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House members probe $535-million loan guarantee by Obama Energy Dept. for Solyndra solar plant

Democrat President Obama hails Fremont Calif's Solyndra company 5-26-10

Here's a sad and revealing chronology about a U.S. president named Obama, a California company named Solyndra and, now, a congressional investigation into the administration's loan guarantee of $535 million in a failed green energy project that was supposed to create jobs.

But it didn't.

At enormous taxpayer cost.

The story starts in the early 2009 days of the Democratic administration of Barack Obama and the hastily written economic stimulus legislation passed by the whopping Democratic congressional majorities of Sen. Harry Reid of Nevada and House Speaker Nancy Pelosi of San Francisco.

You'll remember it was very important to pass the $787-billion economic stimulus bill as quickly as possible then to keep the 7.1% national unemployment rate from rising further. Today, it's 9%. So, that didn't work out well, either.

Remember President Obama went to the Caterpillar plant in his home state of Illinois and said ....

... the worthy stimulus funds would enable the heavy-equipment giant to start hiring again? And Caterpillar's president said, well, no, not really. He foresaw more layoffs first. But the urgent flow of news moved on because it was very important to get that borrowed money moving out the door as quickly as possible.

Back in those days, the term "shovel-ready" wasn't a joke. It was a promise to put this money to work creating jobs ASAP so Obama could get on with the business of his beloved healthcare bill.

Obama had the idea that since he was going to spend three-quarters of a trillion dollars anyway, why not put a fair chunk of that dough into kick-starting green energy projects, which often need subsidies because they're still not economically practical to work on their own? Potentially win-win. Or not.

On Sept. 9 that year in a special closed-circuit TV program for the groundbreaking of Solyndra's new plant, Vice President Joe "Recovery Summer" Biden announced the signing of the $535-million federal loan guarantee, the Energy Department's first under the stimulus plan.

Joe said, "These jobs are the jobs that are going to define the 21st century that will allow America to compete and to lead like we did in the 20th century.”Obama bounds on stage at Solyndra 5-26-10

The money would finance construction of a Solyndra facility, creating 3,000 construction jobs and 1,000 full-time positions in the modern plant making photovoltaic solar panels.

Because it was such a promising venture, Obama himself visited Fremont eight months later (see photos here and video report here) to hail his  administration's decision to move in that direction.

The president said the facility was "leading the way to a brighter and more prosperous future" and the plant was "a testament to American ingenuity and the best workers in the world."

He said high-tech facilities like Solyndra would help "lay a new foundation for lasting growth."

Then came last November, the day after the midterm elections when everyone was focused on the historic shift to Republican control of the House. Solyndra announced then that not only was it not going to create those 1,000 full-time jobs so eagerly hailed by Obama and Biden, but it also was going to close an older factory and actually lay off 175 full- or part-time workers.

That left U.S. taxpayers holding the financial bag for nearly three-quarters of that loan guarantee, about $390 million.

(Clarification: A Solyndra spokeswoman notes "the Department of Energy guaranteed private loans at the height of an unprecedented credit crisis to free up private dollars for a growing – and threatened – strategic industry. These are private loans that Solyndra plans to fully pay back."

(The spokeswoman adds: "To lower costs in the face of intense, subsidized Chinese competition, the company ended production at its old manufacturing facility “Fab 1” in November 2010. That facility had nothing to do with the loan guarantee. Fab 2, a facility currently churning out 1,000 panels, 7 days a week was constructed using the guarantee.  The taxpayers have not had to cover any of the company’s loans.") 

But now Fred Upton and Cliff Stearns, chairmen of the House Energy and Commerce Committee and Oversight Subcommittee, have been examining the company's financials and the possibility of waste and fraud. Since its 2005 founding, it seems that Solyndra has never made a profit and its own auditor had raised serious questions that did not slow or stop the immense guarantee's approval by the Obama administration.

Last week Upton and Stearns wrote Energy Secretary Steven Chu. The Republicans said:

While we understand the purpose of the Loan Guarantee Program is to help private companies engaging in clean energy products to obtain financing by providing loan guarantees, subsequent events raise questions if Solyndra was the right candidate to receive a loan guarantee in excess of half a billion dollars.

