Bloomberg News

First Solar Outspent BP in California While Building Support

December 28, 2011

(Updates with shares in eighth paragraph.)

Dec. 27 (Bloomberg) -- First Solar Inc., the maker of thin- film solar panels that cut jobs and lowered its profit forecast this month, has won government aid while cultivating political relationships from California to the White House.

First Solar is eliminating 60 jobs at a California research center after receiving $3.43 million in state sales-tax credits. The federal government provided $3 billion in loan guarantees to the Tempe, Arizona-based company, the most of any recipient

Government aid to renewable-energy companies and their lobbying efforts have been under scrutiny by lawmakers since the collapse of Solyndra LLC, a California maker of solar panels that filed for bankruptcy in September after winning $535 million in U.S. loan guarantees.

First Solar spent $2.2 million on lobbying in Washington since 2007 and representatives met Obama administration officials before winning the aid, government records show. In California, the company gave $150,000 to campaigns last year, more than triple the $38,750 donated by BP Plc’s North America unit, according to the secretary of state’s office.

“It’s a pretty substantial amount for an emerging tech company,” Phillip Ung, policy advocate for California Common Cause, a Sacramento-based group that tracks money in politics, said in an interview. “We can only assume they’re giving that much to legitimize themselves in the political system. Access got them some benefits.”

Ted Meyer, a company spokesman, declined in an interview to comment on the contributions or its public-policy agenda.

Worst Performer

First Solar, the worst performer in the Standard & Poor’s 500 Index this year after plummeting 73 percent in New York trading through Dec. 23, has been hurt by plunging prices for solar panels, Michael Ahearn, the chairman and acting chief executive officer, said on a conference call Dec. 14 about its decision to cut jobs and reduce its profit estimate for the year.

The company fell 3 percent to $33.64 at 10:24 a.m. in New York trading.

“Global production has effectively tripled over the last three years,” led by China, Ahearn said. Cheap Chinese imports also were cited by Solyndra of Fremont, California.

Republican lawmakers such as Representative Cliff Stearns of Florida have faulted President Barack Obama’s administration for picking “winners and losers” through government subsidies to alternative-energy companies.

Exelon, GE

While some of the U.S. aid to Solyndra may not be recouped by taxpayers, the $3 billion in backing to First Solar helped to develop three solar-power farms in California and Arizona.

The company then sold those projects to NRG Energy Inc.; Exelon Corp.; and NextEra Energy Inc. and General Electric Co. The power plants will create 1,300 construction jobs and save or create 45 permanent positions, according to the Energy Department. Warren Buffett’s MidAmerican Energy Holdings utility bought a 49 percent stake in the NRG project on Dec. 16.

First Solar’s $2.2 million in Washington lobbying to promote policies such as tax credits and renewable-energy mandates since 2007 is about $1 million more than was spent by Solyndra, which began lobbying in 2008, Senate records show. By comparison, Exxon Mobil Corp., largest U.S. oil company, spent $12.5 million in Washington lobbying last year alone, according to the records.

First Solar opened its own office in Washington last year, and its paid advocates included a former chief of staff to Senator Kent Conrad, the North Dakota Democrat who heads the Senate Budget Committee.

White House Dinner

First Solar executives, including Maja Wessels, the company’s director of public affairs, and Kathleen Weiss, the company’s lobbyist, met with administration officials, including Heather Zichal, an Obama adviser, before the loan guarantees were announced, White House visitor’s logs show.

Rob Gillette, First Solar’s chief executive officer until he was ousted in October, attended a White House state dinner for German Chancellor Angela Merkel on June 7, the records show. The company operates a manufacturing plant in Germany.

The records don’t say what was discussed at the White House meetings. Melanie Friedman, a company spokeswoman, said First Solar doesn’t comment on its executives’ schedules. A White House spokesman declined to comment.

First Solar executives and board members also have donated to federal political campaigns. Ahearn, who stepped down as CEO in 2009 to focus on influencing public policy, gave about $76,000 to Democratic candidates and campaign committees since 2008, according to the Center for Responsive Politics, a Washington-based group that tracks political giving.

‘Big Footprint’

“Clearly they are interested in having a big footprint in Washington,” Bill Allison, editorial director at Washington’s Sunlight Foundation, which promotes government transparency, said in an interview. Solar companies “have Washington built into their business models,” he said.

In California, First Solar donated $22,500 to Democratic Governor Jerry Brown’s election campaign in 2009 and last year $20,000 to Meg Whitman, his Republican opponent, according to records provided by the California secretary of state’s office. The company’s largest political donation, $50,000, went toward the defeat of a ballot measure that would have suspended environmental regulations intended to limit greenhouse-gas emissions.

California Lobbying

First Solar employs KP Public Affairs, the second-largest lobbying firm in California’s capital by earnings, to represent it, according to forms filed with the secretary of state. The forms don’t show how much First Solar spent on lobbying in California.

The California Alternative Energy and Advanced Transportation Financing Authority awarded First Solar $3.4 million in tax breaks in November 2010 under a program intended to stimulate the development of alternative energy sources. Among the authority’s five members are state Treasurer Bill Lockyer and Ana Matosantos, state finance director under Brown.

“First Solar was firmly established in California, known to us, and viewed as a credible firm long before they came to” the financing authority for the tax credits, Tom Dresslar, a spokesman for Lockyer, who didn’t receive campaign funds from the company, said in an interview. “They haven’t lobbied Lockyer or anyone on his staff. Lobbying activity and political influence played no role whatsoever in the decision.”

First Solar appears to have been truthful in its application for state tax breaks and probably won’t have to reimburse the state now that it’s cutting jobs, Dresslar said.

--Editors: Larry Liebert, Steve Geimann

To contact the reporters on this story: James Nash in Sacramento at jnash24@bloomberg.net; Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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