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May 20, 2008 10:44 PM UTC

Government Fraud Case: Explosive Schaffer Ties?

  • 62 Comments
  • by: Colorado Pols

9NEWS reported late last week:

A Denver businessman testified in federal court this week against charges that he bilked the government of millions in an attempt to test an alternative automobile fuel.

Bill Orr solicited money from investors and from the federal government in a purported effort to develop a fuel that would be more efficient and less polluting. Prosecutors say Orr misrepresented his research results and business prospects to obtain a $3.6 million grant from Congress.

Orr admitted he paid himself more than $500,000 of the federal funds during two years of research and development work. He said he obtained the grant with the help of Congressional aides whom he met while working on other fuel and environmental issues.

Specifically, Orr worked with politicians on Capitol Hill when he tangled with the Environmental Protection Agency in the 1990s… [Pols emphasis]

The criminal case going to the jury concerns allegedly fraudulent representations made to the federal government by Orr’s National Alternative Fuels Foundation (NAFF), a 501(c)(3) nonprofit organization. According to the criminal indictment, NAFF received over $2 million in grant money to research a new fuel additive. Specifically, the indictment alleges that NAFF submitted false documents–including bogus scientific testing–to the EPA in support of the grant request from 2001 to 2004. Orr is also alleged to have solicited almost $600,000 from private investors to “research” this fuel additive, most of which was deposited into his personal bank account.

We’re shocked 9NEWS only notes that Orr “worked with politicians on Capitol Hill,” since there is much more to the story: the Director of the National Alternative Fuels Foundation during 2004 and 2005 was former Rep. Bob Schaffer.

Schaffer served as Director of the NAFF from October 2004 until March 2005, just two months before the nonprofit was administratively dissolved. By May of the following year, Orr had been indicted.  This is critical because according to documents we’ve seen, Orr continued to make these allegedly false reports to the EPA through at least December of 2004–well into Schaffer’s tenure as Director.

Schaffer was not himself indicted in this case, though his name did appear on the witness list. We are told that the case against Orr is pretty strong: a jury is entering deliberations as we write this to decide the truth of the matter. If Orr is found guilty, watch for the next logical question–what Bob Schaffer knew about this alleged fraud and when he knew it–to become quite urgent.

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62 thoughts on “Government Fraud Case: Explosive Schaffer Ties?”

  1. …did Wadhams bother to do any vetting whatsoever?  

      Did he bother to simply ask Schaffer whether there was possibly anything embarrassing in his background?  If so, did Schaffer disclose this stuff?

      Maybe this will get people to stop laughing about the Pike’s Peak/Mt. McKinley mix-up and focus on something important.

  3. this trial is in the jury phase and this is the first we are hearing about schaffer’s involvement with with a fraudulent non-profit?

    How is it no one in the media has mentioned the tie?

    1. doesn’t have time or staff to read every court filing. Someone would have had to tip them off (which is almost certainly what happened with the 9News report, although why they then buried the Schaffer connection is puzzling, unless they were holding it back for a big expose.)

  4. Schaffer was not himself indicted in this case

    Seriously, can Wadhams bluster and threaten his way past this, or are Republicans lucky the news broke the week BEFORE the state convention?

    Anyone willing to step in at this late date?

  6. From the Denver Business Journal story on Orr’s indictment almost exactly two years ago:

    Orr also successfully lobbied members of Congress to earmark $3.6 million for further testing of the “vapor phase combustion” fuel additive. Between 2001 and 2004, the Environmental Protection Agency disbursed about $2 million in funds to Orr’s nonprofit entity, the National Alternative Fuels Foundation. The indictment alleges that Orr submitted false documents, including phony scientific test results, to the EPA to obtain the grant money.

    Who did Orr lobby and who secured the earmarks for him?

    1. As Orr’s former-congressman-cum-lobbyist, did Bob Schaffer work to open doors for Orr and get him the taxpayer dollars he needed for his fraud?

      1. Schaffer became officially involved with the Foundation AFTER Orr did his lobbying and secured his earmarks.

        Unless you’re implying Schaffer got the director job as a reward for helping out earlier, which is worth investigating but would be entirely supposition.

  7. This guy views congress as nothing more than a huge corporate ATM.  Selling cheap in the Marianas episode, voting for the war in Iraq in exchange for a lucrative oil exploration contract, and now being connected with people defrauding the government in some oil additive scam.  No wonder he had no time to actually represent the people of our state – he’s too busy lining his pockets !

    This guy thinks we are all stupid and disdains the people he is supposed to represent.  Don’t let him get anywhere near an institution of government again.

    1. …for the last 25 years.

      Working for the government is opportunity.  Not to serve the people, but help your cronies first, and then later, cash in your chips.

      I hate them.  (Haners, my daughter, etc. excepted!)

  8. .

