King and Gardiner's Federal Loan Guarantee Application - the Smoking Gun on their Financial Capacity?

Rumford Falls Times November 15, 2010. 

To the Editor,
 
Angus King and Rob Gardiner's Record Hill Wind project in Roxbury is not yet moving forward despite King and Gardiner's representation to the citizens of Roxbury in a letter that construction was planned to have resumed in late summer. 
 
The latest news comes from a letter sent to the town of Roxbury from the US Dept of Energy indicating that King and Gardiner have applied for a Federal Loan Guarantee, a step that indicates that there is not financing in place for this project because the commercial credit market considers the project to be not credit worthy.   If King and Gardiner are successful in obtaining a loan guarantee, the US taxpayer will bear 100% of the risk for this project.  King and Gardiner have indicated in their DEP application that the project would be financed with "non-recourse" debt,  meaning that King and Gardiner are not personally liable for any loans.  Instead, they want us,  the taxpayer, to stand behind their loan,  making them entirely immune from any adversity the project may encounter. 
 
This is very troubling on a number of counts.   DEP rules require that evidence of  financing must be demonstrated in the application.   The evidence submitted, and relied upon by the DEP in granting the permit, has been shown by King and Gardiner's  statements and actions to be apparently inaccurate.  This is a serious matter, because by signing the DEP application the applicant swears that the information submitted is accurate.  
 
Furthermore,  the draft permit issued by the DEP contained a standard condition stating that evidence of financing must be demonstrated prior to the commencement of construction.  When the final permit was issued 5 days later, someone had changed the word "construction" to "operation", meaning the project could be constructed without satisfying the clear requirements of the law.   This improper condition gave King and Gardiner the ability to begin construction in 2009,  making them eligible for a 30% rebate on the entire cost of the project under the federal stimulus program,  a no-strings attached gift to King and Gardiner from the US taxpayer that would be worth $40 million.  When this conflict in the language of the permit was pointed out to DEP, no one admitted responsibility for this language change, other than an admission of a "drafting error". 
 
There is nothing in the record to indicate who requested this change or why this change was agreed to.  When the DEP was forced to admit that an improper condition was included in the permit,  they asked King and Gardiner to submit evidence of financing.  In response, King and Gardiner submitted a letter from a Chicago bank called Northern Trust, indicating that Bayroot, the majority partner in the Record Hill Wind project would provide the funds for construction.  With the news that King and Gardiner have now applied for a federal loan guarantee,  it appears that this representation was questionable.
 
According to the Wall Street Journal, in a story about the loan guarantee program on November 11,  President Obama's economic advisers have recommended to him that the loan guarantee program for wind projects should be reconsidered because of lack of return for the tax payer.  
 
Steve Thurston