Opinion: House members probe $535-million loan guarantee by Obama Energy Dept. for Solyndra solar plant
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Here’s a sad and revealing chronology about a U.S. president named Obama, a California company named Solyndra and, now, a congressional investigation into the administration’s loan guarantee of $535 million in a failed green energy project that was supposed to create jobs.
But it didn’t.
At enormous taxpayer cost.
The story starts in the early 2009 days of the Democratic administration of Barack Obama and the hastily written economic stimulus legislation passed by the whopping Democratic congressional majorities of Sen. Harry Reid of Nevada and House Speaker Nancy Pelosi of San Francisco.
You’ll remember it was very important to pass the $787-billion economic stimulus bill as quickly as possible then to keep the 7.1% national unemployment rate from rising further. Today, it’s 9%. So, that didn’t work out well, either.
Remember President Obama went to the Caterpillar plant in his home state of Illinois and said ....
... the worthy stimulus funds would enable the heavy-equipment giant to start hiring again? And Caterpillar’s president said, well, no, not really. He foresaw more layoffs first. But the urgent flow of news moved on because it was very important to get that borrowed money moving out the door as quickly as possible. Back in those days, the term ‘shovel-ready’ wasn’t a joke. It was a promise to put this money to work creating jobs ASAP so Obama could get on with the business of his beloved healthcare bill.
Obama had the idea that since he was going to spend three-quarters of a trillion dollars anyway, why not put a fair chunk of that dough into kick-starting green energy projects, which often need subsidies because they’re still not economically practical to work on their own? Potentially win-win. Or not.
On Sept. 9 that year in a special closed-circuit TV program for the groundbreaking of Solyndra’s new plant, Vice President Joe ‘Recovery Summer’ Biden announced the signing of the $535-million federal loan guarantee, the Energy Department’s first under the stimulus plan.
Joe said, ‘These jobs are the jobs that are going to define the 21st century that will allow America to compete and to lead like we did in the 20th century.”
The money would finance construction of a Solyndra facility, creating 3,000 construction jobs and 1,000 full-time positions in the modern plant making photovoltaic solar panels.
Because it was such a promising venture, Obama himself visited Fremont eight months later (see photos here and video report here) to hail his administration’s decision to move in that direction.
The president said the facility was ‘leading the way to a brighter and more prosperous future’ and the plant was ‘a testament to American ingenuity and the best workers in the world.’
He said high-tech facilities like Solyndra would help ‘lay a new foundation for lasting growth.’
Then came last November, the day after the midterm elections when everyone was focused on the historic shift to Republican control of the House. Solyndra announced then that not only was it not going to create those 1,000 full-time jobs so eagerly hailed by Obama and Biden, but it also was going to close an older factory and actually lay off 175 full- or part-time workers.
That left U.S. taxpayers holding the financial bag for nearly three-quarters of that loan guarantee, about $390 million.
(Clarification: A Solyndra spokeswoman notes ‘the Department of Energy guaranteed private loans at the height of an unprecedented credit crisis to free up private dollars for a growing – and threatened – strategic industry. These are private loans that Solyndra plans to fully pay back.’
(The spokeswoman adds: ‘To lower costs in the face of intense, subsidized Chinese competition, the company ended production at its old manufacturing facility “Fab 1” in November 2010. That facility had nothing to do with the loan guarantee. Fab 2, a facility currently churning out 1,000 panels, 7 days a week was constructed using the guarantee. The taxpayers have not had to cover any of the company’s loans.’)
But now Fred Upton and Cliff Stearns, chairmen of the House Energy and Commerce Committee and Oversight Subcommittee, have been examining the company’s financials and the possibility of waste and fraud. Since its 2005 founding, it seems that Solyndra has never made a profit and its own auditor had raised serious questions that did not slow or stop the immense guarantee’s approval by the Obama administration.
Last week Upton and Stearns wrote Energy Secretary Steven Chu. The Republicans said:
While we understand the purpose of the Loan Guarantee Program is to help private companies engaging in clean energy products to obtain financing by providing loan guarantees, subsequent events raise questions if Solyndra was the right candidate to receive a loan guarantee in excess of half a billion dollars.
Oh, one other thing: The majority owner of Solyndra is George Kaiser. He’s an Oklahoma billionaire. He was also a bundler, a major fundraiser, for the 2008 presidential campaign of Barack Obama and Joe Biden.
But that’s probably coincidence.
-- Andrew Malcolm
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H/T John Rossomando