December 28, 2012

On the Fourth Day of Cronyism . . . : The System





LAMBRO: Obama’s dirty clean-energy deals

Most green loans went to president’s cronies

by Donald Lambro

As originally posted: The Washington Times
December 26, 2012


Have you seen the latest development in President Obama’s waste-ridden, clean-energy program that’s now under federal investigation at the U.S. Treasury Department?

Three of the country’s biggest residential solar-panel installers — SolarCity, SunRun and Sungevity — have been subpoenaed by Treasury's Office of Inspector General for their financial records to determine if they had inflated the market value of their costs when they applied for federal reimbursement.

The firms have reportedly received more than $500 million in federal grants and tax credits. Officials in two of them, SolarCity and SunRun, have been among some of Mr. Obama’s most generous campaign donors.

The money these companies tapped into flowed from a $13 billion investment fund at Treasury that came from the president’s economic stimulus program, which has poured huge sums of money into clean-energy programs across the country.

Mr. Obama has sunk billions of tax dollars into a scandal-ridden swamp of other energy deals that were crafted and promoted by administration business cronies who also were among his biggest fundraisers.

After an exhaustive analysis of thousands of memos, company records and internal emails detailing Mr. Obama’s green-technology spending program, The Washington Post concluded that it was “infused with politics” at every level of the decision-making process. Political considerations dominated the White House’s deal-making and all too often overruled warnings that billions of tax dollars would be lost on shaky energy projects
that should never have been approved.

Take, for example, Sanjay Wagle, a venture capitalist and one of Mr. Obama’s fundraisers in 2008. He left his firm in California to work in Mr. Obama’s Energy Department on a $40 billion spending program to stimulate the economy by investing in clean-technology companies.

It’s questionable just how much “stimulus” this money provided to the economy when unemployment is still close to 8 percent and a number of these firms went bankrupt and eventually laid off thousands of workers.

Nevertheless, over the next three years, the Energy Department officials Mr. Wagle was advising plowed $2.4 billion into clean-energy corporations that Vantage Point Venture PartnersMr. Wagle’s former company — had invested in.

“Overall, the Post found that $3.9 billion in federal grants and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers,” the newspaper reported at the time.

Those insider connections helped grease the wheels for dubious clean-energy investments that went belly up, leaving taxpayers to foot the bill on loans guaranteed by the government.

One of them was a $535 million loan to the now-bankrupt solar-panel firm Solyndra that Mr. Obama promoted against the better judgment of top budget and contract officials who warned the White House against the deal.

What has come to light so far as part of a congressional investigation is the administration’s willful order to approve a bad loan, despite dire warnings from a number of federal officials that California-based Solyndra was in deep financial trouble.

A steady stream of government emails released by a House Energy and Commerce subcommittee tells a sordid tale of a company Mr. Obama turned into an energy showcase for his $40 billion loan program — until Solyndra declared bankruptcy in August 2011, putting 1,100 employees out of work.

One of the people promoting Solyndra’s $535 million loan, which will be paid off by federal taxpayers, was Steven J. Spinner, a senior Energy Department adviser, an Obama campaign fundraiser, and a Silicon Valley investor given the job of guiding the administration’s clean-technology investments.

He was not only one of Solyndra’s defenders, his wife worked for the California law firm that represented the solar-panel company and helped it file for the federal government loan her husband was promoting, according to the Post investigation.

While growing internal concerns were being raised about Solyndra’s shaky finances as early as the summer of 2009, Mr. Spinner emailed a top aide to then-White House Chief of Staff Rahm Emanuel that Solyndra was a financially solvent company that fully deserved the administration’s support. “I haven’t heard anything negative on my side,” he assured Mr. Emanuel’s aide in an email about the warnings.

As the loan deal stalled over internal criticism of the firm’s looming insolvency, Mr. Spinner grew more impatient. “How [expletive] hard is this?’ he wrote to a career Energy staffer on Aug. 28, 2009, about by an Office of Management and Budget official’s delay of the loan. “What is he waiting for?”

Complaints from the Office of Management and Budget and from Treasury officials about Solyndra’s finances, as well as its favorable loan terms, still persisted.

“In an administration that said it would curtail lobbyists’ influence, the documents show ardent lobbying by political appointees inside the agencies and significant White House access given to venture capitalists with a major stake in the $40 billion stimulus investment program for clean energy,” the Post reported.

The demise of Solyndra and the loss of 1,100 jobs was one of the administration’s many investment failures.

Similar firms have included Ener 1, which was awarded an $118 million “stimulus” deal from Mr. Obama only to go bankrupt on Jan. 26, 2011; the North Las Vegas-based solar power firm Amonix, which laid off 700 workers and shut down in May after receiving $6 million in federal tax credits and a $15.6 million federal grant; and Abound Solar, which reaped a $400 million federal loan guarantee to build photovoltaic panels before halting production and laying off 180 employees in February and has since declared bankruptcy.

Although Mr. Obama declared that the energy grants and loans were all “based solely on their merits,” Hoover Institution scholar Peter Schweizer reported in his book “Throw Them All Out” that 71 percent went to “individuals who were [fundraising] bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party.”

Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.

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