Tom Carnahan defends wind farm award
WASHINGTON • The White House counts Missouri’s Lost Creek wind farm, operated by a member of the Carnahan family, among government-backed projects that are “changing America.”
Missouri Republicans are trying to use the $107 million tax credit payment to Lost Creek to change election dynamics for two Carnahans on Missouri’s November ballot.
In making their case, the Carnahans’ GOP critics argue that the government “handout” to Wind Capital Group of St. Louis, headed by Tom Carnahan, is inappropriate given the political connections of his family. His brother, Russ, is a Democratic congressman from St. Louis; his sister, Robin, is Missouri’s secretary of state and the Democrats’ nominee for U.S. Senate in the November elections.
GOP critics led by Ed Martin, Russ Carnahan’s challenger in St. Louis’ 3rd Congressional District, also target the $814 billion stimulus legislation that authorized money for the payment as well as government efforts to promote wind farms, which are popping up in Missouri and downstate Illinois.
Russ Carnahan was among 244 House Democrats who voted for the legislation. But officials from the Energy and Treasury departments, who jointly administer the program, said that neither Russ nor Robin Carnahan played a role in the awards.
In fact, Robin Carnahan’s opponent in the Senate race, U.S. Rep. Roy Blunt, was a key backer of the financial bailout bill in 2008, one of several measures that reauthorized the tax credit.
Nonetheless, Martin has continued to raise questions.
“I’m not saying there’s anything illegal; it may not be corruption with a capital ‘C’ with people taking bribes. But it doesn’t smell right,” said Martin, who raised the issue while debating Russ Carnahan over the weekend.
“Wind is good, wind is fine. But what we’ve seen is a wholesale shift in billions of dollars in what is not a coherent energy policy,” Martin added in an interview.
Russ Carnahan attributed the attacks to critics’ support for the oil industry over renewable energies. He observed that Martin’s wife owns significant oil stocks, which Martin says were inherited.
“The Republican Party has been in the hip pocket of Big Oil for years,” Carnahan said.
The award for Lost Creek, situated in DeKalb County in northwest Missouri, is part of the drive by President Barack Obama’s administration to bolster renewable energy sources. Installations of wind turbines are down 71 percent this year in large measure because of reduced electricity use during the recession.
Since the Recovery Act took effect, the government has issued more than 200 payments for wind projects, most of them much smaller than Lost Creek, a review of the awards shows. Last year, the government approved an $85 million tax credit payment for the Farmers City Wind Farm in northwest Missouri, a project of Iberdrola Renewables of the Spanish wind power giant.
Meanwhile, Illinois has received payments for eight major wind projects, among them a $170 million in July for the Streator Cayuga Ridge wind park in Livingston County, in central Illinois.
The payments are connected to two tax credits, one for investments in wind energy, on the books since the 1970s, and the other a production tax credit for renewable energy approved by Congress in 1992.
The production credit has been extended several times since then with support from both major political parties. Before the stimulus, it was last renewed in 2008 as part of the financial system bailout.
Critics of the Lost Creek funding have seized on the design of the payment. Rather than giving the credits after companies file tax returns, the stimulus legislation provides for upfront payments equivalent to 30 percent of the cost of the project. It was done that way, the Treasury Department has said, so “the near term goal of creating and retaining jobs is achieved, as well as the long-term benefit of expanding the use of clean and renewable energy.”
The upfront payments to Lost Creek, a $300-million-plus project, and various other projects aren’t awarded competitively but on the basis of meeting various criteria. For instance, companies were required to submit accredited designs and start building by the end of this year. Energy Department officials described the process as automatic; the Treasury Department is required to issue the payments to those who qualify within 60 days of application.
“Treasury has no discretionary authority in this,” said Treasury spokeswoman Sandra Salstrom.
Carnahan said in the spring of 2009 that the stimulus legislation gave Wind Capital Group and other investors “the confidence to proceed” with Lost Creek. Prior to that bill, there was uncertainty in the industry when it would be extended.
The Lost Creek Project did proceed, and it began generating power in May. The wind farm’s 100 400-foot tall turbines, situated on gently rolling farmland near King City, are feeding enough power to the grid to provide electricity to 50,000 homes. Lost Creek is the fifth wind project in Missouri that Carnahan has developed, but the only one his company owns.
In an interview, Carnahan, 41, the youngest son of former Gov. Mel Carnahan and former U.S. Sen. Jean Carnahan, said he is untroubled by criticism of the payment. He said that neither his family’s political clout nor any lobbying could have played a role in the process.
“Not only was there not any contact or anything like that, it was not necessary,” he said, referring to the eligibility requirements.
Carnahan asserted that his 5-year-old company has been responsible for $600 million investments in Missouri “that have made gigantic contributions to the economy in rural Missouri. I’m very proud of that. We need to be doing more to support renewable energy, not less.”
Asked about the political attacks resulting from the Lost Creek payment, Carnahan said: “I’ll leave the political stuff to the politicians; that’s not what we do. We build wind farms.”
While building those wind farms, Carnahan and other Wind Capital employees have had some role in the political process. They have donated more than $100,000 over the past two years to PACs that in turn made contributions primarily to Democratic candidates, according to the website CampaignMoney.com.
“What Wind Capital employees want to do and their politics isn’t any of my concern,” Carnahan said.
-BILL LAMBRECHT
