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Alternative-fuels venture turns into hot potato for Schaffer

By Lynn Bartels, Rocky Mountain News (Contact)

Published June 21, 2008 at 12:05 a.m.

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Scott Shires' name is everywhere in the secretary of state's campaign finance reports.

The Aurora Republican in 2006 was the "registered agent" for 80 clients, including Bob Schaffer's state Board of Education race. The 55-year-old West Point graduate's business was responsible for filing campaign finance reports with the secretary of state or IRS as needed.

Shires also worked off and on for a colorful character named William Orr, owner of Octane International, a Colorado company that won a $3.6 million federal grant to study alternative fuels.

It was Shires in 2004 who recruited Schaffer to serve on the board of directors for a nonprofit foundation Orr created to handle the grant. It's a move Shires now regrets.

"If you like someone, you hope not to embarrass them in any manner," he said.

By joining the board, Schaffer's name forever became linked with that of Orr, who later was accused by the U.S. attorney of misleading investors and falsifying documents to obtain the grant.

The same week that a federal jury found Orr guilty on fraud and other counts, the Colorado Republican Party nominated Schaffer for the U.S. Senate.

Attorneys said Schaffer has no connection to the trial. Schaffer said "it's a stretch" for Democrats to try to link him.

But liberal blogs and Democratic supporters of Schaffer's Senate opponent, U.S. Rep. Mark Udall, D-Eldorado Springs, believe otherwise.

"Lingering questions from Schaffer-linked fraud cause" read the headline on Colorado

Pols.com on June 7.

Udall's campaign spokeswoman, Taylor West, questioned what Schaffer actually did for National Alternative Fuels Foundation when he served on the board.

"Bob Schaffer just doesn't get to sit on the board and reap the benefits of saying he was involved in alternative fuels," West said. "At what point does he show some responsibility, fulfill his fiduciary duties?"

Shires said a number of blog postings from "overactive Democratic attackers" are wrong, particularly speculation that Schaffer was the congressman who obtained the questionable grant for Orr.

Schaffer's campaign manager, Dick Wadhams, shared Shires' frustration.

"These stupid blogs can make things up," Wadhams said. "This is the latest character assassination attempt by Udall and his leftist allies."

As part of a plea agreement, Shires testified at Orr's trial and pleaded guilty to three misdemeanor charges of failing to file corporate tax returns on behalf of Octane International.

Shires faces up to a year in prison and a $75 fine when he is sentenced Monday in U.S. District Court in Denver.

Shires volunteered to work on Schaffer's 2004 U.S. Senate campaign but said the hubhub over the trial and his conviction has caused him to stay away this year.

Shires worked for Orr as Octane's bookkeeper, chief of staff, secretary, treasurer and more.

Orr's attorney, Paul Grant, described his client as an "eccentric inventor" and a "very creative guy." He declined to allow Orr, who is scheduled to be sentenced this fall, to be interviewed.

Orr was found guilty May 28 of 23 criminal counts, including wire fraud, mail fraud, making false statements and failure to file tax returns.

In the 1990s, Orr developed a new class of alternative fuels he said could reduce pollution caused by traditional fossil fuels and could reduce America's dependence on foreign oil, according to court records.

Congress in 2000 awarded Orr the $3.6 million to research the fuel. The money, to come from the Environmental Protection Agency, was in the form of an earmark in an appropriations bill. Earmarks have become controversial in recent years because they are viewed as ways for politicians to slip in money for pet projects.

Schaffer, who served in Congress from 1997 to 2003, said he does not believe he met Orr before 2004.

"I did not advocate his earmark. In fact, I was unaware of his earmark," Schaffer said, adding he voted against the bill that contained the earmark.

Shires said Orr told him the earmark was inserted into the bill by a key House committee staffer at the direction of a non-Colorado congressman, and that a "very expensive bottle of whiskey" changed hands.

In trial testimony, EPA administrator Margo Oge said the earmark was unusual, in part because Orr hadn't yet set up the foundation needed to accept the grant. The EPA had to help him do that after he was awarded the money.

Schaffer said he was invited to serve on the board of directors in October 2004. The board officially voted on his membership in November, and he began his duties Dec. 1, 2004. Schaffer said he toured the research facility, talked to scientists and read reports.

The next month, the EPA froze Orr's grant.

Schaffer said Orr claimed the EPA did so because the research he was undertaking would disprove the agency's policy on fuel additives. Schaffer said the board discussed the situation, although he doesn't remember the details.

Schaffer said he was not aware that Orr was under investigation until a Department of Justice investigator interviewed him in February. Schaffer resigned from the board the next month, March 2005.

"The subsequent decisions that the board was involved in were all about Bill Orr and his activities and that was not a distraction I cared to spend a lot of time on," he said. Schaffer estimated he was paid $1,500 for his service on the board.

Orr's attorney put Schaffer's name on his witness list but decided not to call him to testify.

