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Making a Run at Alternative and Free Energy
By Wade Frazier
The Early Adventures of Dennis Lee
This essay is ancillary to this site’s main energy essay, and will chronicle what may be the most sustained effort ever made to bring alternative energy to the American marketplace. I also participated in it, and make a number of personal observations in the following narrative. Also, the man who led the effort has been slandered, libeled or ignored ever since, and the record needs to set the straight, for not only posterity’s sake, but if humanity is to avoid its self-extinction, people need to understand how today’s world works. The final chapter of Dennis Lee’s adventures has yet to be written, because he is still at it, even after spending a couple of years behind bars for his trouble. Whatever the heroism or failings of Dennis may be, we are all responsible for how today’s world works.
Since electricity is four times as expensive as natural gas, few sane Americans would heat their homes with electricity, but it happens. My home today is heated with electric heaters, mainly because of all the hydroelectric projects in Washington State. I pay about $100 per month for my household energy. When I lived in New Jersey, my apartment had electric heat, and I paid about $200 per month for my household energy. Gas furnaces cost thousands of dollars, while electric heaters cost a small fraction of that. Electric lines run in places where gas lines are too difficult to install. Gas has its dangers, such as explosions and asphyxiation (reduced because artificial scent is added to natural gas, so leaks are easily detected in the home). Electricity has its hazards, such as electrocution and radiation from high voltage lines. Millions of homes have heat pumps. If a heat pump can average a COP of two, then it would be twice as efficient as using that electricity to run space heaters.
Why are any heat pumps sold in the United States, if electricity is four times as expensive as natural gas? If a heat pump averages a COP of two, then electricity is still twice as expensive as burning natural gas for heat. There are regional variations in electric and gas prices, which can make the relationship closer, however. In addition, there are variables in the economics of producing electricity. For instance, the electricity production infrastructure is geared toward meeting peak demand. Only 1% of the time does the nation’s electric production system operate beyond 75% capacity, and it operates at about 25% capacity more than 10% of the time. Electric demand in the United States increases about 15% between winter and summer, and the hot, daytime, business hours are the peak times, when air conditioners are running. At night and in the winter, demand can slacken dramatically. There are technical and practical issues with turning on and off electric company steam turbines. Electric company turbines run all the time, but idle during off-peak hours. Electric companies have long encouraged businesses to use electricity at off peak hours, and do so with preferential pricing. For instance, today the Niagara Mohawk electric company charges more than 17 cents per kilowatt-hour (kWh) at peak times, and less than four cents per kWh on off peak. Also, if a home or business uses electricity for heating, electric companies can give preferential pricing. What if heat pumps could get COPs of eight? Then heat pumps could operate at half the operating cost of natural gas furnaces. Here is where Dennis Lee’s heat pump comes into the picture.
A diagram of a standard air-to-air heat pump is presented below.
In 1974, during America’s first energy crisis, a Colorado cowboy bought a heat pump. Heat pumps are often used to both heat and cool homes. In the winter they pump heat into the home, and in the summer they pump heat out of the home for air conditioning. To work as an air conditioner in the summer, heat pumps needed be placed in the shade, often next to the house. Being in the shade helps for the summer, but hinders winter performance. The cowboy did not know how the heat pump worked, and called an engineer friend of his to come over and explain it. He showed that it was like a refrigerator. The cowboy understood, and asked,
“What if I do not have a need for air conditioning, and only want to use it to heat my home? Then I would not want a heat pump sitting in the shade, but sitting in the sun. If I put that heat pump on the roof of my house, I bet it would operate more efficiently.”
They did just that. They also cut apart the evaporator array and laid it out flat, to get the full effect of the sun’s rays. They hooked up some gauges, and before that heat pump virtually exploded, they obtained some amazing data. For producing heat, much higher efficiencies could be produced by sitting the heat pump in the sun. The cowboy told his buddy, “We'll be rich, putting heat pumps on people’s roofs.” The engineer told him the heat pump could stay on the ground; only the evaporator needed to be on the roof. Their company was born that day on the cowboy’s roof. It was named LamCo, a name based on the cowboy wife’s initials.
The solar industry in America was already growing in response to the energy crisis, and an instance of serendipity happened. They only needed the evaporator on the roof, and they made the evaporator look like the day’s solar panels - large, flat, black - and not the standard tube-and-fin heat pump evaporator. Below are evaporator arrays on LamCo-style units in the field.
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Note the large, flat surface area. The LamCo-style evaporator, in an eight-panel array, provided about 400 square feet of surface area contact with the environment. The standard heat pump provided only a few square feet at best. LamCo stumbled onto a thermodynamic advantage.
The Carnot ideal has never been attained for good reason. With heat engines, entropy saps their efficiency. Hot always goes to cold. As the temperature of any substance rises, so does the motion of its molecules, and the hotter anything gets, the more disordered its molecules become. Boiling water is simply adding enough energy so that the motion of the molecules overcomes their attraction to each other, and water is liberated as steam. That greater disorder is known as entropy, and all heat engines face the entropy issue. The disorder of the molecules increases as they get hotter, and less as they become cooler. When steam condenses into liquid as it cools down, as in a steam turbine’s condenser, the entropy is taken from the closed system, allowing the water to be used in the cycle again. The shape of the turbine blades, the efficiency of the tubing that links the components (straight and wide is better than curvy and narrow, so the molecules do less banging into each other and tubing walls, and more banging into the turbine blades), the heat losses between boiler and turbine, the friction in the turbine bearings and the like decrease the system’s overall efficiency, so the Carnot ideal is never attained. The best steam turbines today only reach about half the Carnot ideal. The standard heat pump, however, only reaches a paltry 10% of the Carnot ideal. With heat pumps, the components that affect the efficiency are the pump, evaporator, condenser and components that link them. Poorly designed or implemented tubing can affect efficiency, but the big variables are the two heat exchangers: the evaporator and condenser. With heat pumps, the Carnot ideal is approached as heat exchangers reach ideal efficiency, which in practice means as they tend to infinite surface areas, thinnest walls for most efficient conduction, most conductive materials, and the like.
LamCo discovered the virtues of large heat pump evaporators. Imagine the heat that an ice cube can take out of a glass of ice tea as it melts. Then imagine how much heat 100 ice cubes can take out of a punch bowl. While the relationship is not quite that linear with the flat plate evaporator of the LamCo-style heat pump, the ability to take heat from the air is obviously greater than an evaporator with 1% of its surface area, even if a fan increases the heat exchange (and uses energy to do it). While a typical air-to-air heat pump held a few pounds of refrigerant and delivered about 50,000 BTUs (British Thermal Unit) per hour to a home, the LamCo-style heat pump regularly delivered 100,000 BTUs, and held sixty pounds of refrigerant. More important than how many BTUs were delivered into the home was how efficiently they were delivered. The efficiency of the heat exchangers would increase the COPs, and come closer to that Carnot ideal. While air-to-air heat pumps recorded COPs of around two, the LamCo system registered COPs of seven and higher. The highest COP I have heard of with the LamCo system was a twelve. Other variables entered the LamCo equation. The panels would take advantage of direct solar radiation, and wind blowing on the panels would increase the heat exchange and COP.
In LamCo’s early days, they tried getting interest in their equipment, but when they talked to engineers, they said their heat pump got COPs of seven, and they were laughed out of engineering offices. Such COPs were “impossible,” so the engineers said. They were the professional descendents those engineers who said that Edison’s light bulb was impossible, while it lit up the night in Menlo Park. In order to maintain their “credibility,” LamCo published data on their equipment showing it getting only COPs of around three. Then they would not be laughed at anymore.
The Early Adventures of Dennis Lee
While LamCo was struggling to establish itself in 1974, another pioneer was having his own travails. Dennis Lee’s life story is hard to believe, and if I had not lived a few chapters of his adventures with him, I might think him the greatest storyteller I had seen, making up grand and fanciful tales.
Dennis was born in 1946 and was raised in a family of migrant farm workers, when white people still did that in America. His early years consisted of following the planting and harvest seasons around the United States. At age 13, he was the eldest child, and his family informed him that they could no longer afford to feed him. So, he left home and survived to reach age 18. He then enlisted in the military, and eventually saw combat in Southeast Asia, the bloody kind that most men never completely recover from. He was a medic in the army, and believed in the American dream. People from his background often had Horatio Alger tales as their comforting mythology, dreaming of improving their station in life one day. There is some truth in the myth, but myth and reality do not mesh well for that myth’s true believers, as there is a distinct class system in America (with more than a little racism in the mix), although less obvious than England’s. Dennis took the American mythology seriously, and was such a flag-waving patriot that during his military days he got into fistfights with fellow American soldiers who said bad things about the United States. Even though he lived the violent life of a soldier, he deeply cared about humanity and wanted to help people.
Because Dennis was a medic, he wanted to become a doctor one day. His first post-military job, however, was loading ships with bombs heading to Vietnam.[1] He was young with money in his pocket. Coming from his background, life was good.
When I had my first “existential crisis” at age nineteen, my desperate prayer was answered, and a voice in my head suggested that I might like studying business. Dennis’ first encounter with an alien voice in his head was far more dramatic. He had a new Mustang convertible, and was making his way up the ladder to middle class respectability. He decided to borrow money from a bank to establish credit, not because he needed the money. As he walked out of the bank with the money, in walked a man with three children following him. They were emaciated, and the man looked and acted like a beggar. The man asked the bank vice president (VP) for help. His wife had died. They had followed the harvest to Washington, but the harvest was poor that year. They had been sleeping in their car for days, and were starving.
That was a scene not often witnessed in a bank lobby. Dennis had hardly been in a bank before, and the embarrassed bank VP acted like bank VPs everywhere, telling the man that the bank was not a charitable organization, and that down the street was a charity, where he should seek help. The banker was rather cold about it. It would have been unusual for that VP to do anything else, but the scene hit Dennis hard. While watching that tableau, he realized that the America he had been raised to believe in did not exist. He walked over to the starving man, shook his hand, and said, “I would like to introduce you to Mr. Vice President. His bank has decided to loan you all this money.” Dennis put that wad of loan money into the man's hands. The man's eyes were bulging, as were the banker’s. Dennis said, “Furthermore, this is really your lucky day, because I’ve decided to trade cars with you.” Dennis gave him the keys to his new Mustang and walked out of the bank with him. As Dennis walked out the door, he turned back to the banker and said, “You'll never get that money back as long as either one of us lives.”[2]
Dennis rode the bus home, crying all the way. His illusions had been shattered, and he decided to put himself out of his misery. He was not in total denial before that day. His experiences growing up, and those he had in Vietnam, had created cognitive dissonance. The facts of life he witnessed contradicted the myth he had been sold, and he came to his stark realization in that bank. Being an ex-soldier, his solution seemed simple. He got his shotgun and put its barrel in his mouth, about to end his misery. At that moment, for the first time in his life, a voice spoke inside his head. The voice asked him what he thought he was doing. Dennis replied that he was going to exit this uncaring world. The voice eventually said, “Hey dummy, if you have a vision for America, don't die because it isn’t; live to make it be!” Dennis feels that every moment of his life since then has been gravy, as he could have easily killed himself.