    Sorry, everyone dogpiling on Mr Schaffer on this one,

    but you blew right past the big news.

    Ever see Brando in the movie “The Formula ?”

    It was absolutely his worst ever performance.

    Not the point.

    One character in the film,

    played in real life by Bill Orr,

    discovered a way to significantly reduce gasoline consumption.  

    Big Oil went after Bill Orr,

    in the movie,

    with both barrels.  

    In real life, here at ColoradoPols,

    all you sanctimonious environmentalistic phonies are crucifying the guy who was going to make the USA energy-independent,

    all because Big Oil has painted him and his science as “bogus scientific testing.”  

    Me,

    I’m installing one of Orr’s vapor phase converters into my Maserati next week.  

    I already have one in my Yugo, and it works great!!!

    .

    2. Just kidding. You would think that if Bob Schaffer were “the guy who was going to make the USA energy-independent,” then he would be proud to trumpet his past work for this organization (to at least help obscure his Big Oil voting record).

      Yet…he’s not. Never heard of it until today…for obvious reasons.  

    3. One of those, “Hmmm…” moments regarding a potential fuel-saving device crushed by “Big Oil.”

      Then I re-read and re-read your statement that you own both a Maserati and a Yugo — and, now, I can’t figure out if I’m reading comedy or satire, as well as hard-hitting expose.

      Please expand on what you’ve written, if you’re game.

      1. .

        and it runs on tap water,

        not the Vapor Phase technology that Mr. Schaffer  was pushing for Mr. Orr.  

        Water is cheaper than Ethanol.

        .

  9. He shows up as the registered agent for Orr’s National Alternative Fuels Foundation. His address on an SOS election filing is on Quince Way, the same as Chuck Thomas, one of the other Directors of the NAFF.  Last I heard Shires was facing criminal charges.  What happened to him?

    1. He was charged in 2006 with failure to file returns for Octane, which was the corporation Orr and Shires formed to develop and market the sham alternative fuel. Shires was also charged with backdating board minutes to purportedly authorize loans to Orr, which prosecutors allege was an attempt to cover Orr’s looting the company’s treasury.

      Shires agreed to testify against Orr. The plea agreement was entered soon after Shires was indicted in Fall 2006.

      Shires departed from the National Alternative Fuels Foundation when things started to unravel, in early 2005, while Schaffer was still a director.

      (Interesting note: Shires was represented by attorney Nathan Chambers, who is chairman of the Arapahoe County Republican Party and married to embattled District Attorney Carol Chambers.)

      Shires is at the heart of a number of recent fundraising and lobbying scandals in Colorado. See this story on Shires.

      Shires was at the center of the Senate Majority Fund’s $100,000 transaction with the Trailhead Group, and Shires wrote the “dig deep” letter to lobbyists that got Tom Wiens in trouble.  

  10. It’s like each week his candidate takes another hit. By the time November rolls around Wadhams will claim getting double digits in the final vote will be a victory.

    And I’m talking total votes, not percentage…

  11. is the same guy who 30 years or so ago pushed a group called the American Constitutional Law Foundation in support of various right-wing causes?  Despite the name of the group, he was not a lawyer, pushed causes like petition rights, etc.

    1. I seem to remember the same character with the same issues.  Also seem to remember a Bill Orr being involved in some of the term limit stuff.  Legislative Council archives on ballot issues would probably turn up the identity.

      If it is a different Bill Orr, it would be an amazing coincidence to have that many Colorado connections, don’t you think?

      I thought the Colorado Bill Orr was a lawyer – perhaps he got defrocked?

      1. Was this Bill Orr also a priest?  Cause lawyers are disbarred; it’s priests who are defrocked. 😉

        Just thought that was amusing.  On a serious note, this is bad bad bad for Schaffer.  Not that I’m complaining, but really… shilling for some snake oil peddling con artist?  That’s pretty low, even for a politician!

      2.    Now that you mention it, I seem to recall Orr’s name associated with term limits.  That would also explain his and Schaffer’s mutual affinity for one another.

      3. I remember talking to him about it because of his role in the American Constitutional Law Foundation. He told me he had never been to law school. Of course, that was 30 years ago and he might have gone later, but I think he just had a layman’s interest in legal issues.

  12. Schaffer is toast.  Watch the Republicans show him the door.  

    The only question is who will run in his place. With a race this tight the Republicans will be ruthless against one of their own and push Schaffer out.

    Schaffer got greedy.

    2. …and move Wayne Wolfe up to the Senate race again with a question mark next to his name.

        Of course, if Bob bails and neither Scooter nor Wolfe is interested, Tancredo has nothing better to do this Nov.

  13. The Republicans are laying back, stories like this don’t matter and coloradopols.com can’t make them matter.

    Udall will run hip-to-hip with Obama,

    and Schaffer will win.

    Schaffer takes 52.4%

    The “Line” is wrong, by a lot.