Oh, one other thing: The majority owner of Solyndra is George Kaiser. He's an Oklahoma billionaire. He was also a bundler, a major fundraiser, for the 2008 presidential campaign of Barack Obama and Joe Biden.

But that's probably coincidence.

-- Andrew Malcolm

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Photos: Genaro Molina / Los Angeles Times (Obama hails the Solyndra company during his visit there in May 26, 2010).

H/T John Rossomando

 
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Who is a bad guy at DOE?:


Steven Chu works for the Nuclear industry and steers support away from wind, hydrogen, electric and geothermal. He is a master of
the delay tactic. His utter refusal to meet with reform groups or even members of Congress regarding process and ethics issues and
his adversarial approach to OMB requests shows what he is about: Protecting his nuclear power friends.

Steve Rattner was the head of the car funding program and has already been charged with criminal actions. He made the backroom deals with Detroit.

Lachlan Seward ran the cut-offs on all DOE funding to make sure only his Detroit friends got money.

Matt Rogers and Steve Spinner were Steven Chu's friends from McKinsey Consulting who helped keep the lid on the insider deals and make sure only the Chu "friendlies" got the money.

Steve Silver was brought in as a "fake VC" to pretend like he was going to fix things but he just serves as a figurehead to sign off
on corrupt deals flowing past him.

Phil Tobin manipulates the Loan Gaurantee program to benefit Nuclear friends and lock out others.

Rod O'Conner conduits funding & support, for Mr. Chu, away from wind, hydrogen, electric and geothermal.

Cathy Zoi supported the corrupt administration efforts.

Kristina Johnson ran the paperwork for the corrupt administration efforts.

Scott Harris keeps the contracts and legal reviews steered towards oil and nuckear friends and avoids investigation requests.

James Markowsky is a direct conduit for the oil companies.

Warren F. “Pete” Miller Jr is a direct conduit for Steven Chu's nuclear agenda.

Cynthia Anderson, DOE-EM's head of stimulus work who ran corrupt funding through the Savannah project.

Tesla Motors is the next one to get investigated. Not only does Tesla's funding/lobby history duplicate every red flag that Solyndra had, Tesla's issues are 10 times worse. Feinstein and Pelosi are deeply involved in manipulating funding for Tesla, Tesla's financials show that it can never make a profit with the obligations it has, they show it can never compete with the Nissan Leaf and the rush of cheaper, better cars and that DOE "fixers" knew this from Day 1. Sen. Bingamans staff slid Tesla and Fisker through and that is probably why he is quitting, he knows the investigations will come down on him.

Unfortunately, the wind, solar, geothermal and other 'alternate' energy sources are not going to ever be more than a few percent of the US energy needs. I'd love to be wrong (especially on solar) but it's senseless to waste trillions of dollars (or billions) on something like this, that if it were effective, would make it without government help.
Nobody knows exactly how soon-but government spending (at current level) will soon end life in the US as we know it-many mathematical implacable factors are converging. Government spending on ANYTHING ELSE but the debt is inevitable without some HUGE production increase in the US. There is nothing anybody can 'see' (without time and research spent) that is going to save us. And the money being printed will be USELESS (because anybody considering buying this debt will realize it's impossible for the government to honor it)
The government's endless spending is eventually going to have to be stopped. It will be the end of the US (as we know it) if we don't stop the spending. Even if we don't stop it, it will end anyway, just with more repercussions than if we stopped spending while it' s possible to restructure this HUGE HUGE debt.
The government just keeps printing money (which is valueless without 'full faith' in government to back it up) and by 'monetizing' the debt, inflation will be HUGE when it DOES arrive. And with about a years DELAY whenever the Fed changes money policy, inflation will RAMPAGE upward and nobody will be able to stop it-all the kings horses and all the kings men couldn't put Humpty Dumpty TOGETHER AGAIN.
But it seems that as long as obama is re-elected next year and catastrophe can be averted until after the re-election, the Executive branch of the US will do NOTHING but 'kick the can' down the road.

Andrew,

It is very easy to regurgitate the stale information that has been echoing throughout the blogosphere for the last six month, but hardly useful if you want to give the impression your opinion is credible and informed on the topic of Solyndra. I assure that rumors of Solyndra’s demise are much exaggerated.

