Not even Solyndra’s asset auction will help taxpayers recoup any money

posted at 6:27 pm on October 21, 2011 by Tina Korbe

Early next month, Solyndra will auction off its assets – including thousands of pieces of office equipment, computers, power tools, assembly line machinery and even solar panels. That should help taxpayers recoup their money — money that should never have been loaned to Solyndra in the first place. Right? Wrong.

Scribe’s Lachlan Markay explains that the proceeds of the auction will all go to … private investors.

DOE has developed an unprecedented interpretation of the law to allow Solyndra’s private investors to recoup $75 million of their investment before taxpayers are repaid.

Heritage Global Partners, which is conducting the auction, told Scribe that the money raised from the upcoming auction “will not be anywhere near” $75 million, meaning the proceeds will go entirely towards repaying Solyndra’s private investors.

That’s highly atypical. According to testimony from two Treasury Department officials, before Solyndra, taxpayers have never been subordinated to private investors in the repayment of a government loan.

Let’s think this through for a minute. Why was Solyndra presumably picked to be the poster child for the government’s foolish loan guarantee program in the first place? I seem to recall some overlap between Solyndra investors and Obama donors. So, naturally, the DOE would want to repay those donors before they repay the taxpayers whose money they irresponsibly invested. This pay-to-play scandal is so transparent I barely know what to say. Yet, Obama continues to defend his decision — no less than he continues to defend Eric Holder’s ability to preside over an investigation into Fast and Furious. Shameless.


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It is not just atypical…it is against Federal regulations, and may be against the law.

neoavatara on October 21, 2011 at 6:29 PM

Obamanomics.

Good Lt on October 21, 2011 at 6:31 PM

Well, just as long the California DNC gets their kickback, all will be well.

cynccook on October 21, 2011 at 6:31 PM

Politico argues so what if the DOE broke the law with solyndra there is no punishment for it in the books

http://www.politico.com/news/stories/1011/66592.html

William Amos on October 21, 2011 at 6:31 PM

The rest in in bho’s election stash?
L

letget on October 21, 2011 at 6:32 PM

ows where art though?

rob verdi on October 21, 2011 at 6:38 PM

No surprise there…

ladyingray on October 21, 2011 at 6:38 PM

Obama assassinates Muslim dictators with his bare hands, and rips off American tax payers at the same time. What a talented guy, eh?!!!

capejasmine on October 21, 2011 at 6:39 PM

It’s money laundering.

BKeyser on October 21, 2011 at 6:40 PM

How much for the Solyndra sign? It would make an excellent museum piece or lawn sculpture for Barry’s presidential library.

Christien on October 21, 2011 at 6:41 PM

It’s money laundering.

BKeyser on October 21, 2011 at 6:40 PM

It’s not even efficient money laundering. The mafia and drug dealers would be ashamed to spend $535,000 to yield $60,000 of “good money” — and this is 1,000 times that.

cthulhu on October 21, 2011 at 6:44 PM

Makes you want to follow the rules and over pay your taxes…

… doesn’t it?

/

Seven Percent Solution on October 21, 2011 at 6:46 PM

SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!
SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!SOLYNDRA!

SOMEBODY please pass this on to the 7 or 8 smiling candidates on stage next GOP debate.

Between Obama’s GREEN GREED JOBS for BUNDLERS program and Fast and Furious, there should be NO TIME left for any other subject for the whole time on stage!

Damn! Do I have to put these guys (and 1 gal) in a headlock before they listen to me???

IGNORE the questions and pound on Obama!!!

Oh yeah, and mention Obama’s ILLEGAL auntie and uncle once per minute.

fred5678 on October 21, 2011 at 6:48 PM

Yet, Obama continues to defend his decision — no less than he continues to defend Eric Holder’s ability to preside over an investigation into Fast and Furious. Shameless.

Why not when the LSM is carrying his water?

csdeven on October 21, 2011 at 6:49 PM

Obama assassinates Muslim dictators with his bare hands, and rips off American tax payers at the same time. What a talented guy, eh?!!!

capejasmine on October 21, 2011 at 6:39 PM

Killing bad guys….the buck stops with Obama.

