Energy Sec. Under Fire For Favoring EV Co. She Owned Stock In, Was Board Member
President Joe Biden’s Energy Secretary Jennifer Granholm is the subject of an ethics complaint about promoting, in her role as a member of the executive branch, an electric bus company she sat on the board of and held over a million dollars of stock in.
Granholm — who oversees moving the country toward an electric vehicle transportation system and enjoys newfound powers after the passage of Biden’s infrastructure package — is facing scrutiny for promoting Proterra, a Burlingame, California-based electric bus company she sat on the board of and held 240,520 shares of stock in, which garnered her $1.6 million when she finally divested them 157 days after her nomination.
Granholm has been criticized for promoting Proterra in her official capacity as energy secretary and for hyping grant access to companies with connections to Proterra.
These critics argue that Granholm’s promotion of the company, which as of Monday had a market cap of $2.6 billion, has increased Proterra’s visibility and thereby potentially increased the value of Granholm’s stock in the company before she was required by ethics rules to sell her shares on May 24.
Granholm’s promotion of the Burlingame, California electric vehicle company came at the same time that Democrats in Congress were crafting—and ultimately passing—Biden’s $1.2 trillion infrastructure package, which dramatically increases Granholm’s authority as energy secretary to advance private sector companies in the transition to electric vehicle-based transportation infrastructure.
The infrastructure package — which has been promoted by Biden, Vice President Kamala Harris, Granholm, Biden’s Secretary of Transportation Pete Buttigieg, and other members of the administration — grants as much as $174 billion to green vehicles and $45 billion to zero-emission buses to “replace 50,000 diesel transit vehicles and electrify at least 20 percent of our yellow school bus fleet” and “to build a national network of 500,000 EV chargers by 2030.”
The California-based Proterra stands to benefit greatly from this Biden administration electric vehicle investment.
It is perhaps unsurprising then that the Center for Responsive Politics found that nearly 85 percent of Proterra’s employee campaign contributions went to Democrats, including Biden.
Granholm’s involvement with Proterra started in March of 2017 when the company announced she would be joining its board ostensibly due to her experience with the automotive sector when she served as Michigan’s governor from 2003 to 2011.
Proterra hoped to use Granholm’s “track record for producing a high-quality clean energy and transportation workforce in the Midwest” to launch the company into the “next phase of strategic growth and national deployment,” its press release explained.
During her time on the board, Granholm supplemented her considerable income by simultaneously serving on the boards and consulting for various left-wing organizations as well, such as American Bridge PAC and Media Matters.
After serving on Proterra’s board for roughly three years, Granholm was nominated to be Biden’s secretary of energy on December 18, 2020, and was later confirmed on February 25.
During her confirmation process, Granholm signed an ethics agreement letter on January 16, in which she promised to step down from the Proterra board and divest her Proterra stock “as soon as practicable but not later than 180 days after my confirmation.”
Within that months-long period following Granholm’s nomination, Proterra’s stock price was potentially boosted by her nomination, as well as by the administration’s continued hyping of the company at various events.
Although the company was not yet publicly traded at the time that Granholm sold her shares, there are indications that the Biden administration’s hyping of Proterra benefitted the company during this period, as was apparent when the stock of a company merging with Proterra spiked following a Biden event at a Proterra plant in April.
On April 6, Granholm signed a document that listed the stocks she had divested from; however, she left out her 240,520 shares of Proterra, which she estimated at the time to be worth up to $5 million, according to the full financial disclosure report she submitted four days after her nomination.
Her investment in Proterra was her largest stock asset, equal in value to her home in Oakland, California, which she also valued as being worth up to $5 million. These two assets – her Proterra stock and her home – were the largest assets listed on Granholm’s financial disclosure form.
While Granholm continued to hold these Proterra stocks, her duties as energy secretary put her in a position to potentially benefit the company and its partners and in turn increase the value of the stock shares she still held.
In fact, on February 24, the day before the Senate confirmed Granholm, Biden signed Executive Order 14017, which gave Granholm, the now-secretary of energy, instructions to lead the efforts to create a supply chain for electric batteries and other electric vehicle components.
Two months later, on April 15, the Energy Department unveiled two different American taxpayer-funded electric vehicle grant opportunities worth more than $162 million. The grants were a continuation of the SuperTruck initiatives that were created in 2009 by the Obama administration and were renewed in 2016.
The 2009 and 2016 SuperTruck grants were aimed at incentivizing fuel efficiency for diesel trucks, but the new “SuperTruck 3” grants under Biden were aimed specifically at creating an electric vehicle fleet and expanding EV infrastructure.
