Sunday, April 08, 2012

CD-07 Dem primary gets contentious

Happy Zombie Jesus Christ Day. Hope you got your eggs in a row early.

The Democratic primary for CD-07 has taken a turn for the worse in recent days, with this e-mail I received some days ago from someone I do not know named Laura Nicol and titled "Insider Track: James Cargas’ Journey from DoE Intern to Energy Lobbyist to Democratic Candidate for US Congress". I will reprint her story in full, add bold emphasis to the names of the various parties she cites, and follow it with the response from the Cargas campaign.

Hector Carreno is a power broker in both senses of the word. Professionally, he is an energy aggregator. That is actually less important than what he seems to control through his business contacts. He knows people… and lots of them owe him favors. As “The Godfather” illustrated, that isn’t always a good thing.

Here’s how Carreno works…

 In February of 2002, Hector Carreno’s company, PowerSol, was written up by the Houston Press in an article that called the company “Little Enron.” <1> They don’t produce any energy themselves; they contract with Reliant to manage other minority firms for a 25% cut of the contracts; great work if you can get it! Carreno cobbled PowerSol together from Enron energy experts and city politicos (including Mayor Brown’s ex chief of staff Jay Aiyer). A few weeks after incorporation, they won a 12% share of the city contract with Reliant Energy as a minority contractor, before they had even been certified by the city’s affirmative action program. Shortly after the award, city councilman Gabe Vasquez paid a $14,000 consulting fee from his campaign funds to PowerSol officer Frank McCune, his own ex-chief of staff. Some council members were dismayed when they realized how well connected their new vendor’s officers were. Mayor Brown’s Hispanic outreach director, Marc Campos, called PowerSol a blatant attempt to cash in on political connections. We normally call that influence peddling!


In January of 2007, Illumina Energy (the new name of PowerSol) un-registered James Cargas as a power marketer and replaced him with Hector Carreno. The contact addresses and phone numbers remained the same, although the email address changed.

Why swap out Cargas? Because it was time for him to go to work for the city, advising them on who to buy power from. Let’s see, a power broker hires you for awhile, then sends you off to advise city hall on buying what he sells. How convenient! He might get some business in return; just a little favor, you know. Could be, could be.

This year James Cargas is running for US Congress in Texas District 7. He started running rather late in the season, without warning, forcing his friends to choose whether to abandon prior endorsements. A few of his organizational endorsements were clouded by procedural gimmicks. At some events, Cargas has appeared ill or upset. Is this run perhaps NOT his own idea? Did somebody make Cargas an offer he couldn’t refuse? If Carreno is behind this, what favors would he expect from a business partner in Congress?


How did Cargas get linked to Carreno this way? We have to roll back the calendar to introduce a pivotal player to the story; Emil Pena. Pena is a lifelong lobbyist; he’s good at it and has an impressive list of clients. He has lobbied for beer, cigarette, oil, and gas companies. But he made his name in the energy arena. He participated in the energy regulator/lobbyist revolving door, while also funneling money from energy companies to candidates they’d like to buy. This was noted by Texans for Public Justice in their report on PACs active in the 2000 election cycle, in a sidebar titled Stealth PAC. <2>

Pena ran the Emil Interests PAC in 1998 as a money conduit from TransTexas Gas Corp CEO Jack Stanley to Texas candidates, including John Cornyn for Attorney General. In 1999, Emil Pena was an energy lobbyist for 6 clients, including Enron. In 2000, Pena became Deputy Energy Assistant in the Clinton administration. He changed his PAC’s name to Government Interests. Despite donations reported by Cornyn & others in 2000, the PAC never reported activity or fund sources, which violates state law. The PAC’s treasurer in 2000 was Richard Bianchi, previously general counsel of TransTexas. By the way, Bianchi is infamous for switching from Democrat to Republican immediately upon winning election to the bench in 2008.

Pena appears to have become acquainted with Cargas when they were both working in the DoE's Office of Fossil Energy in 2000. Generation Power, Inc was created by Pena in 2001, with Bianchi as Regulatory Rep and Cargas as General Counsel. In 2006, Cargas is listed as Treasurer for Pena's disgraced PAC, and both he and Pena are listed as officers in Carreno's company Illumina Energy. They have become a team, shuffling company names, officer titles, and industry roles as needed.


 Since 2008, James Cargas has worked for the City of Houston, as their energy advisor. However, he continues to use advocacy groups and local clubs to push his insider agenda.

Cargas is a past Deputy Director of the North American Energy Standards Board, and is still a member. At a recent meeting, Emil Pena presented the idea that “system safety” might apply to shale gas, and explained how it could be implemented quickly. Now, as a lobbyist for oil companies, this advice probably seems quite reasonable to Pena: profits first, safety later … as PR damage control, maybe? For his part, Cargas proudly claims his involvement in NAESB, and seems perfectly content with their worldview. This is far from the “public service” attitude I expect in a city employee!

