One of the brightest moments of Katie McGinty’s tenure as Pennsylvania’s environmental secretary began in Bilbao, Spain.
At a recycling conference there in 2003, she began courting a wind-turbine manufacturer, Gamesa, that would eventually invest heavily in Pennsylvania, bringing 1,000 jobs to Bucks and Cambria Counties and a U.S. headquarters to Philadelphia.
Luring the company was hailed as a coup for the Rendell administration, won McGinty statewide headlines, and later garnered a mention from Republican Chris Christie as he ran for New Jersey governor.
More than a decade later, with McGinty as the Democratic nominee for a U.S. Senate seat, that victory is fueling attacks.
In ads, mailers, and campaign stops, Sen. Pat Toomey (R., Pa.) and his allies contend that McGinty turned government posts and taxpayer aid into six-figure positions with environmental and energy companies, including one that was a major shareholder in Gamesa.
That criticism forms the backbone of a Republican offensive as the Senate race enters its final two months.
“Special deals, special interests. Katie McGinty: getting ahead at our expense,” says the latest TV ad from Freedom Partners, a Super PAC aligned with the conservative Koch brothers. The group has bought $7 million worth of airtime to oppose the Democrat.
None of these missives, however, points to anything illegal or a violation of ethics law, and they rely on a selective set of facts, many of which distort or exaggerate her record.
McGinty, who has degrees in chemistry and law, and before this run for office was Gov. Wolf’s chief of staff, has argued that it only made sense for her to seek private work that matched her expertise and interests: clean energy projects that could help the environment and economy.
“Responsibly developing renewable energy and energy efficiency while protecting our environment is what I do, no matter what hat I’m wearing,” she said in a statement issued by her campaign, adding that while she was with the Pennsylvania Department of Environmental Protection, she helped attract $1 billion in private investment and 3,000 jobs.
A McGinty spokesman said, “Republicans have no legitimate criticisms. . . . They’re just making things up.” But McGinty refused to address her private work and Toomey’s claims in an interview unless she was given the questions in advance. Instead, her campaign sent answers by email.
The GOP attacks have had at least one effect: illustrating another side of McGinty’s resumé.
On the campaign trail, she often touts her blue-collar roots in a big Northeast Philadelphia family headed by a police officer and a restaurant hostess. Her high-ranking posts in the Clinton White House and Harrisburg are well-known. Less often discussed, for a candidate in only her second run for public office, are recent jobs as an executive with one environmentally focused firm, board positions at two major energy companies, and an operating partner with a private equity firm focused on green investments.
Now residents of Wayne, McGinty, 53, and her husband, Karl Hausker, an environmental consultant and former Environmental Protection Agency official, have a net worth in the millions – possibly more than Toomey, who had a career as a Wall Street trader in the 1980s and early ’90s, according to their financial disclosure records.
Pennsylvania law bars public officials from lobbying on issues they handled for one year after leaving office. There is no indication that McGinty crossed that line.
But Barry Kauffman, executive director of the good-government group Common Cause Pennsylvania, said it’s fair to scrutinize a public official who joins an industry that he or she once regulated.
“The public has a right to be concerned about what did a public official do in their last weeks, days, months of public service, to open the doors to their new, probably more lucrative, jobs,” Kauffman said, adding that he did not know enough about McGinty’s work to comment on her situation.
Government officials often ride their knowledge, connections, and clout into the private sector.
McGinty’s move in that direction didn’t get much attention until she began running for Senate.
Big bet, big win
She was best known as a top environmental aide in the Clinton administration when Gov. Ed Rendell named her secretary of environmental protection.
Soon after taking the post in 2003, she pitched Gamesa’s chief executive on Pennsylvania.
The next year, after heavy lobbying from Rendell and McGinty and pledges of state support, Gamesa announced that it would establish a U.S. headquarters in Center City and open a manufacturing site for its turbines. It brought a $40 million investment, and would later add a $34 million manufacturing facility in Fairless Hills. Pennsylvania kicked in nearly $20 million in grants, job training, tax credits, and loans.
The investment was hailed as critical for revitalizing the state’s struggling manufacturing sector. Rendell, with McGinty’s help, made green jobs a focus of his administration, and by 2007 the state had the third most green-energy jobs in the nation, according to the Pew Charitable Trusts.
Among others, Rendell and McGinty also drew investments from Iberdrola, a Spanish wind-energy giant that opened an office in Radnor.
McGinty, as chair of the Pennsylvania Energy Development Authority, helped approve millions of dollars of state aid for a wide range of new green energy projects.
In 2008, with Iberdrola up and running in Pennsylvania, she also urged Rendell to put in a good word with New York Gov. David Paterson as the company pushed to acquire a utility with operations in the Empire State.
