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June 07, 2008 06:08 PM UTC

Lingering Questions From Schaffer-Linked Fraud Case

  • 13 Comments
  • by: Colorado Pols

The news cycle seems to have closed on the recent conviction of Denver entrepreneur William Orr and his now-defunct National Alternative Fuels Foundation, an energy nonprofit whose board of directors included Colorado Senate candidate Bob Schaffer. As we’ve recounted here in detail, Schaffer was on the board during the end stages of the organization’s existence and (importantly) during the time that fraudulent reports were submitted to the federal government in support of grant requests. Schaffer resigned from the board as the criminal investigation was becoming public according to campaign manager Dick Wadhams.

Even if the news has cycled away from the story for now, don’t forget this case will resurface in early October (a most opportune time) when Mr. Orr begins the sentencing process.

The national investigative blog Talking Points Memo has continued to follow up on questions surrounding the original $3.7 million earmark for the NAFF in 2000, last reporting Tuesday:

Schaffer was in Congress when the earmark was awarded to the little-known not-for-profit founded by Bill Orr, who was convicted last week. And when Schaffer left Congress, he went on to become a director for Orr’s group, the National Alternative Fuels Foundation, where his political buddy Scott Shires was treasurer. Shires pleaded guilty and testified against Orr.

Today we called Thomas Vanek, a former staffer for the House Science Committee’s subcommittee on energy and environment, who testified at Orr’s trial. He oversaw the authorization of the $3.6 million earmark back in October 2000.

I asked Vanek whether Orr received any help from members of Congress in securing the earmark.

“He may have gotten a member of Congress or two involved to get a thumbs up. I don’t recall,” said Vanek, who is now a senior policy advisor at the Department of Energy in Washington.

More specifically, I asked, do you think Bob Schaffer could have been involved in the earmark?

“He may well have been involved. Typically there would be a member involved. I’d say it’s certainly possible. Likely? Who knows,” Vanek said…

It’s a critical point of disclosure–did Schaffer or his congressional staff have any involvement in the earmark for the NAFF? The answer would either help or greatly harm Schaffer. Continued silence from their campaign suggests the latter, but so far the local press has found Wadhams’ tersely-delivered evasions on the subject curiously adequate.

While TPM makes their local phone calls in D.C., there’s a larger and more fundamental question that nobody seems to have a good answer for. The Colorado press seems to have blown right by this one, which we attribute to Wadhams’ skill with something akin to the Jedi Mind Trick. We want to be clear that we don’t begrudge our reporter friends (more to the point, their editors) being a little slow on the uptake, or even feeling slightly intimidated by a particular large, angry man who calls you fifteen times a day when he’s nervous about something. And we want to be helpful above all, so a brief yet illuminating narrative follows:

Let’s say you’re on the board of a federally-funded nonprofit, and you’re a recently ex-Congressman with ongoing political aspirations. You find out that that a criminal investigation is commencing against your organization, in this case because the government has determined the organization has been submitting reports on its research progress that were based on fraudulent representations, particularly troubling since the whole premise of the organization’s existence (and federal funding) is based on those representations. Obviously, it’s time to resign.

You’d be pretty upset about being pulled into this too, wouldn’t you? In addition from immediately going to the feds and cooperating with them in every way possible (no indication that ever occurred in this case), you’d be certain to jettison anyone who had been involved in suckering you into lending your good name to this multimillion dollar fraud committed against the taxpayers of America, wouldn’t you? Particularly the guy who, as has been explained by Schaffer’s campaign manager Dick Wadhams in response to press inquiries about the case, put you up to the whole thing?

Why then did now-convicted NAFF co-conspirator Scott Shires manage Schaffer’s campaign for the state Board of Education in 2006, over a year after Schaffer’s resignation from the NAFF? If Schaffer knew enough about what was going on in the spring of 2005 to conclude that it was time to immediately resign from the board of directors, how can he explain his continued close association with Shires, the person who according to Wadhams ‘recruited’ him to serve on the board and later was indicted in the scheme? It doesn’t make any sense.

Until you realize that Bob Schaffer has a bus-sized hole in his cover story, all the way back to the beginning. Then it makes perfect sense.

Anyway, we hope that helps clarify why people both here and in Washington are still asking questions about this case (it’s one of our top search queries), with or without the help of the local press–and like we said at the beginning, if there’s no ink for the story right now, it’s okay, there’s a prime-time opportunity coming again in the fall. Nobody pays attention until after Labor Day, right?

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13 thoughts on “Lingering Questions From Schaffer-Linked Fraud Case”

  2. There will be an opportunity for the press to revisit the story in a couple weeks. Shires’s sentencing is set for June 23, and you can bet the Denver media that ignored (or missed) the two-month Orr trial will be there.

