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Trump’s Choice of Fracking CEO Chris Wright as Energy Secretary Heralds a Swamp Revival

17 November 2024 at 20:47

Americans of a certain age tend to throw around the term “Orwellian” willy-nilly. But the expression really suits in describing the behavior of our felonious, twice-impeached president-elect.

In George Orwell’s classic novel 1984, a dictatorship represented by the all-powerful “Big Brother” dictates the reality its citizens must adhere to, however topsy-turvy. Official slogans include “ignorance is strength,” “freedom is slavery,” and “war is peace.”

In this context, another slogan comes to mind: “Drain the swamp.”

Trump didn’t invent this populist expression, but he made it a centerpiece of his first campaign—a vow to rid DC of the toxic influence of special interest money, lobbyists, etc. Of course, politicians of both parties have long railed, often without much credibility, against special interests in Washington, and the US Supreme Court’s trashing of campaign finance safeguards has indeed created a cesspool of oligarchic influence in DC that crosses party lines.

It’s not the slogan itself that’s Orwellian. The Orwellian part is Trump’s evocation of the Swamp as he appoints foxes to guard the federal henhouse yet again. It’s a trolling of the libs, but a trolling with potentially dire consequences—and a signal that our government is for sale, more openly now than ever.

Exhibit A: Trump’s selection of Chris Wright, the CEO of a Denver fracking services company called Liberty Energy, for the position of energy secretary. Wright has no government experience and certainly no experience related to the nuclear weapons whose oversight is a critical part of DOE’s role.

Meanwhile, as typical of Trump’s cabinet picks to date, Wright’s other qualifications for the job are—to use Orwellian “Newspeak”—doubleplusungood.

It has escaped nobody’s notice that Trump’s top consideration in doling out key positions is loyalty to the boss. For attorney general, he chose Matt Gaetz, an inexperienced lawyer (but fierce loyalist) who has been accused of sexual impropriety—no charges were ever filed—and is notorious for allegedly foisting upon House colleagues videos of women he’s bedded. For his director of national intelligence, Trump picked Tulsi Gabbard, a former congresswoman my colleague Dan Friedman describes as a “uniquely bad choice.” Namely, she lacks intelligence experience and is so in sync with Vladimir Putin’s propaganda machine that her nomination was even celebrated on Russian television. To oversee White House communications, he picked a bomb-thrower who cut his teeth at UFC. For Health, he chose Robert Kennedy Jr., a man with no academic expertise in the areas he would oversee, and whose views and priorities are far from the mainstream, as my colleague David Corn has reported. (In this administration, apparently, ignorance is indeed strength.)

Wright, too, is a loyalist, but this pick feels distinctly transactional—Swamplike. Trump, after all, met multiple times during his campaign with top fossil-fuel CEOs, promising that, if they gave him money and helped him get elected, they would be richly rewarded. Wright, who denies the climate crisis and completely dismisses the US clean energy transition—which is weird, because it is well under way, despite the fossil fuel industry’s attempts to thwart it—is the industry’s reward. As was Trump’s choice for Interior, North Dakota Gov. Doug Burgham, who is apparently champing at the bit to expand drilling on federal land.

The New York Times reports that Wright’s wife, Liz, co-hosted a Trump fund-raiser in Montana, and that the couple donated a total of $350,000 to a Trump campaign committee. Most notably, Wright was the preferred choice of oil billionaire Harold Hamm, a major Trump donor and co-host of gatherings where candidate Trump wooed oil executives with what sounded suspiciously like a pay-to-play pitch.

Hamm has been playing the political money game for ages. As former Mother Jones reporter Josh Harkinson wrote in an early profile of the oilman, Hamm began supporting political causes in earnest starting in 2007, founding a group called the Domestic Energy Producers Alliance (slogan: “Good things flow from American oil”) and giving millions of dollars to candidates and right-wing causes supported by the billionaire industrialists Charles and David Koch—including nearly $1 million to support Mitt Romney’s unsuccessful 2012 bid for the White House.

In his rush to exploit North Dakota’s Bakken Shale, Harkinson wrote in 2012, Hamm’s company, Continental Resources, “has ridden roughshod over environmental laws….

Documents acquired by ProPublica show that it has spilled at least 200,000 gallons of oil in North Dakota since 2009, far more than any other company. That year, in one of its few formal citations against oil companies, the state’s health department fined Continental $428,500 for poisoning two creeks with thousands of gallons of brine and crude, but later reduced the amount to $35,000. Around the same time, during a thaw, four Continental waste pits overflowed, spilling a toxic soup onto the surrounding land. The Industrial Commission said it would fine the company $125,000, but it ultimately reduced the sum to less than $14,000, since “the wet conditions created circumstances that were unforeseen by Continental.”

Hamm stepped up for Trump in 2016, securing a VIP seat at the 2017 inauguration and exerting his influence during Trump’s first term. From the Washington Post:

In early 2020, he lobbied Trump to help persuade Saudi Arabia and Russia to end a price war that had driven down the price of oil below $0 a barrel, causing Hamm to lose $3 billion in just a few days.

The effort appeared to pay off. In April 2020, under pressure from Trump, members of OPEC, Russia and other oil-producing nations agreed to the largest production cuts ever negotiated—nearly 10 million barrels a day—as oil demand collapsed during the pandemic. 

This time around, Hamm, now Continental’s executive chairman, and his fellow oil and gas executives, would love to see some of those pesky environmental regulations go bye-bye, including the fines imposed under President Joe Biden’s Inflation Reduction Act on drillers who spew waste methane—a particularly potent greenhouse gas and primary component of so-called natural gas—into the atmosphere.

The purpose of regulating the fossil fuel industry is to ensure Americans clean air and water and at least some hope of escaping the worst ravages of a warming planet. Killing such regulations, and preventing new ones that cost his donors money, is a big part of what this second Trump administration—not to mention the US Supreme Court, with its decisions crippling the automony of federal agencies—is poised to deliver.

Call it Swamp 2.0.

Trump’s Choice of Fracking CEO Chris Wright as Energy Secretary Heralds a Swamp Revival

17 November 2024 at 20:47

Americans of a certain age tend to throw around the term “Orwellian” willy-nilly. But the expression really suits in describing the behavior of our felonious, twice-impeached president-elect.

In George Orwell’s classic novel 1984, a dictatorship represented by the all-powerful “Big Brother” dictates the reality its citizens must adhere to, however topsy-turvy. Official slogans include “ignorance is strength,” “freedom is slavery,” and “war is peace.”

In this context, another slogan comes to mind: “Drain the swamp.”

Trump didn’t invent this populist expression, but he made it a centerpiece of his first campaign—a vow to rid DC of the toxic influence of special interest money, lobbyists, etc. Of course, politicians of both parties have long railed, often without much credibility, against special interests in Washington, and the US Supreme Court’s trashing of campaign finance safeguards has indeed created a cesspool of oligarchic influence in DC that crosses party lines.

It’s not the slogan itself that’s Orwellian. The Orwellian part is Trump’s evocation of the Swamp as he appoints foxes to guard the federal henhouse yet again. It’s a trolling of the libs, but a trolling with potentially dire consequences—and a signal that our government is for sale, more openly now than ever.

Exhibit A: Trump’s selection of Chris Wright, the CEO of a Denver fracking services company called Liberty Energy, for the position of energy secretary. Wright has no government experience and certainly no experience related to the nuclear weapons whose oversight is a critical part of DOE’s role.

Meanwhile, as typical of Trump’s cabinet picks to date, Wright’s other qualifications for the job are—to use Orwellian “Newspeak”—doubleplusungood.

It has escaped nobody’s notice that Trump’s top consideration in doling out key positions is loyalty to the boss. For attorney general, he chose Matt Gaetz, an inexperienced lawyer (but fierce loyalist) who has been accused of sexual impropriety—no charges were ever filed—and is notorious for allegedly foisting upon House colleagues videos of women he’s bedded. For his director of national intelligence, Trump picked Tulsi Gabbard, a former congresswoman my colleague Dan Friedman describes as a “uniquely bad choice.” Namely, she lacks intelligence experience and is so in sync with Vladimir Putin’s propaganda machine that her nomination was even celebrated on Russian television. To oversee White House communications, he picked a bomb-thrower who cut his teeth at UFC. For Health, he chose Robert Kennedy Jr., a man with no academic expertise in the areas he would oversee, and whose views and priorities are far from the mainstream, as my colleague David Corn has reported. (In this administration, apparently, ignorance is indeed strength.)

Wright, too, is a loyalist, but this pick feels distinctly transactional—Swamplike. Trump, after all, met multiple times during his campaign with top fossil-fuel CEOs, promising that, if they gave him money and helped him get elected, they would be richly rewarded. Wright, who denies the climate crisis and completely dismisses the US clean energy transition—which is weird, because it is well under way, despite the fossil fuel industry’s attempts to thwart it—is the industry’s reward. As was Trump’s choice for Interior, North Dakota Gov. Doug Burgham, who is apparently champing at the bit to expand drilling on federal land.

The New York Times reports that Wright’s wife, Liz, co-hosted a Trump fund-raiser in Montana, and that the couple donated a total of $350,000 to a Trump campaign committee. Most notably, Wright was the preferred choice of oil billionaire Harold Hamm, a major Trump donor and co-host of gatherings where candidate Trump wooed oil executives with what sounded suspiciously like a pay-to-play pitch.

Hamm has been playing the political money game for ages. As former Mother Jones reporter Josh Harkinson wrote in an early profile of the oilman, Hamm began supporting political causes in earnest starting in 2007, founding a group called the Domestic Energy Producers Alliance (slogan: “Good things flow from American oil”) and giving millions of dollars to candidates and right-wing causes supported by the billionaire industrialists Charles and David Koch—including nearly $1 million to support Mitt Romney’s unsuccessful 2012 bid for the White House.

In his rush to exploit North Dakota’s Bakken Shale, Harkinson wrote in 2012, Hamm’s company, Continental Resources, “has ridden roughshod over environmental laws….

Documents acquired by ProPublica show that it has spilled at least 200,000 gallons of oil in North Dakota since 2009, far more than any other company. That year, in one of its few formal citations against oil companies, the state’s health department fined Continental $428,500 for poisoning two creeks with thousands of gallons of brine and crude, but later reduced the amount to $35,000. Around the same time, during a thaw, four Continental waste pits overflowed, spilling a toxic soup onto the surrounding land. The Industrial Commission said it would fine the company $125,000, but it ultimately reduced the sum to less than $14,000, since “the wet conditions created circumstances that were unforeseen by Continental.”

Hamm stepped up for Trump in 2016, securing a VIP seat at the 2017 inauguration and exerting his influence during Trump’s first term. From the Washington Post:

In early 2020, he lobbied Trump to help persuade Saudi Arabia and Russia to end a price war that had driven down the price of oil below $0 a barrel, causing Hamm to lose $3 billion in just a few days.

The effort appeared to pay off. In April 2020, under pressure from Trump, members of OPEC, Russia and other oil-producing nations agreed to the largest production cuts ever negotiated—nearly 10 million barrels a day—as oil demand collapsed during the pandemic. 

This time around, Hamm, now Continental’s executive chairman, and his fellow oil and gas executives, would love to see some of those pesky environmental regulations go bye-bye, including the fines imposed under President Joe Biden’s Inflation Reduction Act on drillers who spew waste methane—a particularly potent greenhouse gas and primary component of so-called natural gas—into the atmosphere.

The purpose of regulating the fossil fuel industry is to ensure Americans clean air and water and at least some hope of escaping the worst ravages of a warming planet. Killing such regulations, and preventing new ones that cost his donors money, is a big part of what this second Trump administration—not to mention the US Supreme Court, with its decisions crippling the automony of federal agencies—is poised to deliver.

Call it Swamp 2.0.

Utility Regulators Take Millions From Industries They Oversee. What Could Go Wrong?

This story was reported by Floodlight, a nonprofit newsroom that investigates the powerful interests stalling climate action.

It was 2:30 in the morning on November 6, 2014, when flames engulfed the New Orleans home of political consultant Mario Zervigon. Someone had lit his cars on fire, and the flames spread to his house. Zervigon and his family barely made it out of the three-unit building alive. Multiple cats didn’t. 

Law enforcement deemed it arson and investigated whether the fire was related to Zerivigon’s campaign work. (They would ultimately close the case without naming a suspect.) The night before, Zervigon had celebrated the primary election victory of one of his clients for a seat on Louisiana’s Public Service Commission (PSC), a down-ballot position with vast power over the state’s oil, gas, and utility companies.

The candidate, Forest Bradley-Wright, was running as a Republican on a reform platform. He had rejected donations from companies the PSC oversees—a rarity in Louisiana. But the firebombing rattled his campaign. Zervigon took a leave of absence, Bradley-Wright’s fundraising flagged, and another candidate, who had received generous support from the companies in question, eked out a 1.6 percent win in the general election. 

Bradley-Wright now says he believes the firebombing was an act of “political terrorism” meant “to intimidate or at least cripple my campaign.” He argues the incident is worth revisiting because it shows just how high the stakes can get in the election of regulators charged with making, in some cases, billion-dollar decisions and shaping a state’s energy policies. 

“Public utility commissions—especially in the context of climate change—are really important institutions that most people aren’t even aware exist,” said Jared Heern, a Brown University researcher who studies the relationship between the commissions and the industries they regulate. 

But fossil fuel companies and electric utilities, and their lawyers and consultants, are well aware of their importance. 

A new Floodlight analysis of campaign finance data in nine of the 10 states that elect their commissioners found that more than a third of their campaign contributions of $250 and up came from fossil fuel and electric utility interests—more than $13.5 million in all. The analysis covered contributions to the 54 commissioners elected in the 10 years ending on December 31, 2023.

On Tuesday, voters will choose among 33 candidates vying for utility commission seats in eight of those states. 

The states examined were Alabama, Arizona, Georgia, Louisiana, Mississippi, Montana, North Dakota, Oklahoma, and South Dakota. Nebraska, which elects its commissioners but has no private electric utilities, was excluded. (In the remaining 40 states, utility regulators are appointed by governors and/or legislative leaders.)

Topping the influence list is Alabama, where commissioners get almost 55 percent of their financial support from fossil fuel and utility interests. Louisiana is second, with nearly 43 percent. Overall, those sources contribute more than twice as much as the renewables industry does to elect commissioners they believe will be friendly to their interests. The renewables donations accounted for only $5.1 million, or 13 percent, of the roughly $39 million analyzed.

These findings suggest that the electoral influence of fossil fuel and utility contributors may be interfering with some states’ ability to decarbonize, with consequences for consumers and the environment alike.

Indeed, a number of the states are located in the sun belt, making them ideal for solar energy development, yet their commissioners’ decisions have ensured that only a tiny fraction of their power mix comes from the sun. In some cases, commissioners appear openly hostile to the adoption of renewables, far more of which will be needed to limit the catastrophic effects of climate change.

