Wow: Dept of Energy still defending their ghastly failure of a loan guarantee program

posted at 12:41 pm on July 12, 2012 by Erika Johnsen

Because why admit defeat, cut their (our!) losses, and quit trying to pick economic winners and losers when you can keep whining like a little girl and burning through other people’s money like there’s no tomorrow?

This week, the House GOP unveiled new draft legislation — the aptly-named No More Solyndras Act — which is pretty much exactly what it sounds like. The bill would phase out the Department of Energy’s loan guarantee program for clean energy companies, which was expanded through the 2009 stimulus. The Obama DOE has since accumulated an impressive rap sheet of green business ventures that have either gone south or gone completely bankrupt:

Take, for instance, Beacon Power Corp., the second recipient of an Energy Department loan guarantee in 2009. In March 2010, the Massachusetts energy storage company paid cash bonuses of $259,285 to three executives in part due to progress made on the $43 million energy loan, Securities and Exchange Commission records show. Last October, Beacon Power filed for Chapter 11 bankruptcy.

EnerDel, maker of lithium-ion battery systems, landed a $118.5 million energy grant in August 2009. About one-and-a-half years later, Vice President Joe Biden toured a company plant in Indiana and heralded its taxpayer-supported expansion as one of the “100 Recovery Act Projects That Are Changing America.”

Two months after Biden’s visit, EnerDel corporate parent Ener1 paid $725,000 in bonuses to three executives — including $450,000 to then-CEO Charles Gassenheimer, who led Biden on the tour. This January, Ener1 filed for Chapter 11 bankruptcy protection.

At least two other firms that benefited from Energy Department funding — one a $500,000 grant, the other a $535 million loan guarantee — handed out hefty payouts to executives and later went bankrupt.

Should the egregious amount of taxpayer money that the Obama administration has “invested” on our behalf, and subsequently lost, deter them from continuing to do more of the same? Naaaah:

A senior DOE official will tell lawmakers Thursday that House GOP legislation called the “No More Solyndras Act” would harm the program without boosting taxpayer protections. The legislation would create new restrictions on clean energy loan guarantees.

David Frantz, the acting head of the loan programs office, says in testimony to the House Energy and Commerce Committee that DOE has already made a series of improvements to the program.

“This effort has included improvements to the way loan guarantees are originated and the way in which they are monitored. With these improvements in place, the department has concerns that the legislation would not result in increased taxpayer protections, but would instead hinder effective implementation of this important program,” he states in written testimony submitted for a Thursday hearing. …

“…the DOE has already made a series of improvements to the program.” Gee, how reassuring, because they have such a great record of success. I think Rep. Henry Waxman pretty succinctly summed up the Obama administration and Democrats’ attitude about this gigantic boondoggle of a program during the Energy and Commerce hearing this morning:

“I’m sorry Solyndra happened; we lost $500 million, that’s a shame. But that’s why these loan guarantees are provided, because these are risky enterprises, and not all of them are going to succeed.” …No. A thousand times, no. It is absolutely and unequivocally not the federal government’s job to make “investments,” especially not on “risky enterprises” that really only serve as an avenue for them to tout their environmental credentials to the unthinking eco-trendy masses. If the free market isn’t doing it, there’s a darn good reason why — it isn’t a very good bet, and the current regime’s glib, blasé attitude toward this whole mess is what’s really shameful here.


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We give ourselves and A-…..

Baxter Greene on July 12, 2012 at 12:43 PM

This arrogance comes from having zero accountability. The MSM is the primary culprit. Their unwillingness to report Obama failure and their willingness to cover for him are destructive and wasteful.

pat on July 12, 2012 at 12:45 PM

It did exactly what it was designed to do, line the pockets of obozo’s supporters.

Flange on July 12, 2012 at 12:45 PM

This is perhaps the most galling feature of the Obama administration – its complete lack of regard for failure. Dems blasted Bush for refusing to admit that things didn’t always go right 100% of the time, but these clowns take it to a new art form.

This is like someone on the Titanic commenting “eh, that wasn’t so bad. I bet we could probably stand four or five more iceberg strikes.”

Red Cloud on July 12, 2012 at 12:46 PM

No. A thousand times, no. It is absolutely and unequivocally not the federal government’s job to make “investments,” especially not on “risky enterprises” that really only serve as an avenue for them to tout their environmental credentials to the unthinking eco-trendy masses.

BAM!!!….Right…on…target.

Baxter Greene on July 12, 2012 at 12:47 PM

We give ourselves and A-…..

