Al Gore’s tangled web of un-green corporate investments

An article today in Tech Times reveals that former U.S. Vice President Al Gore said we should “punish climate change deniers” and put a price on carbon. He also said “politicians should pay a price for rejecting ‘accepted science,'” according to the Chicago Tribune.

Those comments are from a speech Gore gave last Friday at the South by Southwest (SXSW) festival in Austin, Texas, where he said, “smart investors are moving away from companies tied to fossil fuels and toward companies investing in alternative energy.”

The only problem with those statements is that Gore doesn’t practice what he preaches. A multi-billion dollar investment firm co-founded by Al Gore to advance green technologies is decidedly un-green, with a clear message to investors: stay away from alternative energy.

This gravy train of unethically allocated stimulus funding and “dirty” money is a latticework of connections that began when the former Vice President left the political arena and entered the private sector in the early 2000s.

Tim Cook, Apple’s CEO, has been very public about his company’s commitment to relying on 100% renewable energy for all its data centers. Most of its products, however, are assembled overseas where pollution controls are lax or non-existent, and power primarily comes from coal-fired power plants. Incidentally, Al Gore has sat on Apple’s board of directors since March 19, 2003.

Gore, along with David Blood, founded the investment firm Generation Investment Management (GIM), which claims to “embed sustainability into the mainstream capital markets.” As of Dec. 31, 2014, funds at GIM were valued at $7.3 billion.

At press time, Gore’s investment firm GIM had only one clean tech company*, SolarCity, out of 30 funds listed in its portfolio, with many being directly or indirectly tied to Apple’s profits.

The other 29 funds hardly come close to being sustainable, renewable or Earth-friendly, given Gore’s recent statements at the SXSW speech encouraging companies to invest in alternative energies.

As Bill Gunderson of The Street noted, “If Al Gore has any message for investors today, it might very well be this: ‘Stay the hell away from alternative energy!’ Not that he would say so. At least out loud.”

Curiously, GIM dumped its last First Solar stock in the second quarter of 2012 for a $165.9 million loss. In September 2013, the SEC charged First Solar’s former vice president of investor relations, Lawrence Polizzotto, with insider trading. According to the SEC, Polizzotto violated “numerous regulations via one-on-one phone conversations with approximately 20 sell-side analysts and institutional investors on Sept. 21, 2011.”

In an expos√© written by Marita Noon in TownHall Finance, First Solar’s troubles don’t stop there. “The CEO sells his own stock, jobs are going overseas. Accusations of money laundering materialize, and inside investigations point to a shady scheme within a solar energy company. The firm in question is implicated—as well as the Department of Energy.”

It seems Tim Cook didn’t fully vet First Solar before announcing them as its key partner in delivering solar energy.

And if you’re confused why GIM has only one ‘clean’ technology stock, don’t be. Perhaps this 2014 60 minutes episode may help you understand why. In it they say that, “despite billions invested by the U.S. government in so-called ‘cleantech’ energy, Washington and Silicon Valley have little to show for it.”

One trust in GIM’s portfolio is SPY (SPDR S&P 500), an exchange-traded fund (an ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day).

One asset the SPY fund holds is Apple Computer shares, a company in which Gore personally owns 103,574 shares valued at $13,350,688 million (data as of Mar. 4, 2015). Apple makes up 69 million shares of the SPY trust, and coming in at second is Exxon, an fossil fuel company, making up 49.81 million shares.

All of which would mean Gore, who co-founded and co-owns GIM, and who is sitting on the board of directors at Apple, and who has direct influence and knowledge regarding the decisions Apple Computer makes, may have access to information about its upcoming projects, what materials it will be procuring, what vendors it will need to work with, what threats Apple may face, etc. This symbiotic relationship could prove very fruitful for Gore’s overall portfolio and net worth.

For example, one stock (out of the 30 in GIM’s portfolio package) is Linear Technology Corp (LLTC) where Apple Computer is listed as one of its clients, which “used Linear’s chips in its innovative iPod MP3 player.” Linear Tech makes up 6.3 percent of GIM’s portfolio, the fifth largest of GIM’s portfolio. The iPod MP3 music player was released in 2001, two years before Gore joined Apple’s board of directors (2003). GIM was founded in 2004 and “began investing client money in April 2005,” two years after Gore joined Apple’s board.

Another stock in Gore’s GIM is Google, where Gore is a senior advisor and, once again, would likely have access to information not available to people outside the company.

On February 26, 2015, Google announced it’s intention to contribute $300 million to a fund set up by SolarCity, one of GIM investments, to “finance $750 million in residential solar projects.”

“The new fund will cover the upfront cost of solar panel installations for thousands of homeowners in 14 states and the District of Columbia, and make it possible for them to pay less for solar power than they pay for electricity generated by fossil fuels.”

