Al Gore has thrived as green-tech investor
By Carol D. Leonnig
October 10, 2012 Email the author
Before a rapt audience, Al Gore flashed slides
on a giant screen bearing the logos of 11 clean energy companies he predicted could help slow climate change.
“We can’t wait. . . . We have a planetary emergency,” the former vice president told industry leaders and scientists at the 2008 conference. “Here are just a few of the investments that I personally think make sense.”
Today, several of those clean tech firms are thriving, including a solar energy start-up and a Spanish utility company that has dotted rural America with hundreds of wind turbines.
Al Gore is thriving, too.
The man who was within sight of the presidency 12 years ago has transformed himself, becoming perhaps the world’s most renowned crusader on climate change and a highly successful green-tech investor.
Gore's green investments
Just before leaving public office in 2001, Gore reported assets of less than $2 million; today, his wealth is estimated at $100 million.
Gore charted this path by returning to his longtime passion — clean energy. He benefited from a powerful resume and a constellation of friends in the investment world and in Washington. And four years ago, his portfolio aligned smoothly with the agenda of an incoming administration and its plan to spend billions in stimulus funds on alternative energy.
The recovering politician was pushing the right cause at the perfect time.
Fourteen green-tech firms in which Gore invested received or directly benefited from more than $2.5 billion in loans, grants and tax breaks, part of President Obama’s historic push to seed a U.S. renewable-energy industry with public money.
Over the course of his metamorphosis, Gore became an environmentalist hero with release of his award-winning film and book warning of carbon emissions dangerously overheating the planet. He founded an investment firm devoted in part to backing green-minded companies and later partnered with a leading venture capital firm to invest in clean energy start-ups.
“We have work to do!” Gore recently exhorted an audience while showing his trademark slide show about melting polar ice caps and the urgent need to stop burning so much oil and gas.
That declaration, his friends say, captures his obsession — he’s unable to rest in his self-appointed mission to save the planet.
“Maybe there’s someone as knowledgeable and passionate about climate change. I just haven’t met that person,” said Orin Kramer, a leading New York hedge fund manager, friend of Gore and top Democratic campaign bundler. “His schedule is intensely busy, and my sense is he lives a life that profoundly reflects his values and passions.”
In building his new career, Gore’s name has become ensnared in a broader criticism from Republicans, who put him among political allies they say the Obama administration has unjustly enriched with stimulus and clean-energy funding.
In last week’s presidential debate, Romney criticized the $90 billion that went to promote green technology, saying a number of businesses owned by Obama campaign contributors were winners.
Gore declined to be interviewed, but spokeswoman Betsy McManus said he had not asked the administration for support for any companies in which he had invested. “For almost 40 years, he has consistently advocated for the rapid deployment of renewable energy and other sustainability technologies,” she said. “His investments are consistent with his beliefs.”
White House officials have rejected charges of favoritism.
“These are merit-based decisions made by professionals with the relevant policy expertise,” White House spokesman Eric Schultz said.
One of the rare times Gore addressed the questions, at a congressional hearing in 2009, Republicans had suggested that Obama’s agenda appeared destined to help him become the nation’s first “carbon billionaire.”
Gore bristled when Rep. Marsha Blackburn (R-Tenn.) asked if he stood to profit from his investments and political connections.
“I believe that the transition to a green economy is good for our economy and good for all of us, and I have invested in it,” he said. “And, congresswoman, if you believe that the reason I have been working on this issue for 30 years is because of greed, you don’t know me.”
Gore, 63, divides most of his time now between his home in Nashville and a St. Regis tower apartment
in San Francisco, where he can visit his West Coast investment partnership and see his new girlfriend
, an environmental activist. (He and his wife
of 40 years, Tipper, separated
two years ago. She lives in the $8.9 million mansion they bought in 2010 outside Santa Barbara.)
His schedule includes international travel as well, often delivering speeches for fees that have reached as high as $175,000.
It is a huge shift from a decade ago, when Gore was considered a Washington lifer. The Tennessean was largely raised in the nation’s capital as the son of a U.S. senator. As his father had hoped, Albert Arnold Gore Jr. went on to serve in office for 24 years: 16 years in Congress and eight as vice president under President Bill Clinton.
His loss to George W. Bush in 2000 was personally devastating, and Gore went into a kind of mourning, friends say.
