The White House decision to back a California-based maker of advanced solar panels with a $535 million loan guarantee in 2009 looks seedier by the day. By all appearances, this deal and subsequent debacle had more to do with campaign cash and hoodwinking voters than it did with green energy.
Solyndra Inc. burned through its loans in just two years, filed for bankruptcy and threw its employees on the street.
If the story stopped there, it would be bad enough. But a trail of emails trickling out over recent months reveals much worse.
The emails suggest that the Obama administration put taxpayers on the hook for Solyndra without due diligence and then tried to hide the grim news about the company’s impending failure right before the 2010 midterm election.
Just six months after Uncle Sam guaranteed the loan, the company was losing money so fast that its auditor voiced doubts about its ability to continue operations. Some White House staffers had questioned the wisdom of backing such a high-risk venture, but they were overruled.
The White House wanted to speed up Solyndra’s government guarantee at least in part because Vice President Joe Biden planned to speak at the groundbreaking of a company factory. Obama later visited Solyndra facilities with TV cameras in tow to tout his renewable energy policies. That bit of stage management wound up costing taxpayers a fortune. Expect that TV footage to show up in 2012 campaign commercials ― GOP commercials.
Investors with Republican and Democratic ties backed Solyndra, but a big Obama donor ― Oklahoma billionaire George Kaiser ― may have played a pivotal role in securing the government financing. He discussed Solyndra with the White House as the company tried to get even more taxpayer backing and stave off collapse. Unable to secure a second government loan, Kaiser and fellow investors made a private loan ― but they moved ahead of taxpayers in line for repayment when Solyndra defaulted. The administration said Kaiser never lobbied on behalf of the company. Emails contradict that claim.
This week, evidence surfaced at a congressional hearing that Energy Department officials pressed the company to delay a planned layoff until one day after the November 2010 midterm election. The obvious conclusion: the administration didn’t want voters to know that the government’s half-billion-dollar, signature green-energy investment was going belly up.
Voters gave Democrats a shellacking anyway on Nov. 2. Solyndra announced its layoffs on Nov. 3.
We have a feeling that Solyndra won’t be the last federal energy investment to fall apart. At Solyndra’s groundbreaking, Energy Secretary Steven Chu celebrated his agency’s swift award of its loan guarantee and promised to make many similar deals with “unprecedented speed.” Chu recently said he stands by those words.
No lessons learned? Good question to ask when Chu testifies before Congress on Thursday.
We don’t object to the government providing incentives for renewable energy research and development. But it has to do that with great care ― bureaucrats making decisions about where to put other people’s money are not going to be the best venture capitalists. They have no skin in the game.
The private sector is much better than the government at commercializing technology. Green energy, and America’s competitiveness in the green energy field, can be advanced with government support for research and even for early-stage projects that put science into operation. Keep in mind, as we discuss elsewhere on this page, that the nation desperately needs to curb its deficit spending.
If we’re going to make these investments, they have to be done smartly, carefully ― and they can’t be based on politics.
From George Kaiser to the post-election layoffs, Solyndra is exploding on the Obama administration.
(The Chicago Tribune)
(Distributed by MCT Information Services)
