Corporate Cronyism: Solyndra and Evergreen Solar
09-25-2011, 12:23 AM, (This post was last modified: 09-25-2011, 12:25 AM by SARTRE.)
Corporate Cronyism: Solyndra and Evergreen Solar
If pleading the “Fifth” smells, the Solyndra drama will prove the stereotype applies in this instance. A good old-fashioned scandal in an election year pumps up the media juices. The timeline on Solyndra tells only part of the history. The linkage of corporate cronyism dodges the real world result of “Green Energy” frauds. These shams can be traced back to the Enron schemes, especially their industrial wind model that defrauds the public.
The miserable record from the shovel ready stimulus spending should alarm every American. The distorted idea of using public funding as seed money for private startup companies goes against every aspect of free enterprise. Heretofore, such government nepotism for campaign and climate change supporters was reminiscent of a fascist economy. Now it is sold as a post-industrial initiative to save the planet.
Popular climate expert Paul Driessen laments in Climate Prostitutes, Charlatans and Comedians, about the nature of the favoritism corporate welfare game.
“Rather than developing our nation’s own vast natural resource and human resources, America is wasting billions on politically correct technologies and companies, like Evergreen Solar, which got $486 million in taxpayer subsidies before going belly-up this month. As Al Gore likes to say, that is unsustainable.”
The corruption in the Obama administration needs dissection under a microscope.
Andrew C. McCarthy in National Review sets the stage on the continuation of this insidious pattern of bipartisan abuse of the taxpayer.
“The Solyndra debacle is not just Obama-style crony socialism as usual. It is a criminal fraud. That is the theory that would be guiding any competent prosecutor’s office in the investigation of a scheme that cost victims — in this case, American taxpayers — a fortune.
Although Solyndra was a private company, moreover, it was using its government loans as a springboard to go public. When the sale of securities is involved, federal law criminalizes fraudulent schemes, false statements of material fact, and statements that omit any “material fact necessary in order to make the statements made . . . not misleading.” And we’re not just talking about statements made in required SEC filings. Any statement made to deceive the market can be actionable.”
With the FBI raiding the offices of Obama’s crony capitalist financiers at Solyndra, we may finally be moving toward acknowledging the obvious: “green energy” is a multi-$billion swindle warranting criminal prosecution. From the Wall Street Journal:
“Congress has been investigating the company, which received a $535 million government loan guarantee in March 2009 and announced August 31 that it is filing for bankruptcy. Yesterday’s FBI raid is the first hint of a larger government probe, which is being conducted in cooperation with the Department of Energy’s Inspector General.”
Obama apologists use their standard playbook excuse as ABC News reports.
"By the time the Obama administration took office in late January 2009, the loan programs' staff had already established a goal of, and timeline for, issuing the company a conditional loan guarantee commitment in March 2009," said Jonathan Silver, who heads the Energy loan program.”
Climate Progress publishes this timeline (during the Bush years provided below) — verified by Department of Energy officials — that shows how the loan guarantee came together under both administrations.
May 2005: Just as a global silicon shortage begins driving up prices of solar photovoltaics [PV], Solyndra is founded to provide a cost-competitive alternative to silicon-based panels.
July 2005: The Bush Administration signs the Energy Policy Act of 2005 into law, creating the 1703 loan guarantee program.
February 2006 – October 2006: In February, Solyndra raises its first round of venture financing worth $10.6 million from CMEA Capital, Redpoint Ventures, and U.S. Venture Partners. In October, Argonaut Venture Capital, an investment arm of George Kaiser, invests $17 million into Solyndra. Madrone Capital Partners, an investment arm of the Walton family, invests $7 million. Those investments are part of a $78.2 million fund.
December 2006: Solyndra Applies for a Loan Guarantee under the 1703 program.
Late 2007: Loan guarantee program is funded. Solyndra was one of 16 clean-tech companies deemed ready to move forward in the due diligence process. The Bush Administration DOE moves forward to develop a conditional commitment.
October 2008: Then Solyndra CEO Chris Gronet touted reasons for building in Silicon Valley and noted that the “company’s second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location.”
