disproportionately visited upon low-income communities and communities of color and that in Los Angeles County, 78% of the people living within a quarter mile of a gas well were black or Latino.

Continue reading Who’s profiting from drilling Los Angeles?

SUNY Poly administrator who evaluated developer bids worked for decades at CHA

An engineering firm targeted in federal investigations of potential bid-rigging in New York State enjoyed an especially cozy relationship with one of the state officials who evaluated some Buffalo Billion developer bids, LittleSis has learned.

The firm, CHA (formerly known as Clough Harbour & Associates), was in the news last month because it paid consulting fees to a top aide to Governor Cuomo, Joe Percoco, and also received contracts through the Buffalo Billion, Cuomo’s signature economic initiative in western New York. Additionally, CHA has donated over $200,000 to Cuomo and his lieutenant governor, Kathy Hochul.

What hasn’t been reported: CHA also has strong ties to an official at SUNY Polytechnic who was directly engaged in evaluating Buffalo Billion developer proposals.

The official, Thomas O’Brien, joined SUNY Poly in 2013 after a 30-year career at CHA, most recently as a senior vice president and group manager. He is also tied to the company through his family: his daughter, a college student, indicates that she is an intern at CHA on her social media accounts.

Continue reading SUNY Poly administrator who evaluated developer bids worked for decades at CHA

Hochul raised $35k from Buffalo Billion contractors now under investigation

Campaign finance records show that in early August 2014 Lieutenant Governor Kathy Hochul brought in more than $35,000 from at least eight people and businesses named in subpoenas in the investigation into Governor Andrew Cuomo’s Buffalo Billion initiative. The donations coincide with a private fundraiser Hochul held at a Buffalo law firm, suggesting that numerous beneficiaries of the Buffalo Billion program all gathered with Hochul in Buffalo to donate to her and Cuomo’s campaign.

On August 4, 2014, Hochul told a central New York newspaper that she was going to make economic development a major focus of her campaign as Cuomo’s running mate. “I have a good handle on economic development issues for sure from my time in Congress, so we’ll be laser focused on that issue,” Hochul told Canandaigua’s Daily Messenger.

Photo via Giancarlo's Restaurant Instagram
Photo via Giancarlo’s Restaurant Instagram

The next day, Hochul held a fundraiser at the headquarters of Buffalo law firm Phillips Lytle LLP, and, over the following two days, Hochul’s fundraising committee reported $333,741 in donations, more than any other three-day stretch in her campaign. Tens of thousands of dollars of the contributions during that period came from people and businesses that had benefitted from Cuomo’s economic development programs, including the Buffalo Billion.

Continue reading Hochul raised $35k from Buffalo Billion contractors now under investigation

Paul Ciminelli and Ciminelli Real Estate’s conflicted Buffalo Billion roles

Though much of the reporting around Andrew Cuomo’s Buffalo Billion project has focused on Buffalo construction firm LPCiminelli, relatively little attention has been paid to another major beneficiary of Buffalo Billion spending: Ciminelli Real Estate.

Owned by Paul Ciminelli, the brother of LPCiminelli chairman & CEO Louis Ciminelli, Ciminelli Real Estate has been involved in four Buffalo Billion projects to date, three of which were awarded while its executives held governance positions at state agencies and donated generously to Governor Cuomo’s campaigns.

While these projects were procured by Fort Schuyler Management Corp (FSMC), a non-profit affiliate of SUNY Polytechnic, their funding came from Empire State Development. Ciminelli Real Estate’s president, CEO, and sole owner Paul Ciminelli sat on the Empire State Development board from 2010 through 2014. The land for the SolarCity project was sold to Fort Schuyler by the Buffalo Urban Development Corporation, where Ciminelli Real Estate Executive Vice President Dennis Penman is vice chair.

Though Ciminelli recused himself from votes that benefitted his and his brother’s companies, he did not leave the room during the deliberation and voting process. Penman raised his affiliation with Ciminelli Real Estate, but was permitted to participate in voting and discussion without recusing.

Neither executive disclosed their participation in LPCiminelli’s bid to the boards they sat on as they were making decisions on the project.

