Fuel developer claims his research was legitimate

DENVER - A Denver businessman testified in federal court this week against charges that he bilked the government of millions in an attempt to test an alternative automobile fuel.

Bill Orr solicited money from investors and from the federal government in a purported effort to develop a fuel that would be more efficient and less polluting. Prosecutors say Orr misrepresented his research results and business prospects to obtain a $3.6 million grant from Congress.

Orr admitted he paid himself more than $500,000 of the federal funds during two years of research and development work. He said he obtained the grant with the help of Congressional aides whom he met while working on other fuel and environmental issues.

Specifically, Orr worked with politicians on Capitol Hill when he tangled with the Environmental Protection Agency in the 1990s.

"I sued the EPA for their bad science," Orr told 9NEWS. "Their (standard for fuel) is going to cost the American public and make the air dirtier."

Later, the EPA was assigned to administer the earmark grant that Orr received from Congress. Orr claims the EPA instigated his prosecution in retaliation for his lawsuit. Federal prosecutors have denied that.

Justice Department prosecutors cross-examined Orr at length about his lack of scientific education and experience.

"I had experienced scientists to do the technical work," testified Orr. "I was supervising the work."

Orr and his scientists developed an alternative fuel that he called VPC, for Vapor Phase Combustion. It's a mixture of gasoline and ethanol, with a touch of the metal manganese.

"We thought it would probably result in a fuel that's less expensive to manufacture, with some fuel economy, more miles to the gallon," said Orr. "More importantly, we were trying to clean up the air."

Orr used some of the grant money to establish a small laboratory in Golden. Two scientists who worked on the project disagree about the results.

"The more we measured it, the more we found his fuel was just like any other fuel," said Dr. Tom Reed.

Chemist Frank Cox was more impressed with VPC.

"It was well worthwhile," he said. "The results, to me, indicated we should go to the next step, actual vehicle testing under realistic conditions."

Before Orr could move his research to a larger laboratory, the EPA suspended his grant for alleged mismanagement of the grant money. A year later, a federal grand jury indicted him for defrauding Congress and private investors by claiming that "VPC was superior to conventional gasoline," even though "all scientific testing on VPC failed to demonstrate any benefits regarding emissions or fuel efficiency."

An investor testified in court that Orr's newsletters bragged about connections to big oil companies like Enron and investment banking firms like Prudential-Bache. Prosecutors say those connections never existed.