This failure to adapt is a bad deal for homeowners and businesses. Residential energy bills in Alabama, for example, exceed the national average by $32 a month, and bills in Georgia, Louisiana, and Mississippi have increased faster than the national average over the past five years, according to data from Findenergy.com. This year in Arizona, power bills spiked amid the state’s hottest summer on record. And in Oklahoma, commissioners approved so many fracking applications that the state briefly led the country in earthquakes. 

“It's kind of ludicrous on its face,” said journalist David Roberts, who hosts an energy policy podcast called  Volts, “that commercial entities directly regulated by these people are allowed to give these people money.”

In fact, laws in Alabama, Georgia, and Mississippi prohibit regulated utilities from making direct campaign contributions to commissioners. But in all of those states, Floodlight’s analysis found, contractors, attorneys, or political action committees closely aligned with the utilities keep the money flowing. “(When) the people regulating the utility are essentially propped up by the utility itself, it's problematic,” said Ari Peskoe, director of the Electricity Law initiative at Harvard University. “I think everybody can recognize that as a conflict of interest.” 

The coal-fired James H. Miller Jr. Electrical Generating Plant in Jefferson County, Alabama, a state tied for last place in its adoption of renewable energy sources.Lee Hedgepeth/Inside Climate News

It also turns out that the commissioners who get a large share of their campaign cash from sources linked to fossil fuel firms and utilities tend to stay in office longer than their colleagues. 

Nationwide, utility commissioners serve 5.9 years on average. In states where they are elected, these officials became more entrenched, serving 7.4 years—and a whopping 9.2 years in states where fossil fuel and utility interests account for at least 30 percent of their campaign contributions, according to Floodlight’s analysis of data provided by Heern. 

Consider Alabama PSC member Jeremy Oden. During his 12 years in office, Oden, a Republican, received about $1.3 million, roughly 80 percent of his campaign funds, from sources with links to fossil fuel companies and utilities. 

While Alabama commissioners cannot take money directly from the companies they oversee, our analysis and leaked records revealed that Oden’s top donors were political action committees operated by accountants with long-standing ties to consultants for Alabama Power, the state's largest utility. 

Oden did not respond to requests for comment. Tim Whitt, a principal of the campaign committee to elect Oden, provided a written statement. “All of his campaign contributions have been received and reported in accordance with Alabama law,” it stated, adding: “Commissioner Oden has not received any campaign contributions from regulated utilities.”

The cash flowing into Oden’s campaign coffer has come in handy for tight races, like the first round of the Republican primary in May 2022. If he won the primary, Oden, already in office for a decade at the time, would be certain to win the general election in deep red Alabama.

The three Republicans running against him were calling for more renewable energy and cheaper bills. Alabama, a state with strong solar potential, generates less power from rooftop solar than even low-potential states such as Maine and Michigan. It also has very little utility-scale solar, and saddles utility ratepayers with some of the nation’s highest electric bills. 

So what did Oden do? He took to the airwaves, appearing in TV ads dressed in hunting gear and wielding a shotgun. Calling himself “a Christian conservative pro-Trump Republican,” who “would always fight and defend our God-given Second Amendment rights,” the bald, bespectacled commissioner took aim, but not at his opponents: “With your help, I’ll shoot down Biden’s Green New Deal and keep the left from jacking up our energy prices,” Oden narrated over footage of him downing clay pigeons. 

Alabama PSC commissioner Jeremy Oden takes some rhetorical potshots at the Green New Deal in a campaign ad.

Bolstered by his advertising budget, he won 34 percent of the vote in the four-candidate field before going on to clinch the primary runoff, and later, the general election. 

As a commissioner, Oden has taken aim at clean energy, imposing steep fees on families who install home solar panels, making it a bad investment choice even though those households were using far less utility-generated power than before. And he voted for a series of rate increases that have led to Alabama having the Deep South’s second highest energy prices

Oden and his fellow commissioners have also blocked utility-scale solar and battery storage projects, even some requested by Alabama Power. Such moves—raising the cost of electricity while preventing customers from generating their own—benefit the shareholders and top officials of the utilities Oden is charged with regulating. 

“The influence of money in [utility commission] elections is very high because in a vacuum of information, whoever has the most money gets their message out the best,” said Joshua Basseches, an assistant professor at Tulane University who studies energy and climate policy. “In theory, the elected commissioners would be less susceptible to regulatory capture, because they would have to face the voters,” but "in practice, what happens is that these are very low-visibility elections.” 

Voters, in other words, have little to go on.

Residents packed the house at a November 2019 Public Service Commission meeting to discuss Alabama Power Co.'s proposed fees for rooftop solar households.Solomon Crenshaw Jr./BirminghamWatch

Utility commissions, writ broadly, are charged with overseeing the complex activities and fielding the demands of massive energy conglomerates that the state has granted regional monopoly powers. Commissioners vet new projects, monitor utility financials, and evaluate rate hike requests. The companies, meanwhile, are ensured a guaranteed return on investment, which averages about 10 percent nationally. 

Though each commission is different, their basic mission is the same: to ensure a safe and reliable grid and affordable energy for consumers. But sometimes the relationship between regulator and regulated gets a little too cozy, a phenomenon economists call “regulatory capture.”

“Investments in political candidates—and particularly for economic regulators like a utility commissioner—there's no better market return,” said Tyson Slocum, director of the energy program at Public Citizen, a consumer-advocacy nonprofit . “The amount of benefit that a utility can get, that a fossil fuel interest can get, from a friendly regulator, is better than anything that the stock market can provide.”

Regulatory capture can be costly to consumers. Since 2017, electricity bills in Georgia have increased by about $45 a month, more than double the national average, according to data from FindEnergy.com. Electricity rates, which constitute just a portion of the bill, have kept pace with the national average. Most of the increase is due to surcharges to pay for the $35 billion buildout of a nuclear generating station originally forecast to cost $14 billion.

Commissioner Bob Anthony deemed one PSC decision “the largest fleecing of the Oklahoma ratepayer in the history of the state.” Asked why his colleagues voted for it, he said: “Follow the money."

Back in 2012, when the Nuclear Regulatory Commission gave Georgia Power permission to build two new reactors at Plant Vogtle, the state’s utility commissioners were receiving 70 percent of their campaign support from companies or people that stood to benefit financially, or not, from their decisions, the Atlanta Journal-Constitution reported.

Over the next decade, the five commissioners approved $3.2 billion in cost overruns. ”This nuclear expansion does not make sense. It’s way over budget, way behind schedule,” Jennette Gayer, director of the nonprofit Environment Georgia, told Floodlight. 

Although Georgia law bars utilities from donating in PSC elections, nearly one-third of the campaign contributions to its commissioners since 2014 have come from fossil fuel and utility interests. Among the donors are Georgia Power executives, regulatory attorneys with business before the commission, and construction companies that specialize in utility work.

Thanks to a series of legal battles, Georgia hasn’t held elections for its PSC since 2020, and sitting commissioners have not had to disclose their campaign contributions since 2021. “The commissioners follow all campaign finance laws,” said PSC spokesman Tom Krause. “This includes disclosure of all donors and donated amounts as required by state and federal law.”

A rooftop solar installation in Hiram, Georgia. Despite an abundance of sun potential, Georgia is among the Deep South states that have been very slow to embrace solar power.Deidra Hodges/US DOE via Wikimedia Commons

Critics have also pointed to Oklahoma as a place where commissioners’ close relationships to the companies they oversee might be harming residents. Members of the state Corporation Commission (utility commissions go by various names) have taken in more than $1 million—nearly 35 percent of donations of $250 or more over the last decade—from sources linked to fossil fuel firms and utilities.

In 2022, the commission rapidly approved a plan for ratepayers to shoulder historic increases on their gas bills. The decision followed 2021’s Winter Storm Uri, which depleted the state’s gas reserves, forcing utilities to purchase gas on the spot market at exorbitant prices. The $3 average cost for 1,000 cubic feet of gas skyrocketed to $1,200 for a brief time, saddling the utilities with $3 billion in extra costs.

“What’s the result of all this fossil fuel industry money? ... Very little renewable energy, and in some cases, like Alabama and Mississippi, overt hostility.”

The companies  wanted to pass that loss along to their ratepayers. After the Legislature passed a bill allowing them to issue bonds to finance the debt, the corporation commissioners gave the utilities exactly what they wanted. “We paid more for natural gas in three days than we do in a year,” said Nick Singer, a leader with VOICE Oklahoma, a civic engagement coalition. “And they just created a debt instrument to put it on the backs of ratepayers for the next 25 years. And they did it in a couple months.”

This spring, Oklahoma’s attorney general filed a pair of lawsuits against gas pipeline firms, alleging they helped bid up prices to historic highs during the storm. Commissioner Bob Anthony was the only one of the state’s three commissioners to vote against securitization. In a July op-ed in the Oklahoman, he called the panel’s vote “the largest fleecing of the Oklahoma ratepayer in the history of the state.” 

Asked why his fellow commissioners voted the other way, Anthony, who is serving his final term, told Floodlight: “Follow the money, that’s the heart of it.”

“Correlation does not necessarily determine causation,” Trey Davis, a spokesman for the commission responded in an email, “and, while you might want to argue a majority decision is analogous to some form of quid-pro-quo, you do not appear to have provided any substance in support of what is tantamount to a spurious and seemingly subliminal allegation.”

Almost all of the states that elect their commissioners are led by Republicans—only Arizona has a Democratic governor. The Deep South states in particular stand out for their dearth of renewable energy.

According to the US Energy Information Administration, Alabama, Louisiana, and Mississippi all derive less than 1 percent of their electricity from solar despite ample solar potential in those states. (Utility-scale solar is the cheapest form of energy currently available.) That’s less than one-quarter of the national average.

In Mississippi, where PSC members got 12 percent of their campaign cash from fossil fuel interests, commissioners are openly dismissive of calls to improve the state’s 37th-place solar energy ranking. During an August “solar summit,” two commissioners abruptly cut off public discussion and ended the session early after pro-solar representatives stood up to speak. 

“What’s the result of all this fossil fuel industry money in commission elections?” said Daniel Tait, research and communications director for the Energy and Policy Institute, a utility watchdog. “Very little renewable energy, and in some cases, like Alabama and Mississippi, overt hostility.”

Several utilities in Arizona and Alabama have been caught making large, unreported, and difficult-to-trace dark money contributions to support commissioner candidates.

One state recently switched how it picks energy regulators. New Mexico, a Democratically controlled state with a powerful oil and gas industry, transitioned from electing commissioners to appointing them in 2023. The state law governing the transition also required commissioners to have degrees in fields related to energy. 

Its fresh slate of appointed commissioners has since approved a rate increase for the primary utility, the Public Service Company of New Mexico—but the amount was only about a quarter of what the utility requested. They also ordered PNM to return some $115 million in excess profits to its ratepayers. (The utility has appealed the latter decision to the state Supreme Court.)

One energy activist now says she preferred the elected commissioners, because campaign finance data made utility influence easier to trace—and counteract. “I think that the elected commission was more democratic, even though PNM spent hundreds of thousands of dollars trying to elect the commissioners they wanted,” said Mariel Nanasi, executive director of New Energy Economy, a renewable energy nonprofit. “That backfired for them, and their preferred candidates—at least in more recent times—lost because [their campaign spending] was exposed.” 

The patchwork nature of campaign finance record-keeping and disclosure laws in the United States also can make it difficult to track industry money flowing into state utility commission elections. 

In Mississippi and South Dakota, for example, Floodlight journalists had to manually enter into a database thousands of campaign contributions from records that were handwritten or kept in unsearchable formats. 

The money also can also come through supposedly independent groups—like political committees and 501(c)(4) (dark money) groups that don’t have to reveal their donors—making it harder to trace. These groups are allowed to support (or oppose) particular candidates but are not legally allowed to coordinate with any candidate’s campaign.

Arizona is the only one of the nine states analyzed that makes tracking independent campaign spending easy. For example, the dominant utility, Arizona Public Service, donated nearly $4.2 million in 2016 to the Arizona Coalition for Reliable Electricity, a political action committee that then spent nearly that exact amount to support the company’s preferred commissioners. (Arizona also provides commission candidates with public financing, which was not included in our analysis.)

Over the past decade, several utilities in Arizona and Alabama have been caught making large, unreported, and difficult-to-trace dark money contributions to support PSC candidates.

Clearly, utilities and fossil fuel interests are not donating to lawmakers and energy regulators out of the goodness of their hearts. But campaign donations, to be fair, don’t always predict how a legislator or regulator will act. Oklahoma commissioner Anthony received 65 percent of his donations from such sources, and he has often been a lone dissenting voice on the commission against policies that he says put consumers on the hook for the utilities’ mistakes. 

Bob Burns, an Arizona Corporation Commission member, got 41 percent of his donations from industry sources. Yet in 2016, he used his position to crusade for campaign finance transparency from the holding company that owns Arizona Public Service, which stood accused of using millions of dollars of dark money to support its preferred commissioner candidates. (Under pressure from the commission, the company eventually acknowledged its tactics.)

At least one energy regulator told Floodlight he struggled over whether to take donations from the companies he oversees. “I went through the process of trying to figure out from whom do I accept a donation?” said Gary Hanson, who sits on the South Dakota Public Utilities Commission. His conclusion: “I’m either going to accept donations from everyone or from no one—you either accept from everyone or you don’t accept from anyone.”

He took the money. 

Floodlight reporter Kristi E. Swartz contributed to this story.

Elon Musk Made More Money Yesterday Than He Gave Away in an Entire Year

26 October 2024 at 10:00

Elon Musk, far and away the richest man on the planet, is pouring tens of millions of dollars into efforts to get Donald Trump elected. In addition to his massively valuable promotion of Trump’s messaging on X—an in-kind donation if ever there was one—he reportedly gave $50 million to a group linked to immigrant-hater Stephen Miller, the architect of Trump’s morally abominable family separation policy. And then there’s the legally problematic $100 payments and $1 million lottery-style giveaways he’s been offering registered swing-state voters who sign a petition stating the following:

The First and Second Amendments guarantee freedom of speech and the right to bear arms. By signing below, I am pledging my support for the First and Second Amendments.

Weird, right? But Musk’s return on investment could be huge if Trump prevails and gives him even more power over the very government at whose teat Musk’s companies were nurtured to profitability—and on which they continue to depend. Also, let’s remember, tens of millions for this dude is the equivalent of pocket change for the rest of us. Here’s how much of Musk’s net worth $50 million represents:

0.000183486238532

But what of his philanthropy, you ask? Didn’t Musk sign Bill Gates’ “Giving Pledge,” vowing to give at least half of his wealth to charity?

Yes, he signed up in 2012, for what it’s worth. But he’s running way behind on his giving. Consider that, in all of 2022, according to his foundation’s latest tax filing, he gave $160.5 million to charitable causes. Musk made more than that just yesterday—a great deal more.

Forbes Real Time Billionaires

That’s right, Musk’s net worth increased by $2.7 billion on Friday, according to Forbes’ Real-Time Billionaires, a database that serves as a reminder of just how far our supposedly egalitarian American experiment has devolved into plutocracy—or oligarchy, if you prefer—a situation that founder John Adams had hoped we would avoid (though he wasn’t terribly confident that we would).

