Posts tagged Solyndra
By Bill Robinson
The gasoline prices are nearly double what they were a year ago because the value of the U.S. dollar is shrinking, U.S. Sen. Rand Paul, R-Ky., told a join meeting of the Richmond and Berea chambers of commerce Friday.
“Gasoline is not more scarce than it was a year ago,” he said. “The value of your dollar is shrinking because your government runs up a massive debt and then prints money to pay it.”
Working-class people, the elderly on fixed incomes and new graduates entering the work force need to realize, “Big government is not your friend,” the senator said.
“When they say, ‘We’re going to give you this. It’s free.’ It’s not free. They’re destroying the dollar,” he said. “This year you’ll pay four bucks for a gallon of gas. Next year you’ll pay five.”
About 40 percent of every dollar the federal government spends is borrowed, Paul continued. That is about $4 billion a day and adds up to more than $1 trillion a year.
“This is unsustainable,” Paul said.
America is close to having half of its people receiving a government check, he said, and that promises to induce an economic crisis such as Europe is experiencing.
Officials at the Department of Energy were warned that they could be violating the law if they restructured a loan guarantee for the solar panel maker Solyndra so that investors would be repaid before taxpayers. They went ahead anyway, The Washington Post reports, after getting a look at the email correspondence that preceded the Solyndra deal’s approval.
The documents offer new evidence of wide disagreement between officials at the Energy Department and officials at the Treasury Department and Office of Management and Budget, where questions were raised about the carefulness of the loan vetting process used to select Solyndra and the special help it was given as its finances deteriorated. Energy Department officials continued to make loan payments to the company even after it had defaulted on the terms of its loan.
That revelation follows on the news that a former Obama fundraiser and Energy Department official, Steve Spinner, pushed for the Solyndra loan even though his wife’s law firm worked for the company and he had said he would recuse himself. The Post points to a disagreement among agencies, one that was seemingly won by the Energy Department, about whether the structure of the loan was justifiable.
The e-mails show that Mary Miller, an assistant Treasury secretary, wrote to Jeffrey D. Zients, deputy OMB director, expressing concern. She said that the deal could violate federal law because it put investors’ interests ahead of taxpayers’ and that she had advised that it should be reviewed by the Justice Department.
“To our knowledge that never happened,” Miller wrote in a Aug. 17, 2011, memo to the OMB.
In February, the restructuring was approved by Energy Secretary Steven Chu.
Email traffic reflected growing political concern as the company began to founder, TIME reports:
As recently as August of this year, as Solyndra teetered on default, the import of the company’s failure was not lost on White House officials. On August 26, Heather Zichal, a deputy assistant to the President on energy policy, e-mailed a colleague at the Office of Management and Budget, asking if he would be on an upcoming conference call about Solyndra.
“Y. What’s the deal?” the colleague wrote back.
“*#~@storm,” replied Zichal.
Obama was advised against visiting Solyndra after financial warnings
“Now there are going to be some failures,” he said in an ABC News/Yahoo online television interview. “Hindsight is always 20/20. It went through the normal review process and people thought this was a good bet.”
Since Solyndra filed for bankruptcy on Aug. 31, leaving taxpayers on the hook for almost half a billion dollars, the White House has said that decisions about supporting the solar-panel manufacturer were made by career employees at the Department of Energy, starting in the Bush administration.
But the e-mails capture the vigorous debate within the Obama White House about whether the solar-panel manufacturer was a smart bet. They also highlight the angst inside the West Wing about whether the president’s initiative to support clean energy was ill-equipped to pick winners, or could, as some hoped, help validate Obama’s use of $80 billion in stimulus to build a clean-energy industry.
Obama’s Energy Department had provided Solyndra with a government-backed loan in 2009. A year later, when the company ran out of money, the agency agreed to refinance Solyndra’s loan and continue paying out federal funds.
What was once a showcase of that Obama clean-energy initiative is now a political crisis for the White House. Despite the federal largesse, Solyndra’s sudden shutdown left 1,100 employees out of work and many of its assets up for auction.
A week later, FBI agents raided the company’s headquarters in a criminal probe looking at potential accounting fraud.
In spring 2010, before Solyndra’s fortunes turned, the White House highlighted the administration’s investment in the company in a “Main Street Tour,” to show taxpayers how their stimulus dollars had been put to work.
The Department of Energy (DOE) Friday finalizedgrants for four solar energy projects. The guaranteed funds being made available to the companies total more than $4.7 billion.
Despite the growing Solyndra scandal, yesterday the Department of Energy approved $1 billion in new loans to green energy companies — including a $737 million loan guarantee to a company known as SolarReserve:
SolarReserve LLC, a closely held renewable energy developer, received a $737 million U.S. Energy Department loan guarantee to build a solar-thermal project in Nevada.
The 110-megawatt Crescent Dunes project, near Tonopah, Nevada, will use the sun’s heat to create steam that drives a turbine, the agency said today in a e-mailed statement. SolarReserve is based in Santa Monica, California.
