When I started, there was no story that was ever written by a journalist that didn't frame us in those terms. We were defined by the scandal. When we stopped being defined by the scandal and we started putting breadcrumbs into these stories about the tremendous record of success for the office, people started to tell me, I can't turn around without seeing. And I'm like, great. That's what we're going for. That's what we're going for. It is. It's the show. We are doing a world tour to restore the credibility of this office, and so it certainly took the first two years, but it worked.
Energy isn't just an industry, it's how the world works. I'm Shaw, a clean energy entrepreneur.
And I'm Jamie Nolan, a clean energy communications executive. And this is Energy Empire. I'm childless this week. I feel like a different woman. It's weird.
Well, you know, I am so lucky because both my in-laws and my parents live in the area and my son likes to sleep over at their house and so this week his cousins are in town and so he slept over two nights in a row at his grandparents' house.
Ooh, grandparent camp. That's always fun. I do not have local grandparents, but what I do have is my child at like traditional American sleepaway camp for 5 days. And this will be the longest I've ever gone without speaking to her. But what this has revealed to me thus far is that if I was not a mother, I would still be like a raging workaholic because I like had to tear myself away from my computer last night. And then my husband and I just like on a completely impromptu drove all the way downtown from the suburbs to go out to dinner like adults. Was wild.
Look at you. I worked a 12-hour day. Then I went downtown for dinner. Like who am I?
Date night. My gosh. You were a lot of fun when you were younger, Jamie.
I was. I was, including when I worked at DOE the first time around during the Obama administration, were in the before times before I became a mother and I did pull a lot of 7:30 p.m. departures from the Forrestal building and it's because I love it. I love DOE. I loved working there and I loved working at the loan programs office which is our topic for today's episode. It is amazing that we were able to get Chris Creed to join us. He is currently at Galvanized Climate which is an extraordinary place and he manages the loan fund there and so we were so lucky that he had some time but he actually was at Goldman Sachs Asset Management and the co-managing director for the mortgage program and he was one of the early folks who came on to loan programs office and so it's going to be great to get his insights on those first year and a half.
Chris is amazing. He actually ended up, I think, his final role at LPO. He did a few things, but he was our chief investment officer towards the end. So, he really was one of the key members of the executive team at the loan programs office, and he's a great person to come help us do our part three of who is Shaw. So, let's set the scene a little bit for our listeners because maybe there are folks out there who aren't familiar with the loan programs office. So tell us a little bit about what the office is, what its remit is and why you were brought on.
So the loan programs office was envisioned in the 2005 Energy Policy Act. So this is during the Bush administration and really I think it got started because there was a recognition that we could not fund new nuclear power without having a government debt provider. Because the private sector just didn't want to provide that debt. And then in the 2007 Energy Policy Act, they added the fossil title and some of the other programs within the loan programs office. And then by the 2009 era stimulus bill under Obama, they added the renewable energy title and additional money. And that's when it was the most busy and did about $35 billion of loans between renewable energy projects and then the Vogtle nuclear plant. The loan programs office, you know, basically is a place where you're supposed to go with first-of-a-kind projects, right? So, if you've invented some cool new way to make steel or some cool new way to make sustainable aviation fuel or something else, you go to a bank, the bank's like, "We're not going to do that deal until there's five or 10 of those things running, right?" And for a lot of these projects, you can't get 30% returns, which is what you need to be able to just raise private equity or something like that to do that. So having government debt is super important to getting that first project off the ground. The other thing though is because we have 10,000 engineers and scientists on the platform at the loan programs office but also the Department of Energy at large we can evaluate any technology like any technology is known to the DOE and probably the inventor of that technology still works at DOE at one of the labs right so technologies that would scare off the private sector don't scare the loan programs office and so it becomes this place that gives confidence to the private sector that when their company is ready to do that first of a kind project, there is a place that they can go to get the debt to do that.
Great. So, here we are. We're going to get started with this point of your career. You're sitting in your seat at Generate Capital and you have absolutely no concept about or thought in your brain that you were about to join the Biden administration until the call comes in. So, without further ado, let's bring Chris on and talk about the resurrection of the loan programs office.
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Yay. I'm really excited about this episode. So happy to have Chris Creed here with us. So in part one, you told us about one of the worst calls you ever made on air as a podcaster in your entire podcasting history.