Objective analysis must acknowledge that the race to paint the landscape “Green” has done little more than burn greenback notes in a ceremonial ritual to the climate warming gods. The Solyndra prototype for disaster is not an abnormality. Reuters point to the similarities of another solar company that took the public for a ride with government backing.
“Prior to Solyndra, Evergreen Solar was the most high-profile U.S. solar company to collapse. Evergreen was once at the forefront of U.S. renewable energy technology and had planned to produce its solar wafers in Massachusetts. Ultimately, even a plan to shift manufacturing to Asia could not save it.”
Jarrett Skorup from the Mackinac Center for Public Policy states,
“The bankruptcy of “green jobs” darling Solyndra is in the news because it could potentially cost U.S. taxpayers $535 million due to a federal “stimulus” program loan guarantee. The Silicon Valley solar-panel maker’s failure comes on the heels of another “green” corporate welfare beneficiary also going under, Evergreen Solar (with a factory located in Midland). These deals were big losers for Americans.
Both businesses repudiated claims that company management or the current market for “green” energy products were the cause of their failure. Instead, company officials cited intense competition from lower-cost Chinese manufacturers: “The solar power market is intensely competitive and rapidly evolving,” wrote Evergreen Solar’s chief executive officer, Michael El-Hillow.”
The Boston Globe adds the sorry details.
“Evergreen Solar Inc. will eliminate 800 jobs in Massachusetts and shut its new factory at the former military base in Devens, just two years after it opened the massive facility to great fanfare and with about $58 million in taxpayer subsidies.
Evergreen itself has a factory in Wuhan, China, built in collaboration with a Chinese company, Jiawei Solarchina Co. Ltd., and with money from a Chinese government investment fund. The company had previously said it would shift some production from Devens to the Wuhan plant but yesterday was the first time it said Devens would be closed.”
The State of Massachusetts wants answers. The Boston Globe reporting continues in Auditor to look at Evergreen incentives. “State Auditor Suzanne Bump intends to review public subsidies for Evergreen Solar, the energy company that recently announced plans to shutter its Devens plant and move more 800 jobs elsewhere despite receiving millions of dollars in public funds, as part of a broader review of the state's entire system of tax incentives.”
Will the Obama administration seek the same in the Solyndra episode?
Ms. Skorup concludes,
“Those favoring these energy subsidies may disagree, believing that sending taxpayer money to politically connected select companies is actually a “jobs creator.” Disregarding the mountains of evidence that government is notoriously bad at picking economic winners, just looking at these two solar companies should show that this is a bad argument: The companies combined to employ about 1,500 people at the time of their bankruptcies (a few hundred for Evergreen Solar and 1,100 for Solyndra). On top of the federal funds, Evergreen Solar received $58.6 million from the state of Massachusetts and millions more from Michigan sources, while Solyndra got $535 million in federal aid and more from California. This is, in the words of my colleague Michael LaFaive, an expensive game creating the illusion of jobs.”
What is the lesson from these two defunct ventures? Mixing public subsidies as a source of venture capital is obscene. Allowing green industry swindlers involvement in writing the rules for the government programs guarantees that only the insiders will benefit. Accepting campaign contributions from slick promoters that seek government funding for their projects is out right criminal. The blame game between the two political parties of the same tree begs the real issue. The parasitic diseases that infect the party political system is like a heart rot. Heart rot in living trees is caused by fungi which have the ability to decay wood. These fungi gain entrance to the wood of the tree through wounds, branch stubs, etc., which expose the bare wood. The fruiting bodies, mushrooms or "conks," are common on trunks of decaying trees.
The Enron culture underpins the “Green” corporate cronyism that wastes public money, drives up the cost of energy and perverts the entire political process. Industrial Wind and the Wall Street Cap and Trade Fraud is the step elder sister of the Solyndra and Evergreen Solar failures. Scam rackets between corporate/government partnerships breed new generations into the corrupt system of heart rot. The financial fungi are spreading because the parasites are using public monies to pay for high price lawyers, so their Solyndra clients can take the Fifth!
As long as “Green” subsidies exist, the sun will not shine on the tree of life, in a country of climate prostitutes.
SARTRE - September 25, 2011
09-29-2011, 02:43 PM,
Crony Capitalism: $737 Million Green Jobs Loan Given to Nancy Pelosi's Brother-In-Law
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.
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