Topics: Barack Obama

Obama appointee subsidizes electric bus company, then goes to work for it

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Opinion,Transportation,Timothy P. Carney,Columnists,Barack Obama,Ethics,Revolving Door,Electric Vehicles

Washington's green revolving door keeps on spinning.

President Obama’s Secretary of Transportation Ray LaHood has left the administration and joined the board of an electric bus company he subsidized and praised while in office.

Proterra Inc. makes buses that require no gasoline or diesel – they run on electricity and fuel cells.

You can see why electric buses would appeal to cities that want to clean the air and reduce fuel usage: City buses run a predictable number of miles a day, averting worries about dead batteries. Also, a fleet of buses creates economies of scale that can make recharging infrastructure economical.

Proterra is the leading U.S.-based manufacturer of electric buses. Like most green-technology companies, it receives taxpayer subsidies from many federal, state and local programs.

Under the Bush administration, the Federal Transit Administration - a unit of the U.S. Department of Transportation - gave $49 million in grants to a program aimed at developing fuel-cell powered buses. Proterra was the leading manufacturer in the program.

South Carolina in recent years provided cheap financing for Proterra: $12.5 million in loans funded by Obama’s stimulus.

According to a 2011 DOT press release, Proterra received a “$6.5 million research grant provided by the U.S. Department of Transportation's Federal Transit Administration.”

On top of all this, LaHood's department subsidized Proterra through grants to municipalities that buy electric buses. These grants to local transit authorities cover 80 percent of the cost of a battery-powered electric bus.

In September 2012, for instance, the Worcester Regional Transit Authority in Massachusetts bought three Proterra buses with $4.4 million in DOT grants.

Most of Proterra's sales are subsidized. “The majority of transit agencies buy with federal funds, which cover about 80 percent of the cost,” explained Proterra Vice President Ian Shackleton in a company publication in March 2013.

Given DOT’s generous support for Proterra, it’s no wonder LaHood has been so cozy with the company. In October 2009, Proterra executives brought one of their buses to D.C. as part of a lobbying trip. LaHood rode the bus sitting next to Proterra founder Dale Hill.

In January 2011, LaHood traveled to Proterra's South Carolina plant and sang the company's praises - and his own.

“I’m proud that the Department of Transportation and Federal Transit Administration were able to help this remarkable American business get going,” he said at the factory. “FTA provided crucial seed money for Proterra’s R&D. And we gave additional resources that helped your suppliers manufacture the materials and components necessary to make both sophisticated electric batteries and the charging stations that go with them.”

LaHood also put his name on a blog post headlined, “Winning the Future, Proterra Style.” “Winning the Future” was the slogan in those days for Obama's industrial policy, and had been the refrain of his State of the Union address two days earlier.

LaHood wrote: “When the president said that America's small businesses need to out-innovate, out-educate, and out-build their competition, he must have had Proterra in mind ... ” LaHood also waxed enthusiastically about how “government can deliver the extra little boost” to companies like Proterra.

One fruit of these subsidies, LaHood said, was jobs. “One of Proterra's good jobs went to Julie Shepherd. Julie is a single mother….”

Now, three years later, one of Proterra’s good jobs has gone to Ray LaHood.

On Feb. 18, Proterra announced that LaHood, who left DOT last year, was joining the company's board of directors. “LaHood's government experience and leadership in transportation policy innovation make him an excellent fit for Proterra,” the company said in a news release. He will be paid not in cash but in stock in 2018 if the company successfully goes public, according to a spokesman for LaHood.

Proterra wrote: “During his time as secretary, LaHood was an avid supporter of EV transit, leading the Federal Transit Administration’s Clean Fuels Program, which was used to help fund the purchase of EV buses by several cities across the country.”

So LaHood used his power as a top government official to give taxpayer money to Proterra. Now he stands to personally benefit if the company succeeds.

A DOT spokesman also did not respond to my request for comment by press time.

Federal ethics rules prohibit LaHood from lobbying for the time being, but they don't stop him from taking compensation from Proterra, publicly advocating for the company, or providing lobbying advice.

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UPDATED: This piece, originally published at 5:21 p.m. on Feb. 25, has been updated to reflect LaHood's compensation arrangement with Proterra. Also, this piece originally reported that a Proterra spokeswoman had directed me to Williams & Connolly for comment. It turns out LaHood doesn't have a relationship with Williams & Connolly.

Timothy P. Carney, The Washington Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Sunday and Wednesday on washingtonexaminer.com.

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