How Fundraising Helped Shape Obama’s Green Agenda

During a Roosevelt Room meeting with his economic-recovery advisers in November, President Obama turned to a top Democratic fundraiser sitting at his arm, a boyish billionaire in glasses who had been making regular visits to the White House to kibitz on policy. “John,” Obama said, before a group that included Treasury Secretary Tim Geithner, economic adviser Larry Summers and chief of staff Rahm Emanuel. “You’ve got the floor.”

John Doerr, 58, seized the moment. For more than a decade, Doerr, a Silicon Valley venture capitalist, has been going to Washington as an ambassador from the high-tech industry, donating along with his wife about $800,000 to Democrats since 2000 and advancing ideas in education, worker-visa and shareholder-litigation policies. In the past few years, however, Doerr’s interests in Beltway policies deepened, as he bet hundreds of millions of dollars in private capital on green-energy start-ups, many of which were seeking federal subsidies and regulatory aid.

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And now Doerr, named by Obama as an outside economic adviser, was asking Washington to lend a hand. “We have to change dramatically if we want America to be the worldwide leader in what is going to be the next great global industry,” Doerr told Obama and his fellow members of the President’s Economic Recovery Advisory Board, or PERAB. Then he presented to the group a multibillion-dollar residential-energy retrofit plan, dubbed Home Star. The plan called for billions of dollars in tax breaks for Americans who buy new windows, insulation or appliances to lower their home energy use. A month later, Obama embraced Doerr’s vision, calling on Congress to pass a version of the retrofit plan, along with more federal investment for solar panels and wind turbines. On March 2, Obama traveled to Georgia to pitch Home Star, calling it a “commonsense approach that will help jump-start job creation.”

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In his first year in office, Obama released White House visitor records, banned most lobbyists from working in his Administration and passed up campaign contributions from registered influence brokers. But as Obama has charted a new energy policy that moves away from the fossil fuels favored by George W. Bush, the White House has retained some of the traditional practices for courting politically important industries and interests. In 2001 an energy task force led by Vice President Dick Cheney hosted dozens of conversations with representatives of the oil, natural-gas and coal industries before producing an energy blueprint loaded with tax breaks and regulatory changes that benefited many of the companies that helped draft the policies. Similarly, Obama’s energy gurus rely on advice from campaign donors, lobbyists, corporations, think tanks, unions and environmentalists to help shape policies. Once again, there are questions about whether a new President’s approach to energy is a product of Washington’s unchanged, pay-to-play culture in which political supporters are offered special access to the policymaking process. “When you have campaign donors on these advisory boards,” says Bob Edgar, president of Common Cause, “it has the appearance of being an inside special-interest opportunity.”

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Cheney’s task force, which operated almost entirely in secret, produced $14 billion largely for drillers and miners in 2005. Obama’s greener advisers have helped produce six times that amount, much of it for the comparatively smaller reusable-energy industry. “The dog finally caught the car,” said Dan Reicher, who worked on the Obama transition and helps lead green-technology investments at Google. “We’ve never seen anything like that from the federal government.”

And Doerr has done O.K. too. In the past year, his green-energy companies have received loan guarantees from the Department of Energy, smart-grid contracts funded by stimulus spending and, in the case of one solar firm, more than $100 million in federal research tax credits. At a forum in November, Doerr, who generally casts his interest in clean energy as altruistic, did not shade his opinion. “God bless the Obama Administration and the U.S. government,” he said. “We have really got the A-team now working on green innovation in our country.”

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The Soul of the New Machine
Back when Obama was still just a Chicago pol, few would have mistaken him for the leader who would help give birth to a new clean-energy economy. In the late 1990s, the future President described himself as a “strong supporter” of downstate coal interests, voting in the Illinois legislature for billions of dollars in loan guarantees for new dirty power plants, and for a bill that condemned the Kyoto Protocol.

By 2007, political alliances were shifting. When he ran for President, Obama proposed a 10-year, $150 billion green-jobs plan at a campaign stop in New Hampshire; when the economic-stimulus plan was adopted in 2009, he pushed through billions of dollars for green jobs and alternative-energy strategies that included almost $20 billion for energy efficiency, $26 billion for renewable and alternative energies and $10.5 billion for electrical-grid modernization. The investments went a long way toward fulfilling the lobbying efforts of several core Democratic constituencies — unions, environmentalists and high-tech companies — which had been mounting more aggressive campaigns on behalf of the clean-energy sector as the Bush era came to a close.