“The way he coped with the 2000 disaster was to throw himself into this new work,” said Elaine Kamarck, a former Clinton aide and friend of Gore who was chief policy adviser on his 2000 campaign. “He just didn’t lick his wounds and go away.”
Gore eventually turned the painful experience into a punchline. He didn’t miss a beat when a conference organizer in 2008 confessed it “hurts” to think of the environmental agenda that could have been, if only Gore had won.“You have no
idea,” he said in a deep baritone of mock grief.
By then, Gore had won a Nobel Prize and Oscar for his 2006 book and movie, “An Inconvenient Truth.
” Supporters had begun hailing him as the single most effective spokesman on the threat of climate change.
With his prize winnings, Gore created the Alliance for Climate Protection, an advocacy group that ran ads warning of looming climate change. In the process, he gained high-placed admirers and business associates in Silicon Valley.
Gore entered the investment world full time by co-founding Generation Investment Management, a London-based investment firm. He was the type of high-profile partner sought by Goldman Sachs executive David Blood, who had headed Goldman’s $325 billion asset management division and was looking to start a new firm. The pair launched GIM in 2004 to back companies focused on sustainability, including clean energy, water scarcity and poverty.
GIM also invested in established companies such as Colgate Palmolive and John Deere, as well as medical technology, Internet and other businesses. Within three years, the firm was managing $1 billion.
Gore also found himself to be a sought-after star among elite Silicon Valley investors. In late 2007, he became a senior investment partner at one of the world’s most successful venture capital firms, Kleiner Perkins. He was combining forces with longtime friend John Doerr in a joint mission to spur clean tech.
Doerr had won legendary status at Kleiner by betting early on the meteoric rise of Internet start-ups Google and Amazon. But by 2007, he had switched his bets to green energy and vowed to raise $500 million to invest in what he called the next “mother of all markets.”
Gore and Doerr began comparing notes about start-ups with promise in renewable energy, including biofuels, advanced batteries and solar.
His friends and colleagues say Gore is relishing his new role and has remarked that he feels lucky to be doing something he loves and enjoying financial success.
Kramer, who serves on Gore’s climate change advocacy group, said he has watched with amazement as Gore debates obscure research with a room full of scientists.
“He knows the studies they’re citing and the three other studies which shed a different light on it,” Kramer said.
Eight years after losing the presidential race, with Bush in the final stretch of his administration, Gore was working hard to build support in Washington for his cause. By then a rising green investor, he was keenly focused on shaping policy should a Democrat win in 2008.
Before the election, Gore launched a public campaign known as “Repower America,” aimed at encouraging the public and the next administration to support government investments in clean energy
. His Alliance for Climate Protection was running numerous ads, and he delivered speeches laying out his goal that, within 10 years, 100 percent of the nation’s electricity should come from clean energy.
“The future of human civilization is at stake,” Gore said in a 2008 speech
, stressing that such projects would create jobs.
At the same time, Gore’s venture partner, Doerr, had been raising money for Democrats to take back the White House, holding big-check receptions with Silicon Valley investors. He and fellow Kleiner partners and spouses donated more than $800,000 to Democrats, much of it for Obama and state efforts to get out the vote.
At GIM, five of Gore’s principals, including co-founder David Blood, wrote $130,000 in checks to aid Obama’s bid, according to the Center for Responsive Politics.
As Obama was preparing to take office, it was clear his public agenda supporting clean energy aligned with Gore’s personal agenda. Obama held a highly publicized meeting with Gore
at transition headquarters in Chicago to talk about energy policy. Later, Obama closely echoed several of Gore’s talking points and his plan for public investment in clean energy. Obama even adopted Gore’s campaign catchphrase for the effort
, “Repower America.”
“This is a matter of urgency and national security,” Obama said. “We have the opportunity now to create jobs all across this country in all 50 states to repower America
, to redesign how we use energy and . . . make us competitive for decades to come — even as we save the planet.”
Gore’s orbit extended deeply into the administration, with several former aides winning senior clean-energy posts. Among them were Carol Browner, a former Gore political operative who became the president’s climate change czar, and Ron Klain, Gore’s former chief of staff who went to work for Vice President Biden overseeing the stimulus.
Those connections were underscored in October 2009, when Jonathan Silver, under consideration to head the $38 billion *clean-energy loan program, hosted a party to help Gore raise money for the Alliance for Climate Protection.
