Solyndra update: WH doubled down.

The AP has this piece running today dealing with how the WH knew Solyndra was a disaster waiting to happen, and that when it happened, it was coming right around the 2012 election, too. While the AP article is not clear as to exactly when the WH figured out this company was a disaster waiting to happen – likely I feel, that because pointing out that they knew even before the loan was made, would be damning – it is clear that they knew Solyndra was in deep trouble before Obama went on stage in 2010 to tout them as the example of the success of the stimuluspatronage bill. Epic fail on both counts.

From an e-mail by WH budget official trying to red flag this disaster we get the following:

An email from a White House budget official to a co-worker discussed the likely effect of a default by Solyndra Inc. on President Barack Obama’s re-election campaign.

“The optics of a Solyndra default will be bad,” an official from the Office of Management and Budget wrote in a Jan. 31 email to a senior OMB official. “The timing will likely coincide with the 2012 campaign season heating up.”

You think? But it gets better! Why was the e-mail sent? Well lets read on.

The email, released by the House Energy and Commerce Committee as part of its investigation into a half-billion dollar federal loan to Solyndra, said the budget official wanted White House budget director Jacob Lew to warn Energy Secretary Steven Chu about the risk posed by Solyndra, which was once the poster child for the Obama administration’s clean energy program but by early this year was teetering on collapse.

At the time of the email, the Energy Department was pushing to release an additional $67 million to Solyndra. The Fremont, Calif.-based solar panel maker received a total of $528 million in federal loans before declaring bankruptcy Aug. 31 and laying off 1,100 workers.

They where considering if they should give Solyndra another $67 million of tax payer money. Was that money part of the original allocated half a billion dollars, or was that money on top of that? If the first, then the money was given despite the terrible news, and on can not help but speculate that considering what they knew, if it was done hoping to prevent or postpone the inevitable? If it was new money, we obviously where spared that pain.

We also again get validation that people knew Solyndra was in trouble, but that the WH dismissed them:

At least three reports by federal watchdogs over the past two years warned that the Energy Department had not fully developed the controls needed to manage the multibillion-dollar loan program.

Emails obtained by The Associated Press show that a White House official dismissed reports about Solyndra’s gloomy future. An email from Greg Nelson, a White House official who had been involved in the planning of Obama’s May 2010 trip to Solyndra’s headquarters, to a Solyndra executive downplayed a July 2010 news story in a trade publication that criticized the company’s financial health.

Seems B.S.,” Nelson wrote.

A 2009 report by the Energy Department’s inspector general warned that the DOE lacked the necessary quality control for the loan guarantee program, which was created in 2005 to support clean-energy projects that could not obtain conventional bank loans due to high risks.

In July 2010, the Government Accountability Office said the Energy Department had bypassed required steps for funding awards to five of 10 applicants that received conditional loan guarantees.

Can we now stop pretending that not only did the people in the WH get told Solyndra was a dead beat company, but that they also where warned that they had no mechanism to make sure Solyndra used the money wisely and that the DOE had bypassed required steps in the process by the GAO (that’s fast tracking if you have a problem with English comprehension), but that then politics and ideology trumped common sense, here?

And lest there be any doubt that this was ideology trumping everything else, there is this tidbit:

The report did not publicly identify the companies that were not properly vetted, but congressional investigators say one of them was Solyndra. The company was the first to receive a loan guarantee after the program was expanded under the 2009 stimulus law.

Solyndra was not the only one that had their application process not thoroughly vetted. There is a pattern here. How many of these “other companies” that are not identified by the AP article had similar problems as Solyndra but still got money? How many more Solyndra-like failures are there in the near or not-so-near future? Why where these companies fastracked in the first place? Was it either desperation to produce something with all that stimulus cash being thrown around, or was it because of the political/ideological belief that green industry was the solution to all our ills? Me, I bet it was a little bit of both. And it get’s better!

The Obama administration is moving to finalize as many as 15 loan guarantees for renewable-energy companies before the stimulus program ends on Sept. 30. Republicans question whether that could lead to more loans to companies that fail like Solyndra.

