Keep in mind, this isn’t meant to be an exhaustive expose. I did my homework and I’m providing the highlights that arouse enough reasonable suspicion and healthy skepticism to encourage further research if one is interested enough. As always, do your own verification!!
What is the CHICAGO CLIMATE EXCHANGE? Their website claims the following: “North America’s only cap and trade system for all six greenhouse gases, with global affiliates and projects worldwide.” (http://www.chicagoclimatex.com/)
How about a teaser?
What would you think if Barak Obama, Al Gore, Fannie Mae and Goldman Sachs were possible involved in a decade long collaborative effort to radically change U.S. energy and environmental policy while ensuring they would profit financially along the way? Just a hypothesis here…you decide for yourself if such speculation is fair.
Let’s start with an organization called the Joyce Foundation.
In 2000 Joyce Foundations allocated $347,600 to the J.L. Kellogg School of Management at Northwestern University. That money was then awarded to Environmental Financial Products, LLC, owned by Richard Sandor, former head of the Chicago Mercantile Exchange. In 2001, Sandor received another $760,000 and within a year, Sandor brought the company public to raise additional money thus creating the Chicago Climate Exchange.
- Barak Obama, yes that Barak Obama, was on the board of directors when the grants were awarded. (Interesting side note…with Obama on the Board, the Joyce Foundation also gave a grant to Leadership for Quality Education…an organization run by John Ayers, brother of Bill Ayers. Similar grants were awarded in 1994, 1995, 1996, 1997, 1998, 1999, 2000, and 2002.)
- Valerie Jarrett, President Obama’s top adviser, is still on the board of directors.
- Maurice Strong is on the board of directors and was later named co-founder of the Chicago Climate Exchange.
- Chicago Mayor Richard M. Daley is its honorary chairman.
- The largest shareholder is Goldman Sachs.
Maurice Strong may be the least recognizable name on that list, but he is in fact a remarkably well-connected figure and may be an interesting link in the development of the Exchange. Strong was the founding director of the U.N. Environment Program and was a senior advisor to U.N. Secretary General Kofi Annan. Despite his credentials, however, Strong has quite a history of questionable financial dealings. In 1997, Strong accepted $1 million from Tongsun Park, the man convicted of “conspiracy to act as an unregistered agent of the Government of Iraq” for his role in the Oil-for-Food scandal, which was then invested in Cordex Petroleum Inc., a company owned with his son, Fred Strong. Additionally, as chairman for a company called AZL Resources, he was involved in an insider trading suit which resulted in a $5 million settlement.
Strong becomes a piece of the puzzle here when he crosses paths with a certain environmental advocate and highly visible political figure, Vice-President and Environmental Guru Al Gore! Maurice Strong was a corporate officer of Molten Metal Technology and the primary lobbyist for this company was Peter Knight, Al Gore’s former top Senate aide. On Earth Day 1995 Gore made a trip to the corporate headquarters of Molten Metal Technology Inc. where he praised the company’s environmental contributions and investment potential. In addition to the high profile appearance, this speculative company, which had not yet demonstrated any commercial viability, received $25 million from the DOE and an additional $8 million in grants. At the peak of this speculative fervor, officers including Maurice Strong sold their shares at market highs. In 1996, only after these officers cashed out, the company announced that further funding was unavailable. The stock tanked almost 50% in a day and a civil suit was filed by shareholders.
Ok…so where are we going with all this? Joyce Foundation, Obama, Strong, Goldman Sachs and now AL Gore….how does he fit in?
Al Gore is the founder and chairman of Generation Investment Management LLP which is the 5th largest shareholder in Chicago Climate Exchange. Other founders of Generation Investment Management include former Goldman Sachs executives David Blood, Mark Ferguson and Peter Harris.
Oh but it gets even better.
Fannie Mae…yes THE Fannie Mae which played such a role in the collapse of our housing industry and the economic recession to follow. Keep in mind…Fannie Mae’s congressional mandate is to “make housing more affordable”. Fannie Mae CEO Franklin Raines made over $90 million, $50 million of which was in bonuses, but an investigation by The Office of Federal Housing Enterprise Oversight determined that these bonuses were tied to manipulated accounting practices. Despite this record of incompetence and corruption, in April 2010, Raines was reported by the Washington Post to be an advisor to President Obama. Oh and it’s worth noting that Fannie Mae just happens to be the 2nd largest source of President Obama’s Presidential campaign contributions.
Why does this matter?
Well, back to the Chicago Mercantile Exchange. Any exchange, whether the NYSE, Nasdaq or the Chicago Mercantile Exchange, makes the bulk of its revenue on access fees and trading fees and therefore needs a platform by which all the trading activity and relevant info can be monitored and transacted. One company, CO2e.com, led by CEO Carlton Bartels, was developing such software and filed for a patent in 2003. After Bartels died in the 9/11 attacks before any patent was approved, Bartel’s wife began shopping the software around for a buyer. Fannie Mae, while under the leadership of Franklin Raines, purchased the rights to the software. Considering that Fannie Mae’s congressional mandate to “make housing more affordable”, it’s not clear why such a purchase is even justified. Even more interesting, the patent for the software was finally approved by the U.S. Patent and Trade Office on Nov. 7, 2006….ONE DAY AFTER DEMOCRATS TOOK CONTROL OF CONGRESS! Coincidence?
Consider the following. For years, one of the utopian ambitions of liberal environmentalists, and a specific stated goal President Barak Obama, has been to regulate and tax carbon emissions through cap and trade legislation. The “Chicago Climate Exchange”, as the vehicle for the trading of such carbon credits, would stand to reap possibly billions in trading fees, access fees and commission. So it certainly is curious to see such “coincidental” relationships between the entities and figures which have laid the groundwork for such legislation and the exchange.
- The Exchange is promoted and funded by a foundation directed by Obama and acquaintances.
- Al Gore and Goldman Sachs are primary shareholders in such an exchange.
- The software to monitor, direct and track all transactions on such an exchange is secured by Fannie Mae while Franklin Raines is CEO.
- Fannie Mae becomes the 2nd largest contributor to Barak Obama’s campaign for President.
- Franklin Raines, accused of accounting fraud, settles with the Office of Federal Housing Enterprise Oversight and avoids prison time.
- The patent on the software is locked up one day after Democrats take control of Congress.
- In March 2009 Obama's Environmental Protection Agency declares carbon dioxide a public health threat.
One can only wonder how many backroom deals were done between Goldman Sachs and Fannie Mae with regards to sub prime mortgages and collateralized debt obligations. Also seems funny that Goldman Sachs received barely a slap on the wrist despite such a public investigation by the Justice Department.
The good news? It seems that the struggling economy has diminished the feasibility of any cap and trade legislation overhaul in the near future. Politicians don’t want to risk it and the public isn’t interested in it. Furthermore, the IPCC scandal has further diminished the already growing public skepticism over global warmin. As a result of these and other factors, in October 2010, the Chicago Climate Exchange announced it would cease carbon trading.