And I've made a lot of bad calls. It's funny when people go back and call you out on things that you've said, but this is way back in the day. Steven Lacy asked you on the Energy Gang right before the 2020 election whether the DOE loan programs office had a shot of success if Biden won. And you said that the office was quote irredeemable, that it would never get anyone to trust it again. And the universe was listening. A few weeks later, you got the phone call. Talk to us about that moment.
Yeah, I think I recorded that podcast before the election. So, you know, then the election happened and Brandon Hurlbut came to me and said, "Hey, I'm going to put your name in for something. Do you want me to do it?" And I was like, "Fine." But, you know, I don't know if you guys knew, but Generate Capital was started in 2014. And as Chris Creed knows firsthand, the way that you make money in managing a fund is waiting five freaking years. Like it doesn't make you a lot of money in the first day. You have to like make all sorts of compromises until you get a track record and then you make money. So we were finally starting to make money. This is now like 2020, right? And I was like, this is I'm finally making a salary after like five or six years of doing this. So like I'm not excited. And then I got a call from Christopher Davis about whether I was interested in.
And who was Christopher Davis?
So Christopher Davis turned out to be the chief of staff to Secretary Granholm while we were serving, but at the time he was on the transition team for President Biden and asked me if I would take the job. And I of course went immediately back to Scott Jacobs and Matan Friedman, my partners, and said, "Hey, I got this call." And then to Richard Kaufman who was the chair of my board and had served in the Obama DOE and was, you know, rumored to be in the running to be the head of DOE if Hillary Clinton had won in 2016. And he was like, absolutely not. Like, you're not allowed to take that job. DOE is a mess. No way you can take that job. So he, you know, encouraged me to write a memo that basically said, "Here are the conditions, you know, that I would need to take the job." And so I called Jonathan Silver, who had the job beforehand, and then Tate McDonald, right, who we all know is like the queen of LPO consulting, and they wrote a memo with me, right? And it was basically not that complicated. It just said, "Give us the right to run the LPO in the way it needed to be run so that it could be successful." And I think Richard thought that that was a memo that, you know, the secretary and at the time Brian Deese and Ali Zaidi, right, were part of the sort of triumvirate that the president had chosen. And you know, to everybody's surprise, they said, "Okay, we'll give you everything you want." And then people were like, "Well, damn." like now that you've asked for all these things and they said yes, you kind of have to take the job. So that's sort of how it came together.
What would you say were the top three factors that you most needed to have get a yes to in order for you to take the job?
Well, I think that the definition of innovation was a really important one, right? That we needed to make sure that we weren't required to take real technology risk because like that's really I think what set us back on some of the failures in the program before like LPO should not be taking will it work won't it work risk so we needed to take more mature projects that wouldn't get commercial debt so I think that was point number one and that was really an Office of Management and Budget issue right because they were sort of saying like hey you know like the statute says innovation we want to see real innovation, right? I think the second piece of it is where Treasury ends up on all this stuff, right? Because the folks at Treasury, right, run the Federal Financing Bank, right? And so they have this notion that, you know, we need to make sure that the Federal Financing Bank is used in such a way that we're going to get repaid, right? And all these things, you know, happen in a way that makes the most sense. And so, you know, part of I think the challenge that we had with Treasury is they weren't paying attention to this at all. It's not that they were against the loan programs office. This was not even on their radar screen. The people who were in charge of running this program didn't even know that it was still in existence and operating, right? So, they needed to be on board. And then I think the third piece of it for me was when you talked to Jonathan Silver, I mean he was dragged into the White House every single week and they like micromanaged his credit review board committee, right? And so I was like,
What's the credit review board though?
Well, I mean, you know, every investor has a credit committee, right? Somebody who makes a decision on yay or nay on the loan. That can't be the White House, right? Like LPO has to run like a bank. It can't be run like a political operation. And so I was like, the White House cannot be deeply involved in the process. And as you know, like when we ran the loan programs office, Christopher Davis even protected the secretary from knowing who was in our pipeline. She didn't know who was in our pipeline. And I think that was good because we didn't get the level of micromanagement that I think Jonathan Silver got during the Obama administration. The thing that I found the most interesting was and maybe this is, you know, a longer story but over the three and a half four years we were there the level of comfort and eventually the level of respect and what's the word I'm looking for permission. Permission, yes, but really like you guys are the subject matter expert we got from both OMB and Treasury at the end was remarkable. And I think that we walked them there over that three and a half year period.
