“I am Alison Lundergan Grimes and this is the Big Sandy power plant in Louisa, Kentucky. They are shutting down half the plant and laying off their workers because Mitch McConnell didn’t fight to get the scrubbers it needs to reduce coal emissions. Instead, Mitch and his wife pocketed $600,000 from enemies of coal, including New York City Mayor Michael Bloomberg. I approve this message because the difference between Mitch and me is I will fight for these jobs and no New York anti-coal billionaire will ever buy me off.”
— Alison Lundergan Grimes, Democratic challenger to Sen. Mitch McConnell (R-Ky.), speaking to the camera in a new ad
Excuse the fuzzy quality of this ad, but it has not been publicly released by the Grimes campaign. In The Fact Checker’s experience, the most fact-challenged ads are those that fly under the radar, as campaigns hope that reporters don’t notice the content — but voters do.
This particular ad is especially noteworthy because the candidate herself repeats a claim that The Fact Checker has already deemed worthy of Four Pinocchios. Not only does she double down on this falsehood, but she makes another highly questionable assertion as well.
Ironically, this ad emerged the same week that Grimes launched another ad that calls attention to fact checker criticisms of McConnell’s own ads.
This particular ad appears to be part of a series of TV spots in which Grimes addresses the camera, talking about a regional economic issue. In a similar ad, she blasts McConnell for not doing enough to aid nuclear-fuel workers in Paducah, though we’ve previously found he has some bragging rights on this issue.
First, let’s look at the issue with the 50-year-old Big Sandy power plant, which is owned by American Electric Power. It’s one of the big coal-powered electric plants that must comply with new environmental regulations — imposed by the Obama administration — and in 2012, the company announced that it would shut down its coal-burning furnaces, even though it relied on coal that was mined locally.
The company said the reason for the shift is that retrofitting the plant to comply with the new coal regulations, using a scrubber system, would have resulted in a 31 percent increase in electricity rates for eastern Kentucky residents. The company instead will shift to electricity generated from a plant in West Virginia that meets the new regulations, which will result in only an 8 percent increase. Earlier this year, Kentucky regulators also approved a plan to convert part of the plant to natural gas, which will be used for peak periods.
Grimes and McConnell have both been critical of the environmental regulations, but her assertion that “McConnell didn’t fight to get the scrubbers it needs to reduce coal emissions” makes little sense. First, it’s unclear why a senator would be seeking to provide scrubbers to an investor-owned company. Second, going the scrubber route would have jacked up utility rates for what is already one of the poorest parts of the state.
Retrofitting the plant for the new coal regs “was not in the best interests of our customers” because of the potential rate increase, said Melissa McHenry, AEP’s director of external communications. She said there is nothing that McConnell could have done to help the company get the scrubbers, since it is a state regulatory issue. When a company makes a decision like this, it makes a filing that seeks recovery of the costs of investment. “There is no involvement of a senator in that process,” she said.
The Grimes campaign defends this language on the grounds that McConnell voted against budget plans that would have boosted funding for clean coal technology — research that the campaign claims might have made scrubbers less expensive. But, despite McConnell’s negative vote, the spending bills were approved and the investments were made anyway. (The argument also seems at odds with her rhetoric that the regs are bad in the first place.) Most of the votes cited by the Grimes campaign took place after AEP’s decision to close the plant, so there’s really no justification for this statement.
Then Grimes really goes into the ditch when she asserts that “Mitch and his wife pocketed $600,000 from enemies of coal, including New York City Mayor Michael Bloomberg” and pledges that “no New York anti-coal billionaire will ever buy me off.”
Those are pretty strong words for a claim that has been thoroughly debunked. We can only assume that polling suggests that mentioning Bloomberg has resonance in the hollows of coal country. But let’s review the claim again.
McConnell’s wife, of course, is Elaine Chao, a former labor secretary, president of the United Way of America and Peace Corps director. Thus the attack on McConnell is indirect, except for the fact that her income is also reported on McConnell’s financial disclosure forms filed with the Senate.
In this case, the group in question is Bloomberg Philanthropies, which in 2011 committed $50 million over four years for the Sierra Club’s Beyond Coal initiative, which aims to retire one-third of dirty coal plants by 2020, according to its Web site.
Chao joined Bloomberg Philanthropies’ advisory board in 2012, after the initiative was announced. Her pay was $9,400 a year, according the group’s 2012 financial filing.
“The decision to provide funding to Sierra Club’s Beyond Coal initiative took place before Elaine Chao joined the board,” spokeswoman Meghan Womack told The Fact Checker. “Bloomberg Philanthropies’ board members do not vote on individual initiatives or program spends.”
Womack disputed the description of Bloomberg as an anti-coal group. “The organization focuses on five key areas for creating lasting change: public health, environment, education, government innovation and the arts,” she said. “In 2013, Bloomberg Philanthropies distributed $452 million.”
Even if one were to accept that Chao had anything to do with the Beyond Coal Initiative — which the organizations denies — her pay of $9,400 is chump change compared to the $600,000 claimed by Grimes. Where does the rest come from?
In this case, Grimes is counting Chao’s compensation from serving on the board of directors of Wells Fargo, which totals nearly $685,000, according to the bank’s proxy statements in 2012, 2013 and 2014.
Wait a second. Wells Fargo is a bank. Why does Grimes lump it among “enemies of coal”? The Grimes campaign justified this on the grounds that in a 2013 report Wells Fargo said that it had been curtailing its financing of “mountain top removal” (MTR) coal operations.
But Jennifer G. Dunn, a Wells Fargo spokeswoman, said Wells Fargo adopted this policy in 2006 — five years before Chao joined the board. It was just not formally mentioned in a Wells Fargo external document until 2013, she said.
“In 2006, Wells Fargo adopted a credit policy that provided guidance related to financing coal and metal mining,” Dunn said. “While we continue to finance coal companies, as a result of our deliberate approach and the broader movement of the industry toward other mining methods, our involvement with the practice of MTR is limited and declining.”
In any case, Dunn added, the policy was developed and implemented without any involvement by the Wells Fargo board of directors.
Dunn also disputed the assertion that the bank is an anti-coal group. “Given that we still finance coal companies, we would certainly not characterize ourselves as ‘anti-coal,’” she said.
The Rainforest Action Network, Sierra Club and BankTrak in 2012 issued a report that ranked Wells Fargo as one of the top five worst banks on coal financing, with an overall grade of “D.” In 2013, Wells Fargo earned a “C” for mountaintop removal but retained a “D” for coal-fired power plants. And in 2014, its score for mountaintop removal improved to “B” — making it one of the first banks to earn such a rating — yet it still only earned a “D” for financing coal-fired plants.
The Pinocchio Test
So let’s review. Grimes first makes a nonsense claim that McConnell should have somehow arranged for scrubbers in a privately-owned plant that would have sent utility rates soaring.
Then, in a desperate effort to somehow cite Bloomberg’s name, she accuses McConnell of being bought off by a $9,000 payment to McConnell’s wife (who is independently wealthy). Citing a $600,000 number from “enemies of coal” is especially silly, as it mostly involves money from a bank that continues to finance coal companies.
Most striking, Grimes puts her own credibility on the line by uttering these recidivist claims herself, rather than relying on an unseen narrator.
We realize that the game of politics is sometimes played rough in Kentucky, but this ad is beyond the pale. Indeed, it is likely the worst ad of a nasty campaign year. Grimes should be ashamed of herself.
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