Opinion: Obama was warned of loan dangers long before Solyndra sank
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
Top economic advisors to President Obama warned him a year ago about the serious political and financial risks of the Energy Department’s loan guarantee program that has resulted in taxpayers likely being responsible for the loss of $527 million loaned to the politically-connected California solar firm Solyndra.
That loan is currently under investigation by a House subcommittee and the FBI, which raided company offices earlier this month.
Obama visited the Solyndra plant in 2010, touting it as a shining example of his program to simultaneously boost the U.S. green-energy industry and create new jobs. Last winter the Energy Dept. restructured the more than half-billion dollar loan to the troubled firm.
But on Aug. 31 the company, whose major owner was also a major fundraising bundler for the 2008 Obama-Biden campaign, filed for bankruptcy and eliminated most of its 1,100 jobs.
In a detailed story posted overnight, The Times’ Tom Hamburg, Kim Geiger and Matea Gold outline the danger signals set off in October 2010 when secretary of the Treasury Tim Geithner and chief economic advisor Lawrence Summers warned the president that Energy’s vetting process was not stringent enough to weed out troubled applicants in advance.
Energy Secy. Steven Chu, who like Obama holds a Nobel Prize, was eager to push through applications by 30 companies for the program’s $17 billion. He wanted even less oversight from Treasury.
The story has developed legs for two reasons:
One, it hints at possible high-level political favoritism using taxpayer dollars in risky ventures with well-connected business people, what some have labeled ‘crony capitalism.’
And, two, it’s a classic example of the fundamental ongoing D.C. debate over government’s proper role in the economy and the financial dangers to taxpayer funds inherent when officials and bureaucrats, not free market forces, pick corporate winners and losers.
Pencil this into your calendar for future political debate throughout 2012.