    1. We Dems here just make this stuff up because we know Schaffer will kick ass in November and we’re hoping you believe us and replace him with someone else.

      Unfortunately you saw through our nefarious plan…

      1. You have a candidate for President who will get his ass kicked. Look at the Dem primary votes realistically.

        The Dems once again snatched defeat from the jaws of victory. That’s a given. I say that defeat carries down to this Senate seat. Schaffer with 52.4%.

        You disagree?

        Post you’re estimate.

        1. You are in good company.  Our own Dr. Dobby saw huge wins for Bob and every other Republican candidate.  Sure was wrong.

          Dems aren’t in the catbird seat by any means, lots can happen between now and November.  Lots.  Like the economy keeps going south, $5/gal gasoline, etc.  Makes people vote Dem.

          BTW, that’s “your,” not “you’re.”

        2. When Obama was in Portland he was only able to attrack 75,000 people to come hear him speak. That small level of excitement just won’t get it done.

          John McCain with his crowds of hundreds clearly is generating a lot more enthusium. We just can’t compete with that.

    2. Wire fraud, tax evasion, Abramoff and if you look into this story you will even find the word Enron.

      Those are horrible words to have around your campaign. And your answer is to throw the word ‘Obama’ at the Democrats.

      Well, they just tried that in Mississippi’s 4th district. I hope you keep trying that here.

      1. f you look into this story you will even find the word Enron

        You also find the word Prudential … would it help Schaffer’s campaign if he’s associated with that word? Even if it’s an insurance company Orr deceived investors into believing would invest in Octane?

        How about this word for Schaffer and his two-month stumble out of the gate: Toast.

  14. Too early in the season to really matter, especially if the media does drag it through the mud now.  It shouldnt affect the election in any dramatic way.  This does not change the fact that it is clearly the Democrat’s year, and Udall will do fine.

    1. Schaffer can hardly make it through a week without something blowing up on him. Individually, none of these things probably matter that much to hard-core Republicans. (It’s clear the Orr case doesn’t, as a central figure gets to avoid prison by ratting out Orr, and then gets rewarded with even more campaign and dirty tricks contracts.)

      But collectively, and cumulatively, Schaffer’s skeletons, and Wadhams’ failure to properly vet his senate candidate, drain volunteer and contributor enthusiasm.

      And voters? They like a winner, not a has-been with ethical difficulties and two right feet.

      I’m picking Udall at 58+ percent. If Schaffer gets replaced on the ballot, it might be closer.

      1. 2004-5 is really recent.

        In addition, my nose tells me this one is bad, really bad.

        The fact that the Feds went crim over civil or admin means they have a good case.

        The fact that Schaffer was on the witness list means he had some knowledge (even if limited) of what was going on.  He needs to explain what he knew or at the very least why he failed at oversight.

        I deeply question his moral compass.  His complicity, passivity at best, in the horrors of the Marianas combined with this looting of a taxpayer funded nonprofit shows coruption, immorality or at the very least, extremely poor judgment.

        1. (repeated from above) – why/how did he get this job? I’t not like they ran an ad in the classifieds and Bob saw it and applied. They offered him the job for a very specific reason and he accepted it for a very specific reason. Get the answer to those two why’s and you may have something gigantic.

    2. You might be right if you are concerned only with media hits, but anyone who has done fundraising can tell you, the early money is vital.

      What the voters remember in November is important, but what really is relevant is that Schaffer is going around right now asking people to open their checkbooks and to stake their own reputations backing a failed campaign.

      Who wants to go on record giving big money to a guy when you don’t know if he might get dragged into a government fraud case?

      1. You have a good point with the fundraising side of things, but for most republican candidates the majority f their money is going to come from sources that will give just because he is the Republican ticket.  They would still rather have him than Udall.  I do agree that it will make it slightly more difficult, but I still dont think it will cause that much trouble.  

        (I hope it does, for what its worth)

  15. deserves a new Schaffer nickname.

    We’ve got Big Oil Bob, Sweatshop Bob, The Man Who Moves Mountains … and now

    Blind Eye Bob



    AT BEST, since the indictment alleges the Foundation filed two false reports with the EPA and committed wire fraud twice by requesting transfer of funds to which it was not entitled — WHILE Schaffer was a director — AT BEST, he turned a blind eye to a company he was hired to oversee that was basically set up to launder money from investors and the government into Bill Orr’s bank account. All the beakers full of ethanol lying around the office were apparently enough to convince Schaffer it was on the up and up.

    Perhaps Schaffer was hired to exercise the incisive investigatory and oversight skill he honed in the Mariana Islands.

    That’s the best case scenario, that he simply lacks the ability to figure out if he’s being bamboozled by his sponsors.

    If he has further complicity, either in the Foundation or the earmarked EPA funds, dropping out of the Senate race is going to be the least of his worries.

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