Thousands of pages of documentation and connect-the-dots reading support the contentions in a report from an NBC affiliate in North Texas that Glacial Energy and principal Gary Mole are involved in extracting conflict minerals – so-called “blood diamonds” – in Africa. This despite the demurrals of a Glacial Energy spokesman who last week called the allegations “absurd.”
Glacial receives substantial tax breaks, as a V.I. Economic Development Commission-certified company. In exchange, Glacial provides jobs, invests money and donates to local charities. The principals are also required to reside in the U.S. Virgin Islands and pay their personal income tax here, which can amount to millions of dollars.
Whether it is Mole or Glacial that has invested millions in diamond mining in the Democratic Republic of the Congo is not clear. But several people involved with both say Glacial’s financials will show either $13 million or $20 million was sent to the DRC under the heading of “consulting” fees.
There is nothing illegal about a U.S. company being involved with conflict minerals unless it is publicly traded, which Glacial Energy is not. But the implications of supporting a system that fosters famine and armed conflicts are distasteful to many.
And the company – Gemico – that Glacial is connected with has been spotlighted by International Peace Information Service, an independent research organization focusing on arms trade, exploitation of natural resources and corporate and social responsibility in Sub-Saharan Africa. The NGO, funded by the European Union, questioned Gemico leases that left 500 miners out of 1,000 in one small community without jobs.
According to one former Mole associate, Gemico may be an outright subsidiary, its name a shortened version of “Glacial Energy Mining Co.” Gemico is in fact conspicuously engaged in alluvial mining — dredging rivers in the DRC that diamonds wash into, according to project listings on the website of Rapid Mining, a diamond mining operation in Africa.
Brian Kennedy, Glacial’s spokesman, denied last week the company was involved in DRC mining. He said he thought Mole – not Glacial – had made some investments in parcels of land but had divested himself of them “years ago.”
Kennedy said repeatedly it was tin, not diamonds, that Mole had invested in. Cassiterite, from which nearly all tin derives, is also considered a conflict mineral and is mined by Gemico.
What is certain, however, is that the former chairman of the Glacial board of directors, Donald Barnard, was up to his neck in Gemico diamond mining – he was the owner of Gemico, at least on paper. In a deposition in April 2009, Barnard, an attorney whose law license was revoked in Texas in 1994, stated several times that Gemico was indeed a subsidiary of Glacial.
Closer to home, however, Mole faces other problems relative to his stateside business: energy retailing.
Though Kennedy also told the Source that Mole had never been an officer of or otherwise significantly involved with now-defunct power reseller, Franklin Power, Mole’s former associates say otherwise.
Randall Prengler, who through his energy brokerage and consulting company, Power Brokers, provided customers to Franklin Power, is suing Glacial Energy of Texas, and Mole, for unpaid commissions as well as fraudulent misrepresentation, breach of contract and more in Texas district court. Prengler accuses Mole of hiding his ownership in Franklin Power behind an entity named Touchdown Properties. He also claims Mole omitted his prior 60 percent ownership of Franklin when he filed a sworn application to the Public Utility Commission of Texas to become a retail electric provider (REP) – under the name of Glacial Energy.
And that’s the rub. If Mole was involved with bankrupt Franklin Power and failed to mention that on an application made to the public utility board in Texas (or elsewhere) when he formed Glacial, the company’s license could be revoked, according to Roger McAulay, former chief executive officer of Franklin.
Terry Hadley, public information officer for the Public Utility Commission of Texas, said Monday it is “reviewing” Glacial Energy in part because of the recent lawsuits, though he added that reviews of the utilities they regulate are routine.
Hadley said when the PUC revokes a utility company’s license, most often it is due to customer dissatisfaction or under-capitalization.
According to people familiar with Glacial’s financials, it is a viable entity – with annual earnings of $400 to $500 million. But the company’s future may hang on whether Mole “does the right thing,” McAulay said.
His failure to disclose his involvement in a failed retail energy provider is the key. If Mole lied on the Glacial application and the Texas Public Utility Commission revokes his license, Glacial could not do business in Texas – and possibly elsewhere, if commissions in other states followed suit.
But if Mole were to take steps to reimburse those who are suing him due to his alleged part in Franklin’s demise, and set the record straight with the utility commissions, Glacial could be salvaged along with all the jobs provided by the company with operations in the Virgin Islands and 16 states, McAulay said.
Mole may be unlikely to come clean, if blogs about him and the voluminous, scathing legal filings referencing his typical truculent behavior are to be believed.
But McAulay, who has no legal quarrel with Mole or Glacial, said there is another possibility: the banks.
Though Mole holds all the shares of Glacial Energy, UCC filings indicate they were used as collateral to borrow money from a couple of lending institutions. Should Mole default on his commitments to them – and losing his license to sell electricity could be considered a default — they hold all the cards and could force him out of the company.
One of those companies, Centurion Credit in New York, was ravaged recently by a Ponzi scheme that left Glacial as one of its larger debtors; that might provide motivation to save the functioning company, with or without Mole.
It appears that the Public Utility Commission in Texas holds all the cards right now. Meanwhile, in the Virgin Islands, 115 people employed by Glacial and their families are holding their breath.