Baxter Greene on July 12, 2012 at 12:43 PM

…how about JAIL!
Taxpayer theft…Chew Choo is a joke!

KOOLAID2 on July 12, 2012 at 12:48 PM

Tie Waxman’s pay to the performance of those loans, then let me know if he feels the same way.

BacaDog on July 12, 2012 at 12:50 PM

How does anybody vote for Waxman?

Deano1952 on July 12, 2012 at 12:53 PM

So bain investment evil and doe investment meh
According to the dems
Got it

cmsinaz on July 12, 2012 at 12:54 PM

The ruling class knows best. Move along, citizens. Nothing to see here.

Laura Curtis on July 12, 2012 at 12:54 PM

Since when have the pigs in Congress given a damn about wasting beaucoup money?

After all, they have a readily available, but dwindling stockpile of taxpayers, to make everything all better.

They remind me of the ponzi-scheme pigs who spend investor money, like drunk sailors on shore leave, and have only to wait for some more injection money in order to keep spending.

The only problem is, the pigs in Congress, unlike the ponzi-scheme pigs, never seem to get their jail-term comeuppances.

OhEssYouCowboys on July 12, 2012 at 12:55 PM

t did exactly what it was designed to do, line the pockets of obozo’s supporters.

Flange on July 12, 2012 at 12:45 PM

This.

Deano1952 on July 12, 2012 at 12:55 PM

the department has concerns that the legislation would not result in increased taxpayer protections, but would instead hinder effective implementation of this important program

TRANSLATION:
HEY! We’ve got to reward our campaign bundlers! We’re having a hard enough time raising money as it is right now!

GarandFan on July 12, 2012 at 1:00 PM

Investments! (political payoffs, cough, cough). Nostrildamus is right about one thing; he is indeed sorry.

ghostwalker1 on July 12, 2012 at 1:03 PM

“But that’s why these loan guarantees are provided, because these are risky enterprises, and not all of them are going to succeed.”

Name one that did you rat faced son of a bit%h…!

Seven Percent Solution on July 12, 2012 at 1:04 PM

This arrogance comes from having zero accountability. The MSM is the primary culprit. Their unwillingness to report Obama failure and their willingness to cover for him are destructive and wasteful.

pat on July 12, 2012 at 12:45 PM

Why should they stop?

They are getting away with theft and there was barely any reporting on it.

tetriskid on July 12, 2012 at 1:06 PM

Comparatively speaking, those companies are in much better shape, fiscally, than our country.

So, of course, this administration can’t judge them.

Nobama x 1.6 x 10^13

WryTrvllr on July 12, 2012 at 1:06 PM

The problem with these programs is the only personal liability attached to them is to you and me the taxpayer. The Congressman approving the program have no skin in the game; the DOE officials approving the loans have no skin in the game; the directors, officers and investors of the borrowers have no personal liability for the loans – nobody but the taxpayers are at risk. At the same time before a dime of the loan is paid back, everybody but the taxpayer may benefit – the Congressman get political donations, the DOE officials open post-government employment doors, the directors and officers of the borrower may receive payments and salaries from the loan and the investors get a big bump in valuation.

These programs need some personal guaranties to protect the taxpayer. At a minimum from the borrower’s officers and investors and preferably from the DOE decision makers. If these are such great “investments” they should have no problem taking on that risk; and if they won’t, then maybe the investment should not be made.

Over50 on July 12, 2012 at 1:12 PM

“FELON”?

Really? Does the White House really go after Romney as a liar and felon when it has destroyed American industries by the score?

http://www.buzzfeed.com/rosiegray/cutter-romney-a-liar-potential-criminal

Obama deputy campaign manager Stephanie Cutter suggested that Mitt Romney may be a criminal on a conference call with reporters this morning about a Boston Globe report that shows that Romney stayed at Bain Capital three years past when he said he’d left.

Cutter said that there were two ways to interpret the story. The first: Mitt Romney was “misrepresenting his position” at Bain to the Securities and Exchange Commission, “which is a felony.”

Or, he was “misrepresenting his position at Bain to the American people. If that’s the case, if he was lying to the American people, that’s a real character and trust issue,” Cutter said.

Cutter called on the Romney campaign to clear up by the issue by releasing the candidate’s tax returns.

“If the SEC filings aren’t accurate, then prove it,” she said.

FELON? How about Obama’s college transcripts Ms. Cutter?

PappyD61 on July 12, 2012 at 1:23 PM

The ultimate irony?

The obama administration is playing venture capitalist with your money and they are both losing the investment and outsourcing. Awesome.