Silver invited the Department of Energy’s chief financial officer, days before the official was scheduled to meet Silver to discuss the job.
“At the risk of seeming presumptuous, I want to mention that my wife and I are holding a small event for Al Gore at our home this coming Thursday evening,” Silver wrote in an e-mail. “I expect there will be about 40 people or so, generally folks we know who are interested in this issue and have the capacity to write significant checks and a couple of others with professional involvement in the topic.”
Help for a portfolio
Gore’s investments coincided with the government’s largest investment in clean tech. A full 10 percent, estimated at $80 billion to $90 billion, of the 2009 stimulus package was devoted to clean energy.
Like thousands of other companies, those Gore invested in entered the competition for a piece of the pie. (An administration official said more than 80 percent of applicants the first year were turned away.) Several companies in Gore’s portfolio emerged as winners. Of the 11 companies he mentioned in his 2008 slide show, nine received or directly benefited from stimulus or clean energy funding.
Rep. Fred Upton (R-Mich.), who chairs the Energy and Commerce Committee and is a leading critic of clean tech funding, said Gore’s portfolio “is reflective of a disturbing pattern that those closest to the president have been rewarded with billions of taxpayer dollars . . . and benefited from the administration’s green bonanza in the rush to spend stimulus cash.”
Department of Energy officials have noted that many of the funds that went to companies Gore invested in were available to all eligible firms, and some had won funding from the Bush administration.
“Decisions about the competitively awarded grants and loans were made on the merits by career civil servants after a careful review of the applications,” said Dan Leistikow, director of public affairs at the Department of Energy, which administered the awards.
Gore appeared well-positioned. Generation Investment Management saw its earnings quadruple from 2008 to 2009, although there is no way to know how much can be tied to federal support. GIM reported earnings of $51 million in 2009 available to Gore and his nine partners.
But some of the firms in Gore’s portfolio have struggled since winning federal funds. For others, the money was a major boon.
Iberdrola Renovables, a wind subsidiary largely owned by the Spanish electricity giant Iberdrola, received $1.5 billion for 20 wind farms it built across the United States.
The company benefited from a program that had been reshaped by the Obama transition team to award cash grants to defray construction costs for renewable energy plants. The grants, available to any eligible builder, replaced tax credits that had become worthless in the financial crisis. With early warning from the Obama team, Iberdrola and other developers could time construction and qualify for the cash for some plants largely built in 2008 — before Obama took office.
GIM had invested modest amounts in Iberdrola Renovables in early 2008 but began dramatically increasing its holdings in early 2009, eventually owning 4.2 million shares.
GIM officials declined to comment, citing their policy not to publicly discuss investment strategies.
Iberdrola spokeswoman Jan Johnson credited the Obama program as a savior that came “just in time,” helping the company avoid halting construction that was underway in 2008.
The company now has 40 renewable energy plants
operating in the United States, and its parent is the world’s largest provider of wind energy.
GIM also invested in Johnson Controls, a long-established Milwaukee company that in August 2009 won the largest award — $299 million — in a $2.4 billion program Obama had launched
to help firms making electric car batteries.
Gore’s investment firm had earlier invested modestly in the company, then ramped up its holdings in late 2008 and held 5.6 million shares by 2009.
The grant to Johnson Controls
was meant to help retrofit one plant and build another. But the company has dramatically scaled back,
after executives concluded demand for electric cars was far lower than the administration forecast. The factory outfitted with stimulus funds is nearly idle, and plans to build a second plant have been postponed.
Johnson Controls Vice President Alex Molinaroli stressed that the company has tapped just half of the funds it was awarded. He said the program helped build the foundation for a U.S. electric battery industry that could compete internationally when demand picks up.
“We’ll have to wait a long time to see if this was a good investment or not,” Molinaroli told the Post in 2011.
The company’s decision to pull back, however, will not affect GIM’s portfolio. When the investment firm doubled its holdings, shares were as low as $9; GIM sold them from April to December 2009, with prices running from $21 to $26.
Gore’s support for companies that also won federal funds is a natural alignment of interests, his friends and partners said. Gore chose to invest in firms with promising technologies, they said, and it makes sense that the administration would choose some of the same firms in hopes of backing successful companies.
“Is he better than average” at picking the best companies, Kamarck asked. “Of course he is. Why is that a surprise? He’s spent his life studying this sector.”