After that day, Dennis began adventures of a different sort. A famous doctor took Dennis under his wing, and convinced him not to become one. In “medicine,” as with most aspects of American life, myth and reality are vastly different. For Washingtonian youth, Alaska has long been a way to earn good money, especially during the summer. Dennis availed himself of the opportunity, and worked on an Alaskan radar base, in its infirmary. It paid well, especially on a base of thousands of men, living in isolation. Those men spent much of their pay on life’s pleasures, and the local crime syndicate provided the illicit ones, such as drugs and women. Dennis had plenty of naïveté to lose, and thought it merely his good fortune when the only woman in the region became his girlfriend. He eventually discovered that she was part of the local mob’s “recruiting pitch.” They were trying to run their illegal drugs through the infirmary. His girlfriend eventually admitted to their plan. Dennis decided to keep stringing them along, as he told the FBI everything. The FBI eventually pulled off the sting, and Dennis had a price on his head. After one mob murder attempt, Dennis left Alaska with twelve policemen as his bodyguard. At the airport where he departed Alaska, he went into the bathroom just before takeoff, followed by one of his bodyguards. The bodyguard pulled out a knife and tried killing Dennis in the bathroom. Dennis’ soldier instincts saved him, as he fought off the attack and yelled for help. That assailant spent a long time in prison after his botched hit. Dennis still has the scar from it on his arm.
Dennis fled Alaska, and the doctor who talked him out of becoming one helped him. The doctor’s family lived in New Jersey, and Dennis moved there and went to college. In retrospect, fleeing organized crime by moving to New Jersey may not have been the best move, but that is where he landed. Dennis became a highly enthusiastic student, pulling straight A’s and becoming the student body president. When it was discovered that he never graduated from high school (although he attended all 12 years of school), it was a minor scandal. Because Dennis was such an academic star, the college president made an exception in his case. In college, Dennis studied social psychology, and was an Honors College student. He had the freedom to pick a topic of study, and he studied Utopian literature. He also surveyed people door to door, asking about their perception of America’s potential and reality, and discovered that most people felt helpless and unable to change the way America functioned. They distrusted the government, seeing it as oppressor instead of servant. Dennis also attended a conference where B.F. Skinner spoke. Skinner was recently voted the most influential figure in psychology’s history. Dennis heard Skinner and took in the conference’s milieu, to his mounting horror. The theme of Skinner’s talk was about manipulating the public, using conditioning methods. It was a more sophisticated version of Pavlov’s work. At Dennis’ college, he had internship opportunities with politicians, where he could hone the fine art of manipulating the public mind. Today, it is called public relations (PR).
Dennis stumbled into the world of mass mind control. Pioneered by PR legends such as Edward Bernays and Walter Lippmann, the term propaganda had positive connotations when Bernays wrote a book of that title. Bernays, a nephew of Freud, felt that average people were too stupid to know what was good for them, so their minds had to be manipulated. Bernays helped “engineer” the “consent” of the masses regarding what the powerful did in the public’s name. There was a black side to that engineering of public consent. Bernays designed the American Tobacco Company’s 1929 campaign to addict American women to cigarettes. Bernays’ ruse was to get flappers to adopt smoking as a badge of freedom, the deadliest badge ever devised. Hitler’s propaganda chief, Joseph Goebbels, studied Bernays’ work in designing his propaganda attacks on Jews. Bernays also designed the campaign to fluoridate America’s water supplies. Since the Nazis and Soviet Union both used and planned to use fluoridated water as part of a mind control strategy on subject populations and prisoners, because the fluorine ion was proven to attack the brain and lower one’s IQ, it is legitimate to wonder if that effect is partly why most Americans drink fluoridated water today. The difference was that the Soviet Union and Nazis targeted subject populations and prisoners, where the target in America is the general population. Two-time New York City teacher-of-the-year John Taylor Gatto is emphatic that America’s public school system intentionally dumbs us down.[3] Bernays was a committed elitist, happily reminiscing in his later years about when his chauffeur was a virtual slave.[4]
Dennis got a glimpse into the profession of manipulating the public mind, and was nauseated. On the brink of graduation, he lost interest and never graduated. He was having a difficult time pursuing the ideal for America that he imagined. Upon leaving college, Dennis got married and went into the home improvement business, and soon his idealism saw him found a company named “Old World Builders,” with his eye set on building a Utopian community one day. It was the early 1970s, and he received a baptism by fire in New Jersey’s business world. Dennis’ first wife gave birth to a premature child who stayed nearly her entire brief life in the hospital. Dennis learned many lessons of America’s capitalistic shark tank the hard way in those early days, but he learned from them, and was just getting his head above water when the Oil Crisis of 1973-1974 hit. Gas lines, soaring lumber prices and other hardships put many companies out of business in those days, especially in construction. When his lumber supplier panicked and repossessed the building material it sold him, showing up at the construction site and taking it back (not a legal repossession, but possession is nine-tenths of the law, at least in New Jersey), Dennis’ company was destroyed.
Dennis was not singled out; that lumber supplier put most of its small contractor customers out of business the same way. I lived in a deteriorating Ohio town during the 1990s, and the residents said that the 1973-1974 Oil Crisis ended construction growth in that town, and it never recovered, with the “Rust Belt” recession of 1981-1982 delivering the final blow. As Dennis’ company crumbled, a customer stopped payment on a large check to him. Dennis’ company’s checks then began bouncing all over town, and it was curtains for his Old World Builders dream. His child was dying in the hospital when it all came crashing down, and in his youthful desperation, Dennis went to Las Vegas to gamble up the money he needed to save his company. Naturally, he went back to New Jersey broke, with his child dead, and he faced the music. Dennis was young and still quite innocent to the world’s ways. He received what was probably intentionally bad legal advice, and knuckled under to the prosecutor trying to keep his kill ratio high.[5] Bouncing those checks in that situation was no crime, but he pled guilty to fraud for bouncing those checks, a decision that still haunts him, nearly thirty years later.
Dennis eventually paid back everybody who was hurt in the company’s collapse (a rare act), and had an intimate communion with that voice in his head, and spent days in a room doing what can be called automatic writing. He invented a new kind of card. It was not a credit card, but a savings card. People would use it when buying anything, and the merchant would give money back to the customer. Today, Dennis’ idea has reincarnated in a watered down form known as the Discover Card. Dennis will not claim credit for his idea, but that it came through him. When he finished his bout with automatic writing, the beauty of what he had created astounded himself and anybody who pondered it. It was a simple yet sophisticated way of uniting consumers and giving them a voice in the marketplace. Although corporate propaganda portrays the consumer as sovereign, in reality, they are largely captive.
As with Mr. Mentor’s inventions, what I eventually invented myself, and other works like it, it does feel like it is coming through you, not from you, and yet, although it does not come through the intellect, it still has our individual stamp on it. For instance, Richard Bach declined authorship of Jonathan Livingston Seagull for many years, and then Seth set him straight.[6] Dennis had the brilliant idea come through him, but now came the hard part: making his vision a reality. Dennis created a new company to launch his card concept. He named his company United Community Services (UCS), a name that he resurrected in his ventures today. Then Dennis got his real baptism in the business world. He did it in New Jersey again. Since New Jersey is Mafia Central, and the Mafia was constantly muscling in on small businesses there, Dennis’ grand dream was a natural for the Mafia to try muscling in on. They tried it a number of times, which led to another Mafia hit attempt on Dennis, which he again survived, and the way he survived it gained the Mafia’s “respect,” and they never tried it again (he could have the hit men arrested when their attempt failed, but chose not to).
Dennis experienced high adventure in those days. He suffered from rheumatoid arthritis, met his current wife and soul partner, became a Christian and experienced many miraculous and horrific events. The police constantly hassled him because of the Old World Builders days, and arrested him a dozen times. One cop in particular was especially zealous, and did most of the arresting. Customers were having Dennis arrested as a tactic for avoiding debts they owed him. I once asked Dennis if the police ever thought to cease arresting him, because the charges were always frivolous. He replied that I did not understand the sick minds that policemen could have. With each arrest, the charges became more fanciful and unsupportable, but the cop who did most of the arresting became convinced that he had a major criminal in his clutches, and that one day he would catch Dennis doing something truly heinous. During one arrest, Dennis had a pill of arthritis medicine in his shirt pocket. The cop thought that he finally caught Dennis in a crime. He held the pill aloft in triumph, saying that he had Dennis now. He found drugs on him! Although the lab analysis showed that it was arthritis medicine, the “arrested on suspicion of drug possession” haunts Dennis to this day, even used by Mr. Deputy in concocting his fraudulent million-dollar bail request.
Dennis spent years getting his UCS baptism, with partners trying to steal the business, the Mafia trying to muscle in, zealous policemen, corrupt business practices (not far removed from Mafia tactics), consumer apathy, crippling arthritis, starvation (literally), losing teeth and other traumas, and his company was on the ropes. During those days, Dennis became a Christian, and a somewhat fanatical one, a fanaticism that he freely admits. The fierceness with which he embraced Christianity has everything to do with his journey and background, I believe, and is understandable. When Dennis is not assailing feminists (Adam’s rib), homosexuals (Leviticus) and others that the Old Testament demotes, he has the love part of Christianity down fairly well, about as well as I have seen, which is about all that really matters.
Dennis decided to give his failing business to the Christian community, and eventually had an audience with one of America’s leading television evangelists. He saw the beauty of Dennis’ vision, and invested more than $100,000 in Dennis’ dead company to resurrect it. Then the evangelist’s lawyers decided the business’ design looked like a pyramid scheme, and they would not budge from their position. It was not a pyramid, but the evangelist would not associate with something that might appear like one. The so-called pyramid aspect of it was partly what made it work, but the evangelist pulled out of the contract. To this day, he says that Dennis hurt him, but he only hurt himself.
When the evangelist pulled out, UCS was dead. Dennis tried keeping it alive in the evangelist community, but it died nevertheless. At one point, Dennis surrounded himself with Christians at his business. That was one of his life’s more dismaying experiences. Dennis had no idea how fanatical, narrow-minded and intolerant his new Christian brethren could be. There were almost holy wars at Dennis’ company, as each Christian warred with other Christians over their doctrines. Dennis also had visions and realizations, thinking that one day his god would make his plan evident.
One day, as they waited for a sign, to show them a direction to take, one member of their little group had crates of low-flow showerheads that he wanted to sell to resorts on the New Jersey shore. Dennis thought of a way to sell them on a trial purchase plan. They would install them for free, and at the end of the season, the resort owners could look at their energy savings and decide whether they wanted to buy them. If not, Dennis’ company would put their old showerheads back on. It was risk-free to the customer. Dennis dreamed up a corny acronym for the new venture. He called it Project C.O.N.S.E.R.V.E. (Costs of Owning the Newest Systems in Energy Reduction are Virtually Eliminated). They also decided to take advantage of Jimmy Carter’s “moral equivalent of war” on energy consumption and the attendant tax credits. They sold insulation, burner modifications and other energy-saving equipment. Dennis invented what he believes was the United States’ first shared savings plan during the “war on energy.” He offered the customer three options:
1. Share the savings and costs with the company.
2. The company pays all the costs and gets all the savings.
3. Buy the package cheaply and keep all the savings.[7]
That kind of strategy became the hallmark of Dennis’ programs. They were risk-free to the customer, and usually took years to pay for themselves. The third option was for customers to shoulder the risk of performance and get the savings for themselves. Dennis soon discovered that there was big money to be made in urea-formaldehyde insulation. Dennis has always thought big, and soon had big insulation plans. At that time, he made his first visit to Israel. He experienced a number of paranormal events that girded his faith and provided direction. Dennis tried to change his name to a biblical Josiah David, but the authorities did not allow it because of his Old World Builders conviction. His wife changed her name however, and their children bear that surname. Dennis and his wife slept on their office floor during those days. They hid from janitors; a hot plate was their stove, and their privation great. They often suffered from malnutrition. Dennis lost most of his teeth during his journey.