Yeah. And we should get into that later in the conversation, but I think you played an absolutely critical role in making that happen, right? I mean, I think when you've, you know, like just fast forwarding a little bit, you know, I mean, I got a random email from somebody I knew, a headhunter, saying, "I got this guy Chris Creed. Do you want to talk to him?" And I was like, "Yeah, sure." And then I got Chris on the phone and Chris is like, "Ah, I got a job at Goldman Sachs, but you know, looking at getting into Treasury, but you know," and I was making the hard sell saying, "Well, I think this might be better." And it was funny because the hard sell I was making is for Chris to be a contractor for the loan programs office. Like I mean I couldn't promise him a political position or even a job within the loan programs office. So I think you joined as a contractor didn't you?
No I joined as a federal employee but it took if you remember you know one of the loan program office legends Don Kim you know he Dong was like this person needs to be a federal employee. So from the time you know we agreed that I would join to when I actually joined was four months right and that was the whole hiring process.
Yeah. Exactly. Exactly. So hold on before we get to my story. How did Secretary Granholm end up convincing you to join?
Well, I mean, because I mean, I told her because I mean, you know, there were talking points going around during the transition team that the Biden administration and Secretary Granholm wanted the loan programs office to be a central part of this phase of the presidency, right? Like that they had publicly said that that was $40 billion of loan authority that was sitting there that they wanted to do something with, right? And so you know I mean that was separate from me right like whether I took the job or somebody else took the job they were saying that publicly and so my feeling was great like you know like I mean I'm one of those people I think you know by now that like I do criticize lots of things right because I think things need to be fixed but if someone calls me to task I'm happy to roll up my sleeves and actually do the work like I'm not lazy like I'm not looking to like throw pot shots from the sidelines. But like you don't want to get into a situation where you're destined for failure. And I think the secretary convinced me that she had my back. And to her credit for the entire four years, she absolutely had to make good on that promise because there were several times that she had to have our back.
Absolutely. I will say having worked with you for a long time, you criticize plenty of things. You absolutely are willing to roll up your sleeves and do the work to improve things. You and I have collaborated on other projects like that. I do think sometimes you think it's going to be a little bit more straightforward or a little bit more simple than it actually is. It always looks very easy to fix it from the outside. Then you get there and you're like, "Huh, all right. It's not what I expected." So, what did the first months look like? What was your biggest surprise when you got in there? Like, where were you completely wrong?
So, just to go right before that moment. So, my financial disclosure took longer to get through. That's why I didn't start till March 3rd instead of January 20th. And the reason for that is because I owned a bunch of solar projects and I went to like war with the ethics people. I was like, so I could be a slumlord and like come into office and own a bunch of like real estate, but you won't let me own solar projects where no amount of policy would have improved the value of solar projects that I already owned.
It's so funny now with what we're seeing in this administration as the president has profited by like $2.3 billion last time I checked the numbers from his office and here you are with your little old solar projects.
Yeah. So I definitely got delayed by that. The other thing I did though was, you know, like I had been, my wife retired from the State Department and had senior executive service. So, I knew people that worked in the government and it was very clear that you needed a chief of staff to help manage your role within the DOE and everyone pointed to Sydney Bopp, right, our first chief of staff who was extraordinary. And so then winning her over because she had just had a baby, right? She had just had Daisy. So getting her on board was like my best decision and that was great. The funny thing is on my first day, no one knew I was starting. So I happened to be friends with Andrew McCabe and so Andrew was our head of risk. And so I called up Andrew and said, "Hey Andrew, this is my first day. What should I do?" Because I'm sitting in my office in Bethesda, right? So like nobody's in the office. There's no place for me to walk around and say hello to people.
You went to Forrestal on your first day?
No, because it was closed. It was only like White House was open and those people had to get tested like every day I think to go to the White House. And they mailed me a laptop. I went to not Gaithersburg, Germantown office and you know got my like badge and all that stuff, right? And so Andrew like quickly assembled everybody online and said, "Hey, let's do a manager's meeting" and Dong Kim and all these other folks like showed up. So that was my first day and it was very clear to me that like Dong had done an extraordinary job while the office had basically been dormant according obviously the secretary, that's what she called it when she was getting confirmed, but like the quality of the people was just so high for a dormant office like I mean you would have imagined that most of the people would have left but he kept a solid group of like 80 people together.
The dormancy was on new loans. I mean, they were obviously managing the loans that they had originated during the first term of the Obama administration.
Like there was what over 35 billion of active loans that the team was managing.
