NEW YORK SHARES

PASCO -- Something is going on inside Green Power's space at the Big Pasco Industrial Park.

The lights are on and water is being used, say Port of Pasco officials. Some employees are working on grinding up piles of garbage, but exactly what is being done remains unclear.

Almost three years after the state halted construction on the plant that CEO Michael Spitzauer promises will turn garbage into fuel, Green Power still lacks the necessary permits to finish the project.

The company is half way through a six-month lease with the port and does not appear to be making much progress on the plant or on paying off debts, according to state officials and court records.

Spitzauer told the Herald in an email last week that his company has gotten through hard times and is now paying what it owes and creating jobs.

But Spitzauer still owes at least $21 million to former investors, employees and contractors, said Seattle attorney James Rigby, who is the U.S. trustee on Spitzauer's ongoing personal bankruptcy case.

Spitzauer says that amount is exaggerated.

Pasco plant stalled

Spitzauer first leased Port of Pasco property in May 2008. Previously, he had planned to build an $82 million plant in Fife inside the Puyallup tribal reservation to convert waste to diesel. That project never was built.

It's also unclear if Spitzauer has made any of the mobile biofuel-producing vehicles that he once proposed.

Green Power's partially built biofuels plant in Pasco was shut down in August 2009 because Spitzauer lacked the necessary permits from the state Department of Ecology.

But despite telling state officials that a new permit application would be filed, that hasn't happened, according to Ecology officials.

Green Power still owes the Department of Ecology a $42,000 fine for starting construction without the proper permit and for state staff time spent on his first attempt to get a permit. He must pay that before filing a new application.

Spitzauer, who has told the Herald he lives in the Seattle area, said he's paid the penalty and is in the permitting stages.

Jani Gilbert, Department of Ecology communications manager for Eastern Washington, said Spitzauer emailed state officials Tuesday saying a check was in the mail, but they have not received the payment nor a new permit application.

Spitzauer has had similar problems getting city permits.

Green Power had an air conditioning system installed at the Pasco plant in March without receiving the required city permit, said Mitch Nickolds, Pasco's inspection services manager.

According to the contract Spitzauer signed with Horst Inc. of Kennewick, which installed the units, Green Power was responsible for getting the necessary permits.

Nickolds, who inspected the work earlier this month, said Spitzauer agreed to begin the permit application and pay any penalties.

The usual fine is to pay double the permit fee, which is based on the value of the work, he said.

Spitzauer applied for the building permit Wednesday after the Herald asked him about the issue. Nickolds said it would take about 10 days for the permit to be reviewed.

At the same time, Spitzauer also applied to renew his expired 2009 building permit for remodeling the office that never had a final inspection, Nickolds said.

Steve Horst said he likely still would be waiting to receive the last $16,000 that Green Power owed his company for the $30,000 air conditioning installation project if he hadn't told Spitzauer that he'd reported the payment problem to the Port of Pasco and the Herald.

Financial struggles

On the other side of the state, Spitzauer continues to face personal financial problems.

He has been unable to get a judge to drop a bankruptcy case he filed in 2010 in Western Washington.

He filed for bankruptcy protection three other times that same year, then asked to withdraw his requests and the dismissals were granted.

In the recent case, he has not provided required information about his debts and has failed to appear at meetings scheduled with creditors, according to court documents.

Spitzauer's creditors claim they are owed $21 million and have taken the lead in pursuing the case, which isn't the norm, said Rigby, the U.S. trustee overseeing the current case. He called the case unusual.

Spitzauer estimated in court documents that his debts are less than $1 million.

So far, Spitzauer has turned over $55,000 to the trustee. And $50,000 of that was a payment that Spitzauer made to keep from having to appear at a deposition.

The judge refused to discharge Spitzauer's debts, so his creditors can continue to try to collect what they're owed. In the mean time, Rigby said he has found no more assets for the creditors and plans to close the case.

Spitzauer told the Herald this week that his bankruptcy case is private and that he has settled some debts and is arranging to settle others.

But Rajan Babaria, with Texas-based Chakra Energy Corp., which is among four investors who claim Spitzauer owes them $16 million, said in an email to the Herald that Spitzauer has not paid his company anything.

Chakra Energy claims to be owed about $2.4 million, but Babaria doesn't think his company will ever be paid.

Lingering Tri-City debts

Part of the bankruptcy is a $3.6 million judgment and interest owed to a former employee who sued in Benton County Superior Court.

James Osterloh, who was chief engineer for Green Power before he resigned two years into a five-year contract, told the Herald that Spitzauer has been making some payments on his May 2010 judgment.

Osterloh sued Spitzauer and Green Power in August 2009 for using Osterloh's Social Security number and other employment information to open credit card accounts in Osterloh's name and charge at least $54,000.

Spitzauer initially agreed to pay off the credit cards, but when he didn't, Osterloh got a court judgment against him, court documents show.

American Express Bank has sued Spitzauer in Franklin County Superior Court for repayment of the $54,000, according to court documents. That case is not settled.

In addition, two Tri-City companies have filed in Franklin County, claiming they haven't been paid for their work for Green Power.

American Electric of Richland said it's owed $500,000, and Twin City Metals of Kennewick is owed $48,000, according to court judgments.

Elaine Fischer, spokeswoman for the state Department of Labor and Industries, said Green Power still owes the state about $27,000 in unpaid wages, interest and penalties. The agency also received a wage complaint from an employee alleging the worker wasn't paid overtime for work between September 2011 and January. Fischer said the complaint is pending.

Spitzauer told the Herald he has a payment agreement with the agency.

While he has been making payments on unpaid workers compensation insurance, Fischer said he has not paid the wage claims and does not have a payment agreement for them.

Because of previous problems with Green Power's late payments, the Port of Pasco required Spitzauer to pay $233,867 in advance for his current six-month lease and water and sewer utilities. That lease expires Aug. 31.

Spitzauer will have to come back before the port commission to request a lease extension, said Jim Toomey, the port's executive director.

Spitzauer said he plans to ask for a lease renewal and more space at the port. He told the Herald that his company is doing well and is assembling mobile biofuels units at Big Pasco for customers.

"We are delivering systems and we are growing," he said in an email. "We are proud of what we do."