How to Make an Easy $875,000
No experience or special skills are required. You don’t even need good credit. But you are going to need a post office box and a (preferably catchy) company name.
Looks like some of the good citizens of North Carolina are up in arms because $875,000 in taxpayer dollars is being given to a person with absolutely no experience (but a catchy company name) to build an ethanol plant. The backer of the plant is an Indian billionaire (but not Vinod Khosla). Here are some excerpts from an article discussing the controversy, Passing Bad Gas:
E85 is described as a Delaware-based corporation with corporate offices in the Seattle area. What the CCBC has not publicly disclosed, perhaps because they do not know, is that E85 corporate headquarters is the private residence of Mark Dassel in Indianola, Wash. The corporate staff consists of Mr. And Mrs. Dassel.
An investigation earlier this month indicated that the county property taxes on this house were in arrears. Also the corporate address is a post office box with no listed corporate telephone number. The Dassels have a listed telephone. So much for E85. Would you buy stock in this company or a used car from Mr. Dassel? Neither would I.
Bill Martin, CCBC [Cumberland County Business Council] president was quoted in a December 29, 2006 newspaper article as saying “he knew E85 had a foreign affiliation but he did not know the specifics” Come again? If your job is to research a prospect before it is recommended to local government for funding, how could you not “know the specifics?” How could you not know that Mr. Sivasankaran (a.k.a. Mr. Siva for us occidentals) is an Asian Indian billionaire, and a corporate raider and trader who has zero, zip, nada experience in building and operating ethanol plants? His lieutenant Mark Dassel, spokesperson for E85, has none either. But let’s give them $875,000 anyway. Else we might lose this splendid opportunity to further screw up our local environment.
The air quality permit was issued two months and 12 days after it was applied for by a state agency with absolutely no experience with the construction or operation of ethanol plants. The County Commissioners have made no public statements indicating any concerns about the hazards this plant will pose or the absolutely negative effect the plant will have on the environment in our community. All they have said is that $875,000 of your money and mine will be awarded to a foreign billionaire.
Linda Devore also weighed in on this in her blog in the Fayetteville Observer:
E85, the company-on-paper located in the personal residence of Mr. and Mrs. Mark Dassel in Indianola, WA, wants to begin its first ever business venture in
Cumberland County, NC. Neither the company nor the Dassels have ever built an ethanol plant before–but with our cash, PWC giveaways, and federal tax credits–they are willing to give it a try. This isn’t a unique undertaking.
Proposals for ethanol plants are popping up all over the country–especially in areas that have never seen an ethanol plant up close and personal. Federal tax credits are the reason, and the naive residents of small, desperate, economically-depressed communities are the target.
This is the kind of thing that often happens when the government throws lots of money at a problem without conducting the proper due diligence. It reminded me of the situation after Hurricane Katrina where they were giving money to everyone claiming to have been affected. The first time I heard that, I said to my wife “It won’t be long before you start hearing about all kinds of fraud.” And that is exactly what happened.
About $1 billion in relief meant for victims of Hurricane Katrina was lost to fraud, with bogus claimants spending the money on Hawaiian holidays, football tickets, diamond jewellery and Girls Gone Wild porn videos, the US Congress was told yesterday.
The fraud, exposed through an audit by the Government Accountability Office, found a staggering amount of abuse of the housing assistance and debit cards given out by the beleaguered Federal Emergency Management Agency as a way of granting relief to those who lost their homes to Katrina.
“Fema paid over $20,000 to an inmate who used a post office box as his damaged property,” Gregory Kutz, the GAO’s director of audits, told the committee.
The audacity of the fraud exposed shocked the congressional committee yesterday. As much as 16% of the relief distributed by the agency was lost to fraud, the auditors said. They also said it was likely they were underestimating the scope of the fraud.
This happens when due diligence is not carried out. In our rush to build ethanol plants, taxpayers will lose money to opportunists who don’t know the first thing about making ethanol. They just smell money. Unqualified people are going go to step forward to grab a piece of the action.
I saw the same thing following my ethanol testimony at the Montana legislature. I talked to a lot of people afterward who were trying to secure funding to build an ethanol plant. After visiting with some of them, it became apparent that many were way over their heads and didn’t even know the most basic information, yet because funding was being offered they thought they would step up and get some. Usually, this sort of thing gets sniffed out before governments start handing them loads of money. But not always.
I guess I should start brainstorming catchy company names and then apply for funding. I wonder if “Cellulosic” is taken?