Biofuels industry generous to Gingrich after decades-long relationship

Source: Amanda Peterka • E&E  • Posted: Wednesday, November 30, 2011

For decades, Republican presidential candidate Newt Gingrich has made clear his feelings about ethanol.

While speaker of the House in the 1990s, he blocked what was supposed to be the end of a then-$600 million-a-year tax incentive for ethanol blends. A decade later he was a paid consultant for a key biofuels group as it was just getting started and learning to navigate the Washington, D.C., lobbying scene.Gingrich frequently endorses ethanol in speeches, and earlier this year he appeared in the pro-ethanol documentary “Freedom.””He has certainly understood the potential for biofuels,” said Bob Dinneen, president and CEO of the Renewable Fuels Association.The ethanol industry is rewarding Gingrich in the race for the GOP presidential nomination.Major ethanol firm POET LLC and its employees are the second-highest contributor to the former speaker’s presidential campaign, according the Center for Responsive Politics, which tracks money in politics.

The “miscellaneous energy” category, which includes biofuels organizations, and the crop production industries have contributed about $25,000 each to the campaign. Gingrich has only gotten $18,000 total from traditional oil and gas, according to the center.

“POET believes that homegrown, renewable fuels play a critical role in America’s energy mix and we have always supported candidates who share that belief,” said Jeff Broin, founder and CEO of POET, which earlier this year won a $105 million loan guarantee from the U.S. Department of Energy for a cellulosic ethanol plant in Iowa.

POET, the world’s largest ethanol company, had contributed $20,000 to Gingrich’s campaign as of Nov. 14. A quarter of that came from the company’s political action committee, POET PAC, while the rest came from its employees or their immediate families, the center reported.

The contribution to Gingrich makes up about a tenth of the PAC’s contributions this election cycle; much of the remainder has gone to leading agriculture members of Congress as they both debate the future of ethanol subsidies and gear up to write the next farm bill.

In this presidential campaign, the PAC has also given $5,000 each to former Massachusetts Gov. Mitt Romney (R) and former Minnesota Gov. Tim Pawlenty (R), who dropped out of the race in August.

Gingrich, who has raised $2.9 million total and who recent national polls show is the leader among the GOP candidates, receives the highest praise from biofuels groups.

“So many of the candidates are afraid to mention ethanol in their policy speeches. Newt’s not one of those people,” said Walt Wendland, president of the Iowa Renewable Fuels Association. “We’re working with all of the candidates … but Newt just gets it.”

In Iowa, where support for ethanol resonates most, IRFA has sharply criticized Texas Gov. Rick Perry for proposing to end tax credits for renewable energy yet keep subsidies for oil and gas. The organization has also bashed Perry’s fellow Repulican nominee Minnesota Rep. Michele Bachmann for avoiding questions on whether she supports the renewable fuels standard.

Former Utah Gov. Jon Huntsman has called for an end to all energy subsidies, while Romney recently said he would not support any new subsidies. He has, however, maintained his position that ethanol is an important domestic fuel source. Former Pennsylvania Sen. Rick Santorum said he would phase out the existing blender tax incentive but in turn would use the money for investing in ethanol fueling stations.

Gingrich arguably has the longest history with ethanol, beginning in 1984, when he voted to support “gasohol,” which was then the name for the renewable fuel.

When an ethanol tax incentive was up for renewal in the late 1990s, then-Speaker Gingrich stacked a conference committee with ethanol supporters, causing House Ways and Means Chairman Bill Archer (R-Texas) to boycott the committee. The lawmakers struck down a provision in a highway and mass transit reauthorization bill that would have ended the subsidy.

A decade later, biofuels industry organization Growth Energy, which counts Broin of POET as a board member, hired Gingrich under contract between 2009 and early 2011. The group was just starting out and hired him “because we know of his record in Congress in support of ethanol,” said Chris Thorne, spokesman for the group.

Gingrich’s contract was first reported by the Center for Public Integrity’s iWatch News in April, which found that the biofuels group paid Gingrich’s consulting firm $312,500 in 2009.

“He’s smart, engaging and his time as a leader here is helpful to folks who are puzzling through how this town works,” Thorne said. “Newt gave his advice to us in calls and meetings, but his value to Growth Energy was his insight into how Washington, D.C., works.”

Thorne said that Gingrich never did any lobbying for the group. But Gingrich’s relationship with ethanol, and recent reports that his firm received $1.6 million from Freddie Mac over the past decade, have earned him criticism from some conservatives.

The Wall Street Journal in January wrote a biting editorial against Gingrich. More recently, on Nov. 20, George Will, conservative opinion writer for The Washington Post, criticized the former speaker on ABC’s “This Week.”

“People think his problem is his colorful personal life. He’s going to hope people concentrate on that, rather than on, for example, ethanol,” Will said. “Al Gore has recanted ethanol. Not Newt Gingrich, who has served the ethanol lobby.”

Gingrich’s views have also come under criticism from environmental groups, who would like to see the end of tax incentives for corn ethanol. The $6-billion-a-year blender tax incentive is set to expire at the end of this year; the Senate voted to end it earlier, but it was then left out of the debt deal passed during the summer.

Biofuels groups say they support ending the tax credit, but there are still many other federal measures that help the ethanol industry.

“If a politician is in support of free markets, then how can you support ethanol subsidies, especially in a time of federal deficits?” asked Sheila Karpf, legislative and policy analyst at Environmental Working Group. Karpf spoke of candidates in general, as the group does not comment on specific political campaigns.

Gingrich says that he would push for more support for flex-fuel infrastructure and vehicles. To be fair, Gingrich also says he supports not just ethanol but an all-of-the-above energy approach.

“I’m for drilling offshore, I am for the development of natural gas, I am for the use of coal,” he said at a Nov. 2 forum held by the National Manufacturers Association. “And I would encourage the development of green coal, carbon sequestration, using that for tertiary recovery in the oil fields.”

But earlier this year, Gingrich appeared critical of traditional energy amid celebrities and bipartisan politicians in the documentary “Freedom,” a celebration of ethanol’s role in the country.

“Big Oil doesn’t tell you how much we subsidize their safety around the world with American military,” he said in the film, “and Big Oil doesn’t tell you all the other things we do that are subsidies.”