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By Willoughby Mariano October 19, 2010

US House hopeful said stimulus funds went to China

Your stimulus money is being shanghaied, Republicans are saying. Literally, it's going to China.

And credit belongs in part to Democratic U.S. Rep. Jim Marshall, according to a recent TV commercial by his Republican opponent, Austin Scott.

The attack claims Marshall, from Macon, voted for the stimulus bill, which "sent nearly $2 billion overseas to build wind turbines and create jobs, mostly in China."

U.S. stimulus money went to China? To create jobs there? AJC PolitiFact Georgia took a look.

Marshall spokesman Doug Moore said the claim is wrong.

"There is just no evidence to support the claim that jobs were created in China," Moore said.

Marshall and Scott are in one of the state's toughest races. Marshall, the incumbent since 2002, has a record of fending off serious challenges. But this season, Democrats are struggling and victory is far from assured.

Similar accusations about China and wind power are haunting Democratic congressmen in Illinois, Indiana, Minnesota, New Mexico, Ohio and Virginia. They, like Marshall, voted for the American Reinvestment and Recovery Act of 2009, otherwise known as the stimulus bill.

Republicans are attacking the stimulus because they think it was squandered. And that's where China comes in.

PolitiFact National assessed a similar claim in February on wind turbines and China by former Republican vice presidential candidate Sarah Palin. She said the stimulus bill was supposed to help create U.S. jobs, but 80 percent of the $2 billion in stimulus dollars spent on alternative energy went to buy wind turbines built in China.

The stimulus did include tax credits and grants to help investors develop wind and other alternative-energy projects in the U.S. But beyond that, Palin's claim fell apart.

Before the stimulus, the federal government gave tax credits to investors in U.S. alternative-energy projects. A program created by the stimulus bill lets the investors get that money up front if they meet certain conditions. But there was no requirement that equipment used in those projects be made in the U.S. or that the investment companies be American-owned.

In October 2009, American University's nonprofit Investigative Reporting Workshop published stories that said much of this program's stimulus money for wind projects ended up in the hands of foreign firms. Although the projects were located in the U.S., many were being built by American subsidiaries of foreign-owned companies, reported Russ Choma, a reporter at the workshop.

In February, the workshop ran additional stories in partnership with ABC News and the Watchdog Institute at San Diego State University. By that time, about 79 percent of the $2.1 billion given to wind-energy companies had gone to foreign ones.

So Palin's claim did address a real controversy, but she misrepresented it.

Some of the stimulus money supports jobs abroad because turbine parts are often made overseas. But many are made by U.S. companies or made by foreign companies in the U.S. Not a single recipient of program money is owned by a Chinese company.

Back to Scott's commercial, which makes a claim that's slightly different from Palin's. It said that the stimulus sent nearly $2 billion overseas to build turbines and create jobs, mostly in China.

There are a few problems with this accusation.

The first is that it uses the $2 billion figure incorrectly. The amount, which is from the February stories, was the total for wind grants -- including domestic ones. About 79 percent of that money went to foreign-owned companies.

Secondly, the $2 billion number is outdated. Because claims about jobs in China and wind turbines began to re-emerge recently, Choma posted updated stimulus figures Sept. 27. on the workshop website.

Major wind farm projects in the U.S. received $4.4 billion worth of grants under the program, according to more recent calculations based on U.S. Department of Energy numbers. About $2.38 billion, or 54 percent, has gone to foreign-owned developers.

Third, the commercial's claim that the $2 billion got sent "overseas" is well short of correct. Although equipment was made overseas and foreign companies were involved, much of the money was also spent domestically. Every one of the projects was located in the U.S., and some of the turbines were manufactured here.

How much money stayed here? Experts said it's difficult to tell. But the Lawrence Berkeley National Laboratory in California used Energy Department funds to study the grant program's impact, including its effect on jobs.

The lab's calculations were rough, early estimates based on limited information and do not take into account nonwind-energy jobs lost because of the program. But its economic model showed wind projects funded by the grant program created or retained more than 55,400 domestic jobs, most of them short-term.

If the project were entirely domestic, it would have created more than 87,000 jobs, the report said. However, this was not possible. The U.S. does not have the capability to manufacture enough wind turbines, it noted.

Another estimate based on research from the Renewable Energy Policy Project, which has been critical of how the Obama administration handled the stimulus grants, indicates the projects created a total of 35,000 jobs.

But it's not clear how many jobs would be overseas. Too few are domestic, the group said, and the program doesn't do enough to foster the development of U.S. wind turbine manufacturing.

Unlike the lab's calculations, the REPP number does not include "induced" jobs, or jobs supported when workers and firms spend the money they make.

Regardless, these job estimates indicate money did stay in the U.S. Although turbine manufacturing does take place overseas, some takes place domestically, and the construction and operation of the sites take place in the U.S.

And finally, the most important problem with Scott's claim is China. It's barely a factor in this debate.

A wind industry trade group that's been critical of how Choma and others portray the issue confirmed that only three turbines were purchased outright from China. Not a single company that received these funds is owned by a Chinese company.

"When we talk about money going overseas, it's going to Europe," Choma said.

So while the green-energy grants did end up in the hands of foreign companies, the situation is far from what Scott's commercial claimed.

The $2 billion figure is old and incorrect. Even critics agree that money is staying in the country in the form of domestic construction and manufacturing jobs, though the amount is unclear and most jobs are short-term.

It's not possible for domestic manufacturers to produce all the wind turbines because they don't have enough capacity. And the overseas jobs in question are mostly in Europe, not China.

We rule Scott's statement False.

Featured Fact-check

Our Sources

Austin Scott For Congress, "Georgia Jim" commercial, posted Oct. 5, 2010

Interview with Sam Ray, spokesman, Austin Scott for Congress, Oct. 12, 2010

Interview with Doug Moore, spokesman, U.S. Rep. Jim Marshall for Congress, Oct. 12, 2010

Interview with Russ Choma, reporter, Investigative Reporting Workshop, Oct. 14, 2010

Interview with George Sterzinger, executive director, Renewable Energy Policy Project, Oct. 15, 2010

Investigative Reporting Workshop, "Renewable energy money still going abroad, despite criticism from Congress," Feb. 8, 2010

Investigative Reporting Workshop, "Most wind grants go to overseas firms," Oct. 29, 2009

Investigative Reporting Workshop, "Workshop's wind stories kicking up political dust," Sept. 27, 2010

ABC News, "New Wind Farms in the U.S. Do Not Bring Jobs," Feb. 9, 2010

American Wind Association, "Correcting Myths about Renewable Energy Programs in the Stimulus Bill," received Oct. 12, 2010

Washington Post, The Fix blog, "As ad wars heat up, Republicans eye China as their secret weapon," Oct. 13, 2010, "Palin claims that most of the renewable energy stimulus dollars have gone to Chinese turbinemakers," Feb. 23, 2010

American Reinvestment and Recovery Act of 2009, accessed Oct. 12, 2010

Lawrence Berkeley National Laboratory, "Preliminary Evaluation of the Impact of the Section 1603 Treasury Grant Program on Renewable Energy Deployment in 2009," April 2010

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