Mississippi threw away hundreds of millions of dollars on experimental "green energy" projects under Haley's tenure with little to show for it. Jerry Mitchell reported in the Clarion-Ledger yesterday that another Mississippi Hustle took place when KIOR ripped off the state for a $75 million loan. Mr. Mitchell reported:
Then-Gov. Haley Barbour bragged in 2010 that the biofuel company KiOR would invest $500 million and create 1,000 jobs in Mississippi.
He gushed about the project for which lawmakers loaned $75 million, saying, “We may look back and say it did more to change and do good for the people of Mississippi than any other.”
The company has since declared bankruptcy, and internal documents obtained by The Clarion-Ledger show executives hoodwinked Barbour and other Mississippi officials about its ability to produce large amounts of a cheap bio-crude that oil companies could refine.
As a result, taxpayers are being forced to shell out $69 million — even more than the $55 million they paid for the beef plant fiasco, which ended in the criminal convictions of private developers....
A week after the stock sale, William Coates took over as KiOR’s chief operating officer, and he soon learned from a scientist that the company’s demonstration plant had been producing only 40-something gallons of the bio-crude per ton, rather than 67.
When Coats later testified before the SEC, he was asked if he questioned the 67 figure.
“Yes,” he replied.
“Did you raise the same skepticism with the $1.80?” the SEC lawyer asked.
“Absolutely.”
He recalled KiOR executives showing off a jug of the catalyst and Cannon telling people this was “the magic secret sauce of KiOR.”
“So they were telling potential investors that the secret to all this is this — what’s in this vial?” the SEC asked Coates.
“Yes.”
“And it’s proprietary?”
“Yes.”
“But in reality it was something they just bought off the shelf.”
“Yes.”
Coates resigned Sept. 9, 2011, telling fellow executives he wasn’t “going to be a part of this scam.”
JJ readers are familiar with much of this story as this website, Bigger Pie Forum, and the AP's Jeff Amy have reported this fiasco over the last few years. Mr. Mitchell reports some new information that is based on company emails that were not available. It is a good story and well worth reading.
18 comments:
As the leader of the 'Good Ole Boy' network here in MS, Boss Hawg made/makes sure that his cronies are taken care of for sure! Other than his leadership after Hurricane Katrina, Haley was no better a governor than any of his predecessors. And, I'm almost ashamed that I voted for him twice............shame on me!!
Excerpts from Mitchell's reporting.
Barbour announced that KiOR would get no state money unless a major oil refinery agreed to refine the bio-crude. On Aug. 27, 2010, the Legislature voted in favor of giving KiOR a $75 million loan.
To get its first installment of the $75 million loan from Mississippi, the company needed an “off-take agreement” with a major oil company to refine this new bio-crude. So far, no one had agreed because the bio-crude reportedly contained too much oxygen to be refined like normal crude.
KiOR officials pivoted and got a Feb. 18, 2010, agreement from Hunt Refining Co. Rather than Hunt refining its bio-crude, Hunt agreed to take an already refined product.
According to the lawsuit filed in 2015 by Attorney General Jim Hood against officials from KiOR and Khosla Ventures, these officials knew this new agreement failed to satisfy its Memorandum of Understanding with Mississippi.
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The upshot, to receive state funding, according to the AG, Kior and Khosla Ventures committed fraud.
The State of Mississippi does not need to be in "businesses"; Businesses worth their salt are already in business or can obtain investors.
Haley Barbour couldn't even keep his 25hp Mercury running on Wolf Lake and we trusted him to hawk bio-fuel off the back of a covered wagon down at the legislature?
this is what happens when you elect a political lobbyist to elected office....he sells stuff, bogus or not! there is a reason we are the most corrupt state....my vote? HUSTLER
Haley Barbour is the biggest fake Republican in Mississippi history.
Seriously, these political figures have no business making decisions concerning funding businesses. They don't even seem to have the sense to ask an expert in the field to evaluate the proposal. Anybody in the oil and gas or other energy business could have told you this project was not feasible
this is a bigger fiasco than the beef plant. and you got those "pro-business" republicans who run this one party third world country you call mississippi ,to thank for it.
Some Haley KIOR hubris from the groundbreaking ceremony dog and pony show KIOR and Haley put on for the press:
Kior breaks ground, and draws customers, for Columbus biofuels plant
Initially, the Columbus facility will turn 500 tons of biomass a day into 11 million gallons of oil. The oil can be processed at refineries with other oil or put directly into gas tanks, Barbour said. The company plans to refine the oil into gasoline and diesel fuel blendstocks at the Columbus facility.
Either the 'KIOR miracle pinecone oil' needs further processing to be sold to the end consumer, or it doesn't. So which one was it that the state was betting on?
"This is an unbelievable accomplishment, and it's a game changer for our country," he said.
'Murrica! Git-R-Dun!
Barbour recalled when the idea was first presented to him. The notion of turning wood chips and agricultural waste into fuel sounded like the alchemists of old claiming they could turn straw into gold.
KIOR sounded almost too good to be true?
Good thing Haley's one of those smart guys, always looking out for the taxpayers and so forth...and it's also a good thing the state made sure to do their due diligence in order to figure out why a bunch of smart rich venture capitalists needed some dumb money in their deal to make it fly...
"It's almost like making gold out of straw," Barbour said of the technology, which reduces nature's process of breaking down biomass over the course of decades into a matter of seconds.
Almost but not quite as it turned out...
"It does sound like science fiction, even though I have explained (the process) a number of times," admitted Fred Cannon, CEO of Kior.
Science fiction? Or 'KIOR pinecone miracle oil' fraud fiction?
Same clown above who always posts on every thread about 'third world country Mississippi'. Yet his goofball ass lives here.
3:56, of course those in the oil and gas business would tell you this was a bad deal; they don't want any competition with their continued dominance of the energy market. Just as the oil/gas business people are telling Elon Musk that the electric car won't work and trying to keep them out of the market. Creating competition never gets the support of the existing market makers, but thanks for your insightful commentary.
The electric car will work... However one needs to ponder the energy consumed by cars via liquid fuels and then figure out where the generation capacity for the required charging electricity is going to come from. Even if the electric cars of the future are 50% more efficient than the internal combustion models today you are talking a bunch of capacity.
This is what happens when you have one party in complete control. It is better to have different parties in control of the different branches of government. It's called checks and balances people! When the Dems were in complete control the same things happened, now its the GOP's turn. Don't make the same mistake in the next election cycle.
@ July 31, 2017 at 3:33 PM
"Haley Barbour is the biggest fake Republican in Mississippi history."
He is the one that ushered in the current Super Majority running the whole got'damn state, own down to the local level!?
How in the hell is he a fake Republican!? He is the Don Corleone of the Mississippi Republican Party!?
GTFOH with that foolishness!
I can't picture Don Corleone " hitching up his britches ".
"I can't picture Don Corleone " hitching up his britches ". "
I have to slow down when I read. At first I thought you were conjuring up a vision of Haley B as Don Cornelius....
to july 31 @6:10 got news for you mr wannabe political expert, i don't live in this 3nd world county called mississippi in case you didn't know the internet goes around the world
the only thing mississippi state government does worse than govern, is attempt to run a business
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