Archives for 2012
CNN Money: Non-profit sues Delaware Governor, regulators over Bloom Energy deal
Read the full story here. CNN Money
“A non-profit government watch dog group called Cause of Action has filed a lawsuit accusing Delaware Governor Jack Markell, and the Delaware regulatory agency Delaware Public Service Commission, of cronyism over a deal with fuel cell maker Bloom Energy. Bloom Energy is building a factory in Delaware to make its fuel cells, and also has one of the largest fuel cell contracts in the world with local Delaware utility, Delmarva Power & Light.
Fuel cells use natural gas or biogas combined with oxygen to create a chemical reaction to produce electricity. The electricity is generally more expensive than grid power, but can be cleaner (if it’s running on biogas) and is also a distributed system. Bloom Energy is an 11-year-old Silicon Valley company that has raised at least $650 million (and is closing another round of funding).
Cause of Action says the Governor and the Public Service Commission are “unconstitutionally discriminating against Bloom’s competitors and taxing a segment of Delaware residents to subsidize the crony company.” The suit is being delivered on behalf of a utility customer (named John Nichols) and one of Bloom Energy’s fuel cell maker competitors…
Greentech Media: Lawsuit Accuses Bloom Energy, Delaware of Cronyism
Read the full story here. GreenTech Media
“The lawsuit was filed by Cause of Action, which describes itself as a group dedicated to fighting waste, fraud and mismanagement in the federal government. The complaint (PDF) also names Fuel Cell Energy, a Danbury, Conn.-based fuel cell maker and competitor to Bloom Energy, as a plaintiff, Cause of Action spokeswoman Mary Beth Hutchins said in a Wednesday interview. It also names an individual, John Nichols, who is a customer of Delmarva Power & Light, the utility that’s working with Bloom.
“Our desire is that the court will issue a summary judgment” halting the Bloom deal from going forward, Hutchins said. “Our allegation is that the governor and the public service commission have essentially engaged in cronyism.”…Cause of Action’s lawsuit accuses the state of creating a “system of discriminatory eligibility requirements, subsidies, and energy-portfolio-standards multipliers that benefit Bloom,” when it rewrote its renewable portfolio standards act in late 2011. Cause of Action has also filed two Freedom of Information Act requests to examine public comments and economic studies submitted in support of the tariff…”
Cause of Action Sues Delaware Governor Markell And Public Service Commission To Stop Cronyism
CAUSE OF ACTION SUES DELAWARE GOVERNOR MARKELL
AND PUBLIC SERVICE COMMISSION
TO STOP CRONYISM
Illegal Scheme Forces Ratepayers to Pick Up Tab for $133 Million Tariff-Subsidy
WASHINGTON – Government accountability group Cause of Action (CoA) filed suit today in federal court to challenge Delaware’s sweetheart deal with Bloom Energy, Inc. (Bloom). Governor Jack Markell and the members of the Delaware Public Service Commission are unconstitutionally discriminating against Bloom’s competitors and taxing a segment of Delaware residents to subsidize the crony company.
The suit is brought on behalf of individual plaintiff John Nichols, one of the Delaware ratepayers subject to a special tariff-subsidy created to pay for the deal, and a fuel cell manufacturer whose competitive place in the energy market has been thwarted by the state of Delaware’s scheme to prop up Bloom.
“Delaware has unconstitutionally undermined competitive markets to subsidize one favored company and forced a specific group of Delaware residents to pick up the tab,” said Amber Abbasi, CoA’s Chief Counsel for Regulatory Affairs. “Cause of Action is exposing this burden on taxpayers and businesses and is holding the Governor and the Public Service Commission accountable for violating the Commerce Clause and the rights of the people of Delaware.”
In late 2011, the Delaware Renewable Energy Portfolio Standards Act (REPSA) was modified solely to accommodate the state’s deal with Bloom. In return for Bloom’s promise to construct a manufacturing facility in Delaware, the state established a system of discriminatory eligibility requirements, subsidies, and energy-portfolio-standards multipliers that benefit Bloom. These requirements deny out-of-state companies equal competitive footing and increase costs for Delmarva ratepayers who might otherwise benefit from the competitive interstate market. According to a report by the Delaware Public Service Commission, the cost through tariffs to ratepayers will amount to $133 million.
“There’s no rational basis for forcing Nichols and other Delmarva ratepayers to fund Bloom Energy, while the rest of the state looks on.” stated Dan Epstein, Executive Director of CoA. “Governor Markell and the Public Service Commission are discriminating against competitive businesses in other states to prop up their cronies at Bloom, in direct violation of the U.S. Constitution, and they must be forced to answer for their actions.”
In addition to filing suit against the Governor andthe members of the Delaware Public Service Commission, Cause of Action also filed two Freedom of Information Act requests regarding public comments submitted during the formation of the Bloom tariff and economic impact studies that were submitted in support of the tariff.
The complaint can be found here.
About Cause of Action:
Cause of Action is a non-partisan, non-profit organization that uses public advocacy and legal reform tools to ensure greater transparency in government, protect taxpayer interests and promote economic freedom. For more information, visit www.causeofaction.org.