    Here’s what Colorado Confidential reported back in 2006:

    U.S. District Attorney Troy Eid, once a top aide to Gov. Owens, filed the charges against Shires on August 24. He faces sentencing of up to one year of imprisonment and/or $25,000 in fines, and one year of supervised release for each of the three counts.

    According to court documents, Shires entered into a plea agreement with the understanding that he will testify against Octane International’s founder and president William Orr of Parker, Colo. Assistant US Attorney Patricia Davies indicated in court filings that she will not seek detention for Shires in return for his cooperation.

    The Shires indictment was for failing to file tax returns for Octane, the for-profit Orr corporation that purportedly held the vapor phase combustion patent. Some of Orr’s 22 convictions last week were for bilking Octane investors by misrepresenting the company’s prospects. That’s a polite way of saying Orr repeatedly lied to investors, claiming Exxon-Mobil and Prudential Bache were interested in his alternative fuel, when in fact the companies had never even heard of it.

    The problem with extricating himself from Shires, which Schaffer appears unable or uninterested in doing, is that Shires is elbow-deep in the state GOP’s maze of campaign committees, 527s and candidates.

    Defense attorney Nathan Chambers represented Shires to secure his plea agreement. Chambers won a reputation for representing the worst of the worst as one of executed terrorist Timothy McVeigh’s lawyers. Since adding Shires to his illustrious clientele, Chambers has become chairman of the Arapahoe County Republican Party and was picked last week as a delegate from the 6th Congressional District to the national Republican Convention.

    His wife, Carol Chambers, won election as Arapahoe County district attorney by upsetting the favorite in a Republican primary four years ago. She’s won a reputation for pursuing the death penalty despite earning a rare censure for intervening on behalf of one of her husband’s clients in a check fraud case. Chambers is running for re-election after thwarting a challenge from a Jeffco prosecutor who failed to make the primary ballot.

    The question is whether Wadhams had Shires buttoned up before throwing him under the bus on the Schaffer-Orr link. By all indications, the Republican establishment is rewarding Shires for confining his statements to those required by his plea bargain. It’s the mark of a loyal Republican soldier that he didn’t turn state’s evidence until faced with indictments himself.

    According to a search of registered agents for Colorado political committees, Shires is still active on 16 committees, including Schaffer’s Board of Education committee and those of a host of Republican legislative candidates, such as Kathy Green and Muhammad Ali Hasan.

    Shires also runs the Senate Majority Fund, which has reported contributions of $322,790 in the last year, according to reports filed with the Colorado Secretary of State. That’s the same Senate Majority Fund that faced allegations of money laundering in a series of unreported transactions totaling $100,000 with the Trailhead Group.

    Is Shires likely to flip on Schaffer? It’s doubtful, as his entire, lucrative career seems to be based on being a good, quiet soldier. The Colorado press, of course, is under no such obligation.

      1. He’s the agent for those committees. In the two years since he rendered his plea agreement (which was not for fraud, but failure to file tax returns as part of a fraudulent scheme), Shires has organized and run dozens and dozens of committees.

          1. I remember when the cyclists would just plain block airport road on weekends, many abreast. The BC sheriff finally started writing tickets.

            One the Platte River bike path, they are hazardous.  Going 40 mph just whizzing past people without so much as an “On your left.”

            I almost killed one a month ago.  Waiting to pull out in heavy traffic, I started to go and my old mom yelled. Seems that a cyclist was on the sidewalk, on the wrong flow of a one way segment, riding fast.  I yelled “Moron!” (thinking of the Darwin Reports) and he yelled back, “I’m on a bike!”

            Dead mofo on his bike, almost.  It was that close.

            I like bikes and cycling and my son in law is a nationally rated racer, so there is no prejudice on my part.  

              1. the Andy Rooney diary?

                Another thing I really hate is junk mail.

                And summer “blockbusters.” Whatever happened to movies like Jaws?

                Seriously, no more insight into the Schaffer-Shires-Orr triangle?

  4. What an irresponsible bunch of “reporters” who’d rather write down another DICK Wadhams smear line rather than anything of true substance in this race. Schaffer hassn been politically active with a countless number of corrupt individuals including Abramoff, Orr and Shires for years, and yet the press is silent.

    It’s a shame that the press can’t put down their stenographs long enough to write about something this important. This is a troubling trend that’s all too familiar to Americans especially from the perspective of the press’s failure to do any sort of critical reporting during the lead up to war.

    The press is once again denying citizenry the full facts.

    1. …swimming upstream, I’ve lost all respect for the current crop.  Four years in journalism school and they couldn’t tell you The Five W’s I learned on the school paper in 8th grade.  

      I read whole articles looking for one of those W’s I want to know about….nada.  The real culprit as someone here alluded to this weekend are the editors.  Do they ever read the stuff?  I doubt it.  They sure don’t check for spelling errors.  Those homonyms just fly right through the spell checker, you know?  

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