Put another way, the amount Musk gave to charity in one year is this much of what he gained in a day:

0.05962962962963

Six percent! Musk, by the way, is now roughly 100 times as rich as he was when he signed the pledge—a scenario Andrew Carnegie would consider grotesque. He’d best start acting more like MacKenzie Scott. Because, as a trusted advisor to industrialist John D. Rockefeller once warned his boss:

You must distribute it faster than it grows! If you do not, it will crush you, and your children, and your children’s children!

Now, Musk did contribute almost $2.3 billion in Tesla stock to his foundation in 2022, earning a fat tax break and locking in a huge, tax-free capital gain at the expense of America’s taxpayers. But our rules governing philanthropy are so toothless that he need only disburse a small fraction of these “charitable” assets. His foundation’s nest egg—roughly $7.2 billion at the end of 2022—generated $309 million in investment income that year, and the value of its unsold assets gained at least $373 million. Yet the amount it gave to charity was about the same as the previous year.

Federal law requires private foundations to spend down 5 percent of their assets annually (which includes overhead). Musk’s 2022 obligation was about $358 million—he didn’t give even half that. The government lets foundations average their disbursements over five years, but he’ll have to pick up his pace considerably.

Lest you were hoping the Musk Foundation’s tax documents would reveal sinister causes to which he may have donated, sorry to disappoint. His public giving is unobjectionable. What you have to watch out for, though, is the transfers to donor-advised funds. His foundation has, since 2018, moved more than $75 million over to a fund at Fidelity Charitable. For some unfathomable reason, the government lets such transfers count toward a foundation’s mandatory charitable payout.

Donor-advised funds are even more problematic than private foundations—although both cost taxpayers a fortune and are, as I explained in our must-read American Oligarchy issue, profoundly undemocratic. Not only are the creators not obligated to dole out a minimum of their assets each year, they are not obliged to reveal whom they are giving to. It’s dark money, in other words— convenient for anyone who wants to give secretly to odious nonprofits, including groups willing to subvert the democratic process if it will help put a certain candidate back in the White House.

Elon Musk Is Offering People Cash To Identify Trump Voters. What Could Go Wrong?

8 October 2024 at 19:23

Elon Musk, one of the world’s richest men, has gone “Deep MAGA.” The billionaire owner of X—the “everything app“—endorsed Donald Trump seconds after the former president was nearly assassinated in July, and within a few days was hatching plans to spend $45 million to get Trump elected. On Saturday, Musk joined the former president on stage in Butler, Pennsylvania, where he did his signature hop (which is vaguely in the shape of an X), and predicted that if Kamala Harris is elected there will be no more elections in the United States.

Musk has a habit of making predictions that don’t amount to much. It is one of the defining facets of his personality, up there with scientific racism and being a guy with a signature hop. You can go online and watch a supercut of him promising fully autonomous self-driving cars every year since 2014. Musk promised to put a man on Mars “in 10 years” 13 years ago. He revised his prediction, in 2016, to say that he would send humans to Mars in 2024. Sometimes you have to set aside the net worth and remember you are talking about someone who believes that people have gotten smarter because C-sections make it easier for babies to have big heads.

Musk’s paid referral strategy has drawbacks, for the same reason paying people to gather signatures often does: You’re incentivizing bad data.

So, there’s a good chance he’s wrong about a President Kamala Harris ending democracy as we know it. But the money he and his allies are spending is real. America PAC, the super-PAC Musk launched over the summer with a promise to not be “hyper-partisan” and a goal of saving “meritocracy,” has spent more than $8 million this year on independent expenditures boosting Republican candidates, and tens of millions of dollars on paid organizers to support Trump’s campaign efforts. 

It has not been entirely smooth—the New York Times recently reported that Musk’s PAC cut ties with the consulting it was using to run its field operations, and hired a new one. But on Sunday, he unveiled a secret weapon for the campaign, straight from the world of gym memberships: Refer a friend! Specifically, Musk is offering to pay $47 to anyone who successfully gets a registered voter in a swing state to sign a petition “to support the Constitution,” by which he means “The First and Second Amendments.” Per the fine print:

Each person may only sign this petition once. Eligible people may only list one eligible person as their referrer. Before payment is made, America PAC will verify the accuracy of all information of the referrer and referee.

This is a perfect Musk stunt for two reasons. One is that he seemingly chose this number as a gimmick because Trump would be the 47th president. (This is a guy who was once fined $40 million by the Securities and Exchange Commission after tweeting that he could take Tesla private at $420 a share.) The other is the confidence with which Musk is attempting to invent the concept of “email lists.” 

His end goal is fairly straightforward. America PAC wants to collect data on Trump supporters for the purposes of turning them out on or before Election Day. It is like any email asking you to wish Hillary Clinton a Happy Birthday or to sign this petition to urge Congress to stop adults from ordering off the kids menu. If you are anything like me, you are besieged with list-building petitions and surveys, and you try to tune them out. (Then again, I’ve never had anyone offer me money to get someone to sign one.)

Musk is essentially paying people to collect voter information—which is a standard thing campaigns and organizations do, only in this arrangement he’s paying his distributed organizers by the signature instead of by the hour. His PAC is banking on that cash incentive to juice the MAGA outreach effort, and hopefully identify some new Trump voters. It can then use the information to get out the vote.

This particular approach has drawbacks, for the same reason paying people to gather signatures often does: You’re incentivizing bad data, which is what you really don’t want in a get-out-the-vote operation. Paid petitioners get in trouble all the time because the signatures they collect don’t match real people, or were submitted without a voter’s knowledge. The PAC says it has some safeguards in place, and that you won’t get your $47 until both the referrer and referee are verified. But the money creates a reason for real people who don’t support Trump to sign up and take Musk’s cash. It’s a great way for Harris-backing undergrads at Arizona State to get beer money—it’s certainly easier than giving plasma.

It’s possible this is a genius move from a man with an evolutionarily advanced brain, in other words. But it’s also possible that Musk is simply doing the rich guy thing—and the classic rich tech guy thing—of walking into a new situation and assuming all of his ideas are important. A Washington Post story from July on how Musk ended up endorsing Trump included the following anecdote:

Musk asked people in the room to tell their friends to vote for Trump, saying he had learned from his experience selling Teslas that word-of-mouth promotion was critical. Some people in the crowd shook their heads and winced.

After his appearance in Butler, according to Politico, Musk planned on making more campaign appearances in the state where he once lived while attending the University of Pennsylvania. (The Politico piece includes the immortal line: “In addition to the Steelers, he is also a Philadelphia Eagles fan.”) Republicans love his money, no doubt. But it’s sort of peak donor-brain to think that swing-state voters want to hear anything more from a union-buster with the emotional maturity of a seventh-grade gamer.

Part of being so rich is that no one ever really says “no” to you. You can use drugs and keep your security clearance. You can joke about someone assassinating the vice president and still keep your federal contracts. An employee can accuse you of offering them a horse in exchange for sex and it will not necessarily become the one thing everyone knows about you. (Musk has called that last allegation “utterly untrue.”)

This social immunity has largely redounded to Musk’s benefit, even if one would not necessarily read his missives and conclude that this is a man who is “doing well.” But Musk’s lack of accountability has often clouded his judgment.

The classic rich person’s delusion is to assume people want your wisdom when all they are really after is your money. Because not every billionaire’s idea is a billion-dollar idea. This one may result in a large number of people, who aren’t necessarily who they say they are, looking to make a few bucks. Come to think of it, that actually sounds a lot like Elon Musk’s X.

Elon Musk Is Offering People Cash To Identify Trump Voters. What Could Go Wrong?

8 October 2024 at 19:23

Elon Musk, one of the world’s richest men, has gone “Deep MAGA.” The billionaire owner of X—the “everything app“—endorsed Donald Trump seconds after the former president was nearly assassinated in July, and within a few days was hatching plans to spend $45 million to get Trump elected. On Saturday, Musk joined the former president on stage in Butler, Pennsylvania, where he did his signature hop (which is vaguely in the shape of an X), and predicted that if Kamala Harris is elected there will be no more elections in the United States.

Musk has a habit of making predictions that don’t amount to much. It is one of the defining facets of his personality, up there with scientific racism and being a guy with a signature hop. You can go online and watch a supercut of him promising fully autonomous self-driving cars every year since 2014. Musk promised to put a man on Mars “in 10 years” 13 years ago. He revised his prediction, in 2016, to say that he would send humans to Mars in 2024. Sometimes you have to set aside the net worth and remember you are talking about someone who believes that people have gotten smarter because C-sections make it easier for babies to have big heads.

Musk’s paid referral strategy has drawbacks, for the same reason paying people to gather signatures often does: You’re incentivizing bad data.

So, there’s a good chance he’s wrong about a President Kamala Harris ending democracy as we know it. But the money he and his allies are spending is real. America PAC, the super-PAC Musk launched over the summer with a promise to not be “hyper-partisan” and a goal of saving “meritocracy,” has spent more than $8 million this year on independent expenditures boosting Republican candidates, and tens of millions of dollars on paid organizers to support Trump’s campaign efforts. 

It has not been entirely smooth—the New York Times recently reported that Musk’s PAC cut ties with the consulting it was using to run its field operations, and hired a new one. But on Sunday, he unveiled a secret weapon for the campaign, straight from the world of gym memberships: Refer a friend! Specifically, Musk is offering to pay $47 to anyone who successfully gets a registered voter in a swing state to sign a petition “to support the Constitution,” by which he means “The First and Second Amendments.” Per the fine print:

Each person may only sign this petition once. Eligible people may only list one eligible person as their referrer. Before payment is made, America PAC will verify the accuracy of all information of the referrer and referee.

This is a perfect Musk stunt for two reasons. One is that he seemingly chose this number as a gimmick because Trump would be the 47th president. (This is a guy who was once fined $40 million by the Securities and Exchange Commission after tweeting that he could take Tesla private at $420 a share.) The other is the confidence with which Musk is attempting to invent the concept of “email lists.” 

His end goal is fairly straightforward. America PAC wants to collect data on Trump supporters for the purposes of turning them out on or before Election Day. It is like any email asking you to wish Hillary Clinton a Happy Birthday or to sign this petition to urge Congress to stop adults from ordering off the kids menu. If you are anything like me, you are besieged with list-building petitions and surveys, and you try to tune them out. (Then again, I’ve never had anyone offer me money to get someone to sign one.)

Musk is essentially paying people to collect voter information—which is a standard thing campaigns and organizations do, only in this arrangement he’s paying his distributed organizers by the signature instead of by the hour. His PAC is banking on that cash incentive to juice the MAGA outreach effort, and hopefully identify some new Trump voters. It can then use the information to get out the vote.

This particular approach has drawbacks, for the same reason paying people to gather signatures often does: You’re incentivizing bad data, which is what you really don’t want in a get-out-the-vote operation. Paid petitioners get in trouble all the time because the signatures they collect don’t match real people, or were submitted without a voter’s knowledge. The PAC says it has some safeguards in place, and that you won’t get your $47 until both the referrer and referee are verified. But the money creates a reason for real people who don’t support Trump to sign up and take Musk’s cash. It’s a great way for Harris-backing undergrads at Arizona State to get beer money—it’s certainly easier than giving plasma.

It’s possible this is a genius move from a man with an evolutionarily advanced brain, in other words. But it’s also possible that Musk is simply doing the rich guy thing—and the classic rich tech guy thing—of walking into a new situation and assuming all of his ideas are important. A Washington Post story from July on how Musk ended up endorsing Trump included the following anecdote:

Musk asked people in the room to tell their friends to vote for Trump, saying he had learned from his experience selling Teslas that word-of-mouth promotion was critical. Some people in the crowd shook their heads and winced.

After his appearance in Butler, according to Politico, Musk planned on making more campaign appearances in the state where he once lived while attending the University of Pennsylvania. (The Politico piece includes the immortal line: “In addition to the Steelers, he is also a Philadelphia Eagles fan.”) Republicans love his money, no doubt. But it’s sort of peak donor-brain to think that swing-state voters want to hear anything more from a union-buster with the emotional maturity of a seventh-grade gamer.

Part of being so rich is that no one ever really says “no” to you. You can use drugs and keep your security clearance. You can joke about someone assassinating the vice president and still keep your federal contracts. An employee can accuse you of offering them a horse in exchange for sex and it will not necessarily become the one thing everyone knows about you. (Musk has called that last allegation “utterly untrue.”)

This social immunity has largely redounded to Musk’s benefit, even if one would not necessarily read his missives and conclude that this is a man who is “doing well.” But Musk’s lack of accountability has often clouded his judgment.

The classic rich person’s delusion is to assume people want your wisdom when all they are really after is your money. Because not every billionaire’s idea is a billion-dollar idea. This one may result in a large number of people, who aren’t necessarily who they say they are, looking to make a few bucks. Come to think of it, that actually sounds a lot like Elon Musk’s X.

“They Stole an Election”: Former Florida Senator Found Guilty in “Ghost Candidates” Scandal

1 October 2024 at 00:20

This story was reported by Floodlight, a nonprofit newsroom that investigates the powerful interests stalling climate action.

Former Florida state Sen. Frank Artiles was convicted by a Miami-Dade Circuit Court jury Monday evening, the latest fallout from the state’s 2020 “ghost candidates” scandal.

Artiles was convicted on three felony counts related to $44,000 in payments he made to Alex Rodriguez, a no-party candidate whose role was to siphon votes from Sen. Jose Javier Rodriguez, the Democratic incumbent. The six-member jury deliberated for seven hours before reaching its verdict. Artiles was acquitted on a fourth count of aiding and abetting a false voter registration. Artiles sat stone-faced as the guilty verdicts were read.

“They won. They were successful. They beat JJR,” public corruption prosecutor Tim VanderGiesen said in his opening argument. “They beat the incumbent named Rodriguez.” 

“They stole an election,” he said. 

Artiles’ defense attorney Frank Quintero had reminded jurors that ghost candidates are legal “so long as Florida election law is not violated.”

But that’s precisely what the jury found. 

Florida Power & Light’s then-CEO Eric Silagy had instructed underlings to make Florida state Sen. Jose Rodriguez’s life “a living hell.”

The term “ghost candidate” is used to describe a candidate who has no chance of winning, but runs to harm an actual contender’s chances. Ghost candidate Rodriguez was part of an opaquely funded 501(c)(4)—or “dark money”—effort enabled by consultants working for Florida Power & Light, a subsidiary of the NextEra utility conglomerate.

Florida Power & Light CEO Eric Silagy, who was never charged with wrongdoing, had ordered his underlings to “make [Sen. Rodriguez’s] life a living hell.” Silagy retired abruptly in January 2023 in the wake of reporting by Floodlight and its media partners about FPL’s involvement in the ghost candidate scandal.

Artiles was charged with conspiracy, making campaign contributions above the $1,000 limit, and “false swearing” for instructing Alex Rodriguez—who actually lived outside District 37—on how to fill out paperwork to get on the ballot. 

