Tax Dollars Blowing in the Wind of Crony Capitalism

We recently posted an excellent article by former Congressman Ernest Istook highlighting the battle we face in the upcoming lame duck session of Congress over a proposed $18 billion extension of the wind-energy production tax credit being fueled by crony capitalism.

For the latest example of wind blown tax dollars and crony capitalism in Ohio we only need to look at the shores of Lake Erie and the Lake Erie Energy Development Corporation (LEEDCo).

LEEDCo was founded as a non-profit economic development corporation in 2009 as a result of a public/private funded feasibility study for the Great Lakes Energy Development Task Force to put wind turbines in Lake Erie. Members of LEEDCo include the Cleveland Foundation, NorTech, the City of Cleveland, Cuyahoga, Lake, Lorain and Ashtabula counties.

The projected costs for the 6-9 wind turbines alone is approximately $92 - $100 million. This does not include any overruns of construction costs, the cost of installing the transmission lines to get the power from the turbines to the shore, reworking or updating of the existing power grid to accommodate the wind power and/or the estimated yearly maintenance costs of $5 million as outlined in the feasibility study.

After several failed bills in the U.S. Senate to promote funding for wind energy (Here & Here) by Senator Sherrod Brown (D-OH), and after his continued badgering, LEEDCo received an initial $4 million grant in 2012 to fund their Project Ice Breaker. Project Ice Breaker is for research & design engineering on the bases needed for the proposed wind turbines in Lake Erie.

This grant is through the first stage of a $180 million U.S. Dept of Energy sponsored offshore wind power competition.  Along with this, three other N/E Ohio companies with ties to LEEDCo received grants;

• Freshwater Wind LLC (LEEDCo's private developer) $500,000
• Nautica Windpower LLC (A LEEDCo Partner) $500,000
• Case Western Reserve (A LEEDCo Partner) $540,000

Failing to qualify for the full $47 million available for each project in the second round of the grant awards (tax dollar giveaways), LEEDCo was only awarded $2.8 million by the D.O.E. to complete engineering and other related studies on Project Ice Breaker.

But this setback is not about to stop LEEDCo. Lorry Wagner, president of LEEDCo, acknowledges the setback but reaffirms their dedication to forcing this project through.

In 2012 the left-leaning Brent Larkin of the Plain Dealer was surprisingly critical of the wind turbines in Lake Erie and again questioned the cost & sensibility of the turbine project....

There are 534,899 households in Cuyahoga County. Installing five or six wind turbines seven miles out would generate enough power to light a maximum of 6,100 of those households.

The cost is pegged at about $150 million. In Cleveland dollars, that means overruns would push the final figure past the $200 million mark. That doesn’t include annual maintenance costs of about $5 million.

Because businesses and manufacturers always use between 30 percent and 40 percent of the power produced, the wind turbine pilot project would produce about 0.5 percent of the county’s required electricity.

Nevertheless, windmill supporters haven’t given up the chase. Even as business leaders who know how to read a bottom line have quietly backed away, proponents – led by the Cleveland Foundation – have refused to follow the lead of other Great Lakes cities and scale back their grandiose plans. (Emphasis Added)

And this brings us to the wind-blown bile of crony capitalism we see in many of these wind turbine projects.

When speaking of crony capitalism in Cuyahoga County and/or Ohio, somewhere along the line you will find some sort of non-profit group being controlled or influenced by the cabal of corporate charlatan's at The Cleveland Foundation & the Greater Cleveland Partnership (GCP).

Taking a look at the original Great Lakes Energy Task Force and LEEDCo the non-profit economic development corporation specially created for wind turbine project, you will see it is nothing more than a shell game of incestuous relationships fleecing the public with our own tax dollars.

The Cleveland Foundation and Nortech, a non-profit front group for the GCP, both served on the Great Lakes Energy Task Force. The task force in turn hired JW Great Lakes Wind LLC to create a wind feasibility study for turbines in Lake Erie.  

In creating this wind feasibility study for the Task Force, JW Great Lakes Wind LLC had the "help" of the Great Lakes Wind Energy Center, a front group for the Cleveland Foundation pushing for turbines in Lake Erie. 

From this wind feasibility study for the Task Force, paid for partially with public money & created with the help of groups tied to the Task Force, the non-profit Lake Erie Energy Development Corp. (LEEDCo) was created by the Task Force to oversee the push for wind turbines in Lake Erie.  

With a quick click here, you will see many of the Board members of the Task Force that created LEEDCo, are now Board members for LEEDCo.

The non-profit LEEDCo hired Bechtel Development Company, Inc. (Bechtel), Cavallo Great Lakes Ohio Wind, LLC (Cavallo) and Great Lakes Wind Energy, LLC (GLWEnergy) to work on the project.

Bechtel, Cavallo and GLWEnergy have formed Great Lakes Ohio Wind, LLC (GLOW), the company that will own and develop the project.

With only the tip of the corporate cronyism pointed out in just this one "wind" project in Ohio, do you really need more reasons as to why Speaker Boehner & the upcoming lame duck Congress should reject extending the $18 billion Wind Energy Tax Production Credit?