Yeah. Yeah. Yeah. So, no, that was absolutely the case. And then when I came in, right, there was like I remember Don Kim sat me down and said, "Jigar, just want you to know that this office is for nuclear power." And so then we had a good conversation about how we restarted nuclear and true to my word, I mean, we worked on nuclear power for the entire four years to try to figure out how to help them. And so I think that was great, but getting a lay of the land, getting a sense of it was great, but we weren't allowed to go into the office regularly for the entirety of 2021.
Okay, but you didn't answer my question. What was the biggest surprise? What did you think would be true about LPO when you got there and you were mistaken?
I mean part of my answer is that the quality of the team that was there was extraordinary right so I wasn't starting with a blank canvas and so that was great. The other thing that I realized on day two or something which was fascinating was so the way in which they were dealing with the budget surpluses they had right because they had a certain amount of allocation of money from Congress and then they didn't have enough employees basically to spend that money was they were prepaying their employment contractor. So they had I think it was like $20 million of carryover funds sitting at JLL with the contractor vehicle. So that's when I knew on day one I was like, "Oh, so I can bring in a lot of contractors, right? Cuz we already have pre-funded budget here, right?" And so then I went to work convincing all of the smartest people I knew who would be open to joining the US government to join. I mean, the first person I called and the first person who said yes was, you know, Chelsea Stoner, who ran the ATVM program and then others and I think by the middle of the summer, we had gotten I don't know 30 or 40 people on board. But like I remember Don Kim was very particular. He was like, this is how political appointees get in trouble. So, we have to do this the right way. We have to do the paperwork properly. We have to post the job. We have to get them to interview people. We have to get the right people on board. You can't just tell them who to hire. You can submit names into their queue and then they have to hire them because they work for JLL. And so we did everything by the book, but we brought a lot of people on board by the summer of 2021.
Great. Now Chris, I want to talk about you. Let's talk about your side because I would love to hear this story from your perspective rather than Jigar's. In summer of 2021, at the time, you're a managing director at Goldman Sachs Asset Management, co-running the mortgage-backed and securitized team with more than $75 billion under management. So, at this point, the Inflation Reduction Act is over a year away. The money isn't there. There's very little funding, less than you were managing alone inside of LPO. There's no guarantee that more funding is coming. So, what did Jigar say that actually got you to say yes to join the team?
So it's one of my favorite stories and I love telling it. So I was at an inflection point in my career at Goldman. So I had a few options. I could stay at Goldman. I could go to another Wall Street bank. I could go to another asset manager and all those things you know I was pursuing but you know I was also looking at jobs in the administration. And so I actually did this and I don't think I saved the piece of paper although I probably should look through some more boxes. I actually did one of these Venn diagrams and you know what am I good at and since I only know how to do one thing I wrote debt. You know what do I think is going to have a lot of outsized growth and contribution to GDP growth over the course of the next couple of decades and I wrote down a few things you know we didn't have the term AI back then but I wrote down tech, pharma, energy question mark and then the bottom Venn diagram I wrote Well, what will I be proud to have done at the end of my career? And in that, I wrote down, you know, working for the people, working in public service. And I also should note that I always was proud of what we did in the mortgage world. And I thought that was, you know, always good. And then finally, like, is there something to be done for the energy transition or climate change? And so, I was staring at this for a while, and I'm going to give a shout out to an old boss, now friend of mine, Tom Telles. I'm going to say we were out for coffee or a drink, but this might have been a phone call. And you know, I was showing him this piece of paper and he somewhat tongue-in-cheekly pointed at the middle and said, "You know, you should find out if the Biden administration has in the energy department a loan office that'll help combat climate change." And we kind of laughed and we kind of looked at each other and we were like, you know, I should make sure that that doesn't exist before I dismiss it. And it turns out that they did. And I ended up talking to my headhunter, a guy by the name of Justin Wilkins, who I told this story to him and he said, "Well, you need to talk to Shaw." To which I said to him, and he will back me. This is a true statement. I said, "What is a Shaw?"
And he was like, "I'll make the introduction. You will like him." So, we set up a call which was the day I got my COVID booster shot or my first shot. I remember it was one of the days I got my COVID shot. So, I was feeling not great and I got a phone call. You called me and I was out walking around the Upper West Side and we had a really good conversation. But the thing that really stuck with me was I asked you the very question that Jamie asked, which is, "Why do you want a mortgage idiot to help you with the loan programs office?" And your answer was, "Well, Chris, 40% of emissions come from buildings. And if we don't understand how buildings are financed, we're not going to be able to solve a major component of this problem." And that was what got me. And I think I said yes like 4 seconds after that. And the rest, as they say, is history because it was a great three and a half years working together. And it's one of the things that I'm really proud of in my career.