Dennis approached one of the UCS investors who got hurt when it went out of business. Dennis only needed him to act as front man, with complete ownership, and just let Dennis run it. As would happen countless times during Dennis’ adventures, the man let his position go to his head. Although the man’s professional experience consisted of being a restaurant cook, he increasingly overrode Dennis. Strutting around with his newfound authority harmed the company, even though it was doing extremely well. One day the cook/investor showed up uninvited and blew apart a business deal that Dennis was putting together. At that point, Dennis had enough and told the investor that he was now on his own, if he thought he was so great at running the show. The cook/owner destroyed the company in one afternoon.
Dennis left the area to go into business with a minister in the foam insulation business. The minister got cold feet after hearing about Dennis’ travails, and Dennis soon took on other partners and founded The Foam Company. Dennis soon discovered that the cook/owner was pressing fraud and forgery charges against him, and Dennis was jailed once more. The investor accused Dennis of forging checks without his permission. It turned out that the investor himself had cashed some of those “forged” checks, and the case was thrown out of court, but it was one more mark against Dennis, publicity-wise. A local newspaper named Dennis the “con man of the year” in those days. When Dennis got back to The Foam Company, there was a new face; an investor who stayed in the background until then, but announced that he was now running the company. He smelled like a mobster, and Dennis had encountered many by that time. Since The Foam Company was being controlled by a mobster, Dennis sought a way out fast, and soon gave his interest in The Foam Company to the mobster and left, to try hiring on with another insulation company. He found a man who wanted to sell his insulation business, and Dennis would buy him out from the operation’s profits.
Without Dennis there to run it, The Foam Company soon collapsed around the mobster’s ears, and he blamed Dennis for it. Just then, Dennis’ wife gave birth to their first daughter, and Dennis became ill. It began as the flu, but soon turned into Guillaine Barre Syndrome, which is a form of paralysis. Those events happened in the late 1970s. The Foam Company mobster talked about breaking Dennis’ legs, but when Dennis became paralyzed with Guillaine Barre, the gangster forgot about him. Being a veteran, Dennis was admitted to a VA (Veterans Administration) hospital. Guillaine Barre Syndrome (possibly a vaccination reaction, and called different names over the years) can be fatal. Dennis became paralyzed from the neck down. The VA hospital began giving him massive doses of steroids. It was an experimental treatment. He was given 100 times the dose that athletes illegally took. He began recovering after a few months, got to the point where he could stand, and they sent Dennis home for Christmas. They forgot to send steroids with him. The next day, Christmas Day, Dennis went into steroid withdrawal. By the time the ambulance arrived, he was in convulsions. The hospital staff later told him that going from 1000 milligrams a day to nothing at all should have killed him. His case was unique, and the VA doctors did not know what recovery he would have, if any. Dennis could barely speak because his condition was so severe.
VA hospitals are notorious for their negligence and abysmal conditions, especially on the East Coast, and that VA hospital was no exception. One time, Dennis got an insane roommate who tried killing him, as he lay there paralyzed. The roommate was caught in the act, just in time, and Dennis never saw him again. Dennis finally began recovering, and could move his arms. He did not recover to the point of standing up when disaster struck again. The VA doctors went home for the weekend, and the nurses took over. He was down to a 500-milligram dose, but the doctor forgot to prescribe his steroids. Dennis talked to the nurse, and said he was supposed to get his steroid dose. The nurse said she did not see any prescription, but she would go check and come back. That was the last Dennis saw of her, and he went into convulsions that night, with his mantra being, “I will not die, I will not die.” He survived the night, to be discovered the next afternoon by the head doctor, who wanted to show him to his medical students, Dennis already being a medical marvel from the first steroid withdrawal incident. When they saw Dennis in a catatonic seizure, they realized they had done it to him again. Dennis could have sued the government for big money, but he sympathized with the staff, knowing they worked in an under-funded, horrible environment, dealing with the wreckage of America’s militarism. However, he was also beginning to think they were trying to kill him.
Dennis went from 180 muscular pounds to 90 in that VA hospital. He began recovering once more, and one night his nurse came into his room. She was new and brought no steroids. Dennis asked where they were, and she said there was no order for them. That third time, Dennis took charge in the only way he could. He was nearly a vegetable, but he looked the nurse in the eye and willed her to his bedside. He whispered to her that if she did not bring him a phone, he would kill her one day, because he would somehow survive the night. The nurse’s eyes got as big as saucers, and she brought in the phone. Dennis called his wife and told her to get him out of the VA hospital, because they would kill him if he stayed there any longer. By the time she arrived, the staff was in an uproar, and Dennis’ wife demanded that she be allowed to take him home and be given enough steroids to wean him off them. The doctors protested that he would surely die. Dennis laughed at them, telling them that staying there would mean certain death. They finally relented, and Dennis, his wife and their infant daughter went home…but they had no home. They took a flophouse room and Dennis’ wife’s family made some contributions to help them through their plight. They survived on charity. At one point, Dennis was able to use the rehabilitation facilities at Princeton’s hospital, partly because he was a medical oddity. His condition was highly unusual, and the nearly fatal medical mishaps made him a medical believe-it-or-not story.
The man who Dennis tried buying his business from, before Guillaine Barre struck, was still interested in selling. Dennis could not yet walk, but he had to get active and feed his family. The man “suckered” Dennis into a deal where Dennis paid twice what the man originally asked for, and the man also looted the company’s assets, leaving almost an empty shell for Dennis to buy. With Dennis’ position, he had no other options. Dennis, as usual, made the company grow quickly to large size. He also resurrected C.O.N.S.E.R.V.E. The seller had previously gloated to people about how he “took” Dennis by selling the worthless company so dearly to him. Now that the company was quickly reaching the Big Time, the seller told those same people that Dennis had swindled him out of his company. Because some foam insulation companies had poor quality control, foam insulation began creating health concerns. If properly installed, there was not a problem, but poorly made foam could give off too much formaldehyde gas. I would not want a home with formaldehyde insulation, but poor quality control doomed that industry, as well as attacks from the fiberglass insulation industry, in an effort to wipe out the competition. Dennis was getting too successful, and the local fiberglass insulation interests appeared to have been behind banning foam insulation in the county where Dennis operated. Dennis had perfected a method of mixing the foam with computer-controls, and could insulate large numbers of homes in a short time with a “battle wagon” concept, and the business was flying.
At a mall show, where the authorities tried putting his foam insulation company out of business, Dennis showed off many energy-saving technologies. He did not sell wood or coal burning systems because of the pollution, and he did not sell solar systems because he considered them a scam (and most of them in those days were). As a favor to a friend, he allowed somebody to display a solar system at his mall show, but put it in a dark corner, being more interested in selling his foam insulation and other energy-saving technologies. One man kept asking Dennis about the solar system in the back. Dennis kept trying to discourage him, telling him that his money would be far better spent on insulation. The man kept bugging Dennis about the solar system, and kept telling Dennis that he knew it would work. The man was technically knowledgeable. Finally, as the man bugged Dennis once more, saying he knew it would work, Dennis said, “Sure it will work, but are you prepared to spend $12,000 on it?” The man replied that he would. That got Dennis’ attention. The solar system in the corner was a LamCo demonstration unit. The mall show was hugely successful, and Dennis was cultivating some big plans.
Dennis went to his office building soon after that mall show, and was met by the sheriff. The seller of the business made his legal play, and stole the company out from under Dennis. The nearly worthless company Dennis had bought was doing outrageously well, and the gleam of greed was in the seller’s eyes.
The seller’s lawyer had drawn up the contract, and a legal loophole was created to essentially steal back the company’s stock. Then the seller got a court order, unbeknownst to Dennis. The sheriff escorted Dennis into the building, where the seller sat at Dennis’ desk with his feet up on it, and he informed Dennis that it was now his company, and Dennis could leave the premises and never return. Dennis did, and as the seller sat there with his feet up on Dennis’ desk, so proud of how clever he was, his ill-gotten empire was already crumbling. Dennis decided to walk away, realizing that the man would only kill the business, and knowing that even if he fought to get it back, the man would destroy the company in the meantime.
Dennis then saw something he had seen before. When people commit crimes such as stealing somebody’s livelihood, the darkness in their hearts can turn them truly insane. Even though Dennis walked away, that was not good enough for the thief. He felt it his duty to attack Dennis, believing that somehow heaping on the abuse would, retrospectively, justify his crime. The Europeans did that to justify raping the New World. It is an ancient dynamic. The seller began trying to discredit Dennis with the employees and dealers at his company, showing them newspaper clippings and telling them the lurid details of Dennis’ “fraud conviction.” Whatever he thought it would accomplish, it did not work. The people at the company had bought into Dennis’ obvious talents, not the seller who came from nowhere and could not run anything larger than a street-corner sandwich shop. Most employees and dealers soon quit the company.
Dennis closed his eyes and turned away, and that company went bankrupt before long. Unfortunately, the mentality that business seller displayed is alive and well in America, especially in the small time American entrepreneurial waters, as filled with capitalistic piranha as it is. Dennis was not seeing unusually dishonest or greedy people, nor was his judgment poor. He was getting a healthy dose of what America is really like.
There are two kinds of greed. There is the ingenious greed of John D. Rockefeller, where he took over the entire oil industry within a generation after it was born. He was a genius, but he used his talent for dark ends that humanity is still paying for. Far more common is mindless greed. It is the greed that kills the golden goose, looking for those golden eggs. Mindless greed kills the game for everybody. At least John Rockefeller amassed an empire, which was his goal. People in the thrall of mindless greed destroy everything around them.
In the end, ingenious greed is still not too smart, because it will eventually destroy earth if allowed to guide all actions, as it does in today’s capitalism. Mindless greed however, is, well…mindless. Greed always leads to disaster in the end, but mindless greed gets there quicker. When John Rockefeller wiped out a competitor and saw talent among his victims, he would hire them. He soon amassed one of the most capable, and ruthless, groups of men ever assembled. That was part of Rockefeller’s genius. Those in the grip of mindless greed are blind to the fact that the key reason that Dennis’ ventures are successful is Dennis. As they steal his company, Dennis is the first “useless” thing they throw overboard (along with his “crazy” marketing plans). On more than one occasion, the thieves made their move, and Dennis realized the venture would collapse without him running it, and he offered to keep working for the thieves, even after they stole the company, because he did not want his customers/employees/humanity to get hurt. The thieves kept hacking away at him, trying to bury him even deeper…and the roof always caved in on their heads, as they sat there with their feet up on Dennis’ desk, marveling at how clever they were.