If you were to actually do research, you would discover that the $535 million you refer to are loan guarantees, not grants. No loan has defaulted; hence no tax money has been lost. Doing the same research now required of most sixth graders, with a Google search, you would find that Solyndra has dramatically cut expenses to compete with its competitors from Asia, who enjoy broad based government support with cheap loans, free land and low cost labor, making its all-in installed system competitive with all solar panel suppliers.

Visiting Solyndra’s web site you would learn that Solyndra’s unique low weight, low wind sail, no tilt design enables it to be installed on a large portion of the roof top market not accessible by other panel manufactures. As a result, the installable power on a rooftop is maximized, giving a better and faster return on investment. As a result, Solyndra panels are now installed on over a 1000 rooftops in 20 different countries. You would see that major companies are not only very happy with the value they have received from Solyndra panels, and are expanding current installations and purchasing follow-on systems for their other sites. Solyndra’s sales and installed customer base are expanding rapidly.

Most people would think that the financial backing of a businessman with the acumen to create a billion dollar fortune would be testimonial to Solyndra’s business plan, however in your opinion this just provides unsubstantiated proof of political chicanery and bias by the Obama administration. Yet somehow, a Republican investigation into the DOE loan guarantee program is untainted, nonpolitical and pure. For someone who witnessed the glory years of the politically motivated investigation during the Clinton years, that pig is just not going to fly.

However, to lower costs and be competitive in the solar market, it takes large investments to scale the manufacturing . Why criticize our government for supporting businesses to compete against foreign businesses that have far more support from their governments? Sure there is risk involved, success is not guaranteed, but the alternative is to capitulate yet another industry to foreign manufacturers. Not many jobs created for Americans in that scenario, unless you want to move to China.

Although the criticism is extreme, as it was when the government bailed out the auto industry, Solyndra is not failing. If current facts are published, and not political rhetoric and stale information about a business plan that is no longer relevant or useful for predicting Solyndra’s future, chances are more Americans will have jobs working at Solyndra as the company grows.

Bert Plambeck

BERT PLAMBECK you missed the entire point of the article. The article is about corruption and kickbacks. It is not about whether this company has good or bad solar panels. There were 150+ great companies that had great technology that applied to DOE for money and somehow the only ones that got money were companies tied to campaign contributions. We are talking about crime here and not about how good the hardware is. Feinstein and others got campaign funds in exchange for helping Solyndra, the other applicants did not get the DOE money! The FOIA's prove this.

Bert - you are an idiot. Go back to sleep!

Crony/State capitalism doesn't work in the former Soviet Union and it won't work here.

Since a little googling will show that a Mr. Bert Plambeck is/was a Solyndra employee if the commentator is that person he might have a vested interest in his view of the story.

Regards.

Basically the same thing happened here in Massachusetts. Our Governor, Obama's pal Deval Patrick, extended millions in taxpayer funds to a green company that left the country! Do these guys have a script? Who is writing it. When will enough people wake up to get these dangerous destroyers out of office? Massachusetts will never I fear. Someone is raking in piles of taxpayer funds and I seriously question how both of these men became so wealthy so fast without ever working.

91% of the media voted for Barack Obama., which makes perfect sense since that is about the percentage of the media that are liberals. And to liberals the environmental lobby is everything. (Never mind the emails that showed that "climate change" is the hoax of 2 centuries). My point is, that as Libya's oil is increasingly endangered, and it is possible that the Saudi oil could be lost to the United States, how is the Obama Administration reacting? They have simply stopped approving any drilling applications. Remember, the United States has 200 years worth of oil that our environmental groups have prohibited us from recovering. Common sense and a love for this country would have made any former president set his political agenda aside and approved drilling immediately. Not so the ever hard leftist, Mr. Obama.

Strangest of all: This company was going public, but called off its IPO after its accounting firm said it was "not a going concern."

Shortly after the president visited to much hoopla. And not one paper reported that the president and Joe Biden thought it was a great company, but its accounting firm did not.

I can't believe how much more worse he can take us down.

If you're concerned about a $500 million first-of-its-kind solar project that may not get to the point of utilizing the federal loan guarantee (it didn't get the loan yet so get your facts straight) failure, you should be really worried about the Administration's proposal to give an additional $36 billion in loan guarantees to conventional nuclear plants for a whopping total of $58 billion. Given the industry's long history of plant cancellations, cost overruns and defaults, and the fact that the nuclear industry has given hundreds of millions in contributions to any politician that breathes, you ain't seen nothing yet when it comes to putting taxpayers on the hook for industry profit.

