President-elect Barack Obama promised to expand the nation’s renewable energy sources and close the “revolving door” that allows top officials to profit by moving between government and the businesses it regulates.
His appointment of Tom Vilsack as agriculture secretary may test the limits of both of those promises.
During his days as Iowa’s governor, Mr. Vilsack provided a classic example of the revolving door that helps politicians benefit both politically and personally from their government contacts.
As governor early this decade, Mr. Vilsack took state actions that greatly boosted MidAmerican Energy Co.’s expansion into wind energy. He later collected political donations from company executives when he chose to run for president in 2008.
When he stepped down from office in 2006, Mr. Vilsack went to work as a consultant for the very same energy company helped by his policies, a Washington Times review of public records found. Now Mr. Vilsack is poised to return to government, where he’ll help shape a renewable-energy industry that counts MidAmerican as one of its major players.
A Senate committee is set to review his nomination Wednesday.
Ethics experts say Mr. Vilsack probably will have to remove himself from decisions that would affect his former employer if he is to live up to the new president’s ethics rules.
“He should be obligated to recuse himself in those matters of a direct pecuniary nature,” said Craig Holman, legislative director for Public Citizen, a nonpartisan watchdog group that tracks political fundraising and its influence on government policy.
With his nomination pending, Mr. Vilsack was not available for comment, but he told reporters last year that since joining the private sector he had “a very limited client list” and that MidAmerican had no business pending before the federal government. “I can promise I will do whatever is appropriate in the face of the conflict,” he said.
Obama’s two promises
The president-elect has promised to “free the executive branch from special-interest influence.” In an effort to close what Mr. Obama described as “the revolving door on former and future employers,” he said no political appointees in his administration would be permitted to work on regulations or contracts “directly and substantially” related to their prior employer for two years. He also said no political appointee would be able to lobby the executive branch after leaving government service, during the remainder of his administration.
In picking Mr. Vilsack to head the massive Department of Agriculture, Mr. Obama said the former Iowa governor would be “fiercely protective of family farms but also forward looking on how we can develop cellulosic ethanol and harness wind and solar power to boost rural economies.”
Mr. Obama has proposed an economic stimulus package to promote the creation of thousands of new jobs tied to “green energy” industries, including the production of solar and wind energy.
“Tom understands that the solution to our energy crisis will be found not in the oil fields abroad but in our farm fields here at home,” Mr. Obama said in announcing the selection. “That’s the kind of leader I want in my Cabinet.”
The Iowa energy giant
Public records tell the story of how then-Gov. Vilsack forged a national reputation as an expert on renewable-energy policy at the same time he was developing a relationship with MidAmerican, one of the biggest utilities in his state.
Mr. Vilsack made headlines in January 2003 when he asked Iowa lawmakers to boost by fivefold the state’s energy production from renewable sources. The ensuing action, which involved state regulation, paved the way for MidAmerican Energy’s construction of a $323 million wind farm - the country’s largest.
Two years later, Mr. Vilsack issued an executive order requiring that by 2010 state agencies purchase at least 10 percent of their electricity from renewable energy sources. By that time, MidAmerican was a key supplier of wind-based energy in the state.
In November 2006, with little more than a month remaining as governor, Mr. Vilsack announced his intention to run for president in a Democratic primary. That pitted him against Mr. Obama, his new boss, and Hillary Rodham Clinton, now a fellow Cabinet nominee-designate.
Trail of donations
All five members of the board of directors of MidAmerican Energy Co.’s parent organization, MidAmerican Energy Holdings Co., stepped forward with campaign donations for Mr. Vilsack - including one who had never contributed to a Democrat before.
Four of the five board members for MidAmerican Energy in Iowa also donated to Mr. Vilsack’s presidential campaign, although three had contributed in the past to only Republicans and one had never given any money to a political candidate.
