WASHINGTON—POET, LLC, the world’s largest ethanol producer, secured approval from the Federal Election Commission Wednesday for an innovative fundraising push that will allow it to raise campaign funds directly from corn farmers in Iowa and other Midwestern states.
The Sioux Falls, S.D.-based company sought the FEC’s blessing, formally known as an advisory opinion, which will allow the company’s political action committee to collect funds from corn farmers by deducting a portion of money from corn sales contracts.
POET operates 27 plants in seven states, including seven facilities in Iowa communities—Ashton, Coon Rapids, Corning, Emmetsburg, Gowrie, Hanlontown and Jewell. The company estimates that each plant provides an annual payroll of about $1.8 million and creates approximately 40 jobs.
According to POET’s April FEC request, the company and its plants are owned by a trust established by company founder Jeff Broin and his wife—as well as corn farmers and agriculture investors. To produce ethanol, the plants purchase corn from some 30,000 farmers via individual sales contracts.
POET PAC, the company’s political action committee, plans to establish a program called the “POET PAC Cultivator Club” to ease the ability of farmers to contribute to the company’s campaign spending by deducting a portion of the money the POET plants owe per bushel of corn.
For example, using the average of 35,000 bushels of corn per farmer, a one-half cent deduction per bushel would result in a $175 contribution to POET PAC. Participation by farmers will be voluntary and limited to growers organized as individuals, partnerships or limited liability companies—not corporations (including LLCs electing corporate tax treatment).
POET, which produces more than $1.6 billion gallons of ethanol per year, strongly advocates for ethanol production in Washington, D.C. In 2010 POET spent about $1.2 million lobbying the federal government on agriculture, energy and tax issues. The company released a statement Tuesday hailing the Senate’s vote to preserve a tax credit for ethanol.
“The ethanol tax credit has been responsible for building America’s most successful renewable fuel into 10 percent of our gasoline supply,” said Broin, POET’s chairman and CEO. “The decision of Congress to preserve this credit as a bridge to meaningful reform shows that America recognizes the importance of domestic, renewable fuels.”
The discussion of POET’s request came near the end of a contentious, marathon-length meeting of the FEC. After tense back-and-forth questions over regulations for online advertising on Facebook and a long-delayed rulemaking to comply with the Supreme Court’s 2010 decision in Citizens United v. FEC, the POET request injected some levity into the hearing.
Democratic Commissioner Ellen Weintraub asked POET attorney Michael Toner, a former Republican chairman of the FEC, why an ethanol company selected a name invoking the fine arts.
“Where does the name come from?” she asked. “I mean, are these verse-writing corn farmers?”
Toner, an attorney at Wiley Rein LLP, summoned Jonathan Kobes, POET’s Senior Counsel for Public Policy and Corporate Affairs, to tackle the question. Joking that the name has caused a fair amount of confusion (despite its capitalization, it’s not an acronym), Kobes simply replied that the idea “came from the creative minds at our management team.”
“Ethanol is poetry,” FEC chair Cynthia Bauerly, a Democrat, said. “I hadn’t really thought of it that way.”
In a three-hour meeting filled with contentious questioning of other lawyers for political groups, POET’s advisory opinion request flew virtually under the radar. The name question was the only query lobbed at POET representatives, and their request was unanimously approved, 6-0.
At least at the FEC, ethanol by any other name smells just as sweet.
Jeff Patch, a Dubuque native and University of Iowa graduate, is a writer and political consultant based in Alexandria, Va.
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