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5/21/2013
The Greening Of Gore's Bank Account
Al Gore giving his global warming talk. (Photo credit: Wikipedia)
With his estimated wealth exceeding $200 million, Albert Arnold Gore has come a long way from the time he began a career in government politics. But it hasn’t all been a green path. He can thank some earlier events for paving over muddy ground, a time when his father, Al Gore Sr. met Occidental Petroleum’s CEO Armand Hammer at a cattle auction in the 1940s.
When zinc was discovered on some of Gore’s land, Hammer and Occidental bought it for twice the price of the only other bid, and then sold some of the land back to Gore while retaining the mineral rights. Gore Sr. then sold the land to his son, Al Jr., who received $20,000 in yearly mineral royalties. Two years after Gore Sr. was defeated in a Senate reelection bid, he joined Occidental as a board member and received a $500,000 per year job with a subsidiary.
Al Jr. received the favor and patronage of Hammer’s successor, Occidental CEO Ray Irani, throughout his political career. He was one of the campaign contributors who slept in the Lincoln bedroom upon writing a $100,000 check to the DNC. When Al made illegal fundraising calls from the White House, a memo unearthed during the investigation revealed that Irani had ponied up $50,000. It appears that Al may possibly have made that generosity worth every penny… and a lot more.
At least 100 sacred burial sites gave historic testimony to the fact that Kitanemuk Indians had made their homes in the Elk Hills of central California for thousands of years, land that was surrendered to the U.S. Government through an 1851 treaty. Rich in oil that Occidental sought to gain drilling rights to develop, the region was also inhabited by a rare species of fox, lizard and kangaroo rat which environmental groups fought to protect through a lawsuit filed under the Endangered Species Act. Accordingly, Occidental’s plans were perceived as a threat to both the grave sites and the critters.
Fortunately for Oxy, they had an influential friend. Yup, you probably guessed who. Congratulations!
Vice President Gore recommended that Elk Hills be sold as part of his “Reinventing Government”National Performance Review program. Tony Coelho, his confident, Democrat super-fundraiser, and later, campaign manager, served on the board of directors of ICF Kaiser International, the private company hired to assess the sale’s environmental consequences. As Peter Eisner, director of the Center for Public Integrity, observed: “I can’t say that I’ve ever seen an environmental assessment prepared so quickly.” And, perhaps not entirely surprisingly, it worked out in Occidental’s favor. They purchased the 47,000 acres of land from the federal government for $3.7 billion, tripling the company’s oil reserves.
In response to Kitanemuk pleas that the burial sites not be destroyed, Occidental officials granted permission for the State Native Heritage Commission to retrieve what they believed to be most valuable artifacts for display at the California State University in Bakersfield. Tribal member Dee Dominquez lamented: “They are going to take last memories of our people, the last evidence that we once inhabited this land and put it in a box and ship it to a museum.” She described the executives as“cold” and “insensitive”, unwilling to even consider slant drilling that could save pieces of the tribe’s history for future generations. “We’ve never denied them taking the oil. We are not asking for land. We are not asking for royalties. We are just asking them to leave something to show that we were here.”
Incidentally, despite the fact that there was big controversy over whether V.P. Dick Cheney should keep his stock options when elected, V.P. Gore had previously controlled between $250,000 and $500,000 of Occidental stock throughout his terms of office. He claimed that he was merely acting as executor of a trust that would go to his mother, but revert to him after her death. After the Elk Hills sale, Gore began disclosing between $500,000 and $1 million of his significantly more valuable stock.
Al revealed a different type of trust execution problem regarding ethanol tax breaks he had supported as a presidential candidate. Speaking in 2010 at a green energy business conference in Athens, Greece, he said: “It is not a good policy to have these massive subsidies for first-generation ethanol.” Reutersquoted Gore saying of the U.S. policy that was about to come up for congressional review, “First-generation ethanol I think was a mistake. The energy conversion ratios are at best very small.”