Also at the SXSW festival, “U.S. Commerce Secretary Penny Pritzker swore in former Google attorney Michelle K. Lee as director of the U.S. Patent and Trademarks Office.” Very cozy.

The rest of GIM’s investment portfolio is largely related to IT (information technology) and biotech firms, which make up the highest percentage of GIM’s total investment portfolio.

GIM’s Client Update is “very cagey about how much and where Generation Investment puts its money. But it did list several firms as part of its portfolio that do not show up in SEC filings.”

In 2007, Gore also joined the venture capital firm Kleiner Perkins Caufield & Byers(KPCB), which focuses primarily on IT and Biotech. Many of the companies KPCB has invested in are also part of GIM’s portfolio.

In March 2008, “KPCB announced the iFund, a $100 million venture capital investment initiative that funds innovators developing applications, services, and components for Apple’s iPhone and iPod touch platform… KPCB doubled their iFund investment in April 2009 to $200 million.”

In April 2008, Private Equity Week reported that, “KPCB was raising funds for a $400 million growth-stage clean-technology fund.

In 2008, KPCB also announced via press release its intention to invest “$700 million over roughly a three-year period, backing entrepreneurs and innovation in greentech, information technology, and life sciences ventures.” It also announced the “opening of its $500 million Green Growth Fund.”

The highest percentage of any stock comprising the GIM portfolio is Check Point Software Technologies, an IT company, at 8 percent. Check Point makes cyber-security products for computers and, more importantly, ‘cloud computing.’ Apple uses cloud computing in many of its products, including iTunes and Apple Pay.

The second highest stock that makes up 7.7 percent of GIM’s portfolio is Edwards Lifesciences. Number three is MSCI Inc, also an IT company, which makes up 6.9 percent. The list goes on but the pattern remains the same. Stay away from companies in the alternative energy market.

Since leaving office in 2001, Gore reported assets of less than $2 million. Today it is estimated to be at $173 million. In less than fifteen years, Gore has amassed a personal fortune and much of it was from making investments first in clean energy, and then in IT and biotech.

According to a 2012 Washington Post article, it first began when Obama became elected. Gore benefited largely from the Obama administration’s doling out billions of dollars to alternative energy companies he owned stock in or through his partnership with KPCB, which made large investments in clean-energy startups.

Gore’s “portfolio aligned smoothly with the agenda of an incoming administration and its plan to spend billions in stimulus funds on alternative energy…

“Of the 11 companies he mentioned in his 2008 slide show, nine received or directly benefited from stimulus or clean energy funding.

“Fourteen green-tech firms in which Gore invested received or directly benefited from more than $2.5 billion in loans, grants and tax breaks, part of President Obama’s historic push to seed a U.S. renewable-energy industry with public money.”

According to his spokesperson, who spoke to the Washington Post, Gore “had not asked the administration for support for any companies in which he had invested.”

One clean energy stock Gore invested heavily in was Iberdrola Renovables (Iberdrola). The largest shareholder of Iberdrola is Qatar Investment Holding (Qatar Holding LLC), a subsidiary of Qatar Investment Authority (QIA), which happens to own Al Jazeera.

In early January of 2013, Gore sold his 20 percent stake in the now-defunct cable station Current TV to Al Jazeera (Qatar Investment Authority), which turned his unwatched cable channel into a $100 million payday.

Ironically, Qatar is one of the largest oil-producing countries and uses the QIA to make investments and to “strengthen the country’s economy by diversifying into new asset classes.”

Two weeks after the sale of Current TV, Gore exercised his options entitling him to buy 59,000 Apple shares for the backdated price of $7.475 each, spending roughly $444,000 to acquire stock worth nearly $30 million (Apple shares were trading for $508 at the time).

According to Bloomberg, those “59,000 shares are part of 101,358 Apple options and shares . . . Gore has amassed . . . giving his total holdings a gross value of more than $45.6 million today.”

Regarding the Keystone pipeline, whose construction was recently vetoed by Obama, Gore said, “there is no such thing as ethical oil“, there’s “only dirty oil and dirtier oil.” Unless you’re Al Gore, that statement might sound a bit hypocritical.

Rep. Fred Upton (R-Mich.), who chairs the House Energy Committee, said Gore’s portfolio “is reflective of a disturbing pattern that those closest to the president have been rewarded with billions of taxpayer dollars .‚Äâ.‚Äâ. and benefited from the administration’s green bonanza in the rush to spend stimulus cash.”

*If you believe that owning stock in a clean-tech company is somehow Earth friendly, watch this 60 minutes episode on the devastation e-waste is creating in China (where most solar panels are cheaply made) from the toxic chemicals used to make each one. No oversight, lax or no regulations, with carcinogenic waste products being discarded into landfills, groundwater, and nearby streams and rivers.

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