Artiles, who faced up to five years in prison per count, sat quietly throughout the two-week trial. He was flanked by his attorneys, Quintero and Frank Quiñon. Behind him in the Miami courtroom was a revolving cast of friends and family.

The charges stem from efforts to achieve a Republican supermajority in the Florida Senate by running three ghost candidates to take votes away from Democratic candidates in key 2020 races. The spoiler candidates were backed, in part, by a series of nonprofits controlled by Jeff Pitts, then-CEO of Matrix LLC, a consulting company that was working for Florida Power & Light, according to reporting by Floodlight and other news outlets

The nonprofits in question were 501(c)(4)s, which are not required to disclose their donors’ identities, and the prosecution stopped short of tracing the money back to its original source. On September 27, Florida federal judge Aileen Cannon dismissed a shareholder lawsuit accusing FPL’s parent company, NextEra Energy, of issuing misleading statements about its political activities.

From the utility’s perspective, as noted in our earlier, in-depth story on the scandal, expanding GOP dominance—by whatever means—would help fulfill the utility’s legislative priorities:

Those priorities included escaping liability for damages related to power outages in the wake of Hurricane Irma; ousting J.R. Kelly, the state’s long-serving (unsympathetic) consumer utility watchdog; and winning approval from the Senate-confirmed Public Service Commission for Florida’s largest-ever hike in electricity rates. 

The defeat of Sen. Rodriguez had the added benefit of kneecapping one of the state’s most prominent backers of rooftop solar, which reduces carbon emissions and lowers utility bills—and against which FPL had waged a decade-long counterinsurgency campaign.

He was defeated by 32 votes by Ileana Garcia, founder of Latinas for Trump.

Prosecutors said consultants implicated in the scandal had withheld records that had been subpoenaed. Key evidence in the form of hundreds of text messages between Artiles and Rodriguez also went missing, they said.

Much of the trial revolved around the credibility of the state’s star witness, ghost candidate Alex Rodriguez, who admitted under cross examination that he had a difficult relationship with the truth. To buttress his credibility, prosecutors laid out the broader effort to influence the 2020 election. 

Their first witness was a reticent Pat Bainter, a north Florida peanut farmer and powerful operative for the state Republican Senatorial Campaign Committee. 

In a pretrial deposition, Bainter, whose company, Data Targeting, did work for GOP candidates, had acknowledged he paid Artiles $15,000 a month for six months for on-the-ground research in the District 37 race, including running a spoiler candidate. Bainter also acknowledged he sent a $100,000 no-strings-attached payment to a 501(c)(4) nonprofit controlled by Artiles. 

Testimony and evidence presented at trial revealed that Bainter held meetings with Artiles and Garcia campaign consultants who had a business relationship with Pitts, then-CEO of Matrix.

“There is no other explanation for why the defendant is giving tens of thousands of dollars to Alex Rodriguez,” the prosecutor said.

Garcia’s campaign manager testified that Bainter held the purse strings for that campaign. Bainter, too, testified that his company worked for Garcia’s campaign.

Rodriguez took the stand late on the fourth day of the trial. Prosecutor VanderGiesen showed him totals from the 2020 race, in which he got 6,000 votes.

“Did you come about getting those votes honestly?”

“No,” Rodriguez responded. 

Rodriguez, who had pleaded guilty to election-related charges and served six months of home detention and three years of probation, also testified that Artiles offered him $50,000 to run as a spoiler: $25,000 before the election and $25,000 after.

But he was afraid Artiles would never come through on his promise to pay, so he “fabricated” a series of business deals involving construction equipment, diesel engines and COVID masks to extract money from Artiles. He also asked Artiles to help cover his rent and his daughter’s private school tuition, Rodriguez testified. 

At one point, he admitted, he invented a story about a Range Rover he was going to buy at auction for Artiles, asking the former state senator for a $10,900 payment.

His reason for all the scams? “I was concerned I wasn’t going to get the $50,000.”

The defense grilled Rodriguez, working to establish reasonable doubt about the nature of his transactions with Artiles. They portrayed the former senator as the victim in a series of fraudulent business deals and requests for financial help from Rodriguez. “The evidence is going to show that Rodriguez is a con artist, a professional con artist, a pathological liar,” Quintero told the jurors.

On the stand, Rodriguez didn’t defend himself, replying to Quintero’s increasingly forceful questions in a quiet monotone. 

The key question posed by the defense was: Could the state prove—incontrovertibly—that the payments at the heart of the case were illegal campaign contributions? 

“There is no other explanation,” VanderGiesen posited, “for why the defendant is giving tens of thousands of dollars to Alex Rodriguez.”

When approached by a reporter from Floodlight, Rodriguez declined to speak on the record until the end of the trial. He took the reporter’s phone number and said he would call. As he walked down the escalator, he shot the reporter a wink. 

The reporter also spoke to Artiles shortly before the verdict was handed down. Artiles called the trial “a colossal waste of time.”

“The press won’t report what’s really happening,” he said. 

The reporter replied that he’d be happy to write the whole story—if he could ever find out precisely what it was. 

“They Stole an Election”: Former Florida Senator Found Guilty in “Ghost Candidates” Scandal

1 October 2024 at 00:20

This story was reported by Floodlight, a nonprofit newsroom that investigates the powerful interests stalling climate action.

Former Florida state Sen. Frank Artiles was convicted by a Miami-Dade Circuit Court jury Monday evening, the latest fallout from the state’s 2020 “ghost candidates” scandal.

Artiles was convicted on three felony counts related to $44,000 in payments he made to Alex Rodriguez, a no-party candidate whose role was to siphon votes from Sen. Jose Javier Rodriguez, the Democratic incumbent. The six-member jury deliberated for seven hours before reaching its verdict. Artiles was acquitted on a fourth count of aiding and abetting a false voter registration. Artiles sat stone-faced as the guilty verdicts were read.

“They won. They were successful. They beat JJR,” public corruption prosecutor Tim VanderGiesen said in his opening argument. “They beat the incumbent named Rodriguez.” 

“They stole an election,” he said. 

Artiles’ defense attorney Frank Quintero had reminded jurors that ghost candidates are legal “so long as Florida election law is not violated.”

But that’s precisely what the jury found. 

Florida Power & Light’s then-CEO Eric Silagy had instructed underlings to make Florida state Sen. Jose Rodriguez’s life “a living hell.”

The term “ghost candidate” is used to describe a candidate who has no chance of winning, but runs to harm an actual contender’s chances. Ghost candidate Rodriguez was part of an opaquely funded 501(c)(4)—or “dark money”—effort enabled by consultants working for Florida Power & Light, a subsidiary of the NextEra utility conglomerate.

Florida Power & Light CEO Eric Silagy, who was never charged with wrongdoing, had ordered his underlings to “make [Sen. Rodriguez’s] life a living hell.” Silagy retired abruptly in January 2023 in the wake of reporting by Floodlight and its media partners about FPL’s involvement in the ghost candidate scandal.

Artiles was charged with conspiracy, making campaign contributions above the $1,000 limit, and “false swearing” for instructing Alex Rodriguez—who actually lived outside District 37—on how to fill out paperwork to get on the ballot. 

Artiles, who faced up to five years in prison per count, sat quietly throughout the two-week trial. He was flanked by his attorneys, Quintero and Frank Quiñon. Behind him in the Miami courtroom was a revolving cast of friends and family.

The charges stem from efforts to achieve a Republican supermajority in the Florida Senate by running three ghost candidates to take votes away from Democratic candidates in key 2020 races. The spoiler candidates were backed, in part, by a series of nonprofits controlled by Jeff Pitts, then-CEO of Matrix LLC, a consulting company that was working for Florida Power & Light, according to reporting by Floodlight and other news outlets

The nonprofits in question were 501(c)(4)s, which are not required to disclose their donors’ identities, and the prosecution stopped short of tracing the money back to its original source. On September 27, Florida federal judge Aileen Cannon dismissed a shareholder lawsuit accusing FPL’s parent company, NextEra Energy, of issuing misleading statements about its political activities.

From the utility’s perspective, as noted in our earlier, in-depth story on the scandal, expanding GOP dominance—by whatever means—would help fulfill the utility’s legislative priorities:

Those priorities included escaping liability for damages related to power outages in the wake of Hurricane Irma; ousting J.R. Kelly, the state’s long-serving (unsympathetic) consumer utility watchdog; and winning approval from the Senate-confirmed Public Service Commission for Florida’s largest-ever hike in electricity rates. 

The defeat of Sen. Rodriguez had the added benefit of kneecapping one of the state’s most prominent backers of rooftop solar, which reduces carbon emissions and lowers utility bills—and against which FPL had waged a decade-long counterinsurgency campaign.

He was defeated by 32 votes by Ileana Garcia, founder of Latinas for Trump.

Prosecutors said consultants implicated in the scandal had withheld records that had been subpoenaed. Key evidence in the form of hundreds of text messages between Artiles and Rodriguez also went missing, they said.

Much of the trial revolved around the credibility of the state’s star witness, ghost candidate Alex Rodriguez, who admitted under cross examination that he had a difficult relationship with the truth. To buttress his credibility, prosecutors laid out the broader effort to influence the 2020 election. 

Their first witness was a reticent Pat Bainter, a north Florida peanut farmer and powerful operative for the state Republican Senatorial Campaign Committee. 

In a pretrial deposition, Bainter, whose company, Data Targeting, did work for GOP candidates, had acknowledged he paid Artiles $15,000 a month for six months for on-the-ground research in the District 37 race, including running a spoiler candidate. Bainter also acknowledged he sent a $100,000 no-strings-attached payment to a 501(c)(4) nonprofit controlled by Artiles. 

Testimony and evidence presented at trial revealed that Bainter held meetings with Artiles and Garcia campaign consultants who had a business relationship with Pitts, then-CEO of Matrix.

“There is no other explanation for why the defendant is giving tens of thousands of dollars to Alex Rodriguez,” the prosecutor said.

Garcia’s campaign manager testified that Bainter held the purse strings for that campaign. Bainter, too, testified that his company worked for Garcia’s campaign.

Rodriguez took the stand late on the fourth day of the trial. Prosecutor VanderGiesen showed him totals from the 2020 race, in which he got 6,000 votes.

“Did you come about getting those votes honestly?”

“No,” Rodriguez responded. 

Rodriguez, who had pleaded guilty to election-related charges and served six months of home detention and three years of probation, also testified that Artiles offered him $50,000 to run as a spoiler: $25,000 before the election and $25,000 after.

But he was afraid Artiles would never come through on his promise to pay, so he “fabricated” a series of business deals involving construction equipment, diesel engines and COVID masks to extract money from Artiles. He also asked Artiles to help cover his rent and his daughter’s private school tuition, Rodriguez testified. 

At one point, he admitted, he invented a story about a Range Rover he was going to buy at auction for Artiles, asking the former state senator for a $10,900 payment.

His reason for all the scams? “I was concerned I wasn’t going to get the $50,000.”

The defense grilled Rodriguez, working to establish reasonable doubt about the nature of his transactions with Artiles. They portrayed the former senator as the victim in a series of fraudulent business deals and requests for financial help from Rodriguez. “The evidence is going to show that Rodriguez is a con artist, a professional con artist, a pathological liar,” Quintero told the jurors.

On the stand, Rodriguez didn’t defend himself, replying to Quintero’s increasingly forceful questions in a quiet monotone. 

The key question posed by the defense was: Could the state prove—incontrovertibly—that the payments at the heart of the case were illegal campaign contributions? 

“There is no other explanation,” VanderGiesen posited, “for why the defendant is giving tens of thousands of dollars to Alex Rodriguez.”

When approached by a reporter from Floodlight, Rodriguez declined to speak on the record until the end of the trial. He took the reporter’s phone number and said he would call. As he walked down the escalator, he shot the reporter a wink. 

The reporter also spoke to Artiles shortly before the verdict was handed down. Artiles called the trial “a colossal waste of time.”

“The press won’t report what’s really happening,” he said. 

The reporter replied that he’d be happy to write the whole story—if he could ever find out precisely what it was. 

Mark Zuckerberg Isn’t Done With Politics. His Politics Have Just Changed.

24 September 2024 at 21:47

On Tuesday, the New York Times reported that one of the world’s richest men had recently experienced a major epiphany. After bankrolling a political organization that supported immigration reform, espousing his support for social justice, and donating hundreds of millions of dollars to support local election workers during the 2020 election, “Mark Zuckerberg is done with politics.”

The Facebook founder and part-time Hawaiian feudal lord, according to the piece, “believed that both parties loathed technology and that trying to continue engaging with political causes would only draw further scrutiny to their company,” and felt burned by the criticism he has faced in recent years, on everything from the proliferation of disinformation on Facebook to his investment in election administration (which conservatives dismissively referred to as “Zuckerbucks”). He is mad, in other words, that people are mad at him, and it has made him rethink his entire theory of how the world works.

It’s an interesting piece, which identifies a real switch in how Zuckerberg—who along with his wife, Priscilla Chan, has made a non-binding pledge to give away a majority of his wealth by the end of his lifetime—thinks about his influence and his own ideology. But there’s a fallacy underpinning that headline: Zuckerberg isn’t done with politics. His politics have simply changed.

Like a lot of unfathomably wealthy people who have the resources to harvest their own beef, Zuckerberg now reportedly considers himself a “libertarian.” He has spent a lot of time in recent years attempting to cultivate a personal brand as a sort of happy-go-lucky #GirlDad. His new politics are not as ominous or viscerally off-putting as the red-pilled divorced energy of Elon Musk. But they are a politics. Deciding that you no longer want to advocate for a path to citizenship as part of comprehensive immigration reform is as political as the act of advocating for it was. Responding to years of conspiracy theories and personal attacks from conservative politicians by cultivating closer relationships with them is a political tactic. According to the report, Zuckerberg twice talked to Donald Trump by phone this summer, while his new Republican political attache has sought to reassure the ex-president that Zuckerberg has no plans to spend money shoring up election infrastructure this year. It does not really get more political than a pleasant phone call with a man who tried a coup.

Zuckerberg’s efforts to discourage political activism among Meta employees (per the piece) mirror his own efforts to discourage political content on the platforms he controls, such as Facebook and Instagram. Attempting to mute or disincentivize political speech is, of course, a political act, and it betrays an ominous worldview. In that sense, at least, he and Musk aren’t so different; they’re collectively building a “digital public square” where you can find everything but reported, factual news. Zuckerberg has made it clear that he is frustrated with specific kinds of political speech—including criticism of him.

The truth is there is no such thing as an apolitical oligarch. Zuckerberg’s fortune came from a monopolistic enterprise that’s been used to foment ethnic cleansing and collectively unlearn a century-and-a-half of germ theory. His wealth is sustained and protected by political structures, and his spending and strategic priorities can make or break communities, newsrooms, and democratic norms. When he puts his foot down, you notice it. But when he lifts his foot up, you notice that too.

Mark Zuckerberg Isn’t Done With Politics. His Politics Have Just Changed.

