We are living in Obama’s Solyndra economy – cronyism at its worst

In 2009 the Obama administration gave $535 million to Solyndra, claiming that it would create 4,000 new jobs. However, instead of creating those 4,000 new jobs, the company went bankrupt. It was later revealed that the company’s shareholders and executives had made substantial donations to Obama’s campaign, that the company had spent a large sum of money on lobbying, and that Solyndra executives had had many meetings with White House officials.

It was also revealed that the Obama administration had already been aware of Solyndra’s financial troubles. For example, according to the company’s security filings in 2009, the company had been selling its product for less than the cost of production. In 2010, Obama visited the Solyndra factory and cited it as a role model for his stimulus program, saying “It’s here that companies like Solyndra are leading the way toward a brighter and more prosperous future.” The Washington Post wrote of this, “Administration officials and outside advisers warned that President Obama should consider dropping plans to visit a solar startup company in 2010 because its mounting financial problems might ultimately embarrass the White House.” Solyndra was a private company, but had been planning to use its government loans as a means of going public – so when Obama knowingly overstated the company’s condition in order to help his friends at Solyndra, he broke the same law that Martha Stewart had been sent to prison for breaking.

In September 2011, federal agents visited the homes of Brian Harrison, the company’s CEO, and Chris Gronet, the company’s founder, to examine computer files and documents.  Also in September 2011, the U.S. Treasury Department launched an investigation.

On September 13, 2011, the Washington Post reported on emails which showed that the Obama administration had tried to rush federal reviewers to approve the loan so Vice President Joe Biden could announce it at a September 2009 groundbreaking for the company’s factory. The company was a hallmark of President Obama’s plan to support clean energy technologies.

The New York Times reported that government auditors and industry analysts had faulted the Obama administration for failing to properly evaluate the company’s business proposals, as well as for failing to take note of troubling signs which were already evident. In addition, Frank Rusco, a program director at the Government Accountability Office, had found that the preliminary loan approval had been granted before officials had completed the legally mandated evaluations of the company.

The New York Times quoted Shyam Mehta, a senior analyst at GTM Research, as saying “There was just too much misplaced zeal at the Department of Energy for this company.” Among 143 companies that had expressed an interest in getting a loan guarantee, Solyndra was the first one to get approval. During the period when Solyndra’s loan guarantee was under review, the company had spent nearly $1.8 million on lobbying. Tim Harris, the CEO of Solopower, a different solar panel company which had obtained a $197 million loan guarantee, told the New York Times that his company had never considered spending any money on lobbying, and that “It was made clear to us early in the process that that was clearly verboten… We were told that it was not only not helpful but it was not acceptable.”

The Washington Post reported that Solyndra had used some of the loan money to purchase new equipment which it never used, and then sold that new equipment, still in its plastic wrap, for pennies on the dollar. Former Solyndra engineer Lindsey Eastburn told the Washington Post, “After we got the loan guarantee, they were just spending money left and right… Because we were doing well, nobody cared. Because of that infusion of money, it made people sloppy.”

On September 29, 2011, the Washington Post reported that the Obama administration had continued to allow Solyndra to receive taxpayer money even after it had defaulted on its $535 million loan.

On October 7, 2011, The Washington Post reported that newly revealed emails showed that Energy Department officials had been warned that their plan to help Solyndra by restructuring the loan might be illegal, and should be cleared with the Justice Department first. However, Energy Department officials moved ahead with the restructuring anyway, with a new deal that would repay company investors before taxpayers if the company were to default. The emails showed concerns within the Obama administration about the legality of the Energy Department’s actions. In addition, an Energy Department stimulus adviser, Steve Spinner, had pushed for the loan, despite having recused himself because his wife’s law firm had done work for the company.

In January 2012, CBS News reported that Solyndra had thrown millions of dollars worth of brand new glass tubes into garbage dumpsters, where they ended up being shattered. Solyndra told CBS that it had conducted an exhaustive search for buyers of the glass tubes, and that no one had wanted them. However, CBS discovered that Solyndra had not offered the glass tubes for sale at either one of its two asset auctions that took place in 2011. In addition, David Lucky, a buyer and seller of such equipment, told CBS that he would have bought the tubes if he had had a chance to do so. Greg Smestad, a solar scientist who had consulted for the Department of Energy, also agreed that the tubes had value, and had asked Solyndra to donate any unwanted tubes to Santa Clara University. Smestad stated, “That really makes me sad… Those tubes represent intellectual investment. These could have had a better value to do public good. I think they owed the U.S. taxpayer that.”

In April 2012, CBS News reported that Solyndra had left a substantial amount of toxic waste at its abandoned facility in Milpitas, California.

Solyndra was not the only “green energy” company involved in this type of fraud. After Obama gave Raser Technologies $33 million to build a power plant, the company declared bankruptcy, and owed $1.5 million in back taxes. After Obama gave Abound Solar, Inc. a $400 million loan guarantee to build photovoltaic panel factories, the company halted production and laid off 180 employees. After Obama gave Beacon Power a $43 million loan guarantee to build green energy storage, the company filed for bankruptcy. After Obama approved $2.1 billion in loan guarantees for Solar Trust of America so it could build solar power plants, the company filed for bankruptcy.

Although Obama stated that all of the “green energy” companies that received taxpayer money were chosen “based solely on their merits,” the truth is that 71% of these grants and loans went to Obama donors and fundraisers, who raised $457,834 for his campaign, and were later approved for grants and loans totaling more than $11 billion. By November 2011, the Energy Department’s inspector general had begun more than 100 criminal investigations related to Obama’s stimulus. Although an “independent” review said that Obama had not done anything wrong, it was later reported that Herbert M. Allison Jr., the person who had conducted this “independent” review, donated $52,500 to Obama’s campaign.

March 21, 2013. Tags: Barack Obama, Obama, Politics, Solyndra. Barack Obama, Politics. Leave a comment.