Dennis could barely walk, his wife was pregnant with their second daughter, and Dennis was once again on the streets. Few people would give a cripple a job, and Dennis applied for food stamps. He finally got a job selling a medical alert pendant, and between that and food stamps the family survived. Dennis started thinking big again, and tried getting his boss to go after hospitals, selling the pendants hundreds at a time. Just then, he got a call. It was that man from the mall show who was enthralled by the LamCo demonstration unit. He knew what had happened with Dennis’ company being stolen, but he had to get his hands on one of those LamCo systems. Dennis dug up the name of the guy who displayed that LamCo system, and called him. Dennis asked if he would be interested in selling one of those solar systems, and if Dennis could get a commission of some kind if he sold it. The man promised Dennis a finder’s fee of $1000 if the man bought the $12,000 system.
The LamCo dealer picked Dennis up, and they went to the man’s house. The man lived in an impressive home in a nice neighborhood, and he turned out to be a scientist. Dennis knew nothing of the system at that point, and the scientist and the LamCo dealer talked until 3 AM about many technical issues. Dennis finally interrupted and said, “Have you heard enough to pay $12,000 for the system?” The scientist handed Dennis a check for $3000 as a down payment. The next day Dennis met the LamCo dealer’s boss, bought the rights to his county for $25,000 (to be worked off in sales) and went into training to understand the LamCo system. It was obviously no run-of-the-mill solar system. He soon manned the LamCo booth at a mall show, for half of the leads it provided. He was excited about the system, and bragged to people at the mall that his solar system was making hot water in the mall, at night, while the other solar systems just sat there looking good.
Dennis walked away from that mall with 21 qualified leads, for a $12,000 piece of equipment that sold to a homeowner. That kind of number, for qualified leads, for something that expensive, to go on a home (one of the most secure sales from a lender’s point of view, because homes are immobile), for a weekend of work, was a salesman’s dream.
Dennis drove to his first appointment in the broken down ambulance he used for his medic alert pendant selling. He was nervous, and still did not know much about how the system worked. He drove up in the banged-up ambulance, used his walker to approach the house, and was met by his prospective customer, who helped him into his home. The man began bombarding Dennis with technical questions. Dennis did not even understand the questions; much less know the answers. Dennis asked the man what he did for a living. He was a scientist who worked in the Freon division at DuPont, and a refrigeration expert. Dennis gave him the keys to the ambulance and asked him to take a box out and bring it in. Dennis proceeded to have one of his life’s most educational nights. The DuPont scientist was ecstatic about the LamCo system, and spent the night poring over the technical data in the LamCo literature. He educated Dennis on everything he could about the system, from the simple to the sophisticated. They got lost in the lesson. Dennis was startled to hear birds chirping, and looked outside to see the sun coming up. They had spent all night going over the LamCo system. The scientist said there was something wrong with the data, and that the COPs the system could attain should be higher than the literature said. The scientist predicted the system could do a COP of 6 in Philadelphia, when the LamCo literature said it would do a COP of 3. Dennis eventually got the president of LamCo, that Colorado cowboy, to admit they had cut their COPs in half in their literature so the engineers who “knew” it was impossible would stop laughing at them. The letter below from a household-name American corporation surfaced about that time, where the engineer who measured a COP of more than 7 remarked that the LamCo literature predicted a COP of 3.37 under those conditions. LamCo was indeed cutting its claim in half.
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I have cut out the engineer’s name, and his company’s. Consistent with this presentation of Dennis Lee’s story, names are usually left out. They are not important, and I am trying to honor privacy concerns as much as possible. Anybody who researches this issue can easily discover all the blanked-out names. A long-time friend of mine has a father who was an executive at that corporation that tested the system. On his own, partly because it seemed incredible, my friend’s father checked into that engineer who signed the letter, and it checked out.
Dennis was running into the opposite problem that most salesmen run into. Usually, salesmen have to stretch the truth to sell their wares. It is called puffery, which is as American as apple pie, and a practice that probably dates back to history’s first sale. Dennis told LamCo that he wanted to be able to at least tell customers what it would do, not half of what it would do.
Dennis was excited about the system before his all-nighter with the DuPont scientist. He was practically in orbit after that night. The other twenty leads did not know what hit them. Dennis immediately began thinking big, as usual, and dropped the $12,000 sales price to $8500. The cost of the system to him to buy and install it was $8000, and he figured he could increase sales by decreasing his margin. Those twenty other leads had already heard the $12,000 price tag, and all immediately went for it at $8500, plus Dennis was so on fire that he could have easily sold them for $12,000. Dennis was thinking very big, though.
Dennis met his East Coast distributor, and hoped that twenty-two sales in one month was good enough. He had given most of his commission away in discounting the systems, and asked them to forgive his lack of performance. Dennis thought the systems were easy to sell, and wanted a chance to really start selling them. The man who had just stolen Dennis’ company stalked him, and tried outbidding Dennis for the county’s LamCo dealership. Dennis was worried, and the East Coast distributor took Dennis out to lunch. Dennis beseeched the man to give him another month to try selling more systems. Dennis hurriedly ran ads for salespeople, and called his customers and offered them $500 finder’s fees for any friend who came to Dennis’ presentation at the ritzy DuPont hotel in Wilmington, Delaware. Dennis used his deposit money to rent out the ballroom and buy a five-course meal for those who showed up. Dennis arranged the room, and Mr. East Coast Distributor brought the LamCo demo unit to the facility, and as they wheeled it up through the ballroom, the man marveled over the place, sneaking a glass of champagne from a table, not suspecting that the room was reserved for Dennis’ potential customers.
Dennis unveiled his Systems for Savings (SFS) program that night. Dennis was selling the LamCo system for $10,000 apiece. It qualified for Carter’s Renewable Energy Source Tax Credit, so the federal government was subsidizing $4000 of the purchase price. The remaining $6000 balance could be paid for from proven energy savings. At that time, in that region, the electricity and gas/oil curve had the system paying for itself if it only got a COP of two. Dennis found another rocket ship. He sold 280 systems that night, and sold 300 systems in two months. Dennis thought it was good enough to get the county dealership free from the clutches of the thief who stole his last company. Mr. East Coast Distributor was at the show. Although he was cool with Dennis at their lunch meeting, he dropped his poker face after the show. He begged Dennis to be his partner for the East Coast, and admitted that LamCo had not even sold twenty systems on the entire East Coast during the past three years. The dealers he sold usually only sold the system they got with the dealership before they went out of business. Mr. East Coast Distributor had sold nearly as many dealerships as systems. Three hundred in one county in two months was not a bad start.
The East Coast distributor was technically proficient, but could not sell a system. That was the main problem with LamCo. Their pitch went into technical talk, and only technical types would buy them. When Dennis arrived on the scene, the LamCo customers were so technically proficient that half of them had installed the system themselves. Dennis knew that Mr. and Mrs. Average American would neither comprehend nor be impressed with the technical talk, especially if they had to part with $12,000 for it, based on information they largely could not comprehend. They wanted to hear it would save them money. With Dennis’ SFS program, the customer really did not even have to care if it worked. All their risk was removed with Dennis’ program. That was part of Dennis’ genius. More than a hundred companies came and went over the years, trying to make the LamCo system happen, but Dennis was the only one who knew how to sell them.
I have never seen a more astute observer of the human condition than Dennis. Dennis once told me that the reason all those other LamCo dealers and others failed was because they did not understand that the LamCo system was not one that saved energy; it was one that saved money. All the times Dennis would have his companies stolen, the thieves immediately discarded Dennis’ “crazy” marketing plans, and tried selling the systems for cash (the quick kill). They always said, “Mr. Customer, this is a great piece of equipment, and the price is $10,000 cash.” They all promptly went out of business, unable to sell any systems. Dennis’ marketing programs were the real gold, not the LamCo system, but the greed-blinded thieves could never comprehend it.
Dennis did not want to have a partner, as his previous experiences soured him on that. Dennis formed a joint venture with Mr. East Coast Distributor. Dennis would sell them as fast as possible, and Mr. East Coast Distributor could try installing them as fast as Dennis sold them. The market for the LamCo system in America was around 5 to 10 million homes, and Dennis wanted to go after them. The LamCo equipment was exactly what Carter’s tax credit was encouraging. A one time tax credit of $40 billion would decrease fossil fuel consumption by four times that much over twenty years. It was what the energy conservation movement was all about, and nobody sold anything remotely close to the LamCo system’s performance. Tin can solar collectors on roofs were pathetic pretenders compared the LamCo system.
Dennis soon met the Colorado cowboy who founded LamCo, and Mr. Colorado Cowboy only wanted Dennis to order 20 to 30 systems a month under the current deal. With the LamCo equipment and Dennis’ experience and imagination, a million plays became possible. At about that time, the Delaware attorney general began looking into LamCo’s “too-good-to-be-true” offer, which was actually the “it-does-twice-what-we-say” offer. The systems installed in the Philadelphia area qualified for preferential electric rates from electric companies, because they then heated their homes with electricity. Typical Philadelphia customers saved about 70% of their heating costs. In the example below, the customer saved 100% of his heating costs, because of that preferential rate.
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LamCo was trying to take the company public (sell its stock to the public), and Dennis was the biggest thing LamCo had ever seen. Dennis was flying high, moving to Long Island, about to carpet New York State with LamCo systems. Then the stock deal fell apart, Mr. Colorado Cowboy brought in new management, and suddenly LamCo made it hard to do business with them. They were not filling Dennis’ orders, and began acting strangely. Then Mr. Colorado Cowboy called Dennis at 3 AM, telling him that LamCo had been put into a Chapter 7 (liquidation) bankruptcy, and for $15,000, they could pull it into a Chapter 11 (work out the debts with creditors) bankruptcy. Dennis worked out a deal with LamCo to manufacture the systems and give LamCo a royalty. He sold dealerships, getting a ready-made sales force. With the LamCo system and Dennis’ SFS program, the sky was the limit. They quickly trained their first dealers. Some of the dealers smelled like mobsters, and Dennis told Mr. East Coast Distributor that he would not deal with mobsters.
LamCo’s bank acted strangely. Dennis negotiated a deal with Mr. Colorado Cowboy’s engineer buddy (who took apart that heat pump on Mr. Colorado Cowboy’s roof that fateful day) who was his second in command, and Dennis paid more than $400,000 to LamCo to buy two-thirds of the company and keep it alive. Days after giving nearly every cent he had to LamCo, Dennis came to work to be surrounded by Mr. East Coast Distributor and two ex-soldier karate experts, who took him into a back room. The “deal” they gave him was that if he signed over his company to them, they would not kill him. Mr. Colorado Cowboy apparently had some deal going with Mr. East Coast Distributor, and when Dennis cleaned out his bank account, Mr. East Coast Distributor got some, Mr. Colorado Cowboy got some, and so did their new Mafia buddies.
Once again, Dennis was kicked out of his company. That time, it was worse than that. The two karate goons who helped kick Dennis out of his company lived with Dennis, because they needed help and Dennis took them in. Not only did they kick him out of his company, Dennis was not even allowed to go back to his home and remove his family’s possessions. They were out on the street with only the clothes on their backs. Worse than their clothes and other possessions being taken, all of Dennis’ materials from his UCS days, materials he needed to resurrect UCS one day, were also now beyond reach, and that was the worst loss of all for Dennis. Those goons probably never realized how close they came to dying at Dennis’ hands, as Dennis seriously thought of settling things the Vietnam way. Dennis then had his moment of truth. He conquered the urge, and has never considered violence as a solution again. I am a pacifist, but I well know the urge to kill people.
