Solyndra as tip of crony capitalism iceberg

September 20, 2011

As the Solyndra scandal continues to heat up in which the White House helped out a donor in its rush to use stimulus money — $90 billion was ear marked for green energy in the 2008 stimulus bill, officially known as the American Recovery and Reinvestment Act — as a means to make green jobs the centerpiece of Obama’s administration, it came as no surprise to hear that the White House is planning to use GM as a poster child for its successes to divert attention away from Solyndra.  Prior to Solyndra going belly up this month along with more than 1,100 jobs and $528 million of our tax dollars, Solyndra Corp. served as the poster child for the Obama administration’s ability to create green jobs.

GM, which many prefer to call “Government Motor”, was selected by the Obama administration as the recipient of a government slush fund to reward unions and other Democratic loyalists upon its arrival in Washington.

It was revealed by Erick Erickson on Monday, September 19, through a freedom of information act request filed by the competitive Enterprise Institute, that (A) General Motors had not actually paid back its loan and (B) had coordinated the ad campaign with the Obama Administration in which GM misleadingly claimed to have repaid all its government loans.

In the same post, Erickson tells of a series of coordinated efforts between the Obama Administration and General Motors.

It remains to be seen whether GM can be made the new poster child of the Obama administration’s push for more government stimulus as the way to produce jobs and jump start the economy.

Returning to the Solyndra bankruptcy, Democratic pundits and the Obama administration are continuing to cast blame for the failure of Solyndra upon the Bush administration (The Bush administration has become the poster child (scape goat) for all the bad that has befallen the Obama administration since it took office in 2009.).

As reported by Fox News on Friday, September 16, it is true that Solyndra officials did intensely pressure Bush administration officials in January of 2009 to approve a government loan for Solyndra prior to the Obama administration taking office, but the Bush administration turned down the request as noted in the following account:

On January 12, 2009, Solyndra CEO Chris Gronet sent an Energy Department official an email marked ‘urgent’ expressing outrage that Bush officials had decided a few days earlier that while the loan application had ‘merit’ it needed further study before officials could move forward with a taxpayer-financed loan.  The next day, Jan. 13, 2009, Bush’s energy official, Lachian Seward, sent his e-mail to Energy Department colleagues saying it was time to stop engaging with Solyndra.

Solyndra was the first green company to get a loan guarantee from Obama’s near trillion dollar stimulus bill of 2008, despite a warning from accounting firm Pricewaterhouse Cooper that Solyndra had financial troubles severe enough to “raise substantial doubts about its ability to continue as a growing concern.  The warning was prior to the Obama Administration’s signing off on the $535 million loan guarantee in September of 2009.  It was in the same month that Vice President Biden made a live announcement about Solyndra’s $535 loan guarantee.

The White House official who had charge of planning a personal visit by Obama to the Solyndra plant in May, 2010 of the following year, dismissed the criticism about Solyndra’s financial woes as nothing but “B.S.”

Fast forward to January of this year, the Office of Budget and Management warned the White House that the “optics of a Solyndra default will be bad . . . The timing will likely coincide with the 2012 campaign season heating up.”

In an act that reaks of outrageous crony capitalism, and following this warning by OBM, the Obama administration restructured Solyndra’s half-billion federal loan guarantee in such a way that private investors — including George Kaiser (Solyndra’s major investor and fundraiser and one of the top 100 richest people in the world who owns 36.7 percent of Solyndra through his Family Foundation), along with other top executives and board members who had donated more than $87,000 to elect Obama, moved ahead of taxpayers for repayment in case of a default.

George Kaiser et al were frequent visitors to 1600 Pennsylvania, including a visit that took place of March of 2009, just one week before the Department of Energy approved Solyndra’s loan.

A much publicized and reported event of several weeks ago was of Solyndra going belly up and the FBI raiding the homes of top executives.  But the story is not over.

Another leg of the Solyndra story made the news on Friday, September 16, when it was reported that a second top fundraiser for President Obama, Steve Spinner, was linked to the federal loan guarantee program that backed Solyndra Inc.  Steve Spinner joined the Obama administration in April of 2009 as adviser to Energy Secretary Steven Chu and was charged with helping oversee a loan guarantee program authorized by the American Recovery and Reinvestment Stimulus Act of 2008.  In this role Spinner also helped monitor the Energy Department’s issuance of $25 billion in government-backed loans to renewable energy projects.

Even though Spinner claims he didn’t have any role in the selection of Solyndra to receive a $535 loan, having recused himself because his wife’s law firm represents the company, Spinner position as top official in the Energy Department Program is likely to raise some red flags.

Out in Sacramento, CA lawmakers are questioning a separate $27 million tax break given to Solyndra under a law intended to encourage clean-energy companies to do business in CA.