Time will tell. One thing is for sure: this is damaging to Obama, the progressives and the green movement in general, and most of all to the tax payer which foots the bill for these ideologues and their crusades against evil fossil feul in the progressive government controlled battle to pick who wins and who loses. And while I suspect no laws where broken, it is obvious that this will haunt Obama and the left in 2012.

Comments are closed.

  1. sahrab

    I’m sure CM will have a legitamate, fact based, non-ideological *rebuttal to the new information (which coincides to what you’ve been sayign all along) about Fast and Furious…. err Solyndra any time now

    * when pigs fly out of my butt

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  2. Mississippi Yankee

    Because the private investors were fully protected this political payoff scheme was ‘put down like an old dog’ now in the hopes that a short-memoried public will have moved on.

    The Obama administration restructured a half-billion dollar federal loan to a troubled solar energy company in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, government records show.

    Kinda/sorta like what happened when GM and Chrysler went tits-up no?

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  3. Mook

    It’s looking like Soylendra may have received a second $469 million federal loan guarantee, bringing the total bill for the Soylendra fiasco to $1 Billion. Not sure if/when this story will get covered with the attention it deserves by the national media.

    No doubt leftist Dems will dishonestly excuse it with “politicians/Repubs do this all the time”..

    I heard the the Federal Reserve has offered to backstop Europe’s financial meltdown in an offer to print more money to be Europe’s ‘lender of last resort’. And to think so many believe that Perry was “extreme” in his comment pointing that Federal Reserve quantitative counterfeiting was so extreme as to be borderline ‘treasonous’. Fed Reserve’s actions are definitely knife-fucking this country in the face. It’s dishonest to pretend otherwise

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  4. CM

    Alex, some of your quotes appear to be from a different link.
    E.g. http://www.fmnewschicago.com/news/article.aspx?id=3200530

    I think this is by far the most damning part of the article you did link to:

    An Associated Press review of regulatory filings shows that Solyndra was hemorrhaging hundreds of millions of dollars for years before the Obama administration signed off on the original $535 million loan guarantee in September 2009. The company eventually got $528 million.

    The more that is revealed, the more it certainly looks clear that the Obama Administration made a really bad and dumb investment on this occasion.

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  5. CM

    As for the jobs claim (this is from Alex from the thread that turned predictably retarded as he failed to defend any of his points and so started throwing his toys out of the cot and just ranting):

    If you are generous and pretend they will create twice as many jobs as they have for the first half of the $38.6 billion they have allocated, we barely create 10K jobs – at a cost of something like $3.86 million per job – in all. Sounds like free money to me man. Maybe your definition, for whatever reason, is different and you have a far, far lower threshold of what should be considered an outright waste, but even then, how does that make me a liar. That’s free money man.

    The emphasis on this $640K/job number assumes every loan defaults, which is implausible.
    The correct numerator is not $38.6 billion, but the “credit subsidy” and that’s likely to be well under $5 billion, which gets you into a much more reasonable neighborhood re bang-for-buck. The “credit subsidy” is the amount of money set aside to cover “defaults and delinquencies, interest subsidies, or other payments” resulting from the loan guarantees. The stimulus provided $2.5 billion for the cost of the loan guarantees for renewable energy projects. If the companies do well, they won’t need to draw on the guarantees and won’t cost the government anything.”

    BTW, DOE also estimates that the program has saved 33,000 jobs and added 7,391 temporary construction jobs.
    http://www.washingtonpost.com/business/economy/clean-tech-job-creation/2011/09/14/gIQAMg43SK_graphic.html

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  6. AlexInCT *

    Forget dumb investment, CM. Check out what Andy McCarthy says about this. I am not sure if even if you think this is criminal that that they have any way or means to pursue a criminal trial here. If they could every damned politician would be behind bars.

    As more information comes out we discover that the Obama WH was warned that Solyndra was going to go boom before the second part of that pay out was done, and they forced it through anyway. The fact that this loan was structured by request from the WH in such a way that Obama’s bundler Kaiser and other investors like him would get paid first, ahead of the US tax payers, when Solyndra went bankrupt, is going to come back to bite them. Hard.