Years later, Dennis heard what had happened. Mr. Colorado Cowboy took his chunk of Dennis’ money and lived in South America for a while. Mobsters took over the operation that Dennis and Mr. East Coast Distributor had jointly ventured on. Then they pulled off a real scam, taking in more than a million dollars in dealership and system deposit money, and then folding the operation. That is a familiar tale. The police rarely catch the real crooks, nor do they really seem eager to. Mr. East Coast Distributor “disappeared” soon after he helped rob Dennis of his company. He probably got cement shoes from his new gangster buddies.
When people catch a glimpse of Dennis’ grand vision, they often get dollar signs in their eyes and greed takes over. In addition, when the sledgehammer of the system crashes down on Dennis as the energy monopolists protect their turf, fear takes over with people, and sometimes there are grotesque combinations of both. I have watched people participate in stealing Dennis’ companies while he was in a headlock from the establishment, although they knew deep down that if they successfully stole his company and did something productive with it, they would end up like him. I had to wonder what, if anything, was going on inside their heads. The most common explanation Dennis has heard as he suffered those slings and arrows is: “It’s nothing personal; it’s only business.”
About the time his company was stolen once more, Dennis went home to Yakima to visit his family, and show them his fourth child, his first son. His two daughters, born between his first child and last, are adults today. Dennis’ son died of crib death while visiting his family, and Dennis and his wife could not seem to move away, especially with their East Coast lives destroyed. It was early 1984. Washington was the hydroelectric state, and at the one-cent-per-kWh price that prevailed before 1982, there was no way that Dennis could ever sell his system, energy being so cheap there. Electricity was so cheap that much of Washington heated with electricity, and electricity-intensive industries such as aluminum refining moved there, to take advantage of cheap electricity.
I remember the TV news in the winter of 1981-1982 in Seattle. Nearly every night there was a top-of-the-hour story about “Whoops.” During the Nixon years there was nuclear euphoria, and the Nixon administration set a goal of 1000 nuclear reactors in America by the year 2000. During those years, a study showed that the watery Northwest would run out of hydroelectric power before long, and the Northwest utilities, led by the Bonneville Power Administration (BPA), formed the Washington Public Power Supply System (WPPSS), and billions of dollars of bonds were floated to build five nuclear reactors. The repeated energy crises in America, which lowered the demand curve, the Three Mile Island accident, skyrocketing projected costs for building nuclear reactors and the like doomed Nixon’s nuke-in-every-county plans, and the WPPSS nuclear plants were mothballed, and in January 1982, Moody’s bond rating service suspended ratings on the bonds for the 4th and 5th reactors. In July 1983, WPPSS declared a formal default on $2.25 billion of its bonds, triggering the largest municipal bond default in U.S. history.[8] WPPSS began being called “Whoops” in the early 1980s.
When Dennis was in Yakima, electricity had just leapt from one cent to three in short order, and five cents appeared to be around the corner because of Whoops. The electric companies were running full-page ads, and suddenly electricity conservation was the most economical form of production, so their ads stated. A heat pump that averaged a COP of five in the Minnesota winter began looking very feasible in Washington. Yakima was in apple country, and they used hot water and hot air to process the apples. Originally Dennis thought that he could sell his heat pump to apple processors. Dennis began doing experiments in the Yakima summer, and the LamCo system was getting COPs of 12. A business tycoon who ran Yakima approached Dennis and told him he would not succeed if the tycoon did not allow it. The tycoon kind of compelled Dennis to become his partner, and Dennis had nothing else going on, so he joined with him.
Dennis’ brashness and brilliance had been demonstrated long before, during his East Coast days. The LamCo-style heat pump remains the best heating system the world market has ever seen, and in the early days of his involvement, Dennis labored mightily to get American business interested in it. He canvassed Wall Street; he approached heat pump manufacturers; he did everything he could to create a new industry around the LamCo-style heat pump. One day, his persistence paid off, and the plant manager of America’s largest heat pump manufacturing facility let Dennis into his office. Air-to-air heat pumps attained a COP of around two in those days, but were relatively easy to install. The plant manager let Dennis into his office and said, “Well, Kid, so you have a superior heat pump, eh? I know about your heat pump. Even if it outperformed ours, the idiots in the field could never install one of yours properly. Come with me, Kid.” The plant manager then led Dennis into the facility. It was one of Dennis’ more sobering experiences. As far as the eye could see, sparks were flying and people were building heat pumps. After letting Dennis take in the scene for a minute, the plant manager said, “We did two billion dollars worth of business last year, Kid. What did you do?”
The plant manager was being slightly disingenuous, if a tad sardonic. The air-to-air heat pump was easier to install, but performed poorly compared to a properly installed LamCo-style heat pump. The plant manager was partly accurate. At that time, installing a LamCo-style heat pump was the province of a highly trained refrigeration mechanic, and the panel array was fabricated at the customer’s site, which not only took time, but also required skill and experience. Although half of the early LamCo customers installed their own systems, many did not work well because they were not properly installed. After the panels were placed, the tubing braised and the system sealed, then the lines had to be evacuated by a vacuum pump for about 24 hours, then the system needed to be charged with refrigerant, there was a “balance” the system needed to attain, and other problems.
There was a newborn and evolving science of making the LamCo-style heat pump work properly, which was being discovered by trial-and-error in the field. Air-to-air heat pumps were about at the appliance level of development, being relatively easy to install, although their performance for heating was poor. The plant manager was not going to admit to Dennis that electric companies were the marketing conduit for heat pumps, as selling a heat pump usually meant replacing or complementing something that burned fossil fuels, so the heat pump was usually a way for the electric companies to expand their market into fossil fuel territory. A COP of two doubled the efficiency of the electricity used, so it could compete with fossil fuels in certain markets. A COP of six would mean only one unit of electricity used for six units of heat farmed from the environment. That is not much electricity, and in an all-electric state like Washington, replacing an electric heater with a LamCo-style heat pump would mean an 83% decline in electric consumption for heating. In Washington, that was a lot more conservation than the electric companies had in mind, though it would take Dennis awhile to figure that out.
Soon after Dennis got into the business, it became obvious that the way LamCo heat pumps were installed would not work, at the level of sales that Dennis had in mind. So Dennis became involved with developing the technology of the LamCo-style heat pump. In all the libel and derision directed Dennis’ way since 1986, none of his detractors have ever mentioned how he helped develop the LamCo-style heat pump. Dennis was instrumental in making it better. He invented what he called the “heat-injector,” which was a LamCo-style heat pump with an upright panel array. In the above pictures, that kind of array is seen; those upright panels, white with frost, looking like a big weather vane. Not only was the panel array pre-fabricated, it would also be evacuated and charged with refrigerant at the factory. With the heat injector, the panel array was placed on top of the system’s guts, making the whole thing a self-contained appliance, with installation largely limited to hooking up the water and electric lines. Dennis was instrumental in making numerous improvements in the technology, although he often had to fight his engineers and technicians, as most could not think past their textbooks and training.
Dennis is not a scientist or mechanic, but he had the kind of creative and thoughtful mind that most engineers do not have. In order to become a capable LamCo-style heat pump technician, refrigeration mechanics had to discard much of what they learned in the refrigeration business. In all refrigeration and air conditioning applications, the goal was removing and getting rid of heat. The LamCo-style heat pump did the opposite: acquiring environmental heat. While the evaporators in industrial freezers and air conditioning systems took heat from closed rooms at constant temperatures, the LamCo-style heat pump’s evaporator sat in the sun, wind and rain, taking heat from the environment. An air-to-air heat pump held a few pounds of refrigerant; the LamCo-style heat pump held sixty pounds.
That huge evaporator array, sitting in the sun, taking heat from the environment, introduced parameters never before encountered in the refrigeration world, and new science and practice had to be developed. For instance, in refrigeration training, the rule of thumb was that a system could process about 12,000 BTUs of heat for every horsepower of refrigeration pump used.[9] The pressures generated by the LamCo-style panels were much higher than a standard heat pump or refrigeration application, so the LamCo-style systems often delivered about 25,000 BTUs per horsepower, which refrigeration textbooks said was impossible. Refrigeration mechanics and engineers had to flush that information from their minds, and many could not do it. Dennis did not have those limitations of education.
Dennis was not simply trying to get heat pump manufacturers interested in the LamCo-style heat pump. He was also knocking on Wall Street’s door, trying to get somebody to see what that heat pump, combined with Dennis’ marketing plans, could do. There was so much money on the table, from the U.S.’ awesomely wasteful energy practices, that an immense market awaited a technology like the LamCo-style heat pump. Dennis’ marketing plans were ingenious. Carter’s tax credit could fund the entire cost of selling, making and installing the LamCo-style heat pump, and customers risked none of their money. Until one has seen the shark tank of American capitalism up close, one might think that something like that would take off immediately. There are many examples of truly extraordinary technologies that have been around for generations and still marginalized, such as Rife’s and Naessens’ microscopes, Brown’s Gas, etc., because such technologies threaten the cash cows of established technologies. The problem is probably greater with the LamCo-style heat pump. Not only were there technical problems to overcome, there may be no industry that protects its turf as ruthlessly as the energy industry, as Dennis was about to discover.
Virtually without exception, businessmen were incapable of seeing the genius of what Dennis was doing. Dennis designed a program that would sell like hotcakes, but the profit would not be fully realized for several years. Such a plan seemed ludicrous to most businessmen, especially when they smelled the blood in the water of a quick kill. However, just before Mr. Colorado Cowboy helped steal hundreds of thousands of dollars from Dennis as they collapsed LamCo, Dennis finally got the attention of somebody who understood. He was the chairman of the board of a household name financial corporation. He understood what Dennis was doing, and Dennis was getting to the short strokes of getting that corporation to invest one billion dollars to carpet America with the LamCo-style heat pump. Just then, Mr. Colorado Cowboy and friends made their play, blowing apart the billion-dollar deal so they could chisel a few hundred thousand from Dennis. Those chiselers and gangsters only wanted to steal a couple million dollars, and they blew apart the greatest opportunity America had for real energy conservation during all the years that have passed since the Oil Crisis of 1973-1974.
In Yakima, Dennis encountered a different kind of mindlessness. Mr. Rich, who ran Yakima, thought that those LamCo panels did not look sexy enough. He told Dennis that nobody would buy one of those systems, as ugly as they were. Dennis replied that people would not care what they looked like, if it saved them $20,000 in energy bills. Soon after Dennis became involved with Mr. Rich, they became involved with an inventor who was making a solar system that looked like R2D2 from Star Wars. It was called “The Bubble.” Its beauty entranced Mr. Rich, and he told Dennis that it would sell because of its sexiness. Dennis married his heat pump technology to it, and it eventually got a COP of three under good conditions, but it was not going to save the customer that much money. Mr. Rich fought Dennis every step of the way, and eventually told people he did not need Dennis anymore, with his “crazy” ideas. It was late 1984, and Dennis had wasted enough time in Yakima. There was only one year left of Carter’s tax credit, and he had only one more year to get the industry off the ground. Driving a beat up station wagon with bald tires over the Cascade mountains during a snowstorm, with his wife praying that they would not be killed, with twenty dollars in his pocket, Dennis rolled into Seattle with nothing but his resolve and talent.