24 September 2024 at 21:47

On Tuesday, the New York Times reported that one of the world’s richest men had recently experienced a major epiphany. After bankrolling a political organization that supported immigration reform, espousing his support for social justice, and donating hundreds of millions of dollars to support local election workers during the 2020 election, “Mark Zuckerberg is done with politics.”

The Facebook founder and part-time Hawaiian feudal lord, according to the piece, “believed that both parties loathed technology and that trying to continue engaging with political causes would only draw further scrutiny to their company,” and felt burned by the criticism he has faced in recent years, on everything from the proliferation of disinformation on Facebook to his investment in election administration (which conservatives dismissively referred to as “Zuckerbucks”). He is mad, in other words, that people are mad at him, and it has made him rethink his entire theory of how the world works.

It’s an interesting piece, which identifies a real switch in how Zuckerberg—who along with his wife, Priscilla Chan, has made a non-binding pledge to give away a majority of his wealth by the end of his lifetime—thinks about his influence and his own ideology. But there’s a fallacy underpinning that headline: Zuckerberg isn’t done with politics. His politics have simply changed.

Like a lot of unfathomably wealthy people who have the resources to harvest their own beef, Zuckerberg now reportedly considers himself a “libertarian.” He has spent a lot of time in recent years attempting to cultivate a personal brand as a sort of happy-go-lucky #GirlDad. His new politics are not as ominous or viscerally off-putting as the red-pilled divorced energy of Elon Musk. But they are a politics. Deciding that you no longer want to advocate for a path to citizenship as part of comprehensive immigration reform is as political as the act of advocating for it was. Responding to years of conspiracy theories and personal attacks from conservative politicians by cultivating closer relationships with them is a political tactic. According to the report, Zuckerberg twice talked to Donald Trump by phone this summer, while his new Republican political attache has sought to reassure the ex-president that Zuckerberg has no plans to spend money shoring up election infrastructure this year. It does not really get more political than a pleasant phone call with a man who tried a coup.

Zuckerberg’s efforts to discourage political activism among Meta employees (per the piece) mirror his own efforts to discourage political content on the platforms he controls, such as Facebook and Instagram. Attempting to mute or disincentivize political speech is, of course, a political act, and it betrays an ominous worldview. In that sense, at least, he and Musk aren’t so different; they’re collectively building a “digital public square” where you can find everything but reported, factual news. Zuckerberg has made it clear that he is frustrated with specific kinds of political speech—including criticism of him.

The truth is there is no such thing as an apolitical oligarch. Zuckerberg’s fortune came from a monopolistic enterprise that’s been used to foment ethnic cleansing and collectively unlearn a century-and-a-half of germ theory. His wealth is sustained and protected by political structures, and his spending and strategic priorities can make or break communities, newsrooms, and democratic norms. When he puts his foot down, you notice it. But when he lifts his foot up, you notice that too.

Kamala Harris’ Personal Popularity Is Surging. So Is Her Campaign Cash.

22 September 2024 at 17:47

Things seem to be going great for Vice President Kamala Harris when it comes to two key data points any politician obsesses over: cash and favorability ratings.

A new NBC News poll out today shows Harris with a 5-point lead over former President Donald Trump among registered voters nationally, who prefer her to him 49 to 44 percent. That’s a big jump from July, when NBC polling found Trump leading Biden 45 to 43 percent. Not only that, the new poll shows Harris’ favorability rating soared 16 points since July, with particular spikes coming from voters under 30 and Black and Hispanic voters. NBC notes that this marks the largest increase for any politician in the network’s polling since George W. Bush saw a post-9/11 surge.

NEW: Kamala Harris’ favorability has jumped 16 points since July, the largest increase for any politician in NBC News polling since George W. Bush’s standing surged after the 9/11 terrorist attacks.@SteveKornacki breaks down the numbers from latest @NBCNews poll. pic.twitter.com/Zc84Q4cXkM

— Meet the Press (@MeetThePress) September 22, 2024

Harris also outraised Trump 4-to-1 in August, according to new filings from the Federal Election Commission released Friday, which show that her campaign took in $189 million, while his brought in $44 million. Harris has been a boon for Democratic fundraising since President Joe Biden dropped from the ticket in July: As my colleagues and I reported, she raised more than $80 million in her first 24 hours and $200 million in her first week campaigning; her campaign also raised $540 million during its first month and more than $80 million during the Democratic National Convention.

The Harris campaign is not sitting on its cash, having spent nearly $174 million last month, while Trump spent about $61 million. As the New York Times reported Friday, some of the campaigns’ spending gap is reflected in the money they’re putting towards digital operations, with the Harris campaign splashing out on more than $12 million on Facebook and Instagram advertising during the week of the debate, while the Trump campaign spent well under $1 million. Trump’s spokespeople told the Times that the campaign is spending less because they can reach people for free at rallies—though that’s a risky bet, given that Trump can’t be counted on to stick to a scriptor facts.

Florida “Ghost Candidates” Scandal Puts the Entire Utility Sector on Trial

18 September 2024 at 10:00

This story was reported by Floodlight, a nonprofit newsroom that investigates the powerful interests stalling climate action.

Liam Fitzpatrick’s was packed on a Tuesday in November, and all eyes in the suburban Orlando, Florida, pub were glued to the TVs behind the bar. Fitzpatrick’s usually had sports on, but this was Election Eve 2020, and Republican state Senate candidate Jason Brodeur watched nervously as the results trickled in. This was his election party. Brodeur’s campaign had spent millions of dollars running him for an open seat against the Democratic nominee, a labor attorney, and the race was neck and neck.

But his backers had a secret weapon. Just before the filing deadline, a substitute teacher named Jestine Iannotti had joined the race as an unaffiliated third-party candidate. A political unknown, she didn’t even campaign. The central Florida district was then carpeted with misleading mailers that appealed to liberal values and voters’ distaste for partisan politics—one included a stock photo that seemed to imply that Iannotti, who is white, is a Black woman. If she siphoned off votes from his Democratic rival, Brodeur stood a better chance.

Iannotti was a “ghost candidate,” one with no hope of winning who runs—or is run—specifically as a spoiler. Ghost candidates are legal in Florida—sort of. Any eligible person can run for public office, but the covert financing of ghost campaigns sometimes runs afoul of even that state’s famously lax election laws. State prosecutors would eventually conclude that Iannotti and another ghost candidate who ran in 2020—along with their political consultants—had broken quite a few. (Brodeur claimed ignorance of the scheme, and has faced no legal action as a result, though a local tax collector on trial for unrelated charges would later testify that Brodeur was well aware of it.)

Also at Fitzpatrick’s that night was then-47-year-old Frank Artiles, a burly, foul-mouthed ex-Marine and former Republican state senator. Artiles, who is Cuban American, had resigned his Senate post in disgrace in 2017 after using racial slurs in front of two Black colleagues during a drunken rant. He, too, was fixated on Brodeur’s returns, as well as the results of an even tighter state Senate race in south Miami-Dade.

Man wearing a mask wearing a white shirt surrounded by TV cameras.
Frank Artiles leaves the Turner Guilford Knight Correctional Center in Miami on March 18, 2021, after posting bail in a case related to Florida’s 2020 District 37 state Senate campaign.Matias J. Ochner/Miami Herald/Floodlight

The latter contest was a slugfest between one of Florida’s highest-profile Democratic lawmakers, José Javier Rodriguez, and Republican Ileana García, founder of Latinas for Trump. It, too, hinged on a ghost candidate: Alex Rodriguez, a down-on-his-luck salesman of used heavy equipment, whose shared surname with the incumbent was no coincidence. Like Iannotti, Rodriguez hadn’t campaigned. He, too, was boosted by a flood of misleading mailers. 

As the final tallies came in, the mood at Fitzpatrick’s turned electric. Brodeur ended up winning his seat by about 7,600 votes. (Iannotti drew nearly 6,000.) In south Miami-Dade, Garcia, the Republican, edged out incumbent José Rodriguez by fewer than 40 votes. Artiles was jubilant. “That was me!” a partygoer recalls him yelling. “That’s all me!”

At a criminal trial this week in Miami, the prosecution may ask the jury to interpret Artiles’ outburst as an admission of guilt. Four months after the election party, the Miami-Dade state attorney charged him and ghost candidate Rodriquez with multiple campaign finance–related felonies. Among other charges, Artiles stands accused of conspiracy, making excessive campaign contributions, and “false swearing” in connection with voting or elections. If found guilty on all counts, he faces up to five years in prison.

In Central Florida, prosecutors issued a multi-count indictment against Iannotti and the two operatives (Eric Foglesong and Ben Paris, chair of the Seminole County Republican Party) who’d arranged for her to run. (A ghost candidate Artiles had recruited for a third state Senate race—a spa owner whose wife regularly waxed Artiles’ back—was not charged.) In 2022, a jury found Paris guilty of interfering in an election by means of an illegal campaign donation—the state recommended 60 days in jail; the judge gave him a year of probation, community service, and a fine. Foglesong, charged with felony and misdemeanor election crimes, avoided possible jail time by pleading no contest to misdemeanor charges, and Iannotti pleaded no contest last month to a pair of first-degree misdemeanors. Artiles maintains his innocence.

In a December 2023 deposition, political consultant Patrick Bainter told Florida prosecutors that he hired former state Sen. Frank Artiles to run “independent” candidates to help solidify the Senate’s Republican majority.Floodlight

And all of the above might have been just another colorful tale of shady politics in the Sunshine State were it not for a spat between political consultants.

Indeed, after the leaders of Matrix LLC, a high-powered political consulting firm whose CEO helped finance the ghost campaigns, started feuding, the story took on a new life, offering something rarer and more consequential: a glimpse, oddly enough, into the political meddling of one of America’s largest power companies.

The source of the leak was never clear, but as the consultants squabbled, thousands of pages of Matrix’s internal documents made it into the hands of Florida news outlets. The revelations therein, and reporting on discovery materials generated by the various prosecutions, would culminate in the abrupt January 2023 retirement of Florida Power & Light CEO Eric Silagy, triggering a single-day, $14 billion drop in the company’s market value.

FPL is a subsidiary of NextEra Energy, one of the nation’s largest utility conglomerates in terms of homes and businesses served. And although its parent is a major producer of renewable energy, FPL is among Florida’s biggest greenhouse-gas emitters. The leaked documents, in any case, showed that FPL was enmeshed in a covert campaign of media manipulation, surveillance, and what one federal securities lawsuit calls electoral “dirty tricks,” all in the name of maximizing profits.

Investigations by Floodlight and other Florida news outlets would reveal that the ghost candidates were bankrolled with some $730,000 in dark money, $100,000 of which was channeled through a prominent Republican operative into a 501(c)(4) nonprofit that Artiles controlled. (Artiles’ attorney, Frank Quintero, disputes that any of that money ever made it to ghost candidate Rodriguez: “The prosecutor can say whatever the fuck he wants, but the reality is different than what he wants it to be.”) The remaining $630,000 made its way through a daisy chain of opaque nonprofits partially overseen by the CEO of Matrix, which was then working for FPL.

In this undated email obtained by Floodlight via public records request, Artiles offers advice to political consultant Patrick Bainter related to running a ghost candidate in the 2020 election.Floodlight

From the utility’s perspective, expanding the state Senate’s Republican majority—by whatever means—would help fulfill its legislative priorities. Those priorities included escaping liability for damages related to power outages in the wake of Hurricane Irma; ousting J.R. Kelly, the state’s long-serving (unsympathetic) consumer utility watchdog; and winning approval from the Senate-confirmed Public Service Commission for Florida’s largest-ever hike in electricity rates. The defeat of Sen. Rodriguez had the added benefit of kneecapping one of the state’s most prominent backers of rooftop solar, which reduces carbon emissions and lowers utility bills—and against which FPL had waged a decade-long counterinsurgency campaign.

FPL, which declined to comment for this article, prevailed on all counts.

The company has steadfastly denied wrongdoing, although it does not dispute hiring Matrix. “They did good work,” then-CEO Silagy told me in June 2022. During the same interview, he admitted to authoring a January 2019 email about Sen. Rodríguez, wherein Silagy ordered his minions “to make his life a living hell”—a directive that was immediately relayed to Matrix.

White man in blue shirt.
Eric Silagy, the former president and CEO of Florida Power & LightMatias J. Ocner/Miami Herald/Zuma

The utility claims that two outside law firms, whose investigations FPL commissioned but has never made public, have cleared it of election-related liability or wrongdoing, despite reporting that suggests otherwise. The Orlando Sentinel, for example, reported that Silagy sometimes used an email pseudonym (Theodore Hayes) when communicating with Jeff Pitts, then CEO of Matrix. And a 2022 Federal Election Commission complaint accused five nonprofits linked to Pitts of “direct and serious violations of the Federal Election Campaign Act.”

The complaint, dismissed earlier this year after the partisan six-member commission deadlocked on a party-line vote, cites a memo Pitts sent to Silagy laying out how FPL could channel money covertly through a series of nonprofits and, ultimately, a super-PAC, to fund “‘political activities’ on both the state and federal level.” The complaint alleges that “the effect of this scheme would be to illegally hide the identities of the true source or sources of contributions.”  

“Unfortunately, partisan gridlock and dysfunction has become routine at the FEC, which has only opened four investigations this year,” says Stuart McPhail, senior litigation counsel at Citizens for Responsibility and Ethics in Washington, the nonprofit that filed the complaint. “That means many complaints, even those for which the FEC’s nonpartisan expert staff recommends an investigation, end in partisan gridlock. That’s exactly what happened with our complaint.”

The scenes to follow are based on thousands of pages of documents and more than 50 interviews with various players. In addition to setting the stage for Artiles’ long-delayed trial, they offer a window into how some utility monopolies have chosen to flex their political power, pushing legal boundaries for financial gain, and sometimes thwarting America’s transition to clean energy in the process.

On a Friday evening in late February 2017, 32 NASCAR race-truck drivers squinted under the Daytona International Speedway’s 2,000-watt lights. Their eyes were fixed on state Sen. Frank Artiles, who sported a suede jacket emblazoned with the NextEra logo. He waved a green flag to kick off the 250-mile race, sponsored by NextEra Energy Resources, another NextEra subsidiary, but just two laps in things went awry—a 17-vehicle pile-up that resulted in one of the trucks getting completely totaled.

Your high school English teacher would call this foreshadowing.

Man in brown jacket standing in the middle of a man and woman in white race car driving suits.
Artiles, then-chairman of the Florida Senate’s energy and utilities committee, poses with race officials at Daytona Beach International Speedway on February 24, 2017.Facebook/Frank Artiles/Floodlight

Artiles was then serving his first term in the Florida Senate and chairing its energy committee. That is to say, the elected official who controlled the fate of state bills related to energy and the environment was accepting the red-carpet treatment from a utility holding company that routinely had business before his committee.

Such potential conflicts of interest are not unusual in the utility realm. Investor-owned power companies specialize in charming and lobbying legislators and regulators. A captured regulator might approve a higher profit margin for a power company than an adversarial one would. A friendly legislator is more likely to pass favorable laws. Across the nation, utilities are the most active lobbyists on state environmental bills.