Continue reading Paul Ciminelli and Ciminelli Real Estate’s conflicted Buffalo Billion roles

Oil pipeline company spends heavily on Cuomo-tied lobbying firm

PAI’s most recent report showed how companies behind major New York State natural gas infrastructure projects have been increasing lobbying expenditures and contracting with firms tied to New York Governor Andrew Cuomo’s family and administration.

This trend is not confined to the natural gas sector: at least one oil infrastructure company is employing the same tactic.

According to filings with New York’s Joint Committee on Public Ethics (JCOPE), Pilgrim Transportation of New York, the company behind the proposed Pilgrim Pipeline, spent a total of $216,250 on lobbying from 2013 through 2015. If it goes forward, the Pilgrim Pipeline will transport gasoline and other petroleum products from New York to New Jersey

Pilgrim’s annual lobbying spending has accelerated rapidly; the company spent more than twice as much in 2015 – $146,500 – as it did in 2014 – $62,250, and is on pace to spend $174,000 in 2016.

More than two thirds of Pilgrim’s total lobbying expenditures have been with the Cuomo-tied firm Bolton-St. Johns.

From PAI’s report “Natural gas infrastructure lobby ramps up spending in New York State:”

Bolton’s top lobbyist, Giorgio DeRosa, is the father of Cuomo’s Chief of Staff Melissa DeRosa and wife of one-time Cuomo patronage chief Maureen DeRosa. Giorgio DeRosa lobbied against the fracking moratorium for the Pipe Trades Association and American Petroleum Institute, and lobbied for Bluestone Gas around its Broome County pipeline. The most recent lobbying disclosure for Bolton show DeRosa was still lobbying for API. He has personally given $10,000 to Cuomo’s campaigns, and given $14,018.94 to his Bolton St. Johns political action committee, BOLT-PAC, which donated $12,000 to the governor.

Another key lobbyist at Bolton St. John’s, Emily Giske, has given $6,250 to Cuomo’s campaigns and volunteered to coordinate floor operations during Cuomo’s campaign for attorney general. She joined DeRosa on the team lobbying on behalf of API in the most recent lobbying cycle for which there are filings.

Bolton St. Johns has donated $42,500 to the governor.

Bolton-St. Johns’ ties to Governor Cuomo can be seen in the map below.

New York Times runs Michael Hayden pro-drone op-ed; fails to disclose ties to drone manufacturers

In its Sunday Review section on February 21, 2016, the New York Times ran a column titled “To Keep America Safe, Embrace Drone Warfare.” The article’s thesis is summarized in its second-last sentence: “Civilians have died, but in my firm opinion, the death toll from terrorist attacks would have been much higher if we had not taken action;” and it was written by Michael V Hayden, who directed first the National Security Agency and then the Central Intelligence Agency under George W Bush. Hayden currently serves on the board of several defense industry corporations, including drone manufacturers.

Though the Times identified Hayden’s past government positions at the end of the article, the newspaper failed to disclose Hayden’s present role on the board of Motorola Solutions, a military and defense contractor that recently made an investment in CyPhy Works, which produces unmanned aerial vehicles – drones. Motorola Solutions paid Hayden $240,125 for his service on its board in 2015.

The Times also did not mention that Hayden served, until last year, on the board of Alion Sciences, a information technology firm that serves the US military. Hayden joined Alion’s board in 2010 in a term that ended in 2015. In 2012, Alion was awarded a $24 million contract to develop the US Navy’s unmanned and automatic weapons systems. From Alion’s press release:

Alion’s NSWC PCD work includes technical engineering to increase unmanned and automated weapon systems capabilities for such tasks as the implementation of unmanned systems payloads on “commercial off the shelf” or existing non-developmental unmanned underwater vehicles (UUVs) with limited modifications. Under the contract, this work can include UUVs, unmanned surface vehicles (USVs), unmanned ground vehicles (UGVs) and unmanned aerial vehicles (UAVs).

In 2014, Alion issued a notice that it was suspending its filings with the SEC because it had fewer than 300 security holders, so Hayden’s compensation from that firm is not available.