Later that year, she left the DEP, and three months later she joined the board of directors at NRG Energy, a Princeton-based energy company. From 2008 to 2013 she made $1.1 million in cash and stocks from NRG, SEC filings show. That board met at least five times a year, her campaign said.
In 2009, roughly a year after leaving the DEP, McGinty also joined Iberdrola’s U.S. affiliate as a board member, paid $100,000 a year. The panel met at least 11 times a year, her campaign said.
In addition, starting in 2009 she was an operating partner at Element Partners, a private equity fund that focused on the environmental sector, and then left to become a vice president at Weston Solutions, a West Chester-based environmental cleanup firm.
She remained on Iberdrola’s board as she launched her first run for public office, unsuccessfully seeking the Democratic nomination for governor in 2014. She stayed on the Iberdrola board until Jan. 18, 2015, two days before Wolf took office and she became his chief of staff, returning to government work.
Grants and attacks
Republicans now insinuate that McGinty’s push to bring Gamesa to Pennsylvania and aid for other green energy projects paved the way for her private work, particularly her board slot with Iberdrola.
A Toomey TV ad bashed the $20 million for Gamesa as McGinty steering funds to a future employer, because Iberdrola held a major stake in the turbine maker. “She wins, we lose,” read a mailer delivered last week by Americans for Prosperity, another Koch-backed group.
That money, though, was backed by Rendell and originated from economic development agencies, not DEP.
Freedom Partners’ attacks single out McGinty for several grants, including $500,000 to a Somerset County wind project that Iberdrola eventually owned.
Meeting minutes, however, show McGinty wasn’t alone: The 2006 grant was unanimously approved by the energy development board she chaired. It was part of a slate of 25 projects that got $8.5 million in state aid that day alone. And Iberdrola wasn’t the beneficiary at the time. The project was being developed by a Scottish power company that Iberdrola acquired nearly 11 months after McGinty’s vote.
McGinty’s team noted that the grants in question represent a tiny fraction of those she oversaw: The DEP gave out nearly $340 million in aid during her tenure, her campaign said.
The GOP also points to a $10 million federal stimulus grant that Iberdrola received from the Rendell administration while McGinty was on the company’s board. That grant was hardly unusual.
Since 2003, Iberdrola has secured $2.2 billion in federal, state and local subsidies in 18 states, according to the Washington-based nonprofit Good Jobs First, which scrutinizes government aid to corporations. That’s the most of any company in the United States.
Much of the support piled up as the company acquired smaller energy firms that had already secured incentives, said Philip Mattera, Good Jobs First’s research director. Green energy outfits also got a big boost from the 2009 federal stimulus.
“There was a decision made to try to stimulate the economy after the financial meltdown in any way possible,” Mattera said. “One of the objectives was to promote renewable energy.”
McGinty and her family now have assets of $2.4 million to $8.5 million, financial disclosure forms show. (The forms require candidates to report only ranges of value for their assets.) Toomey, whom she has pilloried as a Wall Street financier, reported assets of $1.7 million to $4.4 million.
After attacks over her private jobs, McGinty’s campaign has cited Toomey’s career as well, arguing that after years as a derivatives trader, he fights for big banks as a senator.
“Pat Toomey has literally spent his entire career working for Wall Street banks, lobbying for Wall Street banks, and then doing Wall Street’s bidding as a member of the Senate Banking Committee,” said McGinty spokesman Sean Coit.
Toomey points out that he opposed bank bailouts and says he pushes for “pro-growth” free-market principles.
Gamesa goes dark
Initially, the Gamesa investments were a hit.
President Obama, as a candidate, campaigned at Gamesa’s Fairless Hills facility in 2008, and returned there in 2011 to tout the green economy.
In New Jersey, Christie – running for governor in 2009 – specifically cited Gamesa as he argued that his state’s Democrats failed to aggressively pursue new businesses.
But the Pennsylvania sites eventually sputtered.
Layoffs arrived in 2009 and 2012, and in 2014 Gamesa announced it was closing its Western Pennsylvania plant. Work at the Bucks County facility has also wound down.
The cuts arrived as Gamesa slashed thousands of jobs worldwide. In the U.S., wind energy fell on hard times as a federal tax credit lapsed, and fossil fuels got cheaper.
As the Gamesa factories went dark, McGinty, seeking the Democratic nomination for governor in 2014, said “this rips a big piece of my heart out. . . . These were jobs with good salaries and good benefits.” And she blasted then-Gov. Tom Corbett, a Republican, for opposing federal tax credits for wind energy.
At the time, she was still on Iberdrola’s board of directors.
In her statement last week, McGinty said she has backed those tax credits for decades, before she ever sought public office.
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