BILL RICHARDSON’S DUE DILIGENCE ON GREEN2V, or “GOOD ENOUGH FOR GOVERNMENT WORK IN SOLAR VALLEY.”

It took only a single personal meeting for New Mexico Governor Bill Richardson to line up state government behind solar wannabe Green2v.  He was armed with a “confidential backgrounder” describing the company’s plans to revolutionize the solar industry from top to bottom, and along the way create 3,000 New Mexico jobs.  The business model outline had been provided to his chief of staff by Gil M. Olguin, chairman of an outfit called OCS Capital Group whose corporate offices New Mexico Watchdog revealed to be nothing more than rental boxes in UPS stores in Las Vegas, Nevada and Washington, D.C.  A half a billion dollar letter of credit for Green2V was delivered to Rio Rancho after being addressed to OCS.  It had been faxed to OCS from a UPS store north of Los Angeles, California. The “confidential backgrounder,” was also provided to the Rio Rancho City Council when they unanimously approved a resolution of intent to issue $500 million in industrial revenue bonds for Green2V, a few weeks after a gala announcement of the coming Green2v revolution featuring Richardson, U.S. Senator Jeff Bingaman and Tom Swisstack, Rio Rancho’s mayor.

Green2V’s business plan was marked “confidential proprietary.”  It had all the right words and very, very big numbers.  It had pictures of an unidentified high-tech manufacturing plant with a man in a clean suit.  Photographs and schematics showed details of unidentified solar modules.  It concluded with photographs of an unidentified solar manufacturing production line and an unidentified installed solar array somewhere in the American West.

Problem was, none of it was any more real than OCS’s “corporate offices” or the $500 million letter of credit from a nonexistent entity called GP3(full letter linked here).  But it was good enough for Richardson to throw his weight and the prestige and power of his office behind a company that had never built anything, didn’t have a website, and didn’t even have a return address on its corporate correspondence.  What hooked him? Or maybe he hooked himself with his own grandiose, and so far fantastical vision of Solar Valley springing up in the Land of Enchantment.

You may want to read Parts I & II of this series to get a handle on this serpentine story and its players.

“Our Friends in Rio Rancho”

On November 6, 2009, Richardson wrote to Bill Sheppard, CEO of Green2v, asking for a meeting.  “I heard from our friends in Rio Rancho that you are building an integrated solar energy company that has great promise for continuing the movement to renewable energy,” Richardson wrote.  “As you know, I have been a very strong supporter of alternative energy and solar energy in particular….Attracting renewable energy companies to New Mexico has been a key element of my economic development strategy so I am most interested in hearing the details about your new company.  I look forward to seeing you in the near future.  Please contact Janis Hartley in my office to schedule a meeting.”

A meeting was scheduled between Richardson and Sheppard in Bernalillo for November 16.  On November 12, Richardson’s chief of staff Brian Condit received an e-mail from Olguin providing more information, most which was materially false, as we detailed in in Part II of this series.  That same day, Olguin forwarded Green2V’s “confidential proprietary” business plan explaining how it would bust the solar industry wide open. The statements included mention of a “$500 million capital investment” and “clean energy solutions providing over 3000 local jobs at maturity.”  Olguin had also told Condit that OCS had secured for Green2V $1.5 billion in industrial revenue bonds from El Mirage, Arizona.  That statement was also completely false but never checked out by Richardson’s office.

Apparently it didn’t occur to Richardson and his staff to ask why, if Green2V already had $1.5 billion from El Mirage it would want to come to New Mexico where it was only going to get half a billion.

Richardson’s letter was addressed to Green2V at 8270 S. Kyrene Road, Suite 103, Tempe, Arizona 85282.  Google maps show no company by the name of Green2V located at that address.  Green2V’s corporate letterhead provides no physical or mailing address, not even an e-mail or fax number.  Its application for $500 million in industrial revenue bonds did not use the S. Kyrene address, but a P.O. box in Carefree, Arizona.  The Albuquerque Journal has reported how difficult it is to contact or locate Sheppard.