"I was hoping that he knew Mr. Orr well enough to say some positive things, but I realized he didn't," Grant said.

bartels@RockyMountainNews.com or 303-954-5327

Businessman to be sentenced in fraud case

Scott Shires, a key witness in a federal fraud trial, is scheduled to be sentenced Monday for failing to file corporate income tax returns.

Age: 55

City: Aurora

Background: Retired lieutenant colonel, West Point graduate

Political history: Unsuccessfully ran for the state House in 2000; created the Senate Majority Fund, a political 527 committee, to help Republicans get elected to the Senate in 2004

Occupation: Owner of the Compliance Center, a business that handles campaign reports for various candidates, issue committees and political committees that must be filed with the secretary or state and or the IRS. Also owns Shires Financial Group, which handles tax returns, accounting and more.

Previously: Worked for William Orr, president of Octane International, who was convicted in May of fraud and other charges

Comments

  • June 21, 2008

    4:48 a.m.

    Suggest removal

    roger44 writes:

    He still gets my vote over Udall, whose pie in the sky campaign promises are such BS it's shameful. Career Politician. Udall states Al Qaeda is based in Afghanistan. Can he prove that? They have camps all over. He advocates another division for Army but has voted against funding for the Military. Two faced Politician. If he gets elected, all his statements will be hauled off in a septic tank pumper.

  • June 21, 2008

    6:11 a.m.

    Suggest removal

    Hambone writes:

    If all you base your vote on is Al Qaeda, then you are misguided. There is far more to consider.

  • June 21, 2008

    9:48 a.m.

    Suggest removal

    angka writes:

    Wadhams denied that Schaffer had been paid for serving on the board of this organization in Al Lewis' Post column a couple of weeks ago. So there's a straight-up lie they just got caught in.

    When is Hank/Owens/Elway/Who The Hell Ever going to step in and stop this train wreck? Bob Schaffer: Bob Beauprez with manly forearms. The numbers are gonna prove it.

  • June 21, 2008

    10:06 a.m.

    Suggest removal

    jctf writes:

    I know the people in this article and the situation. This is a good example of people trusting the founder and agreeing to support him (Bill Ore) and then he lies to them and does a lot of shady things behind their backs. I know that both Scott and Schaffer had no knowledge of what Ore was doing and to speculate otherwise simply shows how people are willing to rip people apart because of their own personal political bias.

    Those that throw out their attacks in ignorance are shameful and show they have no personal ethics to create lies out of others misfortune for trusting others.

  • June 21, 2008

    1:27 p.m.

    Suggest removal

    ES writes:

    Can we get Salazar to stop voting against the energy proposals in congress? Why is Salazar and the Democrats voting against the energy proposals that would reduce the cost of gas?

    If anybody noticed, The gas prices started increasing when the Democrats got in power in the Senate and the House.

  • June 21, 2008

    8:44 p.m.

    Suggest removal

    mrfxx writes:

    Apparently ES missed the increase in crude and pump prices that began as soon as the "oil friendly" administration took office in 2001. Yes, the increases have been higher since the Dems got the majority in both houses (a bare minimum - not enough to say single-handedly bust a veto, unlike the GOP takeover in 94). You don't suppose that the oil companies both here and in the Middle East are ramping up prices/profits because they KNOW this lame-duck administration won't be around much longer to kiss their feet (or other portions of anatomy) much longer?

  • June 21, 2008

    10:13 p.m.

    Suggest removal

    ghoax writes:

    mrfxxdiot and the rest of you uninformed lemmings...oil prices started rising when the supply did not meet the demand, a warning put forth to the then DEMOCRAT president Clinton, who veto'd the ANWR drilling. Your vacant spokemen have a difficult time with math. We are FORCED to import 2/3 of our oil needs, and the developing countries increased demand was known about for over a decade while democrat environmentalists blocked, thwarted, sued and did everything in their power to choke our ability to deliver cheap energy...and that's the TRUTH. The true traitors are the anti american greens and the elected officials who bow to their alter, sorry but our existence is more important than the mating habits of caribu steak dinners.

  • June 22, 2008

    12:23 a.m.

    Suggest removal

    YellowCatRedCat writes:

    ghoax, your attempt at elitism is amusing, but your argument still falls flat. Even if we extracted every drop of oil in American soil, it'd be a drop in the bucket compared to what we consume--we just don't have enough oil to make a tangible difference. And then what after we used it all up? Drilling for oil domestically is a shortsighted, "band-aid" fix to a much bigger problem. Yes, addiction to foreign oil is bad, but addiction to domestic oil is not much better.

  • June 23, 2008

    8:31 a.m.

    Suggest removal

    ecoscience writes:

    Udall and Soros and the other big money liberals are running a near-perfect campaign against Bob Schaffer. Can Wadhams respond effectively?

  • June 24, 2008

    2:22 p.m.

    Suggest removal

    rockiesfan05 writes:

    Near perfect? How about Udall's support for the EFCA, which is pretty far from perfect when you consider how deceptively named it is. Union lobbyists might actually succeed in getting the Employee Free Choice Act passed. That is, by giving the union organizers front row seats to watch each employee's free choice...

    Or lack thereof.

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