Op-Ed: Conflict of Interest, Cronyism Dog Hydrogen Highway

Sunday, 18 May 2014, 8:00:00 AM

Tom Elias

Thomas B. Elias, Columnist
Santa Monica Mirror Archives
Thomas B. Elias, Columnist

Looking for a new reason to

distrust a state government that won’t even expel legislators when they’ve been

indicted or convicted?

Then examine $46.5 million

in grants announced by the state Energy Commission in early May for building

refueling stations to serve the hydrogen-powered cars due to appear on

California roads as early as next year. These grants thoroughly pollute the coming

hydrogen highway.

Fully 58 percent of the

money – $27.5 million – will go to one company if the commission gives its

final approval. Action was due May 14 (Editors:

say Wednesday here if running this on or before May 20), with the commission’s agenda estimating it would need just 10

minutes to dole out the funds.

What’s wrong with that? The

company getting all that cash – from vehicle license fees – is FirstElement

Fuel, which has never built or managed anything. Its co-president is Dr. Tim

Brown, until last Oct. 1 a senior scientist in the Advanced Power and Energy Program at UC


While there, Brown was the

principal designer of the Energy Commission’s map for placement of hydrogen

stations, most to consist of pumps added into existing service stations. Under

a contract with UCI, Brown also trained Energy Commission staffers on how to

use the material he developed for the commission. Some of those staffers

evaluated grant applications this spring.

If these obvious conflicts

of interest aren’t problematic enough, there’s also the fact FirstElement filed

a 900-page grant application barely four months after Brown left UCI. It

included commitments from more than 20 service stations to allow FirstElement

to install hydrogen pumps. Officials of competing companies say it’s

unprecedented to recruit so many stations and develop a 900-page proposal in so

little time.

About one week after this

column revealed in early March that Brown had applied for tens of millions of

grant dollars under a system he essentially designed, the Energy Commission

requested a written opinion from the state Fair Political Practices Commission

on whether Brown was in conflict of interest. In its 40-year history, the

Energy Commission never before requested such an opinion.

That opinion emerged as a

rubber-stamp document filled with legal sophistry. Example: “Dr. Brown was an

employee of UC Irvine while operating under a contract with the Energy Commission.

The research and education that the Energy Commission gained during that

contract might have informed (his grant application), but we cannot say the

contracts are the same or even that one necessarily led into the other,” the

FPPC said. Translation: the state’s ethics watchdog says Brown can receive the

state money because it can’t prove he drew the map to benefit himself. Even if

this was possible.

Of course, the state

Supreme Court in 1980 ruled that conflict of interest laws are intended “not

only to strike at actual impropriety, but also to strike at the appearance of

impropriety.” The FPPC cited this passage, but then paid it no heed. FPPC

general counsel Zackery (cq) Morazzini refused to answer questions about the

ruling, as did Brown, his attorney and Energy Commission officials.

Then there’s the fact that

FirstElement’s proposal exposed the new company as something like a surrogate

for the large international commercial fuel firm Air Products and Chemicals,

which saw grants of its own pulled back by the Energy Commission after this

column in 2012 revealed a pattern of cronyism in that year’s awards.

FirstElement’s proposal

says the company is a “consortium of  partners,” with financing from Toyota Motor Sales and all

equipment  and hydrogen fuel to

come from Air Products, which will also install the pumps. Executives of Air

Products and Toyota for years have attended meetings of the California Fuel

Cell Partnership (annual dues: $87,000) with Energy Commission staffers. This

was part of what led to the earlier allegations of cronyism.

So contrary to the FPPC’s

convoluted opinion, the large new grants to Brown and FirstElement reek of

conflict of interest and a revival of cronyism.

Which means that if the

Energy Commission, as expected, gives final approval to the announced grants,

Californians will have a dirty hydrogen highway and one more

multi-million-dollar reason to distrust state government.

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