Ripping off the tax payers…..”What buck?”

csdeven on October 21, 2011 at 6:50 PM

Politico argues so what if the DOE broke the law with solyndra there is no punishment for it in the books

http://www.politico.com/news/stories/1011/66592.html

William Amos on October 21, 2011 at 6:31 PM

I believe in most cases like this where the FAR’s (Federal Acquisition Regulations) have been violated, the remedy is simply to recover the money in accordance with the FAR. i.e., they can hold the auction, but all proceeds will first go to taxpayers and anything beyond that would go to investors. The fact that the terms were re-negotiated in violation of the FARs simply means that the negotiated terms were illegal and must be set aside. Too bad for the campaign donors to Obama (boo-hoo) who will lose their investment, but that’s the law.

/yes, I’ve been involved with government acquisition, and that’s the way it works for those who are part of the Chicago Messiah chosen ones. If a company makes a mistake, or a contracting officer makes a mistake, no, there aren’t legal penalties (except for out and out fraud), the company simply is required to reimburse the government for the amount improperly awarded and/or the contract is altered to reflect that the terms are IAW the FARs.

AZfederalist on October 21, 2011 at 6:51 PM

AZfederalist on October 21, 2011 at 6:51 PM

Carp! That should have said, “… for those who are not part of the Chicago Messiah chosen ones”

AZfederalist on October 21, 2011 at 6:52 PM

hey..hey…hey…Ed, come on.

Kaiser needs that money back so he can spread it around and bundle it back up for Obama 2012.

we can’t let ethics or campaign finance laws get in the way of Mr. Obama’s second term.

DrW on October 21, 2011 at 6:53 PM

Have we FINALLY arrived at a serious discussion about genuine ‘high crimes and misdemeanors’ or no? I guess we could create another post to discuss the upcoming weekend of NFL action.

/reality

Shawn92101 on October 21, 2011 at 6:53 PM

No evidence of ANY wrongdoing in this White House over Solyndra

Move along to the next stop on the Conservative Outrage tour..

OBAMA 2012…..Americas last hope to have a messiah!!

PappyD61 on October 21, 2011 at 6:59 PM

George Kaiser is a criminal

tetriskid on October 21, 2011 at 7:02 PM

Take care of your donors first. Screw the taxpayer.

GarandFan on October 21, 2011 at 7:04 PM

DrW on October 21, 2011 at 6:53 PM

Tina.

coldwarrior on October 21, 2011 at 7:06 PM

Welcome to Obamaville.

FlatFoot on October 21, 2011 at 7:15 PM

the company simply is required to reimburse the government for the amount improperly awarded and/or the contract is altered to reflect that the terms are IAW the FARs.

AZfederalist on October 21, 2011 at 6:51 PM

.
Just who, in the government, will have the cojones to modify the contract in accordance with the legally constituted FARs or require Solyndra investors / ØBlama contributors to give back their reimbursed campaign contributions?
.
Heritage Global Partners will demand auction fees as well, probably 5 to 15% in auction premiums (unless there is a Federally mandated limit on this as well. Do you know?)

ExpressoBold on October 21, 2011 at 7:26 PM

Just goes to show, you can build as big of a factory in California as you want, but you can’t make it worth a dollar

phreshone on October 21, 2011 at 7:35 PM

Just who, in the government, will have the cojones to modify the contract in accordance with the legally constituted FARs or require Solyndra investors / ØBlama contributors to give back their reimbursed campaign contributions?
.
Heritage Global Partners will demand auction fees as well, probably 5 to 15% in auction premiums (unless there is a Federally mandated limit on this as well. Do you know?)

ExpressoBold on October 21, 2011 at 7:26 PM

Thus my comment that the rule applies to those who aren’t part of the Chicago political mafia. Unless the Republicans in Congress grow a pair (likelihood about the same as me winning the lottery), nothing is going to happen. The rule isn’t designed to inflict penalties for other than fraud, the rule exists to define proper contracting process and to provide the mechanism to recover improper charges. No criminal prosecution should be required for this (otherwise nobody would want to be a federal contractor, including defense contractors). Congresscritters should raise a stink about this and push to have the executive abide by the laws. Their failure to enforce the FARs could be grounds for legal action, the same as fraud on the part of contractors. Malfeasance, IIRC is still a crime.