On SolarReserve’s website is a list of “investment partners,” including the “PCG Clean Energy & Technology Fund (East) LLC.” As blogger American Glob quickly discovered, PCG’s number two is none other than “Ronald Pelosi, a San Francisco political insider and financial industry polymath who happens to be the brother-in-law of Nancy Pelosi, the Minority Leader of the United States House of Representatives.”
But wait… there’s more! One of SolarReserve’s other investment partners is Argonaut Private Equity:
Steve Mitchell and Argonaut Private Equity might have a chance to recoup some of their losses in the Solyndra debacle now that the Department of Energy has given a $737 million dollar loan guarantee to a company backed by Argonaut that also lists Mitchell among its board of directors.
Mitchell served on the Solyndra LLC Board of Directors. He also serves as Managing Director for Argonaut Private Equity, a company that invested in Solyndra through the LLCs parent company. After Solyndra declared bankruptcy, two Democratic members of the U.S. House asked that Mitchell testify about Solyndra. Though he has not appeared before Congress, he has “been asked to provide documents to Congress” pertaining to Solyndra.
And for good measure, it’s also noteworthy that Obama is about to hold a big money fundraiser at the home of Tom Carnahan in St. Louis:
Carnahan, a member of the prominent Missouri Democratic family, has been tapped by the Obama campaign as its chief Missouri fundraiser. He is chairman of the board of Wind Capital Group, a wind energy company that makes it corporate headquarters in St. Louis. He formerly was president and CEO of the company.
Last year, Wind Capital’s Lost Creek Farm facility in northwest Missouri received a $107 million tax credit from the Treasury Department, among many such wind operations receiving support from from stimulus funds.
Tom Carnahan is the son of former Missouri governor Mel Carnahan and former U.S. senator Jean Carnahan. He’s also the brother of current Missouri secretary of state, Robin Carnahan.
It’s increasingly hard to tell the government’s green jobs subsidies apart from the Democrats’ friends and family rewards program.
Rep. Darrell Issa (R-Calif.) said Tuesday that his committee plans to investigate government loan programs to private corporations in light of allegations of improper dealings between the White House and failed energy company Solyndra and wireless start-up LightSquared.
“I want to see when the president and his cronies are picking winners and losers… it wasn’t because there were large contributions given to them,” the chairman of the Oversight and Government Reform Committee said Tuesday morning on C-SPAN.
Issa said the committee was looking at whether it was improper for members of Congress or White House staff to select companies eligible for subsidized government loans when those companies could give campaign donations. Loan programs have been a popular tool to provide funding for popular industries — like tech, green energy, and American auto companies — at more favorable terms than could be secured privately.
The Obama administration has been defending itself against criticism by Republicans that it exerted improper influence to the aid of both companies.
Solyndra abruptly filed for bankruptcy earlier this month, surprising both employees and the administration, which had secured $535 million in low-interest loans for the company.
Failed solar panel maker Solyndra’s Securities and Exchange Commission filings show that seven months after the Obama administration’s Department of Energy approved a $535 million federal loan guarantee, Solyndra applied for a second one valued at $469 million.
“On September 11, 2009, we applied for a second loan guarantee from the DOE, in the amount of approximately $469 million, to partially fund Phase II,” Solyndra wrote in a report it filed with the SEC on December 18, 2009. “If we are unable to obtain the DOE guaranteed loan in whole or in part, we intend to fund any financing shortfall with some combination of the proceeds of this offering, cash flows from operations, debt financing and additional equity financing.” (RELATED: White House wary of Solyndra re-election effects)
Solyndra applied for that extra $469 million the same year it received the $535 million of ultimately wasted taxpayer money which is the subject of a current congressional investigation. According to the company’s SEC filings, that $535 million was only intended to cover Phase I of the construction of its “Fab 2″ solar panel manufacturing facility.
The second application came just one week after Solyndra broke ground on its facilities construction project on Sept. 4, 2009.
Solyndra told the federal government it needed a total of $642 million to complete Phase II, most of which would have been covered by the $469 million Solyndra sought to borrow with taxpayer-funded guarantees.
It’s unclear if the now-bankrupt and scandal-embroiled green energy company actually received a second loan. Department of Energy officials did not immediately respond to The Daily Caller’s request for comment, and the company’s SEC filing left the question open.
“Although the DOE determined on November 4, 2009, that our initial application was complete, and we submitted the second part of the application on November 17, 2009, there is no guarantee that the DOE will approve our application in the full amount requested or at all,” the company wrote in its December 18, 2009 SEC filing.
Dan Simmons of the Institute for Energy Research told TheDC that Solyndra’s failure looks even worse in light of its aim for even more taxpayer money in 2009.
“Solyndra saw the American taxpayer as their personal piggy-bank, so it’s no surprise that they wanted another half billion dollar loan from the taxpayer,” Simmons said in an email. “The only surprise is that the Obama administration rejected the second loan. After all, both private and Department of Energy financial analysts were not excited by Solyndra’s prospects before the first loan.”