    It’s no wonder the guy likely behind all this Soyldra stuff is feigning an Alzheimer attack on the subject. In one shot these people have done more damage to the green industry than the most villainous and evil bad guy the pro-green people could ever come up with.

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  7. AlexInCT *

    The emphasis on this $640K/job number assumes every loan defaults, which is implausible.

    Erm,

    So your contention is that if the loan doesn’t default, the money wasn’t spent CM? Just because they pay the money back doesn’t mean that the job didn’t cost that much to create/keep. All it means is that the tax payer got the investment money back and government then spent it elsewhere. But the cost of the job still remains whatever was given out vs. how many jobs it created, defaulted on or not.

    The correct numerator is not $38.6 billion, but the “credit subsidy” and that’s likely to be well under $5 billion, which gets you into a much more reasonable neighborhood re bang-for-buck

    Is that why you are ignoring the real cost and trying so hard to make it look like there was no cost unless the loan couldn’t be recouped?

    BTW, DOE also estimates that the program has saved 33,000 jobs and added 7,391 temporary construction jobs.

    Yeah, just like the stimulus did, heh. Where those state or federal jobs?

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  8. CM

    Much of the McCarthy piece seems reasonable. Although not sure about his assertion that the restructuring was done in order to benefit Kaiser. He fails to mention that the deal would also apply to the Walton family, a major donor to Republicans. Solyndra Had close ties to both political parties.

    There is also the issue of how Solyndra was able to raise over $1 billion in private capital (including from GOP-friendly investors like the Walton family of Wal-Mart) if it was always known to be in so much trouble. Something doesn’t quite fit there. In 2010, the Wall Street Journal ranked Solyndra the top clean-tech company with the “capital, executive experience and investor know-how to succeed in an increasingly crowded field.” The “research firm VentureSource (owned by NewsCorp., which also owns Dow Jones & Co., publisher of the Journal) calculated the rankings, applying a set of financial criteria to some 350 U.S.-based venture-backed businesses in clean technology.”
    The WSJ also ranked Solyndra in the top five “Next Big” venture-backed companies.

    In one shot these people have done more damage to the green industry than the most villainous and evil bad guy the pro-green people could ever come up with.

    I don’t agree with that. The industry is absolutely booming, and there’s no reason why that won’t continue. The solar industry is on fire, thanks to the same collapse in prices that doomed Solyndra. People obsessed with Solyndra are seemingly unable to get any perspective.

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  9. AlexInCT *

    Although not sure about his assertion that the restructuring was done in order to benefit Kaiser.

    So what’s a legitimate reason to do what they did especially when they where aware that there were issues CM? For the life of me, whenever I go down the chain of events I can not find one logical reason that the government, especially a government that hold such disdain for private industry, would put investors ahead of tax payers. Not a single reason that i can think off bodes well for them or economic sense. Occam’s razor and all that.

    The industry is absolutely booming, and there’s no reason why that won’t continue.

    Yeah, that’s why they all seem to need help from government and even then many that get it go down in flames. shit, even in China solar is hurting. You hear about the riots there because the biggest solar pannel manufacturer was dumping shit in the water and causing massive health problems? From what i read the people almost burned the place down.

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  10. CM

    Occam’s razor and all that.

    Occam’s razor suggests it’s the most obvious explanation, but if it’s going to benefit friends of the opposition, then I don’t see how it’s all that obvious. It would be far more compelling a narrative if all the investors (and upper management) were Dems or friends of Dems. But clearly that’s not the case. The CEO is a Republican.

    To me, the most obvious reason was to try and encourage more private investment because they still weren’t convinced that Solyndra was doomed. Why would savvy successful private investors throw more money into something already doomed?

    Yeah, that’s why they all seem to need help from government

    Would a nuclear facility would get built in your country if it weren’t for loan guarantees and government-backed insurance?

    This is the problem, in the obsession over this one company, I think people have lost all perspective. The fact is that both parties have historically supported the loan guarantees policy – because it is not a direct government investment. A loan guarantee simply provides a financial backstop in case of default, which is good for raising financing for nuclear and renewable energy projects. Rather than picking winners and losers, the policy leverages private capital across a range of competing industries and technologies that are of strategic national interest.

