Cornspiracy

Democratic presidential candidate Barack Obama has made the support of next-generation biofuels to relieve America’s reliance on foreign oil a cornerstone of his campaign. Part of that plan includes government subsidies for the research of ethanol. But with several different materials from which to make ethanol, why is Barack Obama so big on using corn? A list of Obama contributors suggests the candidate for “Change” may be involved in an old-fashioned government cornspiracy.

The USDA Rural Development published, in its September 2006 report, that:

More than half of world ethanol production is produced from sugar and sugar byproducts, with Brazil being by far the world leader. Currently, there is no commercial production of ethanol from sugarcane or sugar beets in the United States, where 97 percent of ethanol is produced from corn.

Technologically, the process of producing ethanol from sugar is simpler than converting corn into ethanol. Converting corn into ethanol requires additional cooking and the application of enzymes, whereas the conversion of sugar requires only a yeast fermentation process. The energy requirement for converting sugar into ethanol is about half that for corn. [Emphasis added]

So when it comes to energy, you ultimately get a better return by using sugar to produce ethanol than by using corn. And isn’t energy supposed to be what this is all about?

But as we all know, energy has never been just about energy. It’s also about money and power.

Earlier this week the Washington Post reported:

Since entering the Senate in 2005, Obama has been a staunch supporter of ethanol — he justified his vote for for the Bush Administration’s 2005 energy bill, which was favorable to the oil industry, on the grounds that it also contained subsidies for ethanol and other forms of alternative energy, and he has sought earmarks for research projects on ethanol and other biofuels in his home state of Illinois, the second-highest corn-producing state after Iowa. [Emphasis added]

Would you like any waffles with that corn-fed pork, Senator?

Obama has shown a history of working against sugar ethanol. In 2006, the New Yorker reported:

We could, of course, simply import sugar ethanol. But here, too, politics has intervened: Congress has imposed a tariff of fifty-four cents per gallon on sugar-based ethanol in order to protect corn producers from competition. A recent study by Amani Elobeid and Simla Tokgoz, scientists at Iowa State University, projected that if the tariffs were removed prices would fall by fourteen per cent and Americans would use almost three hundred million gallons more of ethanol.

But that isn’t likely to happen anytime soon: the Bush Administration proposed eliminating the ethanol tariff this past spring, but Congress quickly quashed the idea—Barack Obama was among several Midwestern senators who campaigned in support of the tariff—and the sugar quotas appear to be as sacrosanct as ever.

Now it looks like it’s time for Barack Obama to reap what he has sewn in America’s corn fields.

OpenSecrets.org has compiled a list of the top 20 contributors to the Obama presidential campaign. The Center for Responsive Politics makes sure to mention that “The organizations themselves did not donate , rather the money came from the organization’s PAC, its individual members or employees or owners, and those individuals’ immediate families.” Nearly half of the organizations on the list have connections to Big Corn. Together, their contributions to the Obama campaign total nearly $3 million.

Goldman Sachs $571,330
UBS AG $364,556
JPMorgan Chase & Co $364,157
Lehman Brothers $319,147
Sidley Austin LLP $294,445
Skadden, Arps et al $278,163
Morgan Stanley $260,376
Jones Day $249,375
Latham & Watkins $220,865

Goldman Sachs, UBS, and Lehman Brothers all have commodity indexes that speculate on commodities such as oil and—you guessed it—corn. These indexes, amung others, directly effect the cost of items on their lists. According to CNN Money, “Since 2006, oil prices have risen 100%, and corn is up 300%.”

Bunge is “an agribusiness and food company operating in the farm-to-consumer food chain.” The company recently merged with Corn Products International, whose heaquarters is located in Chicago, Illinois. According to Breitbart.com:

Credit Suisse Securities (USA) LLC and Morgan Stanley and Co. Incorporated are acting as financial advisors to Bunge and Shearman & Sterling LLP is serving as legal advisor. Lazard is acting as financial advisor to Corn Products, and Sidley Austin LLP is serving as legal advisor. J.P. Morgan Securities Inc. also provided a fairness opinion to the Board of Corn Products.

Skadden, Arps is a law firm that currently represents Big Corn advisors Lehman Brothers Inc. and Morgan Stanley, along with:

US BioEnergy a producer of ethanol, in the US$427 million financing of a ethanol portfolio that will produce 450 million gallons per year. The financing was split between five plants, including plants in operation and those under construction. This was the largest project financing to date for an ethanol portfolio.

Jones Day is a huge law firm that is currently “Represent[ing] lead arranger and agent bank in the $150 million project financing of a new ethanol production facility in the midwestern United States.”

The law firm Latham & Watkins won a 2007 Project Finance Americas award in the catagory of “”North American Ethanol,” for the $325 million project finance facility for a portfolio of five ethanol plants….”

Barack Obama pretends that he is the candidate for “Change.” And it would appear that some of the change he will bring is who recieves government favors and who benefits by giving them out.

When it comes to government, the more things “Change,” the more they stay the same.