|Solar Bankruptcy Scandal Deepens|
|In The News|
|Monday, 12 September 2011 11:58|
A high profile, politically well-connected California solar energy company that had won a $535 million loan guarantee from the Obama Administration declared bankruptcy earlier this month and closed its doors sending 1100 workers to the unemployment line. The demise of Solyndra has already sparked an FBI investigation, congressional hearings, and raised numerous questions of political cronyism and corruption connected to the highest levels of the Obama Administration.
While the White House and Congressional Democrats feign surprise at the collapse of what was described as "the most hyped startup in the crowded Solar Energy field," it appears Obama Administration representatives were either easily duped or willingly blind to the facts. ABC News reports that Department of Energy officials have been regularly attending Solyndra board meetings for months as the company "careened towards bankruptcy" after blowing through the more than half a billion taxpayer dollars.
Early press reports following Solyndra's bankruptcy announcement disclosed that hundreds of thousands of dollars were contributed by shareholders and executives of Solyndra to the Obama 2008 campaign. One of the company's largest investors, George B. Kaiser of Tulsa, reportedly contributed $53,500 personally and bundled large amounts more for Obama in 2008. Kaiser is a billionaire with banking and oil and gas interests that rank him among the wealthiest people in the world. Kaiser also visited the White House 16 times between 2009 and 2011. The White House public records indicate that three of Kaiser's visits were on March 12, 2009 and one the following day in which he met with "a Senior Advisor, the former Chairman of the Council of Economic Advisors, the Deputy Director of the Domestic Policy Council, and the Deputy Director of the National Economic Council." The $535 million loan was officially approved one week later.
That loan guarantee agreement negotiated on behalf of Solyndra was fast-tracked through approval by Obama Administration officials at the Department of Energy and "included the lowest interest of all the green projects" benefitting from DoE funding, according to ABC News. The guarantee also subordinated the taxpayer's credit position to private investors, like George Kaiser, should the company go bust. Republicans warned that the deal "put taxpayers at unnecessary risk" but their warning went unheeded. This means Kaiser will be at the front of the distribution line when Solyndra assets are liquidated. Chances of any recovery for the taxpayers is somewhere between slim and none.
The startup company also spent over a million dollars lobbying Washington politicians in the last three years; $550,000 in 2010 alone.
At the invitation of company execs, Barack Obama made a highly publicized visit to the Solyndra facility in Fremont, California in 2010. Just weeks before his visit to Solyndra, PricewaterhouseCoopers issued the results of an audit of the company filed with the Securities and Exchange Commission on March 16, 2010 that should have given the President and the White House considerable pause. Noting that in the first five years of operation the company had sustained $558 million in losses, the audit report said Solyndra "has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders' deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern."
Undaunted, Obama arrived amid great fanfare on May 26 and highlighted the solar energy company as the poster child of the $25 billion green energy grants and subsidies doled out through his ill-fated Economic Stimulus. Obama confidently proclaimed that companies "like Solyndra are leading the way toward a brighter and more prosperous future."
The same week, solar energy investment analysts were already warning that Solyndra's business model was seriously flawed and that the hundreds of millions of dollars invested in the company "are going to be a huge waste." The same analysts criticized the Obama Administration's green energy policy as "misguided" for throwing vast sums at "a fledgling startup" (Solyndra) while the established solar companies like Evergreen Solar in Massachusetts were already struggling for market share and economic survival. A few months later, Evergreen closed US operations, laid off 800 workers, and moved their company to China.
Less than two months ago, Solyndra CEO Brian Harrison visited Capitol Hill "trumpeting the company's successes and praising the [government] loan." According to Henry Waxman (CA) and Diana DeGette (CO), Harrison assured them that Solyndra was in a "strong financial position." Apparently, Harrison's verbal reassurance was enough due diligence oversight on behalf of the taxpayers to satisfy the two leading Democrat green energy evangelists. They now express surprise that Harrison "did not convey to us the perilous condition of the company."
The Solyndra debacle is rapidly becoming a White House scandal. It is far too symptomatic of an Administration that is founded not on principle, but on Chicago-style cronyism and political corruption in the worst sense of the term. With the passage of his Stimulus, Obama professed great pride that it was free of "earmarks and pet projects" that he said are fraught with "abuse." Apparently, it's only pork, a pet project, and abusive if somebody other than Obama does it.
Completely oblivious to scandalous failures like Solyndra and other claims of cronyism from the first Stimulus hanging over the White House, Obama summoned the theater of a joint session of Congress this week to press for another half trillion dollars for Son-of-Stimulus – he prefers to call it the American Jobs Act. He offered a weak, glancing one line reassurance to Congress that the White House could be trusted to be good stewards of the money; "And to make sure the money is properly spent, we're building on reforms we've already put in place. No more earmarks. No more boondoggles."
What? At least this time he didn't say he was putting Joe Biden in charge of the checkbook.