Green2V was incorporated a scant three weeks before Richardson invited a meeting with its CEO.  It was registered as an Arizona corporation on October 13, 2009,  with yet another address, this time that of HB Energy LLC at 15509 N. Scottsdale Road, #4, Scottsdale, Arizona.  Bill Sheppard’s name does not appear in the articles of incorporation.  Not until February 2010 when Green2V registered as a foreign corporation with the New Mexico Public Regulation Commission does Sheppard’s name appear as president of Green2v.  His vice president was listed as Donald J. Lenkszuz, a patent attorney in Carefree, Arizona, and Bruce D. Adams, who was also a Vice President of Olguin’s OCS Captial.

HB Energy was listed as the manager of Green2V.  HB Energy, in turn, was owned by HB Equities, which shared the same address.  HB Equities is best known for defaulting on a $100 million note it had obtained to finance construction of the USA Basketball headquarters and a large Glendale development.  HB Equities is now in bankruptcy.  HB Equities had secured $1.2 billion in financing from the La Paz County Industrial Development Authority.  Olguin’s OCS introduced the county to HB Equity. La Paz County is a rural area of only 20,000 people located along Arizona’s southwestern border.  County officials said they would get $12 million from the deal over ten years. But with HB Equities in bankruptcy and default, the deal has collapsed.

Richardson Buys In After One Meeting

Richardson and Sheppard met on November 16, 2009.  That same day, his aides began engaging the wheels of his administration to push Green2V forward.  Sarah Cottrell, Richardson’s Energy and Environmental Policy Advisor, at his instruction pulled in Secretary of Economic Development Fred Mondragon and his aides.  Her November 16 e-mail to Mondragon reads:

This afternoon the Governor met with Bill Sheppard, who I think you know from his days at Intel in Rio Rancho in the 90′s.  Bill has formed a new company called Green2V.  Terry McDermott (also former Intel) is working with him.  A confidential backgrounder is attached.  Bill [Sheppard] is keen to locate this new company in New Mexico–and the associated 3,000 jobs or so–because he and his executive team have a lot of NM ties.  However, we’re in competition with Arizona.  They’re interested in establishing a base in Rio Rancho, but some other facilities could be in other parts of the state.  They’re thinking very big, from solar manufacturing to energy production and financing.  They’re already in touch with James Jimenez [city manager] and Noreen Scott [Rio Rancho Economic Development Corporation] in Rio Rancho.

The Governor asked me to help them set up a joint meeting with the two as soon as possible.  Would you be available tomorrow (Tuesday) to meet with Bill and Terry?  They’d be glad to meet in ABQ early or late if that works better for you.  If tomorrow doesn’t work, they probably would come back to NM early next week.  They’re on a very fast timeline.

Not long after, the Economic Development Department was working to connect Green2V with Spanish solar companies to promote its products.  The Transportation Department had priced out a $12.8 million road project, with storm sewers, bike lanes and sidewalks to connect Green2V’s proposed site with the state’s transporation network.  The Governor’s chief of staff and his Energy and Economic Policy Advisor acted as facilitators opening doors, making introductions, arranging meetings and rolling out the red carpet.  Green2V had become the biggest star in Richardson’s vision for New Mexico’s “Solar Valley.”

Here’s KRQE-TV’s coverage of the big Green2V announcement featuring Richardson and Bingaman:

Big, Big Talk Hooks Richardson

As Cottrell wrote to Mondragon, Green2V was talking big, very big.  Its “confidential proprietary” backgrounder said “We are vertically integrated assuring a constant supply of materials and production to acclerate solar energy production.”  This was Green2V’s “sand to silicon” vision, producing everything from the raw materials of silicon to servicing and installing photovoltaics.  It would produce its own glass, and overflow glass for architectural products.  In its presentation to Rio Rancho for the IRBs, it said, “The company will implement a continuous manufacturing flow allowing the company to pursue volume purchasing power, full equipment utilization, yield improvement and cost reduction programs.  The result will be continued profitability, on-time delivery and reliability.”