    And even though the loan guarantee program is extremely important for helping the largest and most innovative renewable energy facilities get built, there’s still plenty of activity taking place in that sector without the program.

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  11. CM

    So your contention is that if the loan doesn’t default, the money wasn’t spent CM?

    But the govt isn’t throwing money away if it gets it back. You might disagree with the loan scheme, but that doesn’t mean you can argue that it’s just free money, or that it’s all wasted.

    Just because they pay the money back doesn’t mean that the job didn’t cost that much to create/keep. All it means is that the tax payer got the investment money back and government then spent it elsewhere. But the cost of the job still remains whatever was given out vs. how many jobs it created, defaulted on or not.

    LOL. Nice. However I think most people are interested in the amount for which tax payers will be on the hook if the loans fail (likely to be well under $5 billion). If the govt can assist in some job creation without it costing the tax-payers a cent, that’s the program working well. If the money wasn’t required to be spent, then it can’t be considered to be the cost of the job. If the companies do well, they won’t need to draw on the guarantees and won’t cost the government anything.

    Private markets tend to under-invest in some of these types of new ideas and technologies – the returns are too uncertain (see railroads through to the internet). And we should absolutely expect bankruptcies, like Solyndra, along the way. But in the interest of fostering innovation in the production of clean energy and building market share in a globally expanding sector, there are good reasons for the government to have provided seed capital in the form of these subsidized loans, especially given the recession and the jammed financial markets back in 2009.

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  12. AlexInCT *

    Occam’s razor suggests it’s the most obvious explanation, but if it’s going to benefit friends of the opposition, then I don’t see how it’s all that obvious. It would be far more compelling a narrative if all the investors (and upper management) were Dems or friends of Dems. But clearly that’s not the case. The CEO is a Republican.

    Sigh. Sorry to do this to you CM, but by now I figrued you would know better than to argue with me. Forget Occam’s razor since you seem unable to grasp that. Here is proof:

    WASHINGTON — The Obama administration restructured a half-billion dollar federal loan to a troubled solar energy company in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, government records show.

    Administration officials defended the loan restructuring, saying that without an infusion of cash earlier this year, solar panel maker Solyndra Inc. would likely have faced immediate bankruptcy, putting more than 1,000 people out of work.

    They knew exactly what they where doing. And the why is quite obvious. Try again.

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  13. AlexInCT *

    But the govt isn’t throwing money away if it gets it back.

    And I didn’t make that case anywhere so I am not sure why you continue to harp on it. What I pointed out was that green jobs cost a fortune to create, as the amount of money given vs. the jobs created so far proves. There is no disputing that unless your objective is to hide that fact. And reasonably intelligent and logical people can not be faulted for the conclusion that since these jobs cost so much to create, it means they likely do not survive without massive subsidies. And so far the historic record is proving just that.

    You might disagree with the loan scheme, but that doesn’t mean you can argue that it’s just free money, or that it’s all wasted.

    I disagree with the investment in principal. You can’t win this argument. Sorry. Considering the return, even when the entire loan is paid back, it is a bad one. They could have handed out the money to people on credit cards like they did after Katrina, and if they had spend that money on booze, strippers, and hookers, I bet it would have had a far bigger job creation effect than it did loaning it to these people. Imagine if they had lend it to legitimate business that actually make profits and are viable!

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  14. CM

    Sigh. Sorry to do this to you CM, but by now I figrued you would know better than to argue with me.

    LOL. Too funny. Are you deliberately trying to sound like a horribly cliched super-hero?
    I generally find it very easy to counter what you claim because almost all of it is in your head. It’s difficult to remember threads where you’ve made an argument adequately supported by evidence. Often your links demonstrate the opposite of what you’re trying to argue. The whole thing is quite remarkable.
    Thanks for the laugh though. it’s always a good way to start the day!

    Thanks for wasting my time with your link, which provides nothing new.

    Your theory that the loan was restructured for the purpose of benefitting a Dem contributor and friend of Obama’s is undermined by the fact that it also benefited the Walton family. If it ONLY benefited Kaiser, or two Dem supporters/friends it would make much more sense.