It really was. I mean, when you think about...
I mean, I knew Chris was special when I first talked to him and you know, like it's one of those things where like you can never restart a dormant office or accomplish an entrepreneurial goal without an extraordinary set of co-founders basically. And Chris was clearly a co-founder early on. I just didn't know how to give him the title. So, I'm like, can you work for Andrew McCabe in the Risk Group? Could you work for this person? And Chris is like, I left a big job at Goldman to like mop your floors. And I was like, you know, like wax on, wax off, Chris. Like, no. But, you know, I mean, the process, you really trusted the process and he found the spot for you eventually.
No, exactly. And I think that's the thing that was the best part is that you're right. It was a little bit startup feel. I think you're going to have the numbers better than I will, but I think I was the 90th person to join the office and I think you had 60 or 50 when you joined. So, and of course I joined three or four months later than I wanted to because of the time it took to actually onboard. But you know by the time we were done how many people worked for us? 450 plus or minus.
We were up to 450 or so. I mean, but even before the IRA passed, I think we were knocking on 200. We were close.
I know recruiting was a huge part of your job, but give us some insight into your day-to-day in the early days. What did you spend your day doing? I know you spent a lot of time on the phone, so what were your top three priorities and who was the hardest to get on the phone?
Well, the first priority was to bring on Haley because like I mean no shade on, you know, the support staff in the front office when I got there, but like they were not, you know, our good friend Haley Emerson. And so I went out and got her and that made my life, you know, 10 times better.
And what did she do for you?
I mean, you know, she was nominally my assistant. And I think she had just graduated from Washington University. And so I think she was, you know, all of like 22 or something. She knew DC, you know, her dad was an ambassador. She knew other folks like in town. Like she is one of those like extraordinary people who all the rest of the 25-year-old political appointees. And so suddenly we had connections within the rest of the building, right? Like they did social engagements together, they went out for drinks together, whatever it is 22-year-olds do. I don't think they drink alcohol anymore, but whatever they did, right? Like that was hugely important because, you know, like I was running my job, like I didn't know what the rest of DOE was doing or the rest of government. The other thing I did was I just sat down and got everybody. She put all these people that I told her to put on my calendar, right? So I think I probably called 300 companies over the first 6 months and just said I need you to apply to loan programs office like I know that you could use this money I need to get a win and they were like hell no like I don't trust this process and I'm not going to be a part of this thing or whatever it is and so I just kept working it like kept calling people etc. And I got I don't know like seven or eight people to say yes and they started applying to loan programs office. And remember the way the government works is you can't get anything done on a hypothetical. The only way to get things done is to have a real loan application in the loan programs office and then go to your general counsel and say here's a real loan application. What are the four reasons I can't do this loan and how do I go fix those four things? Right? And so getting those first seven people in were critical because otherwise you couldn't start the domino effect of fixing the rest of the office, right? And I'll give you like some examples. Like when we first brought loan applications in, we were still running under like an RFP. So people were like, "Oh, you have to do an RFP and see who applies to the RFP and then you have to evaluate all 20 applicants and then figure out who has the most points." And I was like, "Are you kidding me?" like this has got to be a rolling process. Turns out that like somebody in the Obama administration in 2009 thought that having a solicitation was a good idea. Like just figuring out how to allow people to just apply for a loan wasn't straightforward, right? And then the third thing I did was like assess my senior team. The senior team that we had in was a group of amazing people, right? with amazing careers, but some of them were not perfect for the role that we needed them to do. Like for instance, our general counsel at the time could not stop with like sexist remarks in every single conversation that we had. And I was like, what are we doing here? Like honestly, I don't know what's happening here.
I don't even remember who that was because...
I'm not going to name him, but I'm just telling you that our general counsel was not great. And you know, like he left and then we got Becky Lier. I mean, Lord Almighty, where would we be without that superwoman, right?
So, like, you know, like those are the three big things I had to do was just, you know, find an extraordinary assistant who, you know, I can now say was extraordinary because the secretary, as soon as she realized she was there, stole her from us.
She did that. She did that twice. She stole my admin a year and a half in as well. She was very good at taking the right talent out of our office.
