On Friday, I mentioned that it seems that the odyssey of fail that was the Obama administration’s commitment to “investing” in Fisker Automotive was finally drawing to a merciful close, as the Department of Energy managed to (kind of shadily?) auction off the down-and-out company to some Chinese investors. With the deal, Americans taxpayers would only be taking a net hit of an oh-so-trifling $130 million or so. No big deal, right?
Wrong.
The Department of Energy originally extended Fisker a $529 million line of credit back in the 2009 stimulus effort, but cut off the already ailing Fisker in 2011 after having dished out only about $190 million. Including the recent auction, the DOE has managed to recover only about $53 million of that loan, which is where the number of the $130 million for which taxpayers will be on the hook came from — except that that specific loan guarantee apparently wasn’t the only tax break of which Fisker was one of the Obama administration’s anointed beneficiaries. According to Reuters:
The bankruptcy of Fisker Automotive could end up costing the U.S. government much more than the $168 million it loaned to the maker of the Karma plug-in hybrid sports car.
According to its bankruptcy filing on Friday, Fisker owns tax breaks worth $320 million.
Fisker’s bankruptcy papers said the Southern California-based company plans to sell its automotive operations to a business affiliated with Hong Kong tycoon Richard Li, but it will hold on to the tax breaks after it emerges from bankruptcy.
Fisker piled up some $800 million in net operating losses in recent years, which have a future cash benefit worth approximately $320 million, according to the bankruptcy filing.
That lost tax revenue would add to taxpayers’ pain from Fisker’s failure.
The Obama administration’s green-energy loan guarantees: The “investments” on behalf of the American taxpayer and overriding the obviously cretinous free-market signals of the private sector that just won’t die.
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