by Ryann Grochowski | inewsource
Big money has been pouring into the Congressional race for San Diego’s 52nd district since its boundaries were redrawn and it suddenly became wide open territory.
Republican incumbent Brian Bilbray is at the head of the fundraising frenzy, collecting about $1 million overall — twice as much as his nearest opponent has raised.
A chunk of that million comes from some of Bilbray’s most reliable donors: algae biofuel producers. San Diego County is a hub for the development of algae biofuels, which are fuels extracted from algae byproducts.
Bilbray is a champion of algae fuels, touting them as a cheaper, better alternative to existing alternative fuels. Legislation he has introduced would extend an attractive tax credit to algae biofuel companies, including several of Bilbray’s most consistent donors.
Executives and employees of General Atomics and Sapphire Energy, two San Diego companies developing algae fuels, have contributed a total of about $47,000 to Bilbray’s past three campaigns. General Atomics is Bilbray’s overall biggest donor.
Through their checkbooks, these companies have shown their approval of Bilbray’s work in Congress.
“Does that money drive him to introduce bills, or was he going to introduce that bill anyway, because those companies are in his district?” independent political observer Thad Kousser asked. “The perennial question is the action driving the money or is the money driving the action?”
Through a spokesperson, General Atomics declined to be interviewed for this story. No one at Sapphire Energy returned multiple telephone and e-mail messages requesting an interview.
Legislation and connections
Investigative Newsource examined the 31 bills Bilbray introduced since 2009, the lobbying involved, companies and organizations that could benefit, and campaign contributions connected to the companies. It also dug into Bilbray’s earmark requests and his official logs of privately funded trips.
The scrutiny is meant to pull back the curtain on Bilbray’s legislation and surrounding influence, enabling voters to assess Bilbray’s priorities against their own as he presses for re-election.
The stakes in the election are high. Kousser, an associate professor at UC San Diego’s political science department, expects the race to be extremely competitive, with local and national money pouring in.
“This is now a tossup district,” Kousser said. “This is also one of the only California districts that will have an effect nationally.”
The biofuel connections to Bilbray’s bills and to donors’ lobbying interests stood out in Bilbray’s legislative history during the past two sessions of Congress.
Bilbray’s proposed tax credit could be attractive to companies experimenting with algae fuel production. Sapphire Energy is regarded as a leading company in the algae fuel industry, and General Atomics, known for its advances in nuclear power and production of Predator C unmanned drones, has been researching and developing algae fuel for several years.
These companies registered to lobby on versions of Bilbray’s algae fuel tax credit bill, and both are consistent donors to his congressional campaigns.
According to OpenSecrets.org, a website by the Center for Responsive Politics that analyzes federal campaign spending, General Atomics is Bilbray’s biggest donor, contributing at least $98,900 to his congressional campaigns since the 1990s. This includes $30,000 donated from the company’s political action committee and about $8,000 from individual employee donations in the past three elections. The company PAC also donated $5,000 to Bilbray’s leadership PAC in 2010.
General Atomics executives, including CEO James Blue and vice chairman Linden Blue, have not only given money to Bilbray, but Linden Blue has co-chaired several of Bilbray’s fundraising events, including a $2,500-per-person roundtable reception with Speaker of the House Rep. John Boehner in Coronado last year.
Executives of local algae fuel developer Sapphire Energy also support Bilbray with money and effort. Since 2010, company executives have given $4,405 to Bilbray’s campaign, and Denise Gitsham, who listed her occupation as director of corporate affairs and legislative counsel for Sapphire Energy when she donated to Bilbray, also served as a co-chair of his Coronado campaign fundraiser.
Bilbray said he contacted algae biofuel companies to get their input when crafting his bills.
“I think they’ve seen my record on the issue long before they decided their politics,” Bilbray said. “But I think they see that I am an advocate and they want to see somebody to stay in Congress that will raise these issues and fight the fight.”
Bilbray said he is “the right person at the right committee” to push pro-algae legislation, and so it behooves companies like General Atomics and Sapphire Energy to keep him in Congress.
“Their concern is the one guy they know they’ve always been able to go to for algae legislation is Bilbray, and obviously they hate to lose that asset if their goal is to address this environmental crisis,” Bilbray said.
Independent political observer Carl Luna said it makes sense for algae fuel companies to back Bilbray over his opponents.
“He understands how to play the game, how to get powerful, wealthy, well-backed donors behind him, and while there’s not an outright quid-pro-quo, he will work to benefit those who helped him get into office,” said Luna.
“It is in their (companies’) interest to support him, to get him reelected, so he can continue doing that support,” he added.
Bilbray has also gone to bat for General Atomics in the form of earmarks. In 2009, he submitted a $26 million funding request for the company’s aeronautics division. The earmark was written to fund development of unmanned drones for use in the Iraq and Afghanistan wars.