Days after he formally left the governor’s office in January 2007, MidAmerican Energy Holdings Co. hired Mr. Vilsack as a paid consultant on renewable energy and environmental issues. The retiring governor told reporters at the time that his work would include research and input “to policyholders in the holding company on issues involving renewable energy,” although he did not recall the salary for the 40 hours of work he agreed to do each quarter. To this day, Mr. Vilsack has never disclosed to the public how much he made from MidAmerican.
As a Senate committee prepares to consider Mr. Vilsack’s qualifications to be secretary of agriculture during hearings that begin Wednesday, it is unclear whether Mr. Vilsack’s revolving-door relationship with MidAmerican Energy and MidAmerican Energy Holdings Co. runs counter to Mr. Obama’s campaign pledges about interest-group connections of his appointees.
Obama transition spokesman Nick Shapiro did not respond to written questions submitted by e-mail on Monday and Tuesday, but said during a telephone call that Mr. Obama vigorously guarded against the influence of lobbyists on both the campaign and in his pending administration, adding that Mr. Vilsack was not a registered lobbyist.
Mr. Shapiro said there was a difference between paid lobbyists and consultants.
John Perkins, head of the Iowa Office of Consumer Advocate, a state government agency that represents the interests of consumers and the public in matters before the Iowa Utilities Board, said Mr. Vilsack’s consulting contract with MidAmerican would have precluded him from dealing with Iowa utilities boards.
Mr. Perkins noted that the state already has a statute against employees coming back for two years after leaving office and lobbying boards whose members they might have selected.
He said existing federal statutes do the same.
MidAmerican Energy publicly announced plans to build the largest land-based wind-energy project in the world in Iowa a month before Mr. Vilsack signed legislation authorizing a boost in energy production from renewable sources from 200 to more than 1,000 megawatts, records show.
“MidAmerican applauds the leadership of Governor Vilsack and the strong bipartisan support of the Iowa Legislature,” Greg Abel, president of MidAmerican Energy Holdings Co., said at the time.
Construction at the site was completed in January 2005 and is now known as the Storm Lake Wind Farm project.
A 2004 report by the Center for Innovation and the Environment at the Progressive Policy Institute (PPI) and the Iowa Department of Natural Resources said Mr. Vilsack encouraged lawmakers in his January 2003 State of the State address to boost energy production from renewable sources from 200 to 1,000 megawatts per year by the end of the decade.
“When MidAmerican subsequently came forward with its proposal to develop the massive wind farm, their business plan and the governor’s vision to become a net energy exporter all fit together,” the report said.
In exchange for the new law, MidAmerican agreed to freeze its electric rates through 2010.
After dropping out of the president race in February, Mr. Vilsack vigorously campaigned for Mr. Obama, promoting their common ideas on renewable energy and rural growth.
It is unclear what consulting work Mr. Vilsack did for MidAmerican or what efforts he made on behalf of the company. He has referred to the firm as “the No. 1 regulated utility owner of wind energy installations in the nation.”
He also told enerG Magazine the company’s ability to “invest in new electric generation facilities while continuing to hold the line on electric rates has a huge impact on the energy security of our state.”
The confirmation hearing before the Senate Agriculture Committee will be chaired by Sen. Tom Harkin, Iowa Democrat, who has said he expected a rapid confirmation of his home state’s former governor.
Mr. Vilsack, a lawyer, also is a partner and head of the trial department at the Des Moines offices of Dorsey & Whitney, an international law firm that received more than $4.9 million since 1998 in lobbying fees, according to the Center for Responsive Politics, a nonpartisan group that tracks political money.
The firm said Mr. Vilsack’s practice focuses on strategic counseling and advising clients in the fields of energy conservation, renewable energy and agribusiness development.
According to Federal Election Commission records, all five directors at the holding company contributed to Mr. Vilsack’s 2008 presidential campaign, giving a total of $10,300. Another 18 employees contributed, bringing the total donations to nearly $30,000.
Four of the five board members at the Iowa subsidiary also contributed $3,150 to Mr. Vilsack’s presidential campaign, as did the MidAmerican Energy Co. Executive Political Action Committee, which donated $5,000 to Mr. Vilsack’s presidential bid.