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Inside the new Obama White House, the President’s team included green-energy boosters in the policy skull sessions, and regular meetings with outside advisers and nearly weekly public events were held to promote green energy as a way to create jobs. Some of the heaviest hitters were on the President’s Economic Recovery Advisory Board, a committee of corporate leaders and economists whom Obama brought inside the White House to advise on everything from regulatory reform to global warming. Formed during the transition, it included top fundraisers such as Hyatt family scion Penny Pritzker, Obama’s Silicon Valley ally Doerr and two ambassadors from Wall Street, UBS’s Robert Wolf and private-equity investor Mark Gallogly. This foursome and their spouses had collectively given roughly $2.4 million to Democrats since 2000. Doerr’s venture-capital firm, Kleiner Perkins Caufield & Byers, made more than $1 million in donations to Democrats since 2005, and Ellen Pao, one of Doerr’s clean-energy partners at Kleiner Perkins, gave $50,000 to Obama’s Inauguration committee, according to the Center for Responsive Politics. Gallogly, Wolf and Pritzker hosted a series of meals with business leaders and White House officials last year, blurring the lines between policy outreach and a potential donor-recruitment operation. Though having campaign donors on advisory boards is not without precedent, Democratic influence brokers took notice. “It’s the Lincoln Bedroom with a little more cover,” explained a prominent Democratic lobbyist, referring to a Clinton-era practice of permitting top donors to spend the night at the White House.

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The 17-member PERAB, which meets by conference call most Fridays, is best known for its leader, former Federal Reserve Chairman Paul Volcker, who has persuaded Obama to take a more aggressive approach to banking regulation. But it also includes several executives whose firms stand to benefit from more federal funding of green technology — people like General Electric’s Jeffrey Immelt and Caterpillar’s James Owens, both of whom supported John McCain. Doerr took the lead on the group’s energy subcommittee, drafting a 2009 memo that called for increasing fees on carbon pollution and changing rules to encourage electric utilities to move to a unified smart grid, which would benefit an industry in which he has significant investments.

Doerr’s journey to the Roosevelt Room is the stuff of Silicon Valley legend. Born in St. Louis, Mo., he got his first tech job in 1974 as an Intel engineer and went on to become a prescient bankroller of such companies as Google, Compaq and Amazon.com He later helped fund TechNet, the valley’s first major Washington lobbying effort, and became close friends with then Vice President Al Gore, who has since become a partner at Kleiner Perkins. Doerr’s enthusiasm and vision have been welcomed by the Obama team, just as they were by the Clinton Administration. In a recent interview, Obama mentioned Doerr as one of the corporate leaders he most admires. Doerr was also one of a handful of American executives invited to Obama’s first state dinner, with India’s Prime Minister in November, along with two other green-energy boosters, GE’s Immelt and Honeywell’s David Cote.

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Around 2006, Doerr began to shift his focus away from the “bits and bytes” of the Internet to what he called the “batteries and biofuels” of green energy. As of last year, Kleiner Perkins oversaw a fast-growing green-energy portfolio of more than $600 million, including Silver Spring Networks, one of the largest smart-grid providers, and iControl, a company that makes Web-enabled home thermostats. Describing his investments as “missionary” work, Doerr stepped up his political advocacy for the energy savings they could generate. In 2006 he headed a lobbying push that led California lawmakers to adopt the first state limits on carbon emissions, presaging the current high-tech campaign for clean energy in Washington. “I have referred to prior energy policies as really the sum of all lobbyists,” Doerr told TIME in February. “My lesson about policy is not to argue about your self-interest,” he told a group of smart-grid venture capitalists in late 2009. “Make an argument that is bigger, about jobs or competitiveness, and you are going to change some minds.”

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The New Plan
Home Star was born last fall. After the recession appeared to hit bottom during the summer, White House officials dodged questions about whether a second stimulus effort would be needed to combat deepening unemployment. But behind the scenes, the call for more job-creating ideas had already gone out to the PERAB. In response, Doerr asked a young San Francisco entrepreneur, Matt Golden, to begin working with a Massachusetts-based energy-efficiency specialist, Stephen Cowell, on a multibillion-dollar plan under which Washington would offer tax breaks for all kinds of consumer purchases and home improvements that reduce energy use. By November, Doerr made his Roosevelt Room presentation, and before long, the Home Star plan was on the President’s desk. Doerr sees Home Star as the next step in creating a new national focus on energy conservation that will generate “thousands” of jobs at the same time, say White House aides. “Never before has anybody pulled together a coalition and said we can take this practice — 100,000 or 200,000 science-based home retrofits — to a whole new level,” Doerr told TIME.

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All that remains is to get the plan through Congress. Doerr and his allies put together a broad coalition to lobby for the money, including big-box retailers like Home Depot and Lowe’s and insulation makers such as Owens Corning and Dow Chemical, as well as environmental groups and labor unions. Most important, the plan has a presidential seal of approval. “Everybody on the Hill knows that the President is interested in this,” explains Steven Nadel, executive director of one of the groups supporting the deal, the American Council for an Energy-Efficient Economy. Both the White House and Doerr say they see nothing improper about a campaign donor with direct industry interests helping draft policy for the White House. “The industry people are there as representatives of their industry,” explains White House economist Austan Goolsbee, who advises the PERAB. “They are supposed to come and say, ‘Here are what the concerns are,’ or ‘Here are what the interests are for whatever industry, [including] the venture-capital industry, about this.’ “

Doerr, meanwhile, has continued to provide financial support to Democrats. On Dec. 21, just weeks after President Obama publicly embraced Home Star, Doerr and his wife Ann each wrote a $15,200 check to the Democratic Senatorial Campaign Committee.

— With reporting by Katy Steinmetz / Washington

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