Last month, Biden took a virtual tour of Proterra, a company where Granholm holds multi-million dollar vested stock options that was previously on the board of directors. During the tour, Biden praised the staff and the CEO for their work in the electric vehicle space.
“Chairman, let me have something to say to you quickly. The fact is, you make me look good,” Biden told the company’s chief executive, before promising to return in person at a later date. “I used to have a friend who said it was always great to be good and good – you do both, mate. You really are.”
Despite the hundreds of electric vehicle-related companies in the U.S., Harris also toured a Proterra partner, and Proterra’s CEO Jack Allen later attended a meeting at the U.S. government’s climate change summit.
The fact that Granholm even promoted electronic cars as part of the government’s climate protection is already ethically questionable, according to experts, but Biden and Harris’ direct emphasis on Proterra is even more problematic, as it increases the company’s value in the IPO and increases Granholms could be profits.
“Proterra was selected for the virtual visit that day because it is the leading US electric bus manufacturer and employs 600 people in its plants in South Carolina and California,” said a senior administrator of Biden’s visit. “Neither Secretary Granholm nor the Department of Energy were involved in the selection of the Proterra plant.”
‘Money in the bank’
Visits like Biden and Harris can be a boon for companies like Proterra, says Jonathan Macey, professor of corporate, securities and finance at Yale Law School.
“It’s like money in the bank,” he said, adding that Biden’s comments did a great favor to anyone with a legitimate interest in the company.
When asked about the conflict of interest in a recent interview, the former Democratic governor of Michigan said she had “nothing to do with Biden’s tour.” She also re-committed to dispose of her stock options – something she committed to within 180 days in the ethics agreement she signed upon joining the administration.
Despite the fact that the company is about to go public, their plan to deliver on that promise has not been revealed.
Last week, Wyoming Senator John Barrasso, the top Republican on the Senate’s Energy and Natural Resources Committee, called for an investigation into possible conflicts of interest in Granholm’s Proterra investments and government funding for electric vehicles. Proterra also makes electric buses, as well as a range of products for electric vehicles, including batteries and electric charging systems.
“Given this status, the investment value of up to $ 5 million that Secretary Granholm continues to hold in Proterra, Inc., given her personal and substantial involvement in an aggressive, far-reaching, and relentless public relations campaign for EV promotion, is to increase. Batteries and charging infrastructure, their leadership in promoting President Biden’s American employment plan, including a proposal to spend $ 174 billion to win the EV market, Barrasso wrote.
“Secretary Granholm has acted in full compliance with the comprehensive ethical standards of the Biden administration,” a spokesman for the energy department told CNN. “She is in the process of selling all interests in the company within the 180-day period set out in her ethics agreement.”
Granholm did not provide a direct response to CNN’s requests for comment.
Make public
Granholm will soon see a sizeable payday as Proterra is slated to go public in the first half of 2021, according to a company statement. In her ethics agreement, the former governor pledged to sell her Proterra stock options “as much as possible but no later than 180 days after” its confirmation in February – a schedule that is within the 180 days.
Also in the agreement, Granholm vowed “not to participate personally and essentially in any specific matter that concerns this.” [her] Knowledge has a direct and predictable impact on Proterra’s financial interests “until it is sold or received a written waiver.
“The high risk areas would be things like regulating electric cars, as that would naturally increase or decrease the demand for electric charging stations,” said Richard Painter, chief ethics attorney for the White House under George W. Bush. “The only alternative is to stay completely away from the automotive industry, electric vehicles and other areas where these (Proterra) batteries could be useful.”
But Granholm has repeatedly promoted electric vehicles since taking office. Last Thursday, the Department of Energy released a statement that the agency had awarded $ 19 million to projects “in traditional fossil fuel communities” in the US to encourage the production of items essential to the “clean energy economy.” . According to Granholm, this included electric vehicles and batteries.
“The same fossil fuel communities that have powered our country for decades can be at the forefront of the clean energy economy by producing the critical minerals needed to build electric vehicles, wind turbines and more,” Granholm said in the explanation.
On April 23, Granholm announced that the energy department would present new targets to “lower the cost of next-generation clean energy technologies, including: clean, renewable hydrogen, battery cells for electric vehicles and energy storage, and industrial and atmospheric carbon capture.”
Proterra declined to comment on Granholm’s stock options with the company, how an IPO would affect them, or the Energy Secretary’s divestment plan.
“When a company goes public, its stocks are generally undervalued and the stock price rises after the IPO so people can sell for a profit,” Macey said, adding that a company’s stock options become more liquid and easier when one Company goes public to sell. “The fact is, when you go public, stocks get liquid, which makes stock options more valuable.”
Gray area
While the STOCK Act of 2012 restricts federal officials from participating in an initial public offering (IPO), Proterra is going public through a new and less regulated maneuver – the merger with a special purpose vehicle (SPAC). This potentially creates an ethical gray area that neither the White House nor the Energy Department have explained how Granholm will handle it.
A SPAC is a shell company with the sole purpose of buying a private company and bringing it public through an acquisition. While an IPO takes time, as the company’s financials are reviewed, banks do the underwriting, and then government regulations go into effect, SPACs can bypass most of it as they have no underlying operating business and therefore no outside assets the fund’s investors have.
While a federal official cannot participate in an IPO, there is no language that indicates whether or not participation in a SPAC is prohibited.
Granholm isn’t the first high-profile government official to come under fire for his stock options.
In 2017, the new Secretary of State Rex Tillerson, the former CEO of ExxonMobil, reached an agreement with his former firm that allowed Tillerson to sell millions of Exxon shares and receive a significant tax break.
Last year when the White House named Moncef Slaoui, a former Moderna executive, to head Operation Warp Speed, the businessman stepped down from the company’s board of directors and sold millions of stock options. Slaoui has been criticized for the profits his shares had made prior to his sale. A spokesman for the Department of Health and Human Services at the time said he would donate those funds to cancer research.
