Administration put taxpayers at the back of the line for Solyndra assets
The skeletons are being dragged out of the closet in the Solyndra scandal, in the face of White House resistance. First came news that over $500 million dollars of loan guarantees were extended to the solar scheme despite outside auditors warning there was a huge risk that this company was going to go bankrupt, and despite government auditors also agreeing this was a loser proposition. Then it comes out that the major private investor of this venture was a foundation set up by George Kaiser, a major Obama and Democratic Party bundler and donor. The same George Kaiser has been a frequent visitor to the White House.
Additional revelations keep coming to light: normal government protocols and filters meant to protect taxpayers were ignored when it came to pouring taxpayer dollars into Solyndra (one of only 5 companies, apparently, that received such special treatment.
The White House was steamrolling the granting of loan guarantees to Solyndra through what looks like badgering of the Department of Energy to get off their duffs and shovel the half a billion dollars out the door to keep Solyndra on life-support.
But the latest revelation is especially appalling. Instead of cutting our losses, the administration double-downed and willfully subordinated taxpayers' claims