It is also noteworthy that Hayden is a principal at the Chertoff Group, a consulting firm that advises defense industry clients on how to obtain government contracts, another detail that went unmentioned in the Times.

Hayden’s positions on the boards of the defense contractors whose business he advocated for in the Times can be seen in the map below:

The Times’s failure to disclose Hayden’s ties to the industry he was advocating in its pages is the latest example of a trend of media outlets running commentary by defense experts that also have a financial stake in perpetuating warfare. PAI reported on this phenomenon – and Hayden’s involvement – in 2013 with respect to President Obama’s proposed war in Syria.

Measuring “contagion” effect of political donations using LittleSis data

While the LittleSis website is a useful tool for researchers, academics, journalists, and activists to explore and map networks of powerful people and organizations, our data is available for anyone to use for free under a Creative Commons Attribution-ShareAlike 3.0 license. This means that anyone can use the data in our database for whatever they like, so long as they credit LittleSis and make their own content freely available as well.

Vincent Traag, a researcher at Leiden University in the Netherlands, recently used the LittleSis database to track how decisions to donate to political candidates spread through social networks.

Continue reading Measuring “contagion” effect of political donations using LittleSis data

Industry-tied Department of Energy study finds gas exports will drive fracking, makes no mention of climate

On December 28, Bloomberg reported on a US Department of Energy analysis that found that increasing exports of liquefied natural gas (LNG) from the United States would result in a 5% decrease in natural gas prices in Asia along with a 1% increase in US prices. The contracted researchers concluded that this would be a net benefit for the US economy as higher gas prices would result in larger profits for US gas companies and more spending on increasing gas drilling.

The study, conducted by researchers at the consulting firm Oxford Economics and the James A Baker III Institute for Public Policy at Rice University, does not appear to contemplate the climate effects of increased natural gas drilling and burning, despite the fact that experts have identified climate change as a significant threat to US security interests and the economy. In fact, the word climate only appears once in the entire report (in a passing reference to the COP21 climate negotiations), and the researchers built the assumption that there would be no change in environmental policies into their models.

The researchers found that increasing LNG exports would expand natural gas drilling in the United States. In the first of the key points in the report’s executive summary, the authors write: “The majority of the increase in LNG exports is accommodated by expanded domestic production rather than reductions in domestic demand.”

The authors’ second key point is that the increased LNG exports advocated will result in higher energy prices in the United States. From the executive summary: “In every case, greater LNG exports raise domestic prices and lower prices internationally.” Higher prices with no reduction in demand, as well as access to international markets, would entail bigger profits for US drillers.

The increase in GDP from gas producers’ higher profits would offset the negative impact of higher prices on the US economy, according to the report.

As mentioned above, the study was conducted on contract by economists at Oxford Economics, a UK-based consulting firm, and by Kenneth Medlock III, the James A. Baker, III, and Susan G. Baker Fellow in Energy and Resource Economics at Rice University. On its website, Oxford Economics touts its work for multinational corporate clients, including a number of oil and gas firms. Oxford’s clients include supermajor oil producers BP, Chevron, Eni, and Shell as well as the mining giants BHP Billiton and Rio Tinto.

The James A Baker III Institute for Public Policy, where report author Medlock is a fellow, is an oil-and-gas-industry-funded unit at Rice University. Its members, which fund the institute at levels between $25,000 and $75,000 per year, include BP, Chevron, ConocoPhillips, ExxonMobil, and Shell as well as LNG export company Cheniere Energy. FTI Consulting, a public relations firm that runs the Independent Petroleum Association of America’s Energy in Depth campaign, is a “Director’s Circle” member of the Baker Institute, paying $75,000 per year for access to the institute’s advisory meetings and conferences and private briefings at their headquarters. In 2012, the Baker Institute, in conjunction with Harvard’s industry-funded Belfer Center, published “The Geopolitics of Natural Gas,” a project steered by a Shell employee and funded by ConocoPhillips, that also endorsed increasing LNG exports.

