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On Wednesday, President Barack Obama signed the STOCK Act into law. The law forbids members of Congress, the president, and thousands of other federal workers from conducting what is essentially insider trading. On December 15 of last year, executives at the company ECOtality, a manufacturer of electric vehicle charging stations, received a subpoena from the Securities and Exchange Commission as it launched an investigation into allegations of insider trading at the company. If you are familiar with the cases of Solyndra, Ener1, or the Chevrolet Volt, you can probably guess where this is going.
ECOtality received roughly $115 million dollars from the Stimulus Package in 2010 with and additional $26.4 million dollars coming from a Department of Energy grant in October 2011.
As you may have also guessed, the company is an utter financial failure. Forbes has reported that since May 2010, the company’s stock value has plummeted almost 84 percent and the latest earnings report from the company shows a $3.4 million loss last quarter. A single share of the company is worth less than an already weak dollar.
Despite the juggernaut of financial misery that faces the company, the executives are doing just fine. “Executive and Director” salaries increased 150 percent from 2010 to 2011, totaling $1 million. Last November, chief executive Jonathan Read re-signed a contract worth $1.4 million over two years including bonuses with roughly another $3.7 million worth of stock awards.
While the Obama administration is trying to lead a clean-up of trading practices in the halls of government, corrupt cronies of the administration are wasting hundreds of millions of dollars on failed programs and are potentially involved in illegal stock dealings. If we are going to fix Washington, we need to fix Washington’s friends too.
Read more about the ECOtality scandal here.
The information presented here resulted from an investigative report conducted by Rob Bluey and Lachlan Markay at the Heritage Foundation.