Inquiring minds want to know: Why did green-jobs bust Solyndra get a gigantic federal loan?
posted at 3:27 pm on September 2, 2011 by Allahpundit
House investigators said they have uncovered evidence that White House officials became personally involved in an Energy Department review of a hot-button $535 million loan guarantee to the now-failed California solar company Solyndra…
“We have learned from our investigation that White House officials monitored Solyndra’s application and communicated with [Department of Energy] and Office of Management and Budget officials during the course of their review,” the letter says…
“Here’s the bottom line,” [solar industry analyst Peter] Lynch said. “It costs them $6 to make a unit. They’re selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan.”
Other flags have been raised about how the Energy Department pushed the deal forward. The Center for Public Integrity’s iWatch News and ABC disclosed that Energy Department officials announced the support for Solyndra even before final marketing and legal reviews were in. To government auditors, that move raised questions about just how fully the department vetted the deal — and assessed its risk to taxpayers — before signing off.
The White House insists it didn’t intervene with DOE on Solyndra’s behalf, but — go figure — the company’s key investor was a foundation headed by George Kaiser, a billionaire known for raising boatloads of money for Barack Obama. The Kaiser Foundation insists that it’s going to take a loss from Solyndra’s failure just like all the other investors, which doesn’t quite explain why Solyndra got a half-billion-dollar loan to keep on chugging towards unprofitability in the first place. And this may be just the beginning:
Solyndra’s closing has raised concerns about other renewable energy investments by the Obama administration.
Frank Rusco, a Government Accountability Office director who helped lead a review of the Solyndra loan and the Energy Department’s loan guarantee program, said the GAO remains “greatly concerned” by its 2010 finding that the agency agreed to back five companies with loans without properly assessing their failure risk. The companies were not identified in the report, but the GAO has since acknowledged that Solyndra was among them. Three of the companies were working together on one massive nuclear project, and the Energy Department said Thursday those funds are not at risk because the money has not yet been released to the companies.
The DOE thinks/hopes that other loans to clean-energy companies will offset the losses from Solyndra, but Rusco says he’s not sure about that for the simple reason that those firms haven’t produced much yet. My own suspicion is that the Solyndra loan is probably more a case of classic Hopenchange incompetence than corruption. Obama’s spent tons of political capital promoting his “green jobs” pipe dream, with Republicans challenging him on it at every turn. The very last thing he needs under those circumstances is to blow $500 million on a money pit funded by one of his big donors. It’s such a huge loss and looks so shady that the GOP will make hay of it for months; his whole “green jobs” plan will be hugely damaged by it. (It doesn’t help either that he’s now happily admitting that environmental regulations are a drag on the economy to be discarded when needed in the interests of growth.) What likely happened here is that the White House and DOE, in their excitement to kickstart the age of clean energy, skipped some of the due diligence on Solyndra on the assumption that the Kaiser Foundation and other investors surely wouldn’t toss their own money into a sinkhole. Oops. Exit quotation from Lowry: “Inevitably, the U.S. solar industry will seek to score the trifecta of government support already achieved by the boondoggle fuel ethanol — subsidizing its production, mandating its use, and barring its foreign competitors.”