Dennis has always built his companies from scratch after they were stolen or wiped out. He and his wife have developed unique skills from having to do that time after time. Building a company that way is an amazing feat. In Seattle, Dennis entered a new phase of his adventures. When LamCo swindled him, what hurt him almost more than anything else was the bank that held the lien on LamCo’s assets would not let Dennis get the rights to LamCo’s patent.
Patents are largely a fool’s dream of protection from competition. Patents usually only protect large companies from other large companies, and even then the protection is more theoretical than actual. Wiping out the theoretical patent protection of the little inventor has been an American specialty for generations, particularly noticeable in the automobile industry.[10] Dennis did not know it, but the patent was worthless. Nevertheless, people thought it was worth something, and what happened, unbeknownst to Dennis, was that a West Coast LamCo dealer seized that patent through the bank. In Seattle, that dealer bragged to Dennis about what he had done, with no inkling of what his play had killed. When Dennis heard that guy bragging about it, he laughed. Obviously, it was not meant to be at that time, when Dennis was on the brink of his big deal.
In Seattle, a bank had gone into business, making the LamCo heat pump from the original patent that the dealer essentially stole. It was an incredible stroke of serendipity. The bank had invested a million dollars, and had a manufacturing facility. They had virtually no idea what they were doing, however, and were building them from the ten-year-old patent. With Dennis’ help, the technology had advanced a long way from what was presented on that patent, and the bank also trying to sell them for cash. Their efforts were doomed. Dennis showed up in his beat-up station wagon and no place to sleep, and told the bank that their problems were over, and did not take Dennis long to start making waves. In February of 1985, with less than a year of the tax credit remaining, Dennis bought out the bank’s dealers and was going to bail the bank out. They would not only recover their investment, but Dennis would take them to the moon with him. He was about to carpet Puget Sound with the LamCo-style heat pump.
Dennis had been trying to attract the electric companies’ interest, believing the full-page ads about energy conservation. In reality, the electric companies were perpetrating a huge fraud upon the public, and Dennis threatened to ruin the racket. The economic reality was that the electric companies sold electricity provided by the Bonneville Power Administration (BPA), from all the hydroelectric dams that dotted the watery Pacific Northwest. The BPA was the wholesaler, and the local electric companies were retailers. Partly because the federal government absorbed most of the dam-building costs, residents of the Pacific Northwest had the United States’ cheapest energy bills. Because electricity was so cheap, electricity-intensive industries such as aluminum refining were located there, and many homes used electricity for heating, generally with electric heaters.
Electricity, when generated using fossil fuels, is an inefficient method for heating, as energy is wasted at the power plant due to entropy. Hydroelectric energy is not inefficient in that way, as it merely converts one form of mechanical energy (flowing water) to another (electricity). There are no thermodynamic, energy-conversion issues to contend with. Hydroelectric energy, however, is ultimately derived from the sun’s energy that fell on earth’s oceans, the latent heat of vaporization being carried in clouds to be dumped onto mountains as rain. The energy is released as gravity brings the water back to the oceans, and is farmed by using dams and hydroelectric turbines, like a windmill farms the energy of wind, which is also created by solar energy. In U.S. energy economics, at the macroeconomic and microeconomic level, burning fossil fuels at the home is several times cheaper in obtaining a BTU of heat energy than it is to burn that fuel in an electric plant and use the resultant electricity to power an electric heater in the consumer’s home. However, when ratepayers paid one cent per kWh for their electricity, heating with electricity was cheaper than fossil fuels. So, like no place else in the United States, many Washington homes heated with electricity, and most of an all-electric home’s electric bill was used to heat the home.
When electricity went to three cents and higher to pay for Whoops (I pay more than six cents per kWh in my Seattle-area, all-electric home), as the ratepayer, as with the taxpayer (as in the S&L scandal) always holds the bag in the end, fossil fuel heating suddenly became a viable option for Washington residents and businesses. If Washington ratepayers en masse abandoned electric heating for fossil fuel heating, the local electric companies faced a disaster, as far as local markets went. The electric companies cooked up a scam to keep their markets, and the ratepayer was going to pay for it. They concocted the “Weatherization Program.” On one hand, there would be some benefit for the consumer, but the purpose was to preserve Pacific Northwest electric company revenues and profit margins. When the 1970s energy crises rolled through the world economy, Americans and residents of other industrialized nations discovered the benefits of insulation and other energy-saving technologies. The projected increase in energy demand for U.S. households did not materialize, which helped doom Whoops. Energy consumption per household in the United States in 2002 is about a quarter less than it was in 1973.[11] Most of the savings came from insulating homes, to lower the energy consumption for heating and cooling.
If a Washington resident changed from electric heating to gas, for instance, his electrical usage would fall by more than half. He would also need to invest thousands of dollars in a gas furnace, and probably have to pay to have ductwork run through the home. The prospect of changing from electric baseboard heating to fossil fuel central heating could be daunting, but if a homeowner’s electric bill increased by a factor of six due to Whoops costs, it would be worth it. Even more likely was a homeowner with a central electric furnace converting to a gas furnace. The Weatherization Program was designed to prevent homeowners from converting to fossil fuel heating. A cornerstone of the Weatherization Program was selling heat pumps to residents. At a COP of two, a homeowner’s electricity consumption would be halved for heating. A standard heat pump cost several thousand dollars, and did not qualify for the renewable energy tax credit. If the homeowner’s heat pump costs were subsidized, he might be induced to buy it rather than a gas furnace. It was still a hard sell, but if the electric companies manipulated the consumer with a propaganda barrage, they might pull it off. That is what all those full-page ads that Dennis saw were about.
Dennis thought that if the electric companies gushed over a heat pump that saved half of the homeowner’s electric consumption, they would be ecstatic about the LamCo-style heat pump that not only saved 85% of consumption, but also qualified for Carter’s tax credit. However, that was far more conservation than the electric companies had in mind. The electric companies were looking at perhaps $20,000 in lost electric revenues for every LamCo-style heat pump installed in Washington, during its estimated life. It simply came down to money. The LamCo-style heat pump could have meant billions of dollars in lost electric revenues for the electric companies.
It is easy to see that in the long run it would be good for everybody if the energy conservation that the conservation that the electric companies publicly said they wanted, came to pass. No American corporation, however, looks far beyond next quarter’s profits. Making a profit is what it is all about for corporations, and maintaining market share, especially a monopolistic/oligopolistic one, is how those profits are ensured. Eliminating 80% of heating consumption in all-electric homes would be bad for business, as far as the electric companies saw it. The Pacific Northwest’s electric companies vigorously promoted heat pumps in 1984. There were heavy inducements waved under homeowners’ noses in those days. The electric companies would subsidize the heat pump purchase, offering zero-interest financing and other gimmicks. As Dennis began figuring out what was really happening, he looked at the numbers. If a homeowner was induced to buy a heat pump, raising the general electric rates paid for the “subsidy” he received. Essentially, the homeowner who bought a heat pump had the purchase unwittingly subsidized by his neighbors. That was the game the Pacific Northwest electric companies were playing in 1984, and Dennis stumbled right into it, thinking the electric companies would throw him a ticker tape parade. He got their attention, all right, with the BPA’s energy conservation department thinking of Dennis and nothing else, for months, as eventually admitted by the BPA itself. Dennis and his heat pump was the scariest thing they had ever seen.
Accordingly, they began throwing their weight around early on, as Dennis made a run at it before the tax credits expired at the end of 1985. That bank was on the fast track to going out of business, with their investment in the LamCo-style heat pump. In February of 1985, with less than a year to go, Dennis kicked it into high gear in Seattle. He bought out the bank’s dealers and sold more than 100 systems. He got a different bank to finance the tax credits for his SFS deals. Suddenly, that bank reneged on the deal. Dennis was going to bail out the “LamCo” bank, and use them to give the business credibility. He contacted the “LamCo” bank, and thought they would be happy to see system orders and the high-quality contracts he had with homeowners. He met with the bank representative, and Dennis got his first inkling that something was awry. The bank representative was impressed with Dennis’ more than 100 contracts (the bank had sold only forty systems during the previous three years), but the bank did not even want to do business with Dennis. Dennis was stunned. “Why?!” he said in amazement. The bank representative then gave Dennis the news:
“Off the record, Dennis, our bank president is embarrassed to do business with you. There’s something big going on here and I don’t have any idea what it is, but I’ve heard that no bank is going to take your deals. We don’t even want to be involved with this thing. I know what you are doing and I see nothing wrong with it, but I don’t know what I can do. Someone is out to get you.”[12]
After delivering that unofficial message, the bank representative officially fired Dennis as a dealer of their heat pump. All Dennis ever wanted was somebody who could build, install and finance them as fast as he could sell them. There was another company in California, also on its way out of business, which was making the LamCo-style heat pump. Eventually, everybody fell by the wayside, that bank even going out of business, and Dennis eventually had to make the systems himself.
Dennis just went for sales, stacking up contracts. With no local bank willing to fund the contracts, Dennis instructed the salesmen to ask the customers to go to their banks themselves and get the tax credit loan, on their own account. The banks would not even allow that, telling their customers that Dennis’ company was a scam and he would skip town with the money. Dennis was dumbfounded. Somebody was out to get him, for sure. He just did not know who it might be.
In the spring of 1985, Dennis finally found another person who understood. It was another chairman of the board, of a finance company in Spokane, far enough away to not be intimidated by whoever was poisoning the Seattle climate. The man became excited. He was a shrewd businessman who built a finance company from scratch. He understood what Dennis was doing, and wanted to be part of it. To this day, he is the only man who ever committed serious money to fund Dennis. Mr. Financier also wanted a piece of the action, and one of his employees got Dennis involved with some people who sold Dennis a shell company.[13] When Dennis bought the shell, he owned more than 85% of the stock, and Mr. Financier got a 10% piece of it. Dennis quickly reached 1000 contracts for the system, and Mr. Financier committed a $10 million line of credit to finance them.[14] It was looking like Dennis was finally going to make that hay while the tax credit sun still shined. He thought he just might build that industry for the superior technology, as he had dreamed of for several years by that time.
An article appeared in the local papers, in early June 1985, just as Mr. Financier was coming on board. The article called Dennis’ company a scam, the equipment worthless, and stated that it would not qualify for the tax credit. The article further stated that a local electric company spokesman called for the Attorney General’s office to investigate such an obvious scam, as well as all solar companies in Washington. The LamCo system had always qualified for the tax credit. It was not a typical heat pump, and Dennis eventually testified to the IRS regarding the LamCo-style heat pump, and even tried helping the government make the tax credit accountable, as the solar systems were largely real scams. The electric company even went so far as to say that they had repeatedly asked Dennis’ company for information about the LamCo-style heat pump, and Dennis had stonewalled them. That was in the Big Lie category. The opposite was true. By that time, Dennis had done everything he could think of to get the electric companies interested in his heat pump. He still thought they would love what he was doing. One day, he even had one of his units put on a truck, and had it running in the electric company parking lot, begging them to come out and test it. They refused to even come out of the building.[15] When that article appeared, Dennis began suspecting who might be “out to get” him.