Solyndra is not the only solar power company to hit rock bottom after being beneficiaries of the 2009, $800 billion economic stimulus package.  Solar panels which cost $6.00 to make with a sale price of  $3.00 is not good business practice under any stretch of the imagination!

Among others solar companies which failed are Evergreen Solar Inc. and SpectraWatts.

Evergreen Solar Inc. filed for bankruptcy last month.  It had received $5.3 million through a state grant to open a $450 million facility to employ roughly 800 people.

SpectraWatt, based in Hopewell Junction, N.Y., was spun out of Intel in 2008.  In June of 2009 the company received a $500,000 grant from the National Renewable Laboratory.  Saying it could not compete with its Chinese competitors, SpectraWatt also filed for bankruptcy in August of this year.

Another recipient of green energy stimulus money who ultimately lost was Mountain Plaza Inc.  The company had received a $424,000 from the Tennessee Department of Transportation as part of a grant aimed at installing “truck stop electrification” systems that allow idling truckers to plug-in during extended stops and turn off their exhaust-belching, environment polluting diesel engines.  Mountain Plaza filed for bankruptcy protection in June, 2020, after first declaring bankruptcy back in 2003.

Troubling is this account from the San Francisco Chronicle of September 8th.  Even after Solyndra and other solar power companies went bankrupt despite receiving government stimulus money, SolarCity has been given a $1 billion Federal Housing Contract to install solar panels at military bases, which constitute America’s largest consumer of energy.  The government is forcing the military to set a goal of getting 25 percent of its energy from renewable sources by 2025.

Obvious is the definite, clear relationship that exists between the recipients of economic stimulus funds and those who support Obama’s green energy agenda and donate money to him.  Despite the connection, the White House and the Energy Department steadfastly deny any favoritism was involved in its grants and loan guarantees.

And where are all the jobs, especially green jobs!  The number of people applying for unemployment benefits for the week leading up to Thursday, September unexpectedly rose 11,000 to 428,000, well ahead of the estimated 411,000.

Might the green-jobs revolution be going up in smoke?  Despite billions of dollars in federal investments and cheer leading from President Obama, even the most ardent supporters of a job-generating energy sector based largely on wind, solar, and other renewable sources are admitting that their dreams have not translated into reality.

“The Myth of Green Jobs” by Dr. Gordon Hughes, a Professor of Economics, refutes claims that green energy policies will create a few thousand jobs as this is not supported by the evidence…”

Spain and other European countries who have embraced green-jobs program have experienced higher-than expected costs and little payoff.

Large scale solar (and wind projects) are inherently unprofitable.  For to be successful they must depend on the sun shining brightly enough hour-after-hour and a consistent wind supply to turn the turbines. Given the inconsistency of wind and sun, government subsidies are needed to finance wind and solar projects or they would most likely not exist at all because of the cost factor involved.

Unfortunately the Obama administration believes it can pick technology winner and losers that will turn into future business successes by issuing loans with tax dollars, even though the green technology currently being pushed and advanced is not yet at a stage where it is able to produce massive amount of energy at a low enough cost to make it viable.

Competition, as with every other industry, is good for the American consumer, if it brings the price down for a product; however, the administration’s stimulus spending on solar and other green technology serves as little more than black holes for taxpayers money, all in the name of reducing carbon emissions to halt man-made global warming.

This is a prime example of throwing good money after bad by an administration all too eager to manipulate the levers of federal power and largess as a means to reward Obama’s  political supporters and those who buy into the administration’s global warming pitch. – Myths of Global Warming

Just in case you haven’t read the Sunday, September 18 commentary of John Kass in the Chicago Tribune, here is what he had to say about the Solyndra scandal, basically that it reeks of the Chicago Way.,0,3951633.column

According to John Kass:  “The Solyndra scandal is about the Washington smell of things.  Those of us from Chicago know exactly what it smells like.  And it doesn’t smell fresh and green.”

Incredulous is this post of September 19 on the Hill’s Energy & Environment Blog: “The Obama administration is doubling down on its support for renewable energy, stressing that it will move forward on more loans just like the one to Solyndra.  In fact, as many as 13 new loan guarantees from the Energy Department — nine of which are for solar projects — could be finalized by the end of the month.”

Often attributed to Albert Einstein is this quote:  “The definition of insanity is doing the same thing over and over but expecting different results.”

Telling is that on Friday, September 16, the National Center for Public Policy Research reported in an e-mail that “Solyndra is only the tip of the crony capitalism iceberg.”

Today the lot on which Solyndra was build may not be vacant, but 1,100 jobs have a lost and American taxpayers are left holding the bag.  This sounds like insanity to me!


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s