Green2V would “facilitate faster adoption of solar energy in the market” by developing and manufacturing “an inverter and storage product line to enhance the output and reliability of installed solar arrays.”  It would get into the business of purchasing and delivering electrictity generated by solar power.  It would build a financing arm to finance power purchase agreements for large governmental and industrial customers.  Green2V will “expand its position by acquiring existing private or co-op utility companies.”  It would break ground in the second quarter of 2010 and be selling solar modules from a finished factory within a year.  It would have no less than 1,500 employees by the end of 2014.  By 2015, it would have revenues of $500 million.

Who couldn’t be impressed?  Richarson was sold.  But he bought a chimera, not the next Microsoft.  Green2v’s $500 million letter of credit wasn’t worth the paper it was written on.  Green2v has not attracted investors.  It hasn’t broken ground.  And it is still difficult to find this company or its CEO.  The only way to contact Green2v is through the Rio Rancho Economic Development Corporation.  They take messages for Sheppard and maintain an e-mail account for Green2v.  The entity behind Green2v, HB Equities, had defaulted on its $100 million note and filed for bankruptcy before Richardson and Bingaman trumpeted the advent of Green2v at the gala press conference in Rio Rancho in April.

Richardson’s Impulse Buying

We’ve seen this sort of behavior before from Bill Richardson in the way he directed venture capital investments through the State Investment Council.  Our reporting on Earthstone International revealed another instance where Richardson urged a $9 million investment based on unsubstantiated promises from the company’s founders that they would build a 200-employee factory in Dona Ana County.  They never built the plant, but got to keep the money.  Like his leap into Green2V, our inspection of Richardson’s files showed no investigation of claims made by the company seeking government backing.

Related:  Another El Jefe Production, The SIC’s Suspicious Investment in Earthstone International

A Boost from Bill

Green2V’s hoopla was a new kind of alchemy.  It would turn sand into gold.  Thanks to Richardson’s endorsement, it picked up enough momentum to pull in the chairman of the Senate Energy and Natural Resources Committee and sail through its first hearing on $500 million in IRBs.  According to an experienced venture capital investor with whom New Mexico Watchdog has consulted about this matter, momentum was the key to Green2v’s business model, perhaps more than anything else.

Richardson’s boost gave Green2v and its CEO instant credibility.  Coming off the April press conference headlined by Richardson and Bingaman, Sheppard had quite a tailwind.  Within weeks, he was selected to deliver the keynote address for Western New Mexico University’s graduation ceremony.  “CEO of solar energy startup company Green2v,” WNMU’s announcement stated, “Bill Sheppard is a recognized senior executive in the semiconductor industry. His experience and recognition in the field led to the recent announcement of a $1 billion initiative in Rio Rancho that is estimated to create more than 3,000 jobs in New Mexico.”

How did WMNU come to select as its keynote speaker the head of a company that had never built or sold anything?  And could we get a copy of Sheppard’s keynote address?  We posed these questions to the public information office at WMNU but couldn’t get an answer or a copy of Sheppard’s speech, which he had not provided to the school.  It was suggested we contact Mr. Sheppard directly.  Could they give us a phone number or e-mail?  They gladly provided both.

At last, solid contact information for Sheppard and Green2v!  Alas, the e-mail goes only to the Rio Rancho Economic Development Corporation.  The phone number is also answered by the Rio Rancho Economic Development Corporation.  They gladly took a message on our behalf.  We’re still waiting to hear from Mr. Sheppard.

By the way, WMNU didn’t know about Green2v’s running out of gas before it ever got started.  That was news way down there in wonderful Silver City.  We referred them to reports on this site and by The Albuquerque Journal.

This story has been corrected since its original posting in which we said the letter of credit had been delivered to Rio Rancho under OCS letterhead. It had been addressed to and faxed to OCS and then later delivered to Rio Rancho in the Green2V application for the $500 million in IRBs. We have also added the KRQE-TV video and the observation about how curious it was that Green2V, supposedly having, according to Olguin, $1.5 billion from El Mirage, would be interested in coming to New Mexico where it would get only half a billion through Rio Rancho’s IRBs.