Our system “gives utilities incredible incentive to build out massive, sophisticated, elaborate, sometimes clandestine political influence machines.”

What makes the situation especially irksome is that utilities are not normal companies. The firms that provide gas and electricity and send monthly bills to homeowners and businesses are state-sanctioned monopolies. They don’t make money from selling power per se. Rather, like a waiter with guaranteed tips, their profit margins are pre-determined by regulators based on how much they invest in their infrastructure. The more plants and poles and substations a utility builds, the bigger its guaranteed return, which averages about 10 percent nationwide. (FPL’s have run as high as 11.8 percent.) Politicians and regulators, at least in theory, are supposed to act on behalf of consumers and prevent utilities from running up the tab.

The way the system is set up “gives utilities incredible incentive to build out massive, sophisticated, elaborate, sometimes clandestine political influence machines,” says David Pomerantz, executive director of the Energy and Policy Institute, a nonprofit utility watchdog. “No matter how you slice it,” he adds, “they are among the biggest spenders on political influence generally.”

The numbers are staggering. According to the Institute for Local Self Reliance, an energy think tank, investor-owned utilities have given more than $130 million to federal candidates over the past decade and have spent more than $294 million on state political races between 2014 and 2023.

FPL alone donated at least $42 million to Florida lawmakers between June 2013 and June 2023, according to a Floodlight analysis. And that’s just reported donations. Across the nation, from 2014 to 2020, power companies pumped at least $215 million more into politics via 501(c)(4) nonprofits that don’t have to reveal their donors—which is why these funds are referred to as “dark money.”

Utility influence operations have led to a generational resurgence of fraud and corruption in the sector. A recent Floodlight analysis of three decades of corporate prosecutions and federal lawsuits describes malfeasance that has cost electricity customers at least $6.6 billion over the past 10 years. The costs to the environment and the energy transition are also steep. Utilities in Ohio struck a corrupt bargain with prominent state lawmakers—some of whom were convicted and sentenced to prison—to prop up failing coal and nuclear plants. Utilities in Arizona were investigated by the FBI for using dark money to elect energy regulators who slashed rooftop solar incentives, though no charges have been filed.

Artiles’ Daytona junket didn’t break any laws, but the optics weren’t great. He’d flown in on a private plane that belonged to his campaign treasurer—an FPL lobbyist. The night of the NASCAR race, he took in $10,000 in contributions at a fundraiser in his honor, where he rubbed shoulders with Keanu Reeves. The next day, he visited Disney’s Epcot Center as the guest of John Holley, FPL’s top in-house lobbyist. “It was an honor to be there,” Artiles told the Miami Herald after the news got out. “I’m not going to lie to you. It was cool.”

After returning to Tallahassee, Artiles fast-tracked two bills coveted by FPL.

But like the truck totaled during that second lap at Daytona, the freshman senator’s tenure would be short-lived. About a month after the FPL junket, Artiles got into an argument with two Black fellow senators at a private club near the state Capitol, berating them and using the n-word. The Senate president made Artiles stand and apologize to his colleagues, after which Artiles walked straight out of the chamber and into a gaggle of reporters, shedding his conciliatory tone like a football player doffing sweaty pads. This prompted the legislative Black caucus to demand his expulsion. Artiles resigned two days later.

Two men in grey suits smile and shake hands.
Then–Florida state Rep. Frank Artiles (R-Miami) is congratulated by Rep. Alan Williams (D-Tallahassee) in 2016. Artiles resigned from the Senate the following year after making racist remarks.Scott Keeler/Tampa Bay Times/Zuma

He was out of the Senate, but not the game. In October 2017, Artiles was invited to a lunch meeting with Ryan Tyson, then a leading Republican operative for Associated Industries of Florida, a powerful trade group to which FPL had donated millions. Tyson, a pollster, had done work on issues critical to FPL, and was executive director of Let’s Preserve the American Dream—a nonprofit that would play a key role in the ghost candidate scandal. Alex Alvarado, Tyson’s protégé, set up the lunch, which Tyson says he does not recall attending. Starting that same month, and continuing into 2021, Artiles would receive $5,000 monthly payments from Tyson for “research services” related to Hispanic voters.

After the 2020 election, Tyson and his group came under the scrutiny of the prosecutors. “We waived all privileges and co-operated with the government in its investigation,” he told me recently. “They couldn’t explain to us what they were looking for, but we were nonetheless cooperative.” (Tyson was never charged with wrongdoing.) “This is crazy that this is how law-abiding tax paying cooperative citizens are treated,” he said.

Chuck’s, a fish house in suburban Birmingham, Alabama, was bustling on the evening of October 26, 2021, when a former Pat Buchanan staffer named K.B. Forbes arrived for what he thought was dinner with Jeff Pitts, who until recently had been CEO of Matrix.

Black and white photo of man in suit smiling.
Jeff Pitts, the former CEO of Matrix , had a major falling out with the firm’s founder.Floodlight

A few months earlier, Joe Perkins, Matrix’s founder, had sued Pitts, his longtime employee and erstwhile protégé. The suit, which had FPL and two of its executives as “fictitious” (unnamed) co-defendants, basically accused Pitts of running his own firm within the firm, stealing Matrix’s clients and cash, operating a clandestine network of dark money groups, and working for FPL without Perkins’s knowledge. (Pitts, in legal filings, denied all of these claims.)

At first, their split had seemed like an amicable, if unexpected, business divorce. “Joe Perkins flew Jeff Pitts down on his plane to meet with me personally to let me know that they had come to an agreement that they were going to part ways, and it was okay,” Silagy said during our 2022 interview. “And then apparently, somewhere along the way, Jeff and Joe got sideways.”

This much was clear: For a decade, Matrix had been the servant of two masters, working both for Southern Co., the nation’s second-largest utility holding company, and NextEra Energy. But as the partners’ acrimony grew, so did the friction between the energy giants. Forbes, who publishes a blog critical of Alabama Power, a Southern Co. subsidiary, told me he had gone to Chuck’s in the hope of obtaining damaging information about Alabama Power’s CEO, Mark Crosswhite. But the vibe was off, and the conversation awkward.

Pitts “was a nervous wreck,” Forbes recalled. “That’s why, on my blog, I call him Jittery Jeff.”

The lawsuit came at a difficult time for Pitts. His new firm, Canopy Partners, less than a year old, was already drawing law enforcement interest. The Miami-Dade Public Corruption Task Force had obtained sworn testimony from Abigail MacIver, one of Pitts’ co-founders, in exchange for limited immunity from prosecution in the ghost candidate scandal. MacIver laid out how she, Pitts, and a contractor had channeled money from a nonprofit operated by Tyson into political committees controlled by Alvarado, Tyson’s associate, by way of a tax-exempt group Pitts controlled. Those committees paid for the ghost candidate mailers.

This voter mailer promoting ghost candidate Jestine Iannotti was criticized for seeming to suggest that Iannotti, who is white, is a Black woman.Floodlight

Reporting from the Sentinel also tied Pitts’ dark-money network to an FPL-funded campaign to defeat a ballot initiative that would have introduced competition into state energy markets and broken FPL’s monopoly. Tyson worked as a pollster on the campaign to counter the initiative. (Neither Pitts nor any Canopy Partners associates have been charged with crimes.)

Pitts is a dapper guy in his early 50s who brings to mind Fred Astaire. He was one of the first employees at Matrix in 1995 and became the director of its Birmingham office in 2009. He enjoys the good life, according to former associates: steak dinners, private flights, expensive wine. But by the time he met with Forbes, his life had grown complicated. “He could not look me in the eye,” Forbes told me, and Pitts wouldn’t stop rubbing the back of his head with his left hand during their dinner: “He was twirling his hair in circles.”

“These are types of allegations and scandals that shatter the belief that this publicly regulated utility is a safe, secure, and non-volatile investment.”

Matrix began consulting for NextEra, FPL’s parent, in the early 2010s. Pitts took extraordinary care to conceal his—and FPL’s—involvement in Florida elections. He obscured the money trail by creating multiple layers of subcontractors, shell companies, and 501(c)(4) nonprofits. In one case, he listed the brother of a Matrix subcontractor as the head of several nonprofits in his network, which he registered in faraway states. He preferred in-person conversations to texts or phone calls and hired expensive tax attorneys to advise him on his moves.

FPL was kept apprised of the work. Flight records show that the Matrix company jet made frequent visits to Palm Beach, where the utility is headquartered, and the leaked documents contain lively text and email correspondences between Pitts and its executives. FPL’s public affairs VPs were forwarded drafts of political ads slated to run against candidates they hoped to defeat. The Matrix document trove also included emails between Pitts and Silagy wherein Pitts lists names of dark money nonprofits and political committees to which Silagy could donate. There was also a Matrix invoice seeking reimbursement for incorporating a nonprofit that helped fund the ghost candidate campaigns.

A generation ago, power companies were forced to disclose the names of their consultants and attorneys, but the Federal Energy Regulatory Commission, which oversees the industry, did away with the rule in 2002. Jon Wellinghoff, FERC’s chairman from 2009 to 2013, told me he regrets not reinstating it. “We didn’t reverse that when I was chairman,” he said, “And we should have. All that should be disclosed. All that should be open to the public and available—information right down to the $100 contribution.”

Pitts didn’t end up staying for dinner at Chuck’s. He got takeout instead, Forbes says, and never forked over the dirt on Alabama Power’s CEO. Neither did Pitts’ attorney, with whom Forbes kept corresponding until he grew too frustrated: “I was livid. I was like, ‘This is a waste of my time.’”

It was opening day of the 2023 session of the Florida Legislature, and the capitol was abuzz. House Speaker Paul Renner presided over his chamber’s opening ceremonies, introducing a dozen former members in attendance. Among them was Frank Artiles, who, despite his legal troubles, had maintained close ties with some of Florida’s Republican power brokers. He would register as a lobbyist that session—for a construction company that paints traffic lanes.

Twenty-nine months had passed since the Fitzpatrick’s election party, and two years since Artiles’ arrest and indictment. Pitts and Perkins had by this time settled their lawsuit, and Silagy had recently taken his leave from FPL.

Police take pictures of Artiles’ car during a raid at his home in Palmetto Bay, March 17, 2021.Pedro Portal/Miami Herald/Floodlight

The utility’s veil of secrecy had been pierced—at least temporarily. Weeks after the meeting between Pitts and Forbes, the first batch of Matrix records arrived at the offices of the Sentinel in an envelope with no return address. The intel consisted of a heavily redacted copy of a nearly 200-page report Perkins had sent to NextEra’s board of directors in November 2021. It detailed Pitts’ allegedly secret work for FPL, efforts ranging from municipal to congressional campaigns, funded by millions in utility cash.

In 2018 alone, the report revealed, Pitts had participated in campaigns against a South Miami mayor who supported rooftop solar, ran ghost candidates against both a Miami-Dade commissioner critical of an FPL nuclear plant and a progressive state Senate candidate in Gainesville, and moved millions of dollars to help defeat Democratic gubernatorial nominee Andrew Gillum, who lost to Ron DeSantis that year by a razor-thin 0.4 percent margin.

Pitts’ work, the report showed, went beyond elections and into acquisitions. In 2019, Pitts had aided in FPL’s failed attempt to acquire the Jacksonville Electric Authority, a city-owned utility whose territory it coveted. His contributions included hiring a private detective to follow a reporter who’d written critically of the proposed sale, running a front group that championed the sale, and enlisting a contractor to offer Garrett Dennis—a Jacksonville councilman seen as unlikely to support the sale—a $250,000-a-year job with the same dark money group, Grow United, that distributed the ghost candidate funds to the other nonprofits. Accepting the position would mean giving up his council seat. (Dennis didn’t bite.)

The leaked records also detailed how Matrix and Pitts had paid at least $900,000 to six pay-to-play news outlets in Florida and Alabama between 2013 and 2020. The outlets, with more than 1.3 million combined monthly viewers, attacked critics and enemies of Southern Co., FPL, and other Matrix clients, though all of them deny that the payments influenced their coverage.

“These are types of allegations and scandals that shatter the belief that this publicly regulated utility is a safe, secure, and non-volatile investment,” the attorneys in a federal securities suit filed against NextEra in December 2023 wrote of the revelations. It was one of at least two class-action suits filed against the company since Silagy’s resignation alleging political impropriety.

The proceedings in the shareholder suit have been telling, though perhaps not in the way the plaintiffs would prefer. At a hearing this past May, federal district court Judge Aileen Cannon asked their attorneys to clarify the case against NextEra. “Just so I understand,” she said, “has there been any finding of liability…We talk about, sort of, allegations of wrongdoing and criminality. Can you just pinpoint exactly what would be the crime and has there been any finding of such a crime?”

“Artiles is the victim in this case!” his lawyer told me. “He’s the one that quote got fucked on fake scams, on fraudulent business deals that didn’t exist.”

Plaintiffs attorney Jeffrey Block responded in the negative.      

“So, I guess, what exactly is wrong that was allegedly done?” Cannon said.      

Her question, albeit unwittingly, broaches a bigger issue, with ramifications far beyond Florida. The IRS and the FEC have generally failed to enforce nonprofit and election laws effectively. At the state level, regulatory boards are easily influenced—and their penalties for breaking the rules, to the extent they are imposed, are often too small to discourage bad behavior.

It is a system that practically invites monopoly power companies and their consultants to exploit every loophole to maximize political leverage and profit—and even, in some cases, to spend money collected from power consumers to lobby for actions that run counter to those ratepayer’s interests. “It’s ludicrous on its face that state-granted monopolies that provide an essential service are allowed to lobby at all. It ought to be unthinkable,” energy expert David Roberts noted during a 2023 discussion of utility corruption on his podcast, Volts.

The notion of a monopoly utility launching a secret effort to field bogus candidates and trick voters would seem all the more unthinkable, and the fact that a federal judge feels compelled to ask what the company is actually alleged to have done wrong is telling.

Back in January, public corruption prosecutor Tim VanderGiesen told Cannon he intended to follow the money, although it’s not clear how far up the chain he intends to go. “It’s the money, the payment, that makes this illegal, judge,” he asserted then. The state’s position is, look at all the trouble that they were going through to run…ghost candidates.”

As for Artiles’ alleged ghost candidate activities, “It’s my opinion that this case is politically motivated,” defense attorney Quintero told a Miami-Dade Circuit Court judge during a hearing earlier this year. “It’s not just one party that does it. It’s both parties and it’s perfectly legal. Period. End of story.”

Man in mask, sunglasses and red baseball hat.
Ghost candidate Alex Rodriguez leaves the Turner Guilford Knight Correctional Center in Miami after posting bail on March 18, 2021. Rodriguez, facing several charges, agreed to testify against Artiles in exchange for leniency.Matias J. Ochner/Miami Herald/Floodlight

The state’s star witness this week is none other than ghost candidate Alex Rodriguez, who agreed to plead guilty to some charges and testify against Artiles to avoid a possible prison sentence. The defendant’s legal team is attempting to impugn Rodriguez’s character and portray the money that changed hands between the two men as a con. “Artiles is the victim in this case!” Quintero told me. “He’s the one that quote got fucked on fake scams, on fraudulent business deals that didn’t exist, on loans, on a car Rodriguez sold to him that didn’t exist.”

