Make us your home page
Instagram

Grifters latch on to green technology

MIAMI — Within hours of landing in Brazil in late 2007 on a trade mission, Gov. Charlie Crist announced a $182 million investment by a Brazilian company to provide clean energy for the state capital.

"I am confident today's announcements are only the first of many new partnerships and new opportunities," Crist said.

But within months the deal had fallen through amid allegations of fraud, and a Tallahassee start-up was out $140,000.

As Congress gets ready to parcel out billions of dollars to create what President Obama likes to call "green collar jobs," energy analysts warn of the dangers of a rush into territory already littered with failed investments.

"Yes, there's gold in green," said Susan Glickman, southern regional director for the Climate Group, which builds bridges between business and government to promote a cleaner planet. "But not all green is gold."

The Tallahassee deal looked good on paper. Green Power Systems had already secured a 30-year power-purchasing agreement from the city of Tallahassee to turn nonrecyclable municipal solid waste into electricity using super-charged heat in a "plasma arc" incinerator.

"We are big believers in this technology," said Ben Cowart, power marketing manager of the city of Tallahassee, which owns the local utility serving 120,000 residential customers.

All that was needed was investors to come up with the millions it would take to build the facility.

Wealthy Colombian brokers in Miami Beach put Green Power Systems in touch with an Argentine businessman, Alberto Grosso, president of Controlsud International, purportedly the Brazilian branch of a multi-national firm with $10 billion in investor capital.

After several meetings, Controlsud agreed to put up $182 million.

"They said they had a whole world of financing behind them," said Ingo Krieg, president of Green Power Systems. "Turned out they were just stringing us along."

In the process Krieg was asked to pony up $140,000 to pay for a "risk assessment," outlining the company's business plan for investors.

Controlsud was never clear on who its investors were, Krieg said. "They said something about a Baron somebody in Germany and a big insurance company," Krieg said.

It turns out Controlsud had a history of offering large investments in green energy throughout Latin America and walking away from deals after payment of risk assessments, leaving a trail of angry former business partners.

A $342 million project to double ethanol production in Colombia was signed by Controlsud in December 2007, with the backing of the Colombian and U.S. governments. At a signing ceremony in the presidential palace in Bogota, Grosso was photographed with President Alvaro Uribe and U.S. Ambassador William Brownfield.

"They took us for a ride," said Juan Manuel Hernandez, president of the Ethanol Consortium Board, who signed the Colombian agreement with Controlsud, and put up $180,000 for a risk assessment. "Now we are broke."

In 2007, Controlsud also was part of an aborted $6.5 billion deal to build "pollution-free" oil refineries in Panama using plasma arc technology.

In a phone interview Grosso of Controlsud confirmed the deals had fallen through, but blamed the global economic meltdown.

He reiterated that his company was backed by major European banks and private investors. Among them he named Germany-based Allianz, one of the world's largest insurance and banking groups, as well as the private funds of Baron August von Finck, heir to a multibillion-dollar banking fortune.

Contacted by the St. Petersburg Times, Allianz said it could not confirm any relationship with Controlsud or Grosso. The office of von Finck emphatically denied any association.

"Mr. August von Finck does not know this company, and he is astonished about your report," his office responded in an e-mail.

Asked to explain, Grosso, who is vacationing in Argentina, said he was not surprised.

"That's their normal business policy to deny these things," he said, before contradicting his previous comments by saying he never claimed to have the personal backing of von Finck or Allianz.

Before Crist arrived in Brazil, the organizers of the state's trade mission looked into Controlsud and found nothing amiss.

"We did some due diligence on them," said Manny Mencia, head of International Trade and Business Development at Enterprise Florida, the not-for-profit government business partnership that organized the trip. "We didn't see anything out of the ordinary. It seemed good as gold."

Green Power Systems and the city of Tallahassee remain confident that the project will go ahead. Krieg is looking for new financing. "We hope to announce some very good news soon," he said.

Contact David Adams at dadams@sptimes.com.

fast facts

How green is it?

Green Power Systems plans to build a 200,000-square-foot energy plant on a 24-acre site in Leon County. The plant will convert 1,000 tons of Leon County's municipal solid waste daily to 42 megawatts of electricity. The city will buy 35 megawatts of the power, enough to supply electricity to 22,000 homes.

Critics say plasma arc technology is largely untested except for military purposes and for recycling in the steel industry. It's also not considered green by environmentalists, as incinerators produce greenhouse gas emissions, which scientists say cause global warming.

David Adams

Grifters latch on to green technology 02/06/09 [Last modified: Friday, February 6, 2009 10:09pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Pinellas construction licensing board needs to be fixed. But how?

    Local Government

    LARGO –– Everyone agrees that the Pinellas County Construction Licensing Board needs to be reformed. But no one agrees on how to do it.

    Rodney Fischer, former executive director of the Pinellas County Construction Licensing Board Rodney, at a February meeting. His management of the agency was criticized by an inspector general's report. [SCOTT KEELER   |   Times]

  2. New owners take over downtown St. Petersburg's Hofbräuhaus

    Retail

    ST. PETERSBURG — The downtown German beer-hall Hofbräuhaus St. Petersburg has been bought by a partnership led by former Checkers Drive-In Restaurants president Keith Sirois.

    The Hofbrauhaus, St. Petersburg, located in the former historic Tramor Cafeteria, St. Petersburg, is under new ownership.
[SCOTT KEELER  |  TIMES]

  3. Boho Hunter will target fashions in Hyde Park

    Business

    Boho Hunter, a boutique based in Miami's Wynwood District, will expand into Tampa with its very first franchise.

    Palma Canaria bags will be among the featured items at Boho Hunter when it opens in October. Photo courtesy of Boho Hunter.
  4. Gallery now bringing useful art to Hyde Park customers

    Business

    HYDE PARK — In 1998, Mike and Sue Shapiro opened a gallery in St. Petersburg along Central Ave., with a majority of the space dedicated to Sue's clay studio.

     As Sue Shapiro continued to work on her pottery in St. Petersburg, her retail space grew and her studio shrunk. Now Shapiro's is bringing wares like these to Hyde Park Village. Photo courtesy of Shapiro's.
  5. Appointments at Raymond James Bank and Saint Leo University highlight this week's Tampa Bay business Movers & Shakers

    Business

    Banking

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. Jackson will oversee all of Raymond James Bank's operational business elements, risk management and strategic planning functions. Kackson joins Raymond James Bank after senior …

    Raymond James Bank has hired Grace Jackson to serve as executive vice president and chief operating officer. [Company handout]