The Department of Energy study, dated October 29, 2015, seems to be another iteration of the Obama administration’s climate ambivalence. As the President publicly describes climate change as a major threat that can’t be dealt with “through pouring money at it,” his administration has relied on analyses by oil and gas industry consulting firms to justify policies that promise to increase the production and consumption of fossil fuels. Since Obama has taken office, his administration has issued permits to liquefy and export natural gas, approved oil drilling in the Arctic Ocean, and, most recently, approved a budget deal lifting the ban on crude oil exports.

PAI has covered the industry-tied science used to advance the oil and gas industry’s agenda in great depth since 2012. This study, and others, can be found in our database of “frackademic” studies here. We have also created a guide to the “frackademia” phenomenon, with profiles of its major players, which is available here.

Update (January 11, 2016):
Itai Vardi published an examination of Rice University’s Baker Institute at DeSmogBlog that goes into the institute’s oil and gas ties in greater depth than the discussion above.

The Baker Institute’s oil and gas backing and its experts’ connections to the industry are mapped below using the LittleSis oligrapher tool:

Oil-financed Senate banking committee poised to greenlight oil exports

Despite signaling earlier this year that President Obama would veto bills repealing the current ban on exporting crude oil produced in the United States, the administration has since walked back that position. Yesterday, Politico reported (subscription required) that White House spokesman Josh Earnest declined to rule out lifting the ban in exchange for other administration priorities in negotiations over a spending bill due Friday.

Meanwhile, another bill that would repeal the export ban, already passed in the House, is under consideration by the Senate Committee on Banking, Housing, and Urban Affairs. Members of that committee from both major political parties are long-time allies of the oil and gas industry, and data from the Center for Responsive Politics show that current committee members have received $2.9 million in campaign contributions from individuals and PACs affiliated with oil and gas companies since 2011.

Tom Cotton, Republican Senator from Arkansas, received the most oil and gas money of anyone on the committee. Cotton has brought in $467,055 from the industry since 2011, according to CRP’s OpenSecrets database. The oil industry is Cotton’s 4th largest donor, and though the senator does not explicitly deny the existence of climate change, he did claim in 2014 that the Earth’s temperature had not risen in the past 16 years. (The top 10 hottest years on record have come since 1998, with 2014 taking the top spot, though 2015 will in all likelihood displace it.)

North Dakota Senator Heidi Heitkamp received the most oil and gas industry money of all the Democrats on the Banking Committee, garnering $233,574 in industry contributions since 2011. Oil and gas donors comprise the senator’s third largest industry donor group according to OpenSecrets. Senator Heitkamp’s state is home to one of the largest shale oil fields in the country, the Bakken Shale, which has seen explosive growth from the oil and gas industry since the advent of hydraulic fracturing and horizontal drilling. Heitkamp has been a staunch proponent of the petroleum industry’s agenda in Washington; in 2013 she co-sponsored a bill to expedite permits to export liquefied natural gas (LNG) from the United States, pitched as a measure to undermine Russia’s near monopoly on the European gas market, but long a priority of oil and gas producers facing depressed prices due to overproduction from the fracking boom.

A third senator allied with the oil and gas industry on the committee considering the export ban is David Vitter of Louisiana, who this year lost his bid for Governor of that state. As we wrote in a 2014 post on efforts to expand LNG exports, Vitter is the son of a Chevron executive and owns a considerable portion of Chevron stock. The oil and gas industry has been Vitter’s top donor since 2011, contributing $189,400 to his campaigns.

As policymakers consider lifting the crude oil export ban, which the Center for American Progress estimates would result in an addition 515 million metric tons of carbon pollution every year, government officials are being targeted by a multifaceted campaign by the oil industry advocating the same. As PAI reported this week, several prominent US think tanks with deep financial and governance ties to the industry have been pushing to repeal the ban. Like the senators on the banking committee, the think tanks advocating the ban cross the mainstream political spectrum – from the Brookings Institution and the Center for Foreign Relations to the American Enterprise Institute and the Heritage Foundation.

That Democrats appear willing to consider acceding to lifting the ban, even as President Obama recognized America’s role in driving climate change at the COP21 negotiations in Paris, indicates that the oil industry’s campaign is working.