< HOME  Sunday, October 03, 2010

Peace talks are a farce: Obama gives zionist BrightSource, a contributor to Bedouin ethnic cleansing, $1 billion in loans

Obama's use of Weekly Address to boost Israel-based "clean energy" firm may constitute inappropriate support for stock market launch.

by Ali Abunimah

On this blog yesterday, I reported how President Barack Obama used his Weekly Address to promote a firm called BrightSource which is benefiting from US government financial support to set up solar power generating plants in California. Obama claimed that BrightSource is an example of home-grown ingenuity and job creation, a pioneering project for a green economy. (See: "Obama uses Weekly Address to lobby for Israeli firm BrightSource")

BrightSource has received more than one billion dollars in subsidized loans from the Obama administration.

What Obama did not disclose is that in fact BrightSource was founded in Israel, where most of its operations still take place, including all of its research and development. The firm is currently hiring more people in Israel than the US, and the jobs it will create in the US would appear to be temporary, lower-skilled construction jobs, not high tech. Moreover, the firm -- like many other Israeli companies that seek to greenwash themselves with environmental credentials -- has close ties to Israel's military.

While BrightSource claims to have pioneered unique solar technologies, its inventions are proprietary and difficult to verify. What we do know is that before it was BrightSource, the company was called Luz Industries - also founded and based in Israel. Luz which had built solar plants in the U.S. for years filed for bankruptcy in 1991.

Yet another disturbing angle to this story has emerged. BrightSource has, according to media reports been "quietly" preparing for an IPO - an initial public offering. It is surely inappropriate for Obama to have used his Weekly Address to boost the firm under these circumstances.

An IPO is the process by which a privately-held company sells shares to the public, usually large institutional investors such as pension funds. The immediate beneficiaries of the IPO are the current private owners who usually receive huge payoffs and the investment banks that are hired to carry out the IPO and recruit potential investors ("BrightSource Energy quietly moves toward IPO in 2011," 22 September 2010).

According to Reuters the investment banks retained to prepare for BrightSource's IPO are Morgan Stanley and Goldman Sachs -- both beneficiaries of government bailouts and largesse. Goldman Sachs is particularly notorious for its incestuous insider relationship with successive US administrations including Obama's.

Obama's Weekly Address (transcript) touting the supposed virtues of BrightSource can now in effect be used as a commercial to sign up large investors for a BrightSource IPO. The explicit backing and prestige of the President of the United States will no doubt be a great selling point for some investors and has potentially greatly boosted the market value of BrightSource when it goes public, despite its unproven technologies and its reliance on US government financial support.

The website Israeli21c which boosts Israeli high tech companies, including BrightSource, celebrated Obama's "endorsement" of BrightSource and called it a "feather in its cap" as the firm reportedly prepares for an IPO.

Obama apparently knows that it is not exactly appropriate for a president to wade into an IPO -- because of the market implications. In August, Obama was asked by CNBC's Phil LeBeau about a potential IPO of General Motors (GM) which was taken over by the government to stave off bankruptcy. Look at this exchange:

But there's an interesting question about the GM IPO many investors would like the President to address. Why not make the GM IPO open to taxpayers? After all, the taxpayer money (almost $50 billion) saved GM. Shouldn't they get a chance to truly own GM and profit if it succeeds?

When I asked President Obama this question, he said, "Well, here's the thing about the IPO. I am hesitant to talk about details on an IPO because it has to go through the Securities & Exchange Commission process of registration and so forth, so I've got to be careful where I tread here."

The President added, "GM has indicated that it is going to move forward with an IPO at some point later this year. When it does so, we expect that taxpayers will get back all the money that my administration has invested in GM. Over time, that is going to be extraordinarily significant, because what it means is we've stood up for this industry, and you know what, we got a good return. But the general point about who's participating in the IPO, who can potentially be an owner in this company and also make some money on that investment over the long-term, beyond my looking out for the interests of taxpayers, I've got to be careful about what I say as regarding individual investors."

So I pressed the President again, "But would you be open to the idea of a Dutch auction, if you will, an open IPO so that the average investor might have an opportunity?"

This time the President was more direct saying, "You're not going to get anything out of me on this one because as I said, I want to make sure that we are not breaching any registration rules or any requirements on the SEC. What I know is that as a general proposition, taxpayers can be made whole as a consequence of the good decisions that we made last year, even though those decisions were unpopular."

While I understand the Presidents position about not commenting on GM's IPO, it is a fair question that should be addressed by someone in Washington. If there are specific reasons for not having an open IPO, tell us what those reasons are so people will understand.

("One on One With Obama--The President Steers Clear of GM IPO Issue," 5 August 2010)

In his Weekly Address, Obama did not say anything about a BrightSource IPO, but nevertheless his boosterism about the company in a presidential address clearly has market implications. Obama's intervention on behalf of BrightSource seems particularly odd and inappropriate. He touted it as an example of creating American jobs with American technological ingenuity, and specifically warned against allowing jobs and "competitive advantage" to flow to India, China or other foreign countries. But as an example of supporting domestic clean energy industries, BrightSource is at best a dubious case. Many of the jobs will be created and stay in Israel, and the high-tech benefits and patents are also being developed in Israel.

How much does Obama know about BrightSource? Who is benefitting and what benefits will his administration receive for shamelessly promoting private interests under the guise of helping the US economy?

The blog Future of Capitalism raises some other pertinent question regarding Obama's support for BrightSource:

The Brightsource Energy Web site lists the company's investors, including Chevron, BP, and Morgan Stanley. Sometimes it's hard to follow this president. Half the time he's telling us that Morgan Stanley are Wall Street "fat cats" who don't deserve tax cuts and that BP is responsible for the worst man-made environmental disaster in American history; then he turns around and tells us that the rest of us taxpayers ought to be subsidizing some investment that BP and Morgan Stanley have made in some solar energy company. If this solar energy is such a great idea, can't BP, Chevron, Morgan Stanley, and the other investors find a way to make it a success without help from the taxpayers?

Good questions indeed. Don't expect "real" journalists to ask them, or for Obama to answer them any time soon.

Displacing Palestinians and Native Americans

BrightSource has developed its technology in the Negev desert in southern Israel, an area where Israel has over decades ruthlessly ethnically cleansed the indigenous Bedouin people in an ongoing process. It would appear that the company's Obama-administration financed project in California's Mojave Desert threatens indigenous people there as well. In September, members of the Colorado River Indian Tribe protested the BrightSource project. Phillip Smith, a Chemehuevi elder told the Las Vegas Review-Journal that the project would destroy the habitat in which his people and the local wildlife have lived for centuries:

Smith said the project threatens the tribes' heritage and the habitat shared by federally protected desert tortoises, bighorn sheep, mountain lions, hawks, snakes, and many sensitive and medicinal plants.

"They're getting squeezed out. We're their protectors," said Smith, 73, in a soft, deliberate voice.

Van Fleet added, "Ants, rats, turtles, nobody speaks for them."

Smith wore a black hat with a shiny, abalone shell resting on its brim. Another shell dangled from a string of beads worn around his neck.

The creature that lived in the abalone shell "lived in that for protection," he said. "And the turtle lives in his shell for protection."

He said what the company's project will do is destroy their homes to profit from the sun's cheap power.

"It's fast money. It's all fast money," said Smith, of Needles, Calif.

"There's hawks, there's snakes. They live here. We live here," he said. "You've got to remember there was no L.A. There was no Las Vegas. Where do you think we lived?"

Related Stories:


Post a Comment

<< Home