The jury is expected to decide on the guilt or innocence of Frank Artiles by the end of September. Yet after all the courtroom dramas, feuding consultants, and exposés about the financial subterfuge that enabled the ghost candidates, it remains unclear when, and whether, and to what extent, anyone will ever hold NextEra accountable.

“The system is on trial, because the system enables this kind of conduct,” Dave Aronberg, the Palm Beach County state attorney, told me of Artiles’ trial. “In a fully functioning democracy, this kind of scandal would result in real changes to campaign finance laws. But Florida doesn’t have a fully functioning democracy.”

Florida “Ghost Candidates” Scandal Puts the Entire Utility Sector on Trial

18 September 2024 at 10:00

This story was reported by Floodlight, a nonprofit newsroom that investigates the powerful interests stalling climate action.

Liam Fitzpatrick’s was packed on a Tuesday in November, and all eyes in the suburban Orlando, Florida, pub were glued to the TVs behind the bar. Fitzpatrick’s usually had sports on, but this was Election Eve 2020, and Republican state Senate candidate Jason Brodeur watched nervously as the results trickled in. This was his election party. Brodeur’s campaign had spent millions of dollars running him for an open seat against the Democratic nominee, a labor attorney, and the race was neck and neck.

But his backers had a secret weapon. Just before the filing deadline, a substitute teacher named Jestine Iannotti had joined the race as an unaffiliated third-party candidate. A political unknown, she didn’t even campaign. The central Florida district was then carpeted with misleading mailers that appealed to liberal values and voters’ distaste for partisan politics—one included a stock photo that seemed to imply that Iannotti, who is white, is a Black woman. If she siphoned off votes from his Democratic rival, Brodeur stood a better chance.

Iannotti was a “ghost candidate,” one with no hope of winning who runs—or is run—specifically as a spoiler. Ghost candidates are legal in Florida—sort of. Any eligible person can run for public office, but the covert financing of ghost campaigns sometimes runs afoul of even that state’s famously lax election laws. State prosecutors would eventually conclude that Iannotti and another ghost candidate who ran in 2020—along with their political consultants—had broken quite a few. (Brodeur claimed ignorance of the scheme, and has faced no legal action as a result, though a local tax collector on trial for unrelated charges would later testify that Brodeur was well aware of it.)

Also at Fitzpatrick’s that night was then-47-year-old Frank Artiles, a burly, foul-mouthed ex-Marine and former Republican state senator. Artiles, who is Cuban American, had resigned his Senate post in disgrace in 2017 after using racial slurs in front of two Black colleagues during a drunken rant. He, too, was fixated on Brodeur’s returns, as well as the results of an even tighter state Senate race in south Miami-Dade.

Man wearing a mask wearing a white shirt surrounded by TV cameras.
Frank Artiles leaves the Turner Guilford Knight Correctional Center in Miami on March 18, 2021, after posting bail in a case related to Florida’s 2020 District 37 state Senate campaign.Matias J. Ochner/Miami Herald/Floodlight

The latter contest was a slugfest between one of Florida’s highest-profile Democratic lawmakers, José Javier Rodriguez, and Republican Ileana García, founder of Latinas for Trump. It, too, hinged on a ghost candidate: Alex Rodriguez, a down-on-his-luck salesman of used heavy equipment, whose shared surname with the incumbent was no coincidence. Like Iannotti, Rodriguez hadn’t campaigned. He, too, was boosted by a flood of misleading mailers. 

As the final tallies came in, the mood at Fitzpatrick’s turned electric. Brodeur ended up winning his seat by about 7,600 votes. (Iannotti drew nearly 6,000.) In south Miami-Dade, Garcia, the Republican, edged out incumbent José Rodriguez by fewer than 40 votes. Artiles was jubilant. “That was me!” a partygoer recalls him yelling. “That’s all me!”

At a criminal trial this week in Miami, the prosecution may ask the jury to interpret Artiles’ outburst as an admission of guilt. Four months after the election party, the Miami-Dade state attorney charged him and ghost candidate Rodriquez with multiple campaign finance–related felonies. Among other charges, Artiles stands accused of conspiracy, making excessive campaign contributions, and “false swearing” in connection with voting or elections. If found guilty on all counts, he faces up to five years in prison.

In Central Florida, prosecutors issued a multi-count indictment against Iannotti and the two operatives (Eric Foglesong and Ben Paris, chair of the Seminole County Republican Party) who’d arranged for her to run. (A ghost candidate Artiles had recruited for a third state Senate race—a spa owner whose wife regularly waxed Artiles’ back—was not charged.) In 2022, a jury found Paris guilty of interfering in an election by means of an illegal campaign donation—the state recommended 60 days in jail; the judge gave him a year of probation, community service, and a fine. Foglesong, charged with felony and misdemeanor election crimes, avoided possible jail time by pleading no contest to misdemeanor charges, and Iannotti pleaded no contest last month to a pair of first-degree misdemeanors. Artiles maintains his innocence.

In a December 2023 deposition, political consultant Patrick Bainter told Florida prosecutors that he hired former state Sen. Frank Artiles to run “independent” candidates to help solidify the Senate’s Republican majority.Floodlight

And all of the above might have been just another colorful tale of shady politics in the Sunshine State were it not for a spat between political consultants.

Indeed, after the leaders of Matrix LLC, a high-powered political consulting firm whose CEO helped finance the ghost campaigns, started feuding, the story took on a new life, offering something rarer and more consequential: a glimpse, oddly enough, into the political meddling of one of America’s largest power companies.

The source of the leak was never clear, but as the consultants squabbled, thousands of pages of Matrix’s internal documents made it into the hands of Florida news outlets. The revelations therein, and reporting on discovery materials generated by the various prosecutions, would culminate in the abrupt January 2023 retirement of Florida Power & Light CEO Eric Silagy, triggering a single-day, $14 billion drop in the company’s market value.

FPL is a subsidiary of NextEra Energy, one of the nation’s largest utility conglomerates in terms of homes and businesses served. And although its parent is a major producer of renewable energy, FPL is among Florida’s biggest greenhouse-gas emitters. The leaked documents, in any case, showed that FPL was enmeshed in a covert campaign of media manipulation, surveillance, and what one federal securities lawsuit calls electoral “dirty tricks,” all in the name of maximizing profits.

Investigations by Floodlight and other Florida news outlets would reveal that the ghost candidates were bankrolled with some $730,000 in dark money, $100,000 of which was channeled through a prominent Republican operative into a 501(c)(4) nonprofit that Artiles controlled. (Artiles’ attorney, Frank Quintero, disputes that any of that money ever made it to ghost candidate Rodriguez: “The prosecutor can say whatever the fuck he wants, but the reality is different than what he wants it to be.”) The remaining $630,000 made its way through a daisy chain of opaque nonprofits partially overseen by the CEO of Matrix, which was then working for FPL.

In this undated email obtained by Floodlight via public records request, Artiles offers advice to political consultant Patrick Bainter related to running a ghost candidate in the 2020 election.Floodlight

From the utility’s perspective, expanding the state Senate’s Republican majority—by whatever means—would help fulfill its legislative priorities. Those priorities included escaping liability for damages related to power outages in the wake of Hurricane Irma; ousting J.R. Kelly, the state’s long-serving (unsympathetic) consumer utility watchdog; and winning approval from the Senate-confirmed Public Service Commission for Florida’s largest-ever hike in electricity rates. The defeat of Sen. Rodriguez had the added benefit of kneecapping one of the state’s most prominent backers of rooftop solar, which reduces carbon emissions and lowers utility bills—and against which FPL had waged a decade-long counterinsurgency campaign.

FPL, which declined to comment for this article, prevailed on all counts.

The company has steadfastly denied wrongdoing, although it does not dispute hiring Matrix. “They did good work,” then-CEO Silagy told me in June 2022. During the same interview, he admitted to authoring a January 2019 email about Sen. Rodríguez, wherein Silagy ordered his minions “to make his life a living hell”—a directive that was immediately relayed to Matrix.

White man in blue shirt.
Eric Silagy, the former president and CEO of Florida Power & LightMatias J. Ocner/Miami Herald/Zuma

The utility claims that two outside law firms, whose investigations FPL commissioned but has never made public, have cleared it of election-related liability or wrongdoing, despite reporting that suggests otherwise. The Orlando Sentinel, for example, reported that Silagy sometimes used an email pseudonym (Theodore Hayes) when communicating with Jeff Pitts, then CEO of Matrix. And a 2022 Federal Election Commission complaint accused five nonprofits linked to Pitts of “direct and serious violations of the Federal Election Campaign Act.”

The complaint, dismissed earlier this year after the partisan six-member commission deadlocked on a party-line vote, cites a memo Pitts sent to Silagy laying out how FPL could channel money covertly through a series of nonprofits and, ultimately, a super-PAC, to fund “‘political activities’ on both the state and federal level.” The complaint alleges that “the effect of this scheme would be to illegally hide the identities of the true source or sources of contributions.”  

“Unfortunately, partisan gridlock and dysfunction has become routine at the FEC, which has only opened four investigations this year,” says Stuart McPhail, senior litigation counsel at Citizens for Responsibility and Ethics in Washington, the nonprofit that filed the complaint. “That means many complaints, even those for which the FEC’s nonpartisan expert staff recommends an investigation, end in partisan gridlock. That’s exactly what happened with our complaint.”

The scenes to follow are based on thousands of pages of documents and more than 50 interviews with various players. In addition to setting the stage for Artiles’ long-delayed trial, they offer a window into how some utility monopolies have chosen to flex their political power, pushing legal boundaries for financial gain, and sometimes thwarting America’s transition to clean energy in the process.

On a Friday evening in late February 2017, 32 NASCAR race-truck drivers squinted under the Daytona International Speedway’s 2,000-watt lights. Their eyes were fixed on state Sen. Frank Artiles, who sported a suede jacket emblazoned with the NextEra logo. He waved a green flag to kick off the 250-mile race, sponsored by NextEra Energy Resources, another NextEra subsidiary, but just two laps in things went awry—a 17-vehicle pile-up that resulted in one of the trucks getting completely totaled.

Your high school English teacher would call this foreshadowing.

Man in brown jacket standing in the middle of a man and woman in white race car driving suits.
Artiles, then-chairman of the Florida Senate’s energy and utilities committee, poses with race officials at Daytona Beach International Speedway on February 24, 2017.Facebook/Frank Artiles/Floodlight

Artiles was then serving his first term in the Florida Senate and chairing its energy committee. That is to say, the elected official who controlled the fate of state bills related to energy and the environment was accepting the red-carpet treatment from a utility holding company that routinely had business before his committee.

Such potential conflicts of interest are not unusual in the utility realm. Investor-owned power companies specialize in charming and lobbying legislators and regulators. A captured regulator might approve a higher profit margin for a power company than an adversarial one would. A friendly legislator is more likely to pass favorable laws. Across the nation, utilities are the most active lobbyists on state environmental bills.

Our system “gives utilities incredible incentive to build out massive, sophisticated, elaborate, sometimes clandestine political influence machines.”

What makes the situation especially irksome is that utilities are not normal companies. The firms that provide gas and electricity and send monthly bills to homeowners and businesses are state-sanctioned monopolies. They don’t make money from selling power per se. Rather, like a waiter with guaranteed tips, their profit margins are pre-determined by regulators based on how much they invest in their infrastructure. The more plants and poles and substations a utility builds, the bigger its guaranteed return, which averages about 10 percent nationwide. (FPL’s have run as high as 11.8 percent.) Politicians and regulators, at least in theory, are supposed to act on behalf of consumers and prevent utilities from running up the tab.

The way the system is set up “gives utilities incredible incentive to build out massive, sophisticated, elaborate, sometimes clandestine political influence machines,” says David Pomerantz, executive director of the Energy and Policy Institute, a nonprofit utility watchdog. “No matter how you slice it,” he adds, “they are among the biggest spenders on political influence generally.”

The numbers are staggering. According to the Institute for Local Self Reliance, an energy think tank, investor-owned utilities have given more than $130 million to federal candidates over the past decade and have spent more than $294 million on state political races between 2014 and 2023.

FPL alone donated at least $42 million to Florida lawmakers between June 2013 and June 2023, according to a Floodlight analysis. And that’s just reported donations. Across the nation, from 2014 to 2020, power companies pumped at least $215 million more into politics via 501(c)(4) nonprofits that don’t have to reveal their donors—which is why these funds are referred to as “dark money.”

Utility influence operations have led to a generational resurgence of fraud and corruption in the sector. A recent Floodlight analysis of three decades of corporate prosecutions and federal lawsuits describes malfeasance that has cost electricity customers at least $6.6 billion over the past 10 years. The costs to the environment and the energy transition are also steep. Utilities in Ohio struck a corrupt bargain with prominent state lawmakers—some of whom were convicted and sentenced to prison—to prop up failing coal and nuclear plants. Utilities in Arizona were investigated by the FBI for using dark money to elect energy regulators who slashed rooftop solar incentives, though no charges have been filed.

Artiles’ Daytona junket didn’t break any laws, but the optics weren’t great. He’d flown in on a private plane that belonged to his campaign treasurer—an FPL lobbyist. The night of the NASCAR race, he took in $10,000 in contributions at a fundraiser in his honor, where he rubbed shoulders with Keanu Reeves. The next day, he visited Disney’s Epcot Center as the guest of John Holley, FPL’s top in-house lobbyist. “It was an honor to be there,” Artiles told the Miami Herald after the news got out. “I’m not going to lie to you. It was cool.”

After returning to Tallahassee, Artiles fast-tracked two bills coveted by FPL.

But like the truck totaled during that second lap at Daytona, the freshman senator’s tenure would be short-lived. About a month after the FPL junket, Artiles got into an argument with two Black fellow senators at a private club near the state Capitol, berating them and using the n-word. The Senate president made Artiles stand and apologize to his colleagues, after which Artiles walked straight out of the chamber and into a gaggle of reporters, shedding his conciliatory tone like a football player doffing sweaty pads. This prompted the legislative Black caucus to demand his expulsion. Artiles resigned two days later.

Two men in grey suits smile and shake hands.
Then–Florida state Rep. Frank Artiles (R-Miami) is congratulated by Rep. Alan Williams (D-Tallahassee) in 2016. Artiles resigned from the Senate the following year after making racist remarks.Scott Keeler/Tampa Bay Times/Zuma

He was out of the Senate, but not the game. In October 2017, Artiles was invited to a lunch meeting with Ryan Tyson, then a leading Republican operative for Associated Industries of Florida, a powerful trade group to which FPL had donated millions. Tyson, a pollster, had done work on issues critical to FPL, and was executive director of Let’s Preserve the American Dream—a nonprofit that would play a key role in the ghost candidate scandal. Alex Alvarado, Tyson’s protégé, set up the lunch, which Tyson says he does not recall attending. Starting that same month, and continuing into 2021, Artiles would receive $5,000 monthly payments from Tyson for “research services” related to Hispanic voters.