WitchDoctor on July 12, 2012 at 1:24 PM

Remember folks we are borrowing all this money !!

Why not just cut this stupid spending.

If they limited it to research grants of $250K to universities chances are some professor would come up with something that a real venture capitalist would invest in. These folks in the DoEn look like they are clueless as far as real science (including Secty Chu) and only look to see if they contributed to Obama’s campaign.

A better bill for Rep. Upton to offer is impeachment of Secty Chu for his cluelessness.

KenInIL on July 12, 2012 at 1:29 PM

But that’s why these loan guarantees are provided, because these are risky enterprises, and not all of them are going to succeed.

Next up — tableside loan guarantees for roulette players.

cthulhu on July 12, 2012 at 1:33 PM

Why should they stop?

They are getting away with theft and there was barely any reporting on it.

Precisely. As long as there is no one that will put a screeching stop to this activity it will continue as long as Obama is in the White House.

hawkeye54 on July 12, 2012 at 1:39 PM

PappyD61 on July 12, 2012 at 1:23 PM

Or not ….

pambi on July 12, 2012 at 1:40 PM

This week, the House GOP unveiled new draft legislation — the aptly-named No More Solyndras Act — which is pretty much exactly what it sounds like. The bill would phase out the Department of Energy’s loan guarantee program for clean energy companies, which was expanded through the 2009 stimulus.

Why doesn’t the House just cut off funding entirely for the Department of Energy? We don’t really NEED a Department of Energy! If the Federal government wants to regulate drilling, fracking, and coal mining, that can be done through the Department of the Interior.

Governor Perry had it right. He just forgot about it in the debates.

Steve Z on July 12, 2012 at 1:52 PM

The problem with these programs is the only personal liability attached to them is to you and me the taxpayer.

Over50 on July 12, 2012 at 1:12 PM

The problem with these programs is that they’re meant to alter the economic balance of markets. A supplier can produce at a variety of levels and prices, and consumers demand various amounts depending on their costs. Where these match up, you have “market clearing”, where everyone is satisfied, and resources are efficiently deployed. Each “thumb on the scale” move like the DoE’s has the obvious effect (flushing money away), but also thousands of unseen effects — e.g., the failed battery makers raise the price of rare earths by purchasing large amounts for batteries that will never be used.

The “No More Solyndras Act” doesn’t go nearly far enough. Where’s the “No More Borrowed Money for Ag Subsidies Act”? How about the “No More Federal Market Distortion in Higher Education Act”?

cthulhu on July 12, 2012 at 1:56 PM

Look, we shouldn’t give up on trying to develop reliable, effective and efficient alternative forms of energy. But Obama’s Green Energy Program was never meant to do that- it was simply investing public money in Democrat-led firms, most of whom contributed heavily to his campaign. It was a massive kick-back program that would’ve made Al Capone jealous.

I would not be opposed to loans going out to these types of companies, but only under well-scrutinized and very public conditions. First, no more money than has already been raised by private investors should be authorized; a maximum 1 to 1 ratio of committed private funds to public funds. If a company show promise and results, and can raise more private investment, then public investment can match it. Also, public money should never be repositioned in the deal to be repaid last, under any condition.

Additionally, all lobbying and donation ties should be made public and funds above a certain figure should have to be approved by no less than the Congressional committee charged with oversight of that industry or type of loan guarantee. This would put skin in the game outside of unelected, appointed bureaucrats.

BKeyser on July 12, 2012 at 1:59 PM

No. A thousand times, no. It is absolutely and unequivocally not the federal government’s job to make “investments,” especially not on “risky enterprises” that really only serve as an avenue for them to tout their environmental credentials to the unthinking eco-trendy masses.

BAM!!!….Right…on…target.

Baxter Greene on July 12, 2012 at 12:47 PM

Yes! A thousand times YES!!!!

Erika, I love your style. Keep up the great work, you are a breath of fresh air!

UltimateBob on July 12, 2012 at 2:02 PM

We don’t really NEED a Department of Energy! If the Federal government wants to regulate drilling, fracking, and coal mining, that can be done through the Department of the Interior.

You are correct we dont need a DoE….it’s responsibilities were once that of the Dept of Interior. In fact, many federal departments were split off from a parent department, remember Health, Education and Welfare was split into two depts. These creations were meant to expand the reach and power of centralized federal government.

