National Center for Public Policy Research press release


For Release: June 3, 2015
Contact:
Judy Kent at (703) 759-7476 or [email protected] or David Almasi at (202) 507-6398 x11 or (703) 568-4727 (text enabled) or [email protected]

 

Free-Market Organization Asks Google to Be Transparent with Investors Regarding Cost of "Green" Initiatives

Shareholder Resolution Sought Disclosure of Risk to Shareholders if Taxpayers Decide to End Generous Subsidies to Alternative Energy

Google Executive Chairman Eric Schmidt Also Criticized for Making the Company Vulnerable to a Lawsuit from the American Legislative Exchange Council (ALEC)

 

Mountain View, CA / Washington, D.C. - At today's annual meeting of Google shareholders in Mountain View, California, the National Center for Public Policy Research presented a shareholder resolution urging the company to come clean with investors about the risks associated with its alternative energy projects - many of which receive lavish taxpayer subsidies that may not continue indefinitely.

"The Obama Administration and many state governments have destructive energy policies that pick winners and losers. Using taxpayer funds, these schemes often subsidize alternative energy projects and cause great harm to middle and low-income Americans. Companies such as Google take advantage of these policies to 'greenwash' their images," said National Center Free Enterprise Project Director Justin Danhof, Esq. "However, as budgets tighten, taxpayer-subsidized freebies may end, thereby exposing Google investors to great risk as the company's portfolio is heavily invested in renewable energy schemes."

At the meeting, Danhof presented the National Center's shareholder proposal. In doing so, he noted that in accepting taxpayer funding for certain green energy projects, Google has placed its own shareholders in an unknown degree of risk:

It is no secret that the federal government and many state and local governments offer substantial tax breaks and lavish grants and loans for many renewable energy projects, and Google has taken advantage of these taxpayer subsidies. Our proposal asks management to tell its shareholders one simple thing: if renewable energy projects such as solar power and geothermal were forced to compete in a free market, would Google investors be at risk? If politicians in Washington, Sacramento and elsewhere changed their minds about spending many hundreds of billions of dollars on the "green" energy projects of private businesses like ours, what would the impact be on our shareholders?

Danhof also noted that Google's decision to accept taxpayer support gives it a conflict of interest when addressing energy issues publicly:

The company has claimed that it supports rigorous debate regarding energy policy, but as long as the company accepts grants and loans based on the belief that global warming is significantly caused by humans and is a severe problem, the company has a conflict of interest. If the company promotes the global warming theory, it promotes policies that enhance the company's coffers. If the company promotes any skepticism whatsoever regarding the global warming theory, it risks undermining support for grants and loans for green energy projects management has already begun.

And Danhof noted that Google Executive Chairman Eric Schmidt seemingly, and unnecessarily, put the company at risk from a lawsuit from the free-market American Legislative Exchange Council:

The company's desire to continue grants and loans for green energy appears to be undermining our management's admirable reputation as straight-shooters. In choosing, we believe unwisely, to withdraw the company from the free-market American Legislative Exchange Council (ALEC), Chairman Eric Schmidt said ALEC was "literally lying" about climate change. But ALEC has no position on the degree to which climate change is occurring and if it is occurring, what the cause might be. ALEC simply promotes policies that reduce government interference with energy markets. Since ALEC has no position, its position cannot be a lie.

But Schmidt's over-the-top statement - which, by the way, could unnecessarily make the company vulnerable to a lawsuit by ALEC - implies Google is highly emotional about the climate change issue, which in turn raises the possibility that the company is very reliant on energy policies providing lavish subsidies for renewable energy projects.

If this is so, don't shareholders deserve to know the extent of the company's exposure?

To read Danhof's full statement, as prepared for delivery, click here.

To watch him make the statement, go here.

The National Center's shareholder proposal highlighted how Google uses taxpayer funds to promote its green portfolio:

Google relies on government actions to obtain certain financial advantages from climate change-related investments. Google might be materially affected by legislative and regulatory developments concerning climate change.

For example, it has been reported that Google and other investors in the Ivanpah Solar Electric Generating System are seeking more than $500 million in taxpayer funds to help pay off a federal loan for the solar project. That project has already received $1.6 billion in government loans. Future political leaders may act differently concerning loans and grants for alternative energy projects.

The National Center's shareholder proposal is found on page 62 of Google's proxy statement.

"If Google wants to green its image, let it do so on its own dime," said Danhof. "Why should American taxpayers help foot the bill so that major tech companies such as Google and Apple can appeal to liberals and the mainstream press by pretending to invest in green energy for virtuous reasons? Politics is fickle, and the next presidential administration may force energy producers to compete freely by removing lavish alternative energy production subsidies. At that point, Google's investors would effectively be left blowing in the wind."

Late last year, the Wall Street Journal explained how Google's renewable energy schemes not only rely on American taxpayers to remain profitable, but harm low-income Americans as well. The Journal article noted:

Most of Google's renewable investments qualify for a federal investment tax credit that covers 30% of the cost. Its $450 million investment in rooftop solar-systems also benefits from state incentives such as "net-metering" laws. This hidden subsidy compensates ratepayers for power they remit to the grid at the retail rate, which can be three times as much as the wholesale price of electricity. Net-metering allows solar companies to charge higher rates to homeowners who lease their panels, and thus for investors like Google to reap larger profits.

Last September, Google Executive Chairman Eric Schmidt announced on a PBS broadcast that the company would no longer be a member of the American Legislative Exchange Council (ALEC). Schmidt accused ALEC of lying about climate change and "hurting our children and grandchildren."

"It was Schmidt who was lying about climate politics," said Danhof. "It was not ALEC. ALEC does not have a position on climate change. Rather, as the Wall Street Journal has reported, 'ALEC provides a forum for sundry businesses to discuss free-market reforms with state lawmakers. Two of its policy targets are renewable-energy mandates and subsidies, which are being exploited by big businesses like Google at the expense of low-and middle-income taxpayers. Google's real problem with ALEC is a conflict of pecuniary interests.'"

An initial vote at today's Google meeting showed the National Center proposal did not pass.

In March, the National Center presented a similar shareholder proposal at the annual meeting of Apple shareholders.

The National Center's Free Enterprise Project is the nation's preeminent free-market activist group focusing on shareholder activism and the confluence of big government and big business. So far in 2014-15, National Center representatives have participated in 69 shareholder meetings advancing free-market ideals in the areas of health care, energy, taxes, subsidies, regulations, religious freedom, food policies, media bias, gun rights, workers' rights and many other important public policy issues.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than four percent from foundations, and less than two percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors.

The National Center for Public Policy Research was founded in 1982. Sign up for free issue alerts here.

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