Great investigative article.

Just at first glance, the results of the stimulus seem to be about par for Obama’s course. $535,000,000 in stimulus funding for a net loss of 175 jobs. That only cost the tax payers about $3,057,000 for every job destroyed.

The link to George Kaiser is just another piece of the puzzle, proving that Obama is trying to destroy this country financially, through wealth distribution TO his chronies!!!

What about George Soros, his & the Petrobras loans? Obama’s connections to the Chicago based ShoreBank, who he selected to oversee (and profit from) the “Cap & Trade” legislation?

Obama, and his chronie-capitalism schemes will make Hosni Mubarak’s profiteering schemes look amateur by comparison.

now it gets really interesting.. I googled the names listed in the comments. The ones in the first comment. All of those people at DOE worked on the Solyndra and Tesla financing, all of them have suddenly left DOE and Washington in what the NYT refers to as "the largest evacuation of DOE in American history" (Read Rats-Leaving-The-Sinking-Ship), all of them got the largest cash giveout in DOE history in the Loan Gaurantee & ATVM programs, most of them are now selling their services as lobbyists, at places like K&L Gates and others. All of them are under investigation or have already been charged with crimes ranging from death threats to securities law crime (Google Rattner and Anderson in particular.. whoooeeee!) But when I google Feinstein and these companies I find this tidbit online:
"Blum Capital has targeted the Lithium fields in Mongolia, said to be the second largest fields after Afghanistan in the region. Mongolia touches Russia so mining and equipment access could first take place there via Russia. China wants the Mongolian Lithium too so there is some two-way bidding that each country (Russia and China) do not know about. The owner of Blum Capital is Senator Feinsteins husband. She recently made him the Goodwill Ambassador to Mongolia.

Blum's wife, Senator Dianne Feinstein, has received scrutiny due to her husband's government contracts and extensive business dealings with China and her past votes on trade issues with the country. Blum has denied any wrongdoing, however. Critics have argued that business contracts with the US government awarded to a company (Perini) controlled by Blum may raise a potential conflict-of-interest issue with the voting and policy activities of his wife. URS Corp, which Blum had a substantial stake in, bought EG&G, a leading provider of technical services and management to the U.S. military, from The Carlyle Group in 2002; EG&G subsequently won a $600m defense contract. In 2009 it was reported that Blum's wife Sen. Dianne Feinstein introduced legislation to provide $25 billion in taxpayer money to the Federal Deposit Insurance Corp, a government agency that had recently awarded her husband's real estate firm, CB Richard Ellis, what the Washington Times called "a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.

Pan American Lithium Corp is led by Andrew Brodkey, CEO, President and Director – who has 25 years in the mining industry as a mining engineer, lawyer and senior executive with a focus on corporate legal and business development activities at major mining companies with an emphasis on Latin America, including Magma Copper Company and BHP Copper Inc. Mr. Brodkey also created the International Mining & Metals Group of CB Richard Ellis, Inc (“CBRE”). He and Mr. Blum work together on Lithium deals

" In 2009 the University of California Board of Regents, of which Blum is a member, voted to increase student registration fees (roughly the Univ. of California equivalent of tuition) by 32%. Shortly thereafter, Blum Capital Partners purchased additional stock in ITT Tech, a for-profit educational institution. These events suggest a conflict of interest on Blum's part. Also see: http://la.indymedia.org/news/2010/09/242044.php and http://www.floppingaces.net/2007/04/02/the-silence-on-the-feinstein-c/ and http://www.washingtontimes.com/news/2009/apr/21/senate-husbands-firm-cashes-in-on-crisis/

Sen. Feinstein got the Fremont, Calif. NUMMI plant for Tesla in exchange for political and campaign support from Tesla and kept other carmakers away from the NUMMI plant and helped TESLA pay for it with TAXPAYER money from the ATVM and Loan Guarantee funds run by Lachlan Seward and Facilitated by Richard Lugar so that her husband & his VC friends would get more Lithium battery deals under their control."

Pretty bad for us taxpayers to get used like that

Shouldn't all spending go through the House of Representatives ?
Does an illegal president have that authority ? Or even a legal one.
We must regain control....