    As I stated, the ‘why’ is obvious to you because you never see the need to assess the evidence. You take what suits you and ignore the rest, and fill in the gaps. You do it again and again and again, even after it’s pointed out to you again and again. What’s that quote about insanity you’re a fan of?

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  15. CM

    And I didn’t make that case anywhere so I am not sure why you continue to harp on it.

    Sorry, you were talking about it being a waste of $38.6 billion. You clearly didn’t understand what the $38.6 billion was, and you relied on others who also didn’t understand it (because, as usual, you’re just regurgitating the talking-points from elsewhere).

    You can’t win this argument.

    No, sorry Alex. I already have. You were falling hook line and sinker for the crazy claims about how much each job cost. They were false claims. You’re now attempting to dial it all the way back to some vague argument about principal.

    They could have handed out the money to people on credit cards like they did after Katrina, and if they had spend that money on booze, strippers, and hookers, I bet it would have had a far bigger job creation effect than it did loaning it to these people. Imagine if they had lend it to legitimate business that actually make profits and are viable!

    There are now 100,237 jobs in the American solar industry, according to preliminary figures released this morning by the Solar Foundation. The organization is currently putting together its second solar jobs census, which will be released next month. The census tracks a diverse range of jobs in solar PV, solar thermal and concentrating solar power.

    The Solar Foundation found that between August of 2010 and August of 2011, the solar industry grew by 6.8%, far outpacing the 0.7% growth rate of the overall U.S. economy.

    According to figures compiled by the solar census researchers from an Economic Modeling Specialists database, jobs in the fossil fuel electricity-generation sector actually dropped by more than 1,600 over the last year. Meanwhile, the solar industry added more than 6,700 jobs.

    While still only representing a small fraction of our energy mix, the solar industry already maintains tens of thousands of jobs. As the cost of the technologies continues to drop, solar is becoming increasingly competitive with nuclear and fossil resources — spreading project development all over the country. (In solar PV, module prices have fallen 80% in two years and total system costs have dropped 30% in the U.S. over the last year and a half). At penetration levels of just a few percent, the industry could potentially add hundreds of thousands of new jobs.

    http://thinkprogress.org/romm/2011/09/20/323353/what-the-press-is-getting-wrong-about-solyndra/

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  16. CM

    One other interesting point: Kaiser’s “Argonaut Ventures” is apparently a ‘wholly owned subsidiary’ of the George Kaiser Family Foundation. Money made or lost by Argonaut was made or lost for the foundation. So the non-profit Foundation made the investment (through Argonaut).

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  17. AlexInCT *

    No, sorry Alex. I already have. You were falling hook line and sinker for the crazy claims about how much each job cost. They were false claims. You’re now attempting to dial it all the way back to some vague argument about principal.

    Erm, no I am not. I am pointing out that the amount of money it takes to create one of these fictitious green jobs is ridiculously high, even when they don’t go broke and leave the tax payer hanging, and you are the one trying desperately to pretend that isn’t so. If out of the billions so far handed out they couldn’t even create 3700 jobs, the ration is whatever was spent to the jobs created. I am not using the magic that the WH used to pretend the massively wasted stimulus money produced tons of job, but you can pretend you are not employing the same slight of hand to in a desperate attempt to defend this bullshit.

    Don’t worry CM, this green jobs stuff is dead on arrival here in the US, and I say good riddance.

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  18. CM

    You are so obviously wrong that there is no point continuining. I’ve explained it. There’s plenty of places you can search and confirm this. There’s nothing more I can do. It’s bizarre that you just keep sticking your fingers in you ears when you’re shown to making stuff up. How do you justify that to yourself? Your powers of self-delusion are quite unbelievable, even when something is right in front of you in black and white. I don’t think I’ve ever come across anyone who has no shame like this.

    Don’t worry CM, this green jobs stuff is dead on arrival here in the US, and I say good riddance.

    Very clearly that’s not the reality, irrespective of the failure of one company and associated bad decision-making by the Obama Administration.

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