We could easily dissolve half of the feds alphabet of depts and agencies for cost savings and efficiency and leave their regulating and oversight to the states, but the entrenched federal bureaucrats and pols wouldn’t take that well.

hawkeye54 on July 12, 2012 at 2:04 PM

Obummer’s complete lack of regard for failure? Yes, double down instead. Complete lack of regard for taking responsibility? yes, double down again. Let boson boy speak that.

jake49 on July 12, 2012 at 2:38 PM

And Governor Romney got boos..

The incredible ignorance of the NAACP to support an administration who goes chasing geese like these alternative energy programs.

The incredible ignorance of the NAACP to support an administration who goes chasing geese like these with black teenage unemployment at 40%.

The incredible ignorance of the NAACP to support an administration with 300 gunshot victims in our Affirmative Action Hero’s hometown.

The incredible ignorance of the NAACP………..

IlikedAUH2O on July 12, 2012 at 2:44 PM

his niece is hot.

reliapundit on July 12, 2012 at 2:46 PM

kate upton

reliapundit on July 12, 2012 at 2:51 PM

“I’m sorry Solyndra happened; we lost $500 million, that’s a shame. But that’s why these loan guarantees are provided, because these are risky enterprises, and not all of them are going to succeed.”

“…that’s a shame”?!?!? REALLY?? We lost $500 million taxpayer dollars and all he says is THAT’S A SHAME?!?!

Let me write that number out to let it sink in a moment… $500,000,000.00

This is one of those things that pisses me off to no end about these a-holes in Washington. They talk about losing $500 million like they just spilled a ph*cking jug of milk!! US taxpayers are struggling with high unemployment and a terrible economy, and when these a-holes lose $500 million on a risky bet all they can say is basically “oopsies”!!

Don’t let a single friggin’ one of them ever say they are “in touch” with the middle class EVER AGAIN!!!

gravityman on July 12, 2012 at 3:00 PM

INCOMPLETE STATEMENT: Obama Official: DOE Energy Loan Program Has Been An “Enormous Success”…

COMPLETE STATEMENT: Obama Official: DOE Energy Loan Program Has Been An “Enormous Success” in making OBOZO’s crony capitalists rich with taxpayer money beyond their wildest dreams…

TeaPartyNation on July 12, 2012 at 3:32 PM

Fred:

1. Bad toupe;
2. The lights for your little camera time there burned more energy than the lightbulbs you banned;
3. I lost Kate’s phone number and I promised I would call…help me out.

Jaibones on July 12, 2012 at 3:37 PM

Historically, the Federal government has provided benefits to our society by funding promising, high-risk research on emerging technologies that commercial investors would not fund. That said, once a technology was shown to be technically viable, the government usually stepped aside and turned commercial development over to the commercial sector. If commercial companies couldn’t find investors who were willing to fund emerging technologies, it was because they did not see them as commercially viable.

The truth is that feasibility research by the Federal government on wind, solar, bio-fuels, etc. was completed long ago. The reason that the Obama administration forced the issue and is wasting tax payers dollars on the development of green products is because the commercial industry had already rejected the commercial viability of most of these products. Obama is simply using our money to cater to a minority special interest group who thinks that CO2 and cow farts are killing us. This has never been about the development of real energy alternatives. It has always been about shoring up Democrat support for a small part of Obama’s base. Sad…but true!

NuclearPhysicist on July 12, 2012 at 3:45 PM

Fred:

1. Bad toupe;
2. The lights for your little camera time there burned more energy than the lightbulbs you banned;
3. I lost Kate’s phone number and I promised I would call…help me out.

Jaibones on July 12, 2012 at 3:37 PM

Careful, or he’ll give you the number of someone from Pigman Waxman’s family.

Man, that is one ugly dude. Inside and out.

UltimateBob on July 12, 2012 at 4:46 PM

DC acts like its on a freaking non-stop weekend bender in Vegas with the mortgage/rent payment.

socalcon on July 12, 2012 at 9:40 PM

Historically, the Federal government has provided benefits to our society by funding promising, high-risk research on emerging technologies that commercial investors would not fund…The truth is that feasibility research by the Federal government on wind, solar, bio-fuels, etc. was completed long ago.

NuclearPhysicist on July 12, 2012 at 3:45 PM

Identify three technologies that were funded in that manner….

Which were feasible….

socalcon on July 12, 2012 at 9:46 PM

“I’m sorry Solyndra happened; we lost $500 million, that’s a shame.

The next Romney/Rubio 2012 bumper sticker with, the obligatory, add-on “Fool me once shame on you, fool me twice shame on me.”

socalcon on July 12, 2012 at 9:54 PM