However, the introduction of these grants and Granholm’s authority as energy secretary to promote them created a potential conflict of interest because Proterra or its partners could benefit from the grants at a time when Granholm still held stock in the company.
According to federal regulations, Granholm is required to consult ethics officials and receive proper approval before participating in any matter involving “specific parties which [she] knows is likely to affect the financial interests of a member of [her] household.”
Obviously, the promotion of Proterra or its partners while holding over 240,000 shares of Proterra stock would conflict with this regulatory requirement. It is unclear whether Granholm sought or was granted a waiver regarding the Biden administration’s promotion of Proterra at that time.
On the same day the new SuperTruck 3 initiative was announced, Granholm joined a call with trucking industry representatives to promote the initiative, promising that the program would “push the envelope even further through the electrification of the vehicle, and hydrogen and fuel cells.”
Granholm also said that the “money has been authorized by Congress” and mentioned by naming the companies that have already been awarded grants, including Daimler, a Proterra partner.
The question of Granholm’s relationship with Proterra came under scrutiny again on April 20, when President Biden raised the company’s profile by virtually touring Proterra’s Greenville, South Carolina, factory to support the administration’s push for electric buses.
Biden’s virtual tour took place at a time when Granholm still owned her Proterra stock. The White House claimed at the time that Granholm was “in the process” of selling off her up to $5 million worth of stock in the company.
Breitbart News’s Charlie Spiering wrote that shares of ArcLight Clean Transition Corp – the company that Proterra announced in January that it would be merging with – “spiked” after Biden’s virtual visit.
Because Proterra was not publicly traded at the time of Biden’s visit, the spike in ArcLight’s stock provides a useful insight into the impact of Biden’s promotion of Proterra. When the merger with ArcLight was announced in January, Proterra was valued at $1.6 billion, and the announcement doubled the price of ArcLight shares.
It is unclear if Granholm was present during Biden’s virtual tour of the Proterra plant, but her connection to the company raised eyebrows at the time. However, the Energy Department denied that they had any involvement in the planning of that virtual tour.
On April 19, the day before Biden’s virtual visit, Vice President Kamala Harris toured Thomas Built Buses, a subsidiary of Daimler. The electric vehicle company is based in North Carolina and uses Proterra as its main supplier.
“Proterra has partnered with Thomas Built Buses to electrify their most popular vehicle, creating a 100% battery-electric bus designed to meet the needs of school bus fleets,” a Proterra press release said. During the tour, Harris was photographed in front of a fleet of school buses near a charging station bearing the Proterra logo.
The favoritism shown to Proterra caught the eye of Sen. John Barrasso (R-WY), the top Republican on the Senate Energy and Natural Resources Committee after Biden virtually toured the company’s South Carolina factory.
On April 27, Barrasso sent a letter to the Energy Department’s Inspector General “requesting a review of a potential conflict of interest involving DOE Secretary Jennifer Granholm’s investments in Proterra, Inc. and her promotion of electric vehicles.”
Additionally, on May 12, Rep. Ralph Norman (R-SC), the top Republican on the Environment Subcommittee in the House of Representatives, sent a letter to Granholm demanding documents from her in order to investigate her “longstanding relationship” and “multi-million-dollar stake” in Proterra.
On May 7, over two months after her confirmation, Granholm officially received an ethics waiver from the Office of Government Ethics to sell off her 240,520 shares of Proterra stock, after receiving backlash from Republicans in the House and Senate for her failure to divest this stock while the administration was promoting the company.
The waiver allowed Granholm to defer capital gains taxes when she unloaded the Proterra stock as long as she reinvested the money into a “permitted property” within 60 days.
When Granholm sold her Proterra stock on May 24, which was 88 days after her confirmation and 157 days after her nomination, she netted a capital gain of $1.6 million, according to the Department of Energy.
However, it is unclear where Granholm reinvested this money and whether that investment could also pose a potential conflict of interest, considering how vast and complex the electric vehicle supply chain is.
All of these potential conflicts of interest caught the attention of Protect the Public’s Trust (PPT), a government watchdog group, which issued a statement raising questions about Granholm’s involvement with the Biden administration’s electric vehicle initiatives.
Meanwhile, the Biden administration’s Proterra promotion continued at the highest levels. On June 29, Biden traveled to a Municipal Transit Utility in Wisconsin to promote his infrastructure agenda.
During his visit, Biden mentioned his tour of the Proterra factory “in the Carolinas,” and the transit manager Biden was speaking to noted that his city was getting two electric buses from that same Proterra factory, a fact which White House Press Secretary Jen Psaki also confirmed.
h/t Rúnar O.
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