Congress knocked down Bilbray’s request, eventually designating $1.2 million from the 2010 Defense Appropriations Bill to General Atomics for the project, according to earmark data collected by nonpartisan group Taxpayers for Common Sense.
Bilbray said the Predator C drones, developed and manufactured by General Atomics, were specifically requested by military commanders.
“That was one of those issues where you go to Afghanistan and you ask the commander, ‘What can I do for you back in Washington?’ and he said two things: reduce the weight of body armor by 50 percent and get me more Predators,” Bilbray said.
Firm focus on algae
As a member of the House Energy and Commerce Committee, Bilbray has supported alternative energy initiatives, including a solar energy regulatory relief act. But he’s had a firm focus on algae biofuel.
None of Bilbray’s biofuel bills have become law, and his current algae tax credit bill is not yet scheduled for a vote, according to a spokesman for the House Energy and Commerce Committee.
In the past three congressional sessions, Bilbray has introduced a version of a bill that would give algae fuel companies the same $1.01-per-gallon tax credit afforded to cellulosic biofuels, such as ethanol, in the Clean Air Act. Essentially, the tax credit knocks $1.01 off the price of each gallon of algae-based fuel. This past session, Bilbray also sponsored a bill that would boost the visibility of algae fuel while allowing states to opt out of an ethanol mandate.
“This legislation will grant algae-based fuel access to a greater market share of the renewable fuels standard and clarifies that algae-based fuels qualify for relevant tax incentives,” said Bilbray in a press release when the tax credit bill was most recently introduced.
Algae-based biofuel producers were not included in original tax credits because the technology did not exist when the credits were added to the Clean Air Act, said John Williams of the Algal Biomass Organization.
“The only game in town was corn and soy biodiesel,” Williams said, calling it a “classic case” of technology outpacing legislation. “At the time there was nothing else.”
Bilbray is adamant that “the benefits that are given to ethanol should apply to other biofuels. We need to break the ethanol monopoly on mandates and subsidies, which is an economic and an environmental issue,” he said.
A long-term tax credit policy, like the one Bilbray proposed, are useful not only to increase a company’s bottom line, but to make prospective investors more likely to drop money on the technology, said Jim Lane, editor and publisher of Biofuels Digest, a trade publication for the biofuel industry.
A tax credit can “assist companies to raise money faster because it means they will commercialize faster,” Lane said. “It brings a higher rate of return.”
Big race, big money
Thanks to redistricting, the 52nd has a competitive congressional race for the first time in years. Once a safe Republican district, it now has a competitive mix of Republican, Democrat and independent voters.
The new 52nd district covers coastal San Diego and northeast areas up to Poway. Bilbray has represented the current 50th district since 2006, and was a congressman in the 1990s.
His main competitors in the June primary are Democrats Scott Peters, Unified Port of San Diego commissioner and former San Diego city councilman, and Lori Saldaña, former state assemblywoman.
“You have two top-tier Democratic candidates,” Kousser said. “You didn’t see those kind of candidates entering this race before.”
Neither Peters or Saldaña reported receiving donations from General Atomics or Sapphire Energy, according to their most recent campaign finance filings with the FEC.
While companies’ donations show their support of candidates, the money given directly to candidates’ campaigns will make little difference in the election, Kousser said. That’s because those contributions are limited by law.
But with new federal court rulings, companies can give as much as they want to so-called super PACs, or independent expenditure committees, who may raise and spend as much as they please to support or defeat candidates. While donors must be disclosed, it is tougher to track where they spend their money.
Political observers have predicted that a competitive, high-profile race like the 52nd will be sure to capture national super PAC money. So far, there is no indication that they have spent money in advance of the primary or that General Atomics or Sapphire Energy have contributed to a super PAC that might back Bilbray.
“This money is going to look like small potatoes by the time this race is done,” Kousser said. “All these donations will be washed away by the national money that is going to come in outside and over and above these direct expenditure limits.”
Here are other notable facts about Bilbray’s most recent legislative history:
- In addition to boosting algae biofuel and alternative energy, Bilbray’s legislative priorities include establishing a skin cancer research fund (his daughter is a melanoma patient), legislation that would eliminate a tax on assets earned overseas by U.S. companies and a bill that would repeal a medical device tax.
- Since 2009, three pieces of his legislation have passed the House: one procedural, one assisting a surface water reclamation project in San Diego County, and a resolution supporting a science and engineering festival.
- Seventy companies and other groups registered to lobby on his bills. Of those, at least 20 have donated money to Bilbray since 2008.
- Bilbray has introduced fifteen bills since November.
- According to House Clerk filings, Bilbray reported no personal financial ties to his top contributors or to those who lobbied legislation he sponsored.
- No top contributors or lobbying organizations reported paying for trips for Bilbray or his staff.
Ryann Grochowski is a data reporter for Investigative Newsource.