He then explained: “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa [the first-in-the-nation caucuses state] because I was about to run for president.”
As it turned out, however, maybe losing that election to George W. Bush in late 2000 wasn’t such a bad thing for Al after all. Consider that during his years in government his total accumulated net worth was about $1.7 million. About $750,000 of that was tied up in two homes he owned with then-wife Tipper in Virginia and Tennessee.
That was a far cry from the property he owns now: a 20-room, 10,000 square foot antebellum mansion in Nashville’s wealthy Belle Meade neighborhood, and the $8.9 million rising ocean-front threatened villa in Montecito, California he purchased following his divorce. He can certainly afford to pay the 221,000 kilowatt-hours utility bill for that Nashville home alone that the Tennessee Center for Policy Research published from 2007 records, 20 times national average household consumption.
In 2004, Gore co-founded London-based Generation Investment Management (GIM) with Senator Feinstein’s husband, former Goldman Sachs Group, Inc. Managing Director David Blood to invest money in businesses that were “going green”. Public filings show that GIM raised profits of nearly $218 million between 2008 and 2011, split among 26 partners. By 2008 Gore was able to put together $35 million into hedge funds and private partnerships through Capricorn Investment Group, a Palo Alto company founded by his Canadian billionaire buddy Jeffrey Skoll, the first president of EBay Inc.
It was Skoll’s Participant Media company that produced Gore’s feverishly frightening science fiction 2006 film, “An Inconvenient Truth.” Following an investigation, Sir Michael Burton, a judge in London’s High Court, ruled in 2007 that the film can be shown in secondary schools only if accompanied by guidance notes for teachers to balance Mr. Gore’s “one-sided” views. In comments regarding that ruling, he pointed out that the “apocalyptical vision” presented in the movie was politically partisan, and not an impartialanalysis of the science of climate change: “It is built around the charismatic presence of the ex-vice president Al Gore, whose crusade is to persuade the world of the dangers of climate change caused by global warming…It is now common ground that this is not simply a science film- although it is based substantially on science research and opinion, but it is [clearly] a political film.”
In November 2007, GIM joined with the Silicon Valley venture capital company Kleiner Perkins Caufield & Byers (KPCB) in its efforts to create “a global collaboration to find, fund and accelerate green business technology and policy solutions with the greatest potential to help solve the current climate crisis.” GIM reportedly put somewhere between $50 million and $100 million into KPCB’s $1 billion growth fund. Gore became a KPCB partner.
During the five years after Gore joined KPCB to promote environmentally-correct “green tech” investments, the results have been pretty dismal. According to VentureSource, of the more than 60 companies that have received KPCB equity backing, only three have been acquired or merged into other companies. and only two have managed to go public. Shareholders of one, Amyris, Inc., a biomass company, have lost 80% of their value since the firm’s 2010 IPO. The other, Enphase Energy, which went public in March 2012, was listed by the Wall Street Journal in December as the worst IPO of that year.
Optimistic that a Democrat-controlled Congress would pass cap-and-trade legislation, GIM bought a 9.6 percent stake in Camco International Ltd, a manager of products to reduce greenhouse gases. GIM also took a 10 percent stake in the Chicago Climate Exchange (CCX) which was also poised to make windfall profits selling CO2 offsets if and when cap-and-trade legislation passed. Speaking before a 2007 Joint House Hearing of the Energy Science Committee, Gore told members: “As soon as carbon has a price, you’re going to see a wave [of investment] in it…There will be unchained investment.”
Big problems originally struck between May of 2008 and October of 2009 when the CCX market value for one metric ton of carbon plummeted from $7 per metric ton to $0.10 along with the shareholders’ investment values. Losers included the Ford Motor Company, Amtrak, DuPont, Dow Corning, American Electric Power, International Paper, and Waste Management, along with the states of Illinois and New Mexico, seven cities, and a number of universities.
Remainder at Forbes.com
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