A few days later, Dennis bought out that “LamCo” bank. In July, it was looking like Dennis was going to make it happen. They reached 1000 contracts, even though the electric companies were trying to talk customers out of signing Dennis’ contracts, even though there was zero risk to the customer. Just then, the Attorney General’s office began an investigation of Dennis’ company. Dennis heard the rumors and called the Attorney General’s office, asking them what was happening. They denied even knowing who he was, for another Big Lie. Dennis was besieged with reports that all the electric companies were openly calling his business and heat pump a scam. At the same time, a man came to Dennis’ office and sold himself as a consultant who could smooth things out between Dennis and the electric companies. He was a corporate hit man from the BPA. Before 1985 was finished, he would be responsible for many evil deeds, including the death of one of Dennis’ employees.
Dennis was getting tired of the rumors and lies coming from the Attorney General’s office and the electric companies, so he called a meeting of all the electric companies, to be held on August 15, 1985. During the summer of 1985, Dennis’ stock in his company made his net worth about $50 million. They built a factory and were training installers, and it was looking like Dennis was going to sell and install thousands of systems before the tax credit expired at year’s end. After fervent beseeching of the electric companies to attend, the August 15th meeting was largely only attended by Dennis’ new employee, the BPA hit man, and two young people who posed as university students interested in conservation. It later turned out that those two “college kids” were “investigators” for the Attorney General’s office. They later acted like children during the “investigation,” giggling at highly inappropriate times, and Dennis would eventually call them Hansel and Gretel in his writings.[16] Dennis filmed the meeting that all the electric companies were invited to. It was a catered event, and Dennis spoke at the nearly empty table, set with the food for the electric company representatives that never showed up. The next year I watched that video, and it was the only time I ever saw the BPA hit man.
Ms. Deputy Attorney General led the investigation. By the end of summer, Dennis was flying high, with sales streaming in, systems being manufactured and installers trained. Mr. Financier’s stock in Dennis’ company was worth millions of dollars, and he sold Dennis a plush house he owned in Bellevue (with a weight room and pool in the basement), for more stock in the company, and Dennis was finally making the Big Time. Unknown to Dennis, the evil deeds were just beginning. The electric companies were not going to stand by and watch Dennis wipe out their market, even though they publicly said they wanted what he was doing. They called in their favors.
As autumn rolled around, the company was in a frenzy to make and install the systems they sold. Although I did not witness that heyday at his Seattle company, I saw it in Ventura, and it was like watching a rocket take off. Dennis’ efforts in 1985 in Seattle stand today as the biggest effort ever made in the United States to bring viable alternative energy to the marketplace. Nothing I know of has come close. Accordingly, the energy gangsters’ tactics became the most vicious. Ms. Deputy Attorney General had no leg to stand on regarding her “investigation.” Even though the “scam” rumors abounded, the customers risked none of their money with the SFS program. The system had been installed all over the United States, and worked beautifully in climates far harsher than Seattle’s, such as in Minnesota, where many happy customers of the LamCo-style heat pump lived. The system was legitimate, the marketing program was the most risk-free one the American market had ever seen, and Dennis was carpeting the Seattle area with salesmen who were closing on about 70% of their presentations, many who had no experience selling anything. In the marketing and sales world, what Dennis was doing was unheard of.
There were many hazards and oddities of those days, and some bear mentioning. Dennis’ company took off like a rocket for a few reasons. One was the market that Whoops and the hydroelectric situation had created, along with the tax credit subsidy and the world’s best heating system. Add in a marketing Einstein like Dennis, who is the Indiana Jones of alternative energy, and it was an explosive situation. Dennis created a “cookie cutter” marketing program, and flooded Seattle with his program and salespeople. As I later saw in Ventura, the skill was in creating a program that worked, and then it was the world’s easiest sale. Many of Dennis’ salespeople quickly got big heads, thinking that their big incomes and easy sales were because they were such brilliant salesmen. With Dennis’ program, a chimpanzee could have closed those deals.
The electric companies were not going to take it lying down, and took advantage of how the American public is brainwashed. Advertising and public relations (PR) are methods that corporations use to manage their image, to help them appear benevolent, when they are really all about making money any way they can (appearing to serve others, when really the goal is being self-serving - the classis tactic). If they were truly benevolent, not much PR work would be necessary. Virtually all advertising and PR is designed to change people’s perception of reality. In the wake of Whoops, the Pacific Northwest electric companies suddenly discovered the virtues of conservation and created conservation departments, putting on the appearance of being the consumer’s best friend. When customers heard the incredible, zero-risk sales pitch given by Dennis’ salesmen, many called the conservation department of the local electric company, asking them if the Lam-Co-style heat pump was a good conservation idea. That would be similar to asking a Catholic priest what he thought of the Cathars in about 1215. The electric company conservation departments responded unsurprisingly, given their true goal of eliminating the competition, especially one as scary as Dennis; they told their customers that Dennis’ company was a scam, the heat pump worthless, etc. They told every lie they could dream up to frighten away those customers from dealing with Dennis’ company. To cap it off, they said Dennis was being “investigated” by the Attorney General’s office, an investigation that the electric companies publicly admitted that they initiated.
A fortunate thing about the LamCo-style heat pump was that every component but one was a standard refrigeration and electrical component. The only “exotic” piece of that heat pump was the evaporator panel. That panel presented a serious problem to anybody who tried getting into the business, however. The panels were not difficult to make, but not many places had the facilities to fabricate them. Huge industrial presses made the panels, and nobody could order eight panels from them to make one LamCo-style heat pump. The facilities with industrial presses only made the panels in lots of 1000, so somebody had to buy panels for 125 systems, or none at all. It was an economy-of-scale factor that doomed small operations. That was another reason why only Dennis was successful in the business. That industry Dennis dreamed of could only be created by selling, making and installing those heat pumps by the hundred.
Another problem Dennis had to constantly fight was what engineers and refrigeration mechanics thought they knew. A young engineer was in charge of the manufacturing facility that the Seattle “LamCo” bank had funded. The kid was about my age, was building them from the worthless patent of ten years earlier, and was referring to his refrigeration textbooks to guide him. It was a path to disaster. When Dennis began making the Big Time, he hired the kid, but had to continually correct what he was doing, because Mr. Young Engineer could not think past his textbooks. For instance, the LamCo-style heat pump operated at much higher pressures than typical refrigeration applications, which was also partly why it got much higher COPs than typical heat pumps. Mr. Young Engineer however, believed that his mission in life was making sure that no component would fail for twenty years on the LamCo-style heat pump. Consequently, he designed the system Dennis had built in his factory to choke down the pressures coming to the refrigerant pump from the panels. Choking down the pressures would ease the strain on the “compressor,” but would also kill the heat pump’s efficiency. It could turn a COP of six into a COP of two. Instead of saving the homeowner 85%, it would only save 50%, and instead of saving the customer $20,000, would only save perhaps $11,000 (in Washington, and far less elsewhere, where it competed against fossil fuels). Nobody would pay $10,000 (or $6000, after the tax credit was considered) for a piece of equipment that would only save $11,000 over many years. The customer might as well buy a gas furnace under those conditions. Under the conditions Dennis had already seen the heat pump operate under, a refrigerant pump in a LamCo-style heat pump needed to be replaced every seven years or so, but would only cost $300 (with more engineering, specifically designed for that application, those pumps could probably have lasted twenty). Mr. Young Engineer would gladly sacrifice $9000 in energy savings to save $300 in replacing the heat pump. That was the kind of shortsightedness that Dennis was always fighting with his technical people.
Another example of the limitations in the technical mind was the notion of 12,000 BTUs per hour that 4-horsepower systems could theoretically produce. Mr. Young Engineer read it in his refrigeration textbook, and it became his mantra. He tested a LamCo-style system, documenting 100,000 BTUs per hour with a four horsepower system, which was 25,000 BTUs per hour.[17] Even then, he still could not reject his knee-jerk notion that only 12,000 BTUs per hour was possible. He even testified to the 12,000 BTUs-per-hour notion at Dennis’ preliminary hearing in late 1988, and then his report in his own hand was shown to him, and he hit his forehead, saying that he had forgotten that he had done it, but had to admit the “impossible” when faced with his own report.
The rumor campaign by the electric companies’ “conservation” departments was doing a lot of damage. Customers who immediately signed up for the no-risk SFS offer got scared after hearing the slander concocted by the electric companies. Dennis gave a facility tour to his customers, and they became excited and realized that the electric companies were lying. Many of Dennis’ customers had some illusions shattered, as they compared electric company propaganda to reality, but the tactics worked well enough to still scare off many customers, even after they had signed contracts.
The tax credit would not apply if those systems were not installed and running by the end of 1985. So, during the summer of 1985, Dennis geared up to make and install the systems himself. The manufacturer in California went out of business, and years later Dennis came into contact with the president of that failed company. That president told me that his company was wiped out, just as Dennis began needing systems made as fast as possible, by Chase Manhattan Bank, the Rockefellers’ bank. They made a dirty play and wiped out Dennis’ manufacturer, so Dennis had to make them himself. It is one of many times that the Rockefeller name has come up during the research for this site, including the banking world. Maybe it was a coincidence, but eventually one wonders, when it happens “coincidentally,” time after time.
The Attorney General’s office began making its investigation officially known, not the bold-faced denials they earlier issued. In September, just as Mr. Financier committed $10 million of financing to Dennis’ company, and Dennis stock was worth $50 million, Dennis was summoned to the Attorney General’s office to make a deposition. There sat Hansel and Gretel with Ms. Deputy Attorney General, dropping their “cover” as college students. Hansel and Gretel acted like children, giggling with their all-knowing grins, and Dennis had to finally complain about their imbecilic behavior. By the questions they were asking, it became obvious that they were filling their slings with mud. Dennis did everything he could to cooperate with their “investigation,” and his attorney told them they would cooperate in any way they could with the “investigation,” as the company could ill afford any more bad publicity. It turned out that Ms. Deputy Attorney General was simply sharpening her ax, and waited until Dennis had his back turned.
By October, due to the climate of electric company rumormongering, banking relationships that evaporated overnight, libelous newspaper articles, the Attorney General’s “investigation,” and other unpleasantness, Dennis was thinking of relocating his business. The state of Indiana, suffering from the “Rust Belt” syndrome that had been plaguing the Midwest for years, was rolling out the red carpet, trying to lure Dennis’ factory there. He went to meet with Indiana officials, but had his lawyer tell Ms. Deputy Attorney General that if she needed Dennis to hang around to assist her investigation, he would not take the trip to Indiana. Ms. Deputy Attorney General replied that her investigation was a formality, that everything looked fine, and that they could talk when Dennis came back from Indiana.[18]
Dennis went to Indiana to meet with the officials, and everything was going great, until Dennis’ Indiana contact came to see him in a panic, and asked what was happening. Dennis’ company was splashed all over the Seattle media. Dennis’ wife came to the factory on the morning of October 9, to a parking lot full of TV camera crews and reporters. They asked her about the lawsuit that the Attorney General had filed against them, and her response was, “What lawsuit?” Ms. Deputy Attorney General had engineered a carefully planned media attack, when Dennis was out of state and unable to defend himself. Even though the media had splashed Dennis’ company all over the airwaves, with one newspaper headline reading, “Attorney General Orders Company to Clean Up Act or Get Out of Town,” in fact, no lawsuit had been filed. In a later situation, I saw for myself how media attacks could be used to wipe out companies. Two days later, the lawsuit was filed. The stock of Dennis’ company plummeted in the wake of the media attack, and his stock lost $30 million of value overnight. The so-called lawsuit had dozens of charges on it. Not one of them was legitimate. It was a string of rumors and lies. To demonstrate how legitimate the lawsuit was, one of its charges was that there was no manufacturing facility where the systems were being made. Guess where the lawsuit was finally served to Dennis’ company? At the factory where the systems were being made. The Mafia acts with more integrity than Ms. Deputy Attorney General did then, and Dennis had experience with both.[19]
When a media attack is made that way, it does not matter if the Attorney General was making up everything from whole cloth, which was largely the case. Most people will flee when faced with such an assault. Every customer that had not put money down on the system immediately canceled his/her system order. About 400 customers had put down a deposit on the system, and those were the customers that did not flee. Those customers even signed a petition to ask the Attorney General’s office to stop “protecting” them.
