Political Hay

The Windsurfer’s Windfall

John Kerry stands to enrich both large corporations and himself if his version of energy reform becomes law.

By 6.29.10

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Last year, in his ongoing struggle to remain relevant, Senator John Kerry (D-Mass) took the legislative reins on the contentious issue of climate change. Now Kerry, against the backdrop of an oil-soaked Gulf, is hoping to ride the current crisis to push his American Power Act to the top of the Democrats' legislative agenda and propel himself back into the national spotlight.

Tuesday's White House meeting with key administration officials and senators presents Kerry with his best chance to convince the Democratic leadership that his APA will end U.S. dependence on foreign oil while simultaneously encouraging economic growth and job creation. 

Kerry has campaigned unusually hard for the bill, berating Senate colleagues on both sides of the aisle, often cornering and lecturing them on the imminent perils of climate change and the necessity of his bill. "He's so obsessed," one beleaguered Democratic senator told Politico. "Clearly it's all climate, all the time with him." A former Senate Democratic aide was asked if he knew the source of Kerry's persistence. "He's not the centrist who normally does the kinds of deals like this," the aide responded. "It's unclear why he's emerged as a central player on climate other than his interest in the subject." 

The APA propaganda touts the bill's carbon-pricing measures with a pledge to cut carbon emissions 17% by 2020. As William Yeatman and Jeremy Lott pointed out earlier this month, the APA's "global warming pollution reduction scheme" and its "linked fee" for transportation costs will dramatically increase energy costs, destined to fall heavily on consumers. But what separates the APA from other energy reform proposals is its lavish subsidies to large energy firms to help them develop alternative energies, particularly nuclear.

Senator Kerry's belief in nuclear energy, a dirty word among liberals, signifies a break from his usual party line and a willingness to work with big businesses to spur alternative energy creation -- the "centrist" position to which the former aide referred. The APA would grant large energy firms between $1.3 billion and $3 billion in subsidies per nuclear reactor and would extend $54 billion in guaranteed loans "to spur the domestic production of nuclear parts," according to a study by EarthTract. As Yeatman and Lott put it, "These businesses stand to make a killing if the bill passes." But they're not the only ones. As Senator Kerry's recently released financial disclosure statements reveal, he too will get a big piece of the action if his legislation succeeds. 

According to Senator Kerry's statements for the last fiscal year, as of December 31, 2009, he and his wife owned large stakes in numerous prominent energy companies, many of which are currently lobbying Congress for legislation aimed at energy reform and stand the most to gain from passage of the APA. Yeatman and Lott singled out GE, BP, ConocoPhillips, Dupont, and Exelon as among the big winners in the APA scheme. GE in particular has been a staunch advocate of the APA. Surprisingly, or not, Kerry holds about $20 million worth of investments in all of these companies, among a slew of other energy sector giants.

For example, Senator Kerry reported owning up to $750,000 in GE; BP shares valued between $350,000 and $750,000; upwards of $350,000 in Petrobras (the state-owned Brazilian oil powerhouse); $100,000 in Suncor Energy; $500,000 in Rio Tinto; $650,000 in ConocoPhillips; $750,000 in Total (an offshore oil, natural gas, and alternative energy company); $500,000 each in Dresser-Rand Group and Consol Energy; and as much as $1,000,000 each in Ultra Petroleum Corp, Chicago Bridge and Iron, Newfield Exploration Inc., Noble Energy Inc., Roper Industries, Smith International Inc., Thermo Fisher Scientific, Ansys Inc., and Praxair Inc. 

From these investments Kerry accrued anywhere from $753,000 to roughly $5 million in unearned income from dividends and capital gains in the last year alone. In one instance, Senator Kerry sold his stake in Apache Corp. for a nifty dividend of up to $1 million. Kerry was not available for comment on this story. 

Such investments among lawmakers are all too common. The Washington Post recently reported that almost across the board, congressmen hold a disproportionately high amount of assets in those industries they directly regulate or craft legislation for. For example, those on the House Agriculture Committee held larger than average holdings in agriculture. Key members of the Senate Banking, Housing, and Urban Affairs Committee, the House Homeland Security Committee, and the House Energy and Commerce Committee held above average holdings in the industries under their jurisdiction.

As the Post points out, "The patterns are important because committee chairmen and ranking members have more power than their colleagues to raise questions, hold hearings and push through targeted legislation that in some cases governs the industries in which they have investments."

It may be business-as-usual in Washington, but it also raises the question of the need of greater transparency in Congress in order at least to expose if not prevent such blatant conflicts of interest. It's hard to believe anyone can feign ignorance of or claim ambivalence toward $20 million in investments in corporations that stand to profit handsomely from the very legislation one is pushing. Not even if you're John Kerry.


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About the Author

Max Brindle is an NJC intern at The American Spectator.