National Journal: Watchdog Group Says IRS Not Monitoring Lobbying Coalitions
Read the full story here. National Journal
“The pro-transparency group Cause of Action is calling on a Treasury Department inspector general to investigate why, according to the group, the Internal Revenue Service is not overseeing lobbying coalitions.
CoA argues that these loose coalitions are spending money on lobbying but because they are not incorporated, they don’t have disclosure requirements or pay taxes. Saying that it wanted to “provide the public with a better understanding of the rules that apply to coalitions and to ensure that lobbying entities are paying taxes and are in compliance with IRS regulations,” CoA wrote the IRS in March asking for documentation showing how the agency monitors tax-exempt organizations’ lobbying ties.
“Cause of Action is concerned about the risk that lobbying coalitions are exercising political influence without paying taxes under the Internal Revenue Code,” CoA wrote in its request for documents. “In order to avoid the disclosure requirements of the Lobbying Disclosure Act, many organizations are simply not incorporating…”
Cause of Action Demands Investigation of IRS’s Failure to Address Lobbying Violations
CAUSE OF ACTION DEMANDS INVESTIGATION OF IRS’S FAILURE TO ADDRESS LOBBYING VIOLATIONS
Lack of oversight of stealth lobbying uncovered by Cause of Action
WASHINGTON – Following an investigation into the oversight of lobbying disclosures, Cause of Action (CoA) uncovered that the Internal Revenue Service (IRS) fails to monitor activities that could violate tax-exempt statuses, prompting CoA to send a request for investigation to the Treasury Department Inspector General concerning the IRS’s lack of action.
On March 22, 2012, Cause of Action wrote to Douglas Shulman, Commissioner of the IRS, to inquire about the IRS’s monitoring of tax-exempt organizations that house lobbying coalitions. These coalitions, as has been revealed in numerous media outlets over the past several years, dodge the Lobbying Disclosure Act by existing as loosely organized groups which are not incorporated under the law. Concerned that lobbying coalitions are exercising political influence without paying taxes under the Internal Revenue Code, CoA sought to ensure that lobbying entities are paying taxes and are in compliance with IRS regulations.
In response to a Freedom of Information Act (FOIA) request Cause of Action submitted, on May 14, 2012, the IRS responded that it was unable to locate any documents relating to the tax-exempt status of unincorporated coalitions residing at tax-exempt corporations, their fiscal sponsors, or any investigations by the IRS into these organizations.
“The inability of the IRS to produce any documents on oversight or investigation into stealth or coalition lobbying points to a gross lack of accountability by the federal government,” stated Dan Epstein, Executive Director of Cause of Action. “The burden now lies upon the Treasury Department’s investigators to examine why the IRS has turned a blind eye to numerous coalitions that have the potential to lobby with tax-exempt dollars, which is a clear violation of the Lobbying Disclosure Act.”
On June 8, 2012, CoA sent a request for investigation letter to J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA) which states that “the IRS has failed to require lobbying coalitions to report their activities and the IRS has failed to conduct oversight over tax-exempt corporations that sponsor coalition lobbying without disclosing those activities. Moreover, the IRS, despite concerns by Congress and the media, has failed to conduct any investigations of lobbying coalition activities that may be inconsistent with the Internal Revenue Code. As a result, we strongly request that you immediately investigate these matters.”
At the time of this release, CoA has not received a response from TIGTA concerning the request for investigation.
About Cause of Action:
Cause of Action is a non-partisan, non-profit organization that uses public advocacy and legal reform tools to ensure greater transparency in government, protect taxpayer interests and promote economic freedom. For more information, visit www.causeofaction.org.
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Stealth lobbying continues under the IRS’s radar
On March 22, 2012, Cause of Action submitted a Freedom of Information Act request to the IRS, seeking information concerning the IRS’ oversight of coalition lobbying, specifically:
• All documents referring or relating to the tax-exempt status of unincorporated coalitions residing at tax-exempt corporations, including reporting requirements concerning these coalitions’ lobbying activities
• All documents referring or relating to the disclosure requirements of tax-exempt entities that sponsor or provide resources to a coalition, concerning the coalition’s lobbying and other activities
• All documents referring or relating to those organizations for which the IRS has:
1. Conducted a criminal investigation, civil audit, or examination, reviewed whistleblower-informant claims, found abusive tax schemes and published alerts or abusive tax scheme investor lists concerning coalitions which lobby and/or “stealth” lobbyists from 2004 to the present
2. For each identified, summarize the subsequent allegations and action by
the IRS, including penalties, fines, reports, memoranda or other assessments made against those investigated coalitions.
3. Provide any documents reflecting coalitions’ response to any IRS criminal investigation, audit,
examination, whistleblower information claim, alert or publication.
On May 14, Susan Marks-Jensky of the IRS responded to CoA’s request, stating “I found no documents specifically responsive to your request.”
This response highlights that the IRS has failed to require lobbying coalition’s to report their stealth activities and has refused to conduct oversight over tax-exempt corporations that sponsor coalition lobbying without disclosing those activities. Moreover, the IRS, despite concerns by Congress and the media, has failed to conduct any investigations of lobbying coalition activities that may be inconsistent with the Internal Revenue Code.