Dennis countered the Attorney General’s media attack with a full-page ad that he wrote on the plane back from Indiana, and it ran in The Seattle Times on October 18, 1985.[20] Public protest buried the Attorney General in calls and letters, and it became one of the two biggest publicity black eyes that the Attorney General ever endured while trying to crush somebody.[21] Suddenly, Ms. Deputy Attorney General was eager to “settle” her so-called case with Dennis. Eventually, Dennis had his customers vote on whether he should settle their fraudulent lawsuit, and they voted for him to, because they would all probably lose their deposit, as the company would be strangled if he did not. Dennis calls it the dirtiest deal he ever did, settling with those people. To this day, Dennis’ detractors use that lawsuit’s settlement as hard evidence that Dennis is a crook. Mr. Deputy even tried that angle on me on the day of his criminal raid, but when he realized that I knew what happened in Seattle, he stopped trying.
A media attack was merely one salvo of many. When the camera crews showed up in the parking lot, the BPA hit man made his move. He had worked less than ten weeks at Dennis’ company, and instead of “smoothing” things out between Dennis and the electric companies, as he had solicited, he instead tried befriending all the key people at the company, and placing doubts in their heads whether Dennis was really fit to run his own company. Until the camera crews showed up in the parking lot, Dennis was flying very high. The BPA hit man then made his play, contacting every key person in the company that morning, trying to incite a mutiny. His plan was for Dennis to come back from Indiana to a company in ruins. It was not a smart move, as the company was in good shape and everybody could see that Dennis was what made it happen. Nobody who mattered was really convinced by Mr. Hit Man’s play, and when Dennis came back, Mr. Hit Man was sent home, with pay, to stop trying to incite mutiny. Mr. Hit Man then waged a several-month-long vendetta against Dennis’ company, which resulted in the death of one of Dennis’ employees before the year was finished.
The attack by Mr. Hit Man was carefully coordinated with the Attorney General’s office, as he was seen with Ms. Deputy Attorney General on more than one occasion. When asked about it, Ms. Deputy Attorney General said she had never heard of the man. Nearly everything that came out of her mouth in those days was a lie. Much later, after she quit her job, she would admit to Dennis that she was merely “following orders” as she tried destroying his company. That was also Eichmann’s defense.
Through great heroism, Dennis’ company survived the onslaught long enough to install those 400 systems by the end of 1985. After that, however, the media and Attorney General attacks, combined with the phony bankruptcy suit that Mr. Hit Man had waged, strangled the company in early 1986, about the time I came to Dennis’ company. Because of what had happened, the systems installed in late 1985 did not work well, nearly thrown on the homes to qualify for the tax credit that expired on December 31, some with only one panel. Mr. Financier was going to be ruined if those systems did not save the customer money in reduced energy bills.
When Mr. Hit Man caused the death of Dennis’ employee, Dennis came to a new level of inspiration. Even though the electric companies, BPA, Attorney General and others acted with great cowardice, siccing sociopaths and toadies such as Mr. Hit Man, Ms. Deputy Attorney General, the media and courts on him, Dennis finally figured out who was behind the attacks. He then declared war on the electric companies, sending them letters, telling them that they had drawn first blood. The day I met Dennis, March 18, 1986, he hired me on the spot, and that night he announced project W.P.P.E.E. at the Seattle Center.[22] I attended that show, and saw my future. The lightning bolt hit me pretty hard when I interviewed with Dennis’ company, and I was going to be able to chase my free energy dreams from my childhood.
Over the years, countless people have blamed Dennis for what happened in Seattle, or used it to call him a crook. None of the charges have ever held water. I do not have the emotional reserves to go into chapter and verse of what Mr. Hit Man, Ms. Deputy Attorney General and their pals did. Dennis’ My Quest and The Alternative do a creditable job of it. My Quest is an amazing document, written from Dennis’ jail cell, and he did not expect to live to see this side of the bars when he wrote it. Killing one of Dennis’ employees did not even slow down Mr. Hit Man. After he helped wipe out Dennis’ company, he changed costumes and cultivated a reputation for being a Tesla researcher. He was a wolf in sheep’s clothing in the alternative energy crowd; the sheep had no idea that the wolf was in their midst. How many like him are in the ranks of such organizations?
While Mr. Hit Man worked his evil, others were at it too. Ms. Deputy Attorney General essentially took Dennis’ customers and Mr. Financier hostage. The entire crux of her case was that one person in Washington innocently misunderstood one thing Dennis said. That was the “crime.” The Washington settlement and the plea bargain Dennis did in Ventura were due to the prosecutors taking innocents as hostage to compel Dennis to settle. They were both for civil law “violations,” not criminal law, and Dennis still spent two years behind bars, while many lives were wrecked.
While the Seattle company was being bludgeoned by the Big Boys, some of Dennis’ dealers made their play to steal customers, employees and the like. One was named Reggie; another was Terry. Dennis was desperately trying to keep the company alive. Employees betrayed the company, becoming spies for the crooks, etc. I was so on fire that I worked for months for free during that spring. Then in June, my boss, the controller, helped engineer the theft of Dennis’ company out from under him. Once again, Dennis was screwed by a stock deal. The controller was entrusted to take care of the stock deal when Dennis bought the shell company, to ensure the deal was consummated properly. That was partly why he was hired. He instead used his position to steal the company. Dennis’ company was stolen mere weeks after Mr. Financier’s company was stolen, by some of the same people who stole Dennis’ company. Mr. Financier thought that the thefts of both companies were related.[23]
When I joined Dennis’ company, I had just left Los Angeles due to a paranormal experience, and began realizing that my profession was worthless. I went through a disillusionment process that lasted for several years. It was a gradual process, with salient events punctuating it periodically. The first one I got with Dennis happened when his company was stolen. Up until then, I was as excited as I have ever been, and felt that people who truly cared about what Dennis was doing surrounded me. During those early days, what impressed me was Dennis’ integrity in the face of adversity. It was a rough ride, working without pay, as the company was dying. I thought that those still there were trying to keep the vision alive.
Dennis’ company was stolen in a shareholders’ meeting. When the meeting began, it was uncertain who would prevail, Dennis or the thieves. There were scores of employees there that night, some who had left the company while I was there, and others I had never seen before. Dennis had a few hundred employees during the previous December, as they rushed to get those systems installed. As the night wore on, it became evident that the thieves would prevail. Some threw their lot in with the thieves from the beginning, while most began neutrally. There were about a dozen who were openly behind Dennis. When it became evident that the thieves would prevail, there was a moment when the thieves’ ringleader took the podium, and said that nobody wanted Dennis around anymore. A cheer went up from the crowd. I looked out across the room, and people who I worked alongside, who gave Dennis standing ovations in meetings I had attended, were now cheering the thieves. When the crowd yelled, “Give us Barabbas!” it probably looked something like that. All those employees were really loyal to their paychecks, and if a thief appeared and put a dagger in Dennis’ back, well, that was OK, as long as the paychecks kept coming. Those who cheered those thieves inherited the wind.
Dennis met the next day with the dozen “loyalists,” and he left the state within days, trying to rebuild his company with some of his dealers. His wife left a few days later, to be with him. We sat in Seattle, waiting for Dennis to make something happen. One-by-one, the loyalists fell by the wayside. I sympathized with those who bowed out to feed their families. It was July, and we had enjoyed one paycheck since March. I used up my savings during those months, and eventually had to move back in with my grandparents. A few bowed out with honor, although some did not. There was another salient event that happened to me during that summer, which helped me eventually figure it out. It is discussed at this footnote.[24]
By August 1986, I was the only one left from the Seattle company who still wanted to work with Dennis. One engineer built Dennis’ Seattle factory, and he used to be the plant superintendent for Boeing’s 747 manufacturing plant in Everett, which is the world’s largest building. Mr. Engineer waited for Dennis to come up with money to pay him. He had bladder cancer, and when he got it, Boeing eased him into retirement. He was in his late 60s and virtually unemployable. I was a young buck in my 20s, and in August I told Dennis, who by that time had moved to Boston to try rebuilding, that I would sleep on a floor to try rebuilding what he was doing. Dennis originally tried dissuading me from moving out there, but when I proved persistent, he told me to come on out.
I moved to Boston in November 1986. When Dennis announced Project W.P.P.E.E., he had no idea how he was going to make electricity and compete with the electric companies. Dennis and his family moved to Boston with little more than the clothes on their backs, once again. From a $50 million net worth to nothing in less than a year…that was the kind of life that Dennis and his family led. Their few possessions were stored in that beat-up station wagon that Dennis drove into Seattle over the mountains in 1984. It was stored in Mr. Engineer’s barn in Ellensburg, and I made a couple of trips over the mountains, loaded their stuff into a trailer, with some of my possessions, and towed it behind my 1973 Pinto to Boston.
Many lives were shattered by the Seattle events, as the electric companies wiped out the competition. One who suffered badly was Mr. Inventor. He had a heat storage technology that Dennis was promoting, and he had a facility at Dennis’ factory. Knowing what might happen, just before the thieves stole the company, several of us rented a truck and moved as much of Mr. Inventor’s equipment to Mr. Engineer’s barn in Ellensburg as we could. It was horrible what the thieves did, and Mr. Inventor suffered. Unfortunately, Mr. Inventor began blaming Dennis for what happened, which was ludicrous, but is a typical reaction. Mr. Inventor was going to make somebody pay for what he suffered through, even if it was his best ally.
Before I moved to Boston, I helped Mr. Inventor as much as I could, and we met several times. One night, he told me about the inventors’ clubs that he belonged to over the years. He found that no inventor would support another in getting his invention out there. It was like a pack of dogs, each trying to be the alpha dog. He said that those inventors’ groups were doomed because of the inventors’ selfish natures. Up until that time, my exposure to inventing was Mr. Mentor, and I never heard that kind of talk from him, but would instead hear how all his stuff was stolen or suppressed, and how all he wanted to do was help the world. My early exposure to inventing misdirected me. Thirty years later, Mr. Mentor is the closest thing I have seen to an altruistic inventor, and that early exposure misled me about how most of them act. What Mr. Inventor told me was not forgotten, and it lay in the back of my mind for years. The last delusion I shed (not completely shed until about ten years after Mr. Inventor told me that story) was that inventors, with their creative talent, somehow had a higher level of integrity than the
