John on August 31, 2011 at 11:47 am
Solyndra, a California business which manufactures solar panels, has shuttered and is filing for chapter 11 bankruptcy. This comes just over a year after the company was touted by the President as an example of public-private partnership and the bright future of green energy.
Solyndra received over half a billion in loans from the Treasury at extremely low interest rates, allowing it to build a new manufacturing facility. Congressional investigators have caught a whiff of scandal as the rates given the company were extremely low and neither Treasury or OMB will provide documents to justify them. We’ll get to that part of the story in a moment, first here is President Obama visiting Solyndra last year. Watch the first 30 seconds or so:
And we can see the positive impacts right here at Solyndra. Less than a year ago we were standing on what was an empty lot. But through the recovery act this company received a loan to expand its operations. This new factory is the result of those loans.
Obama also leaned heavily on Solyndra as an example of green energy’s promise breaking into the present. A bit later in the video clip above he says:
Every day that you build this expanded facility, as you fill orders for solar panels to ship around the world you’re demonstrating that the promise of clean energy isn’t just an article of faith, not anymore. It’s not some abstract possibility for science fiction movies or a distant future, 10 years down the road or 20 years down the road. It’s happening right now. The future is here.
So it must come as a blow to the President that today Solyndra has shuttered its doors and announced it is filing for bankruptcy.
Meanwhile, questions have arisen about the nature of the loans given to Solyndra. Just yesterday Bruce Krasting at Wall Street Pit noted the extremely low interest rates given to Solyndra (notes in red are his):
Which raises the obvious question. Why did Solyndra get subsidized financing? That’s a question a congressional oversight committee has been seeking an answer to well before today’s news. You can get a detailed breakdown of the history in this video clip. I’ll summarize it briefly.
Congress requested documents related to the Solyndra loan from the Office of Management and Budget. After three months and zero documents produced, a hearing was scheduled. An OMB deputy director was asked to attend but didn’t show up, claiming a scheduling conflict. Finally, OMB allowed that congressional staff could view some of the requested documents on site, but when they arrived in mid-July not all the documents were available and some that were made available had been redacted. Specifically, the information on risk ratings had been lined out. Given that this was exactly the information congress had been looking for the entire exercise was becoming a waste of time. At this point the committee held a hearing to consider issuing a subpoena for the documents. The argument seems to have broken on partisan lines with Rep. Waxman arguing against a “fishing expedition.” Now hat Solyndra has gone belly up, perhaps a little fishing is a good idea.
Finally there is also this ABC news story from late May of this year which shows why oversight was badly needed in this case:
The Obama administration bypassed procedural steps meant to protect taxpayers as it hurried to approve an energy loan guarantee to a politically-connected California solar power startup, ABC News and the Center for Public Integrity’s iWatch News have learned.
The Energy Department in March 2009 announced its intention to award Solyndra Inc. a $535 million loan guarantee before receiving final copies of outside reviews typically used to vet such deals. An independent federal auditor who has reviewed the energy loan program said moving so quickly without completing thorough reviews risked exposing the program to claims of political influence and put taxpayers at greater risk…
The loan guarantee, the administration’s first for a clean energy project, benefited a company whose prime financial backers include Oklahoma oil billionaire George Kaiser, a “bundler” of campaign donations. Kaiser raised at least $50,000 for the president’s 2008 election effort.
Could be a coincidence but there’s no doubt that the President and his team at DOE and the Treasury bet heavily on Solyndra with public money. If they didn’t do their due diligence that’s a problem.
No comments:
Post a Comment