Big Government's Cronies

By John Stossel (Archive) · Wednesday, February 3, 2010

Many window-making companies struggle because of the recession's effect on home building. But one little window company, Serious Materials, is "booming," says Fortune. "On a roll," according to Inc. magazine, which put Serious' CEO on its cover, with a story titled: "How to Build a Great Company."

The Minnesota Freedom Foundation tells me that this same little window company also gets serious attention from the most visible people in America.

Vice President Joe Biden appeared at the opening of one of its plants. CEO Kevin Surace thanked him for his "unwavering support." "Without you and the recovery ("stimulus") act, this would not have been possible," Surace said.

Biden returned the compliment: "You are not just churning out windows; you are making some of the most energy-efficient windows in the world. I would argue the most energy-efficient windows in the world."

Gee, other window-makers say their windows are just as energy efficient, but the vice president didn't visit them.

Biden laid it on pretty thick for Serious Materials: "This is a story of how a new economy predicated on innovation and efficiency is not only helping us today but inspiring a better tomorrow."

Serious doesn't just have the vice president in his corner. It's got President Obama himself.

Company board member Paul Holland had the rare of honor of introducing Obama at a "green energy" event. Obama then said: "Serious Materials just reopened ... a manufacturing plant outside of Pittsburgh. These workers will now have a new mission: producing some of the most energy-efficient windows in the world."

How many companies get endorsed by the president of the United States?

When the CEO said that opening his factory wouldn't have been possible without the Obama administration, he may have known something we didn't. Last month, Obama announced a new set of tax credits for so-called green companies. One window company was on the list: Serious Materials. This must be one very special company.

But wait, it gets even more interesting.

On my Fox Business Network show on "crony capitalism," I displayed a picture of administration officials and so-called "energy leaders" taken at the U.S. Department of Energy. Standing front and center was Cathy Zoi, who oversees $16.8 billion in stimulus funds, much of it for weatherization programs that benefit Serious.

The interesting twist is that Zoi happens to be the wife of Robin Roy, who happens to be vice president of "policy" at Serious Windows.

Of all the window companies in America, maybe it's a coincidence that the one which gets presidential and vice presidential attention and a special tax credit is one whose company executives give thousands of dollars to the Obama campaign and where the policy officer spends nights at home with the Energy Department's weatherization boss.

Or maybe not.

There may be nothing illegal about this. Zoi did disclose her marriage and said she would recuse herself from any matter that had a predictable effect on her financial interests.

But it sure looks funny to me, and it's odd that the liberal media have so much interest in this one company. Rachel Maddow of MSNBC, usually not a big promoter of corporate growth, gushed about how Serious Materials is an example of how the "stimulus" is working.

When we asked the company about all this, a spokeswoman said, "We don't comment on the personal lives of our employees." Later she called to say that my story is "full of lies."

But she wouldn't say what those lies are.

On its website, Serious Materials says it did not get a taxpayer subsidy. But that's just playing with terms. What it got was a tax credit, an opportunity that its competitors did not get: to keep money it would have paid in taxes. Let's not be misled. Government is as manipulative with selective tax credits as it is with cash subsidies. It would be more efficient to cut taxes across the board. Why should there be favoritism?

Because politicians like it. Big, complicated government gives them opportunities to do favors for their friends.

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