After the 2020 election, Tyson and his group came under the scrutiny of the prosecutors. “We waived all privileges and co-operated with the government in its investigation,” he told me recently. “They couldn’t explain to us what they were looking for, but we were nonetheless cooperative.” (Tyson was never charged with wrongdoing.) “This is crazy that this is how law-abiding tax paying cooperative citizens are treated,” he said.

Chuck’s, a fish house in suburban Birmingham, Alabama, was bustling on the evening of October 26, 2021, when a former Pat Buchanan staffer named K.B. Forbes arrived for what he thought was dinner with Jeff Pitts, who until recently had been CEO of Matrix.

Black and white photo of man in suit smiling.
Jeff Pitts, the former CEO of Matrix , had a major falling out with the firm’s founder.Floodlight

A few months earlier, Joe Perkins, Matrix’s founder, had sued Pitts, his longtime employee and erstwhile protégé. The suit, which had FPL and two of its executives as “fictitious” (unnamed) co-defendants, basically accused Pitts of running his own firm within the firm, stealing Matrix’s clients and cash, operating a clandestine network of dark money groups, and working for FPL without Perkins’s knowledge. (Pitts, in legal filings, denied all of these claims.)

At first, their split had seemed like an amicable, if unexpected, business divorce. “Joe Perkins flew Jeff Pitts down on his plane to meet with me personally to let me know that they had come to an agreement that they were going to part ways, and it was okay,” Silagy said during our 2022 interview. “And then apparently, somewhere along the way, Jeff and Joe got sideways.”

This much was clear: For a decade, Matrix had been the servant of two masters, working both for Southern Co., the nation’s second-largest utility holding company, and NextEra Energy. But as the partners’ acrimony grew, so did the friction between the energy giants. Forbes, who publishes a blog critical of Alabama Power, a Southern Co. subsidiary, told me he had gone to Chuck’s in the hope of obtaining damaging information about Alabama Power’s CEO, Mark Crosswhite. But the vibe was off, and the conversation awkward.

Pitts “was a nervous wreck,” Forbes recalled. “That’s why, on my blog, I call him Jittery Jeff.”

The lawsuit came at a difficult time for Pitts. His new firm, Canopy Partners, less than a year old, was already drawing law enforcement interest. The Miami-Dade Public Corruption Task Force had obtained sworn testimony from Abigail MacIver, one of Pitts’ co-founders, in exchange for limited immunity from prosecution in the ghost candidate scandal. MacIver laid out how she, Pitts, and a contractor had channeled money from a nonprofit operated by Tyson into political committees controlled by Alvarado, Tyson’s associate, by way of a tax-exempt group Pitts controlled. Those committees paid for the ghost candidate mailers.

This voter mailer promoting ghost candidate Jestine Iannotti was criticized for seeming to suggest that Iannotti, who is white, is a Black woman.Floodlight

Reporting from the Sentinel also tied Pitts’ dark-money network to an FPL-funded campaign to defeat a ballot initiative that would have introduced competition into state energy markets and broken FPL’s monopoly. Tyson worked as a pollster on the campaign to counter the initiative. (Neither Pitts nor any Canopy Partners associates have been charged with crimes.)

Pitts is a dapper guy in his early 50s who brings to mind Fred Astaire. He was one of the first employees at Matrix in 1995 and became the director of its Birmingham office in 2009. He enjoys the good life, according to former associates: steak dinners, private flights, expensive wine. But by the time he met with Forbes, his life had grown complicated. “He could not look me in the eye,” Forbes told me, and Pitts wouldn’t stop rubbing the back of his head with his left hand during their dinner: “He was twirling his hair in circles.”

“These are types of allegations and scandals that shatter the belief that this publicly regulated utility is a safe, secure, and non-volatile investment.”

Matrix began consulting for NextEra, FPL’s parent, in the early 2010s. Pitts took extraordinary care to conceal his—and FPL’s—involvement in Florida elections. He obscured the money trail by creating multiple layers of subcontractors, shell companies, and 501(c)(4) nonprofits. In one case, he listed the brother of a Matrix subcontractor as the head of several nonprofits in his network, which he registered in faraway states. He preferred in-person conversations to texts or phone calls and hired expensive tax attorneys to advise him on his moves.

FPL was kept apprised of the work. Flight records show that the Matrix company jet made frequent visits to Palm Beach, where the utility is headquartered, and the leaked documents contain lively text and email correspondences between Pitts and its executives. FPL’s public affairs VPs were forwarded drafts of political ads slated to run against candidates they hoped to defeat. The Matrix document trove also included emails between Pitts and Silagy wherein Pitts lists names of dark money nonprofits and political committees to which Silagy could donate. There was also a Matrix invoice seeking reimbursement for incorporating a nonprofit that helped fund the ghost candidate campaigns.

A generation ago, power companies were forced to disclose the names of their consultants and attorneys, but the Federal Energy Regulatory Commission, which oversees the industry, did away with the rule in 2002. Jon Wellinghoff, FERC’s chairman from 2009 to 2013, told me he regrets not reinstating it. “We didn’t reverse that when I was chairman,” he said, “And we should have. All that should be disclosed. All that should be open to the public and available—information right down to the $100 contribution.”

Pitts didn’t end up staying for dinner at Chuck’s. He got takeout instead, Forbes says, and never forked over the dirt on Alabama Power’s CEO. Neither did Pitts’ attorney, with whom Forbes kept corresponding until he grew too frustrated: “I was livid. I was like, ‘This is a waste of my time.’”

It was opening day of the 2023 session of the Florida Legislature, and the capitol was abuzz. House Speaker Paul Renner presided over his chamber’s opening ceremonies, introducing a dozen former members in attendance. Among them was Frank Artiles, who, despite his legal troubles, had maintained close ties with some of Florida’s Republican power brokers. He would register as a lobbyist that session—for a construction company that paints traffic lanes.

Twenty-nine months had passed since the Fitzpatrick’s election party, and two years since Artiles’ arrest and indictment. Pitts and Perkins had by this time settled their lawsuit, and Silagy had recently taken his leave from FPL.

Police take pictures of Artiles’ car during a raid at his home in Palmetto Bay, March 17, 2021.Pedro Portal/Miami Herald/Floodlight

The utility’s veil of secrecy had been pierced—at least temporarily. Weeks after the meeting between Pitts and Forbes, the first batch of Matrix records arrived at the offices of the Sentinel in an envelope with no return address. The intel consisted of a heavily redacted copy of a nearly 200-page report Perkins had sent to NextEra’s board of directors in November 2021. It detailed Pitts’ allegedly secret work for FPL, efforts ranging from municipal to congressional campaigns, funded by millions in utility cash.

In 2018 alone, the report revealed, Pitts had participated in campaigns against a South Miami mayor who supported rooftop solar, ran ghost candidates against both a Miami-Dade commissioner critical of an FPL nuclear plant and a progressive state Senate candidate in Gainesville, and moved millions of dollars to help defeat Democratic gubernatorial nominee Andrew Gillum, who lost to Ron DeSantis that year by a razor-thin 0.4 percent margin.

Pitts’ work, the report showed, went beyond elections and into acquisitions. In 2019, Pitts had aided in FPL’s failed attempt to acquire the Jacksonville Electric Authority, a city-owned utility whose territory it coveted. His contributions included hiring a private detective to follow a reporter who’d written critically of the proposed sale, running a front group that championed the sale, and enlisting a contractor to offer Garrett Dennis—a Jacksonville councilman seen as unlikely to support the sale—a $250,000-a-year job with the same dark money group, Grow United, that distributed the ghost candidate funds to the other nonprofits. Accepting the position would mean giving up his council seat. (Dennis didn’t bite.)

The leaked records also detailed how Matrix and Pitts had paid at least $900,000 to six pay-to-play news outlets in Florida and Alabama between 2013 and 2020. The outlets, with more than 1.3 million combined monthly viewers, attacked critics and enemies of Southern Co., FPL, and other Matrix clients, though all of them deny that the payments influenced their coverage.

“These are types of allegations and scandals that shatter the belief that this publicly regulated utility is a safe, secure, and non-volatile investment,” the attorneys in a federal securities suit filed against NextEra in December 2023 wrote of the revelations. It was one of at least two class-action suits filed against the company since Silagy’s resignation alleging political impropriety.

The proceedings in the shareholder suit have been telling, though perhaps not in the way the plaintiffs would prefer. At a hearing this past May, federal district court Judge Aileen Cannon asked their attorneys to clarify the case against NextEra. “Just so I understand,” she said, “has there been any finding of liability…We talk about, sort of, allegations of wrongdoing and criminality. Can you just pinpoint exactly what would be the crime and has there been any finding of such a crime?”

“Artiles is the victim in this case!” his lawyer told me. “He’s the one that quote got fucked on fake scams, on fraudulent business deals that didn’t exist.”

Plaintiffs attorney Jeffrey Block responded in the negative.      

“So, I guess, what exactly is wrong that was allegedly done?” Cannon said.      

Her question, albeit unwittingly, broaches a bigger issue, with ramifications far beyond Florida. The IRS and the FEC have generally failed to enforce nonprofit and election laws effectively. At the state level, regulatory boards are easily influenced—and their penalties for breaking the rules, to the extent they are imposed, are often too small to discourage bad behavior.

It is a system that practically invites monopoly power companies and their consultants to exploit every loophole to maximize political leverage and profit—and even, in some cases, to spend money collected from power consumers to lobby for actions that run counter to those ratepayer’s interests. “It’s ludicrous on its face that state-granted monopolies that provide an essential service are allowed to lobby at all. It ought to be unthinkable,” energy expert David Roberts noted during a 2023 discussion of utility corruption on his podcast, Volts.

The notion of a monopoly utility launching a secret effort to field bogus candidates and trick voters would seem all the more unthinkable, and the fact that a federal judge feels compelled to ask what the company is actually alleged to have done wrong is telling.

Back in January, public corruption prosecutor Tim VanderGiesen told Cannon he intended to follow the money, although it’s not clear how far up the chain he intends to go. “It’s the money, the payment, that makes this illegal, judge,” he asserted then. The state’s position is, look at all the trouble that they were going through to run…ghost candidates.”

As for Artiles’ alleged ghost candidate activities, “It’s my opinion that this case is politically motivated,” defense attorney Quintero told a Miami-Dade Circuit Court judge during a hearing earlier this year. “It’s not just one party that does it. It’s both parties and it’s perfectly legal. Period. End of story.”

Man in mask, sunglasses and red baseball hat.
Ghost candidate Alex Rodriguez leaves the Turner Guilford Knight Correctional Center in Miami after posting bail on March 18, 2021. Rodriguez, facing several charges, agreed to testify against Artiles in exchange for leniency.Matias J. Ochner/Miami Herald/Floodlight

The state’s star witness this week is none other than ghost candidate Alex Rodriguez, who agreed to plead guilty to some charges and testify against Artiles to avoid a possible prison sentence. The defendant’s legal team is attempting to impugn Rodriguez’s character and portray the money that changed hands between the two men as a con. “Artiles is the victim in this case!” Quintero told me. “He’s the one that quote got fucked on fake scams, on fraudulent business deals that didn’t exist, on loans, on a car Rodriguez sold to him that didn’t exist.”

The jury is expected to decide on the guilt or innocence of Frank Artiles by the end of September. Yet after all the courtroom dramas, feuding consultants, and exposés about the financial subterfuge that enabled the ghost candidates, it remains unclear when, and whether, and to what extent, anyone will ever hold NextEra accountable.

“The system is on trial, because the system enables this kind of conduct,” Dave Aronberg, the Palm Beach County state attorney, told me of Artiles’ trial. “In a fully functioning democracy, this kind of scandal would result in real changes to campaign finance laws. But Florida doesn’t have a fully functioning democracy.”

The DNC Gave Kamala Harris a Major Boost

25 August 2024 at 14:36

The Democratic National Convention wasn’t just four days of good vibes: It was also the cause of a major fundraising and volunteer boom for the Harris-Walz ticket.

A massive fundraising haul is nothing new for Harris.

The campaign has now raised $540 million since launching one month ago, which Harris-Walz Campaign Chair Jen O’Malley Dillon called “a record for any campaign in history” in a Sunday morning memo announcing the figure. Part of that is due to a convention-week bump: The campaign had its best fundraising hour ever just after Vice President Harris’s speech, according to the memo; another campaign spokesperson said a total of $82 million was raised during convention week. Those totals reflect funds raised by Harris for President, the Democratic National Committee, and joint fundraising committees, the campaign said.

A third of the week’s donations were from first-time contributors, almost a fifth of whom were young voters and two-thirds of whom were women, the campaign said. Volunteers are also fired up, as O’Malley Dillon reported supporters had signed up for nearly 200,000 shifts since Monday.

The massive fundraising haul is nothing new for Harris’s campaign: As my colleague Russ Choma previously reported, the campaign raised $81 million in its first 24 hours, which they said was the largest such take in history. And as I reported last month, it raised $200 million in Harris’s first week campaigning, two-thirds of which was said to have come from first-time donors.

Meanwhile, Trump spent the week struggling to gain traction as he ranted against Harris and the Democrats on his platform Truth Social. That may have something to do with the fact that not only has Harris been leading him in fundraising, but she has also been leading him in the polls.

The DNC Gave Kamala Harris a Major Boost

25 August 2024 at 14:36

The Democratic National Convention wasn’t just four days of good vibes: It was also the cause of a major fundraising and volunteer boom for the Harris-Walz ticket.

A massive fundraising haul is nothing new for Harris.

The campaign has now raised $540 million since launching one month ago, which Harris-Walz Campaign Chair Jen O’Malley Dillon called “a record for any campaign in history” in a Sunday morning memo announcing the figure. Part of that is due to a convention-week bump: The campaign had its best fundraising hour ever just after Vice President Harris’s speech, according to the memo; another campaign spokesperson said a total of $82 million was raised during convention week. Those totals reflect funds raised by Harris for President, the Democratic National Committee, and joint fundraising committees, the campaign said.

A third of the week’s donations were from first-time contributors, almost a fifth of whom were young voters and two-thirds of whom were women, the campaign said. Volunteers are also fired up, as O’Malley Dillon reported supporters had signed up for nearly 200,000 shifts since Monday.

The massive fundraising haul is nothing new for Harris’s campaign: As my colleague Russ Choma previously reported, the campaign raised $81 million in its first 24 hours, which they said was the largest such take in history. And as I reported last month, it raised $200 million in Harris’s first week campaigning, two-thirds of which was said to have come from first-time donors.

Meanwhile, Trump spent the week struggling to gain traction as he ranted against Harris and the Democrats on his platform Truth Social. That may have something to do with the fact that not only has Harris been leading him in fundraising, but she has also been leading him in the polls.

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