Cargas is also on the Board of the Energy Bar Association, where he basically says “alternative energy will not happen in Texas, due to existing regulations”. <3> One might interpret this as “don’t bother trying to compete with my partners; we’ve got the market sewed up.” Again, not the attitude I would hope for from someone advising the city on energy purchases, but all I could expect from an energy trading insider.


James Cargas deserves to lumped with his partners, Carreno and Pena: fossil fuel fans, shills for Big Oil & Gas, profiting off pushing their poisonous products, pinching OUR pennies for their pockets. No law against any of that … this is America, after all. But is this who we want making the law of the land, our land, our water, our air? No! Cargas is undeserving of our respect, much less a Democrat’s endorsement or vote.

 === === === === === === === ==

<1>  Carreno’s PowerSol wins city contract, gets 25% cut of all subcontracts; 2 officers are city insiders. 2002
<2> Pena’s Stealth PAC with Bianchi. 2000
<3> (page 3) Cargas says it’s tough to implement alternative energy in TX, due to pricing regulations.

I reached out to the Cargas campaign for comment, and here in full (except as noted* at the very end) is the response I received from Hector Carreno.

In a recent blog written by Laura Nicol’s I was mention as a “power broker in both senses of the word”. I am flattered by Ms. Nicol’s statement, but I’d like to point out the truth that escaped her attack on me and my good friend James Cargas.
First, I am not now or ever have been and energy aggregator. Second, in the Houston Press article of 2002 that Ms. Nicol’s refers to, she fails to mentions that myself and former business associate had just finished working on the campaign of Orlando Sanchez for Mayor, in 2001. So her argument that we won a contract because we have political connects is totally incorrect since the person we were attempting to defeat was the incumbent Mayor. We won the contact because we had a better proposal. Third, Ms. Nicol’s should be better informed to understand that power marketer do not generate power, they sell power. I am sure that she would be surprised to find out that most companies selling power in Texas do not own the power plants. I should also point out that the Brown Administration used their political clout to try to kill the contract. Fourth, Mr. Cargas decision to run for Congress was his, and he certainly is not doing it for personal gain. I was excited when I found out he filed. He will make a great Congressman.
As to her point that former Council Member Gabe Vasquez paid my business partner $14,000 after we were awarded the contract, I am not sure what point she was trying to make. The facts are that the former Council Member owed us the funds for running his re-election campaign.
As to the partnership of Illumina Energy, ever single statement she made was totally incorrect. Illumina was set up as a minority-owned company seeking to compete with the majors and pass the savings on to its government and minority customers.
In her reference to Mr. Emil Peña, his PAC and other business interest, I once again think she should get her facts correct before she continues to make false clams.
The final innuendo in Ms. Nicol’s blog is what do I and Emil Peña expect to receive when James Cargas is elected to Congress. I can only speak to what I expect and that is to have James Cargas represent the interest of all residents of District 7, to work hard for all Texans and to conduct himself in a professional manor (sic) – just as he has done in his prior public service positions.
Ms. Nicol’s end (sic) her fantasy story with asking her limited readers not to vote for James Cargas to be the Democratic challenger against the incumbent GOP Tea Party Member. In the America I live in, we have the right to say and vote for whomever we want. In the America I live in, everyone has the right to their own opinions – every incorrect ones. In the America I live in, we all have the freedom to choose who we support.
James Cargas has worked hard his entire life and has been working with Democratic elected officals (sic) since he was 14 years old. Why do you attack him for working in the oil and gas industry, as if that was something he should ashamed of? Doesn’t Ms. Nicol’s husband work for one of those alleged big bad oil service companies? Isn’t Houston the Energy Capital of the World? Are we not proud of Houston?
Ms. Nicol, I am proud to support James Cargas for Congress and I am proud to call him my friend. Stop spreading misinformation and innuendos – get all your facts correct. Your tactics remind me of something I would have expect (sic) from Governor Sarah Palin or Senator Joe McCarthy not from a so-called Democratic activist. I guess you must be very proud of the candidate you are supporting to create such lies for her.

(At the end*, Mr. Carreno added the e-mail address from Ms. Nicol as well as his own. I have deleted those as the only part of his response I edited.)

I previously posted my endorsement of Lissa Squiers in the CD-7 Dem primary. I leave it to you to decide if Ms Nicol's article has merit for consideration for the voters of Congressional District 7, likewise if Mr. Carreno's defense serves as appropriate rebuttal. You know where I stand.

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