Obama Green Energy Gem Tanks Two Years After Taxpayer Prop
September 1, 2011 by Sam Rolley
In March 2009, the Administration of Barack Obama bypassed regular procedures designed to protect taxpayers to guarantee funding to a politically connected green energy company through a Department of Energy lending program. On Wednesday, the company announced that it must now suspend operations and file for Chapter 11 bankruptcy due to green energy market conditions.
Solyndra LLC, an American manufacturer of cylindrical solar systems, was given a guarantee of $535 million in Department of Energy funding as a part of the Administration’s heavily publicized effort to create green jobs and alternative energy sources.
iWatch News reported questionable finances within the company in May after the Department of Energy disclosed it was being forced to restructure Solyndra’s loan package. Questions also arose about the company’s investor relationships with the President. One major investor was George Kaiser, an Oklahoma billionaire who acquired between $50,000 and $100,000 for Obama during the 2008 election.
A press release on the Department of Energy website posted the same day as Solyndra bankruptcy announcement read:
Solar panel manufacturing is a growing international market, with increasingly intense competition from Chinese manufacturers who are supported in many cases by interest free government financing that is much more generous than what the U.S. provides. The price for solar cells has fallen 42 percent since the beginning of the year — even as European countries, currently the largest market for solar panels, are facing economic turmoil and have greatly reduced subsidies for solar power. The changing economics have affected a number of solar manufacturers in recent months, including unfortunately, Solyndra, a once very promising company that has increased its sales revenue by 2000 percent in three years and sold more than 1000 installations in 20 countries. As a result, Solyndra now plans to suspend its manufacturing operations and file for bankruptcy protection.
Next, a statement that seemingly sought to take the heat off the Obama Administration and the Department of Energy for their risky loan guarantees:
This loan guarantee was pursued by both the Bush and Obama Administrations. Private sector investors – who put more than $1 billion of their own money on the line – also saw great potential in the company.
Solyndra placed the blame elsewhere in its announcement:
…global economic and solar industry market conditions have forced the Company to suspend its manufacturing operations.
And as for the green jobs:
As a result of the suspension of operations approximately 1,100 full-time and temporary employees are being laid off effective immediately.
The Government Accountability Office had been critical of the Department of Energy’s loan guarantee program (even in instances unlike Solyndra where due process was carried out), alleging that some beneficiaries of guarantees had received preferential treatment because of political ties. A July report from the agency said that the Department of Energy had in relation to the loans, “…broadly indicated the program’s direction but has not developed all the tools necessary to assess progress.” A request was made that the Department improve its ability to evaluate the implementation of loan guarantees with regards to job creation, projected business success and profitability.