There are definitely limits on profits for specific types of contracts: cost plus fixed fee allows lower profit than firm fixed price contracts because risk assumed by the contractor is lower. I’m sure there is a limit to the fees that the auction house will be able to charge if they are being contracted by the federal government. My guess however is that this is being overseen by the bankruptcy court. If it is normal bankruptcy liquidation, the fees will be “reasonable and customary” as determined by the bankruptcy courts.

AZfederalist on October 21, 2011 at 7:41 PM

Someone needs to file a restraining Order against the sale or, at the least, to escrow the funds, for us the taxpayers who were wrongfully subordinated.

skatz51 on October 21, 2011 at 7:41 PM

The media should be fast and furious about this rank corruption – but instead are slow and incurious.

profitsbeard on October 21, 2011 at 7:49 PM

If the company was not Solyndra, its assets would have been seized long ago…at the time it was clear that the company would not be able to continue as a going concern. In a normal case, cash would be seized from the private investors even after they got any proceeds from the sale of Solyndra property.

The Republicans should be LOUDLY comparing treatment of Solyndra stockholders to the treatment of GM and Chrysler stockholders!!

landlines on October 21, 2011 at 8:23 PM

Somebody needs to go to court and get an injunction to block the sale. We have tons of unemployed lay school types that could make a name for themselves.

Col.John Wm. Reed on October 21, 2011 at 8:57 PM

AZfederalist on October 21, 2011 at 6:51 PM

You’re absolutely correct. This is where the house committee responsible needs to step in and make sure the DOE follows the rules in recovering the people’s money first or those responsible will be held in contempt and prosecuted. Grow a pair GOP!!!

AH_C on October 21, 2011 at 9:10 PM

That’s highly atypical. According to testimony from two Treasury Department officials, before Solyndra, taxpayers have never been subordinated to private investors in the repayment of a government loan.

Welcome to the “new normal.”

Looking at the other loans and their associated SEC filings, it doesn’t seem like Solyndra is the exception, seems like subordinating taxpayer positions is becoming the “new rule”.

Let’s not forget that the GM and Chrysler deals also saw the administration subordinate the legitimate first positions for the administrations favorite’s positions.

Jason Coleman on October 21, 2011 at 9:39 PM

I guess this expensive injustice to the public under Obama’s administration (by & for his cronies) is the way of the future. Taxpayers to come last. I still find it hard to believe that even the democrats can stomach this scandal, or the Fast & Furious one.

Incidentally, some more Justice Dept. injustice:

http://tinyurl.com/3f9cdsv

Chessplayer on October 21, 2011 at 10:01 PM

DOE has developed an unprecedented interpretation of the law to allow Solyndra’s private investors to recoup $75 million of their investment before taxpayers are repaid.

That should say that Obama campaign contributors are being paid “instead of,” rather than “before” taxpayers.

As written, this makes it sound like we just have to wait a few days longer before we get paid. Of course that’s not the case; we’ll never see a penny of this.

They are simply taking our money and giving it directly to Obama campaign contributors. Period.

logis on October 22, 2011 at 2:56 AM

The Republicans should be LOUDLY comparing treatment of Solyndra stockholders to the treatment of GM and Chrysler stockholders!!
landlines on October 21, 2011 at 8:23 PM

Unfortunately, he names of those companies are spelled completely differently. The only way to compare these incidents, and the hundreds of others that are going on every day, is to refer to all of them by one name. And that name happens to be “Fascism.”

Good luck getting the GOP leadership on board with that. Solyndra will be folded into the below-the-threshold buzzing noise. Nothing more.

logis on October 22, 2011 at 3:04 AM

Biden is #2 in an administration that is raping the American public.

The worst part is the American public simply doesn’t care enough.

Barrack on October 22, 2011 at 9:16 PM