Hey if you can personally decide which laws are constitutional why can't you give great big loans to your favorite company without asking Congress. The Monarch Obama promotes anarchy.

The Man. We have someone in DC that is supporting nuclear energy? And here I always thought that the purpose of the Atomic Energy Commission was to decline all applications. Golly, when are we going to see those new nuclear plants pumping out those clean megawatts?

As an individual who makes an effort to try and stay informed about what is going on in our social, political, and economical systems, I really appreciate the postings of individuals who have done background research. As I will not verify their claims, I must assume that there is truth to there findings. I am naturally skeptical of postings that obviously have political agendas. The information from this topical thread has pros and cons. Anyone reading these postings with half a brain will pick up on what I am reading.

As an educated and independent thinking entrepreneur I understand the capitalistic arguments for investing in forward thinking industries and the risks involved. I can appreciate that the loan guarantees are just that; guarantees. I also find disturbing the interconnectedness of the political ties. But, that is to be expected to a certain degree. Any extensions of the aforementioned arguments, pro and con are just that; extensions and, objectively, should not be viewed as anything more than that. So, thank you for your efforts and contributions to a better understanding of these dealings. But, keep in mind that the more one injects their biases, the more it becomes obvious to us reading the positions posted and we will discount them to the degree that the biases are present. Keep up the dialogue and let's advance to a common understanding of the facts.

Posted by: Steven L. Parker |

I have worked at Solyndra, one thing I noiced, is that a very large percentage of the persons working at the solar plants in Fremont, CA dont look like American citizens. I find this very disturbing with all the out of work Americans at this time. Someone please wake up. Put Americans first, since its Americans footing the bill. It a real eyeopener to see this take place. Go see for your self.

Obama, the Liar-in-Chief should definitely be investigated for EVERYTHING he does. He is a traitor.

I feel sick reading this story and thanks to Andrew for writing it....I knew there were still some good people at the LA Times.

I drove by the plant many times during it's construction. I always said the same thing. I have never seen such quality constructions going into a building before. This company must have money coming out their ying yang. I found out later who the company was and it was government money. It then made sense. A private company would have built a building they could afford. It seems they spared no expense with government money.

You must be a racist or some kkk guy. Lord obama can do no wrong. He went to harvard.

Criminal affirmative action scumbag

Oh now.. that is a good point about the brand new expensive building.. the more I think about it I think about how Fremont California, where they are, is in an economic crisis and that many abandoned factory buildings are there. Right across the street from Solyndra is the NUMMI plant that Tesla, who also got giant federal money took over part of. Why didn't the feds tell Solyndra to use the empty part of the NUMMI building that is just going to sit there because the Tesla has no demand for its pricey Sedan? The empty part of the NUMMI plant is more space than all of Solyndras new buildings as of today.. huh? But, on top of that.. there are, and were, tons of empty buildings in Fremont. Why did Solyndra blow its money on fancy new buildings in a recession when any smart early stage company knows that cash is king and you must use what already exists in a recession. The DOE/feds could see this, Solyndra could see it. Was one or the other management group super stupid or is there some sort of real estate shenanigans here?

I was working with the City of Frement, I am now layed off. This guy named Matt Nelson came from Washington, DC and pretty much rammed all this Solyndra/Tesla stuff down everbody's throats. He demanded tax breaks and fee eliminations. Super arrogant guy. The City wanted them to use local people and existing buildings but he said to not bug Solyndra or Tesla and let them do what they wanted or there would be trouble. He implied that the area would lose funding if it was not "cooperative".

first this article on solyndra, albeit one year late. then the article this weekend on the la community college district bogus alternative energy plan.

did someone switch the coffee from decaf in the editor's nap room?

from a San Diego public relations guy

In response to Colin -

I believe this sudden influx of government-critical articles is a response to the Pulitzer Prize that The LA Times just won for digging up dirt on the city of Bell. If the LA times can create the same kind of response on a national level, from digging up State and Federal level corruption, they'll be in a for a decade of Pulitzer Prizes... and the American public will finally learn the truth. At last... journalism is starting to get back on the right track again....


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About the Columnist
A veteran foreign and national correspondent, Andrew Malcolm has served on the L.A. Times Editorial Board and was a Pulitzer finalist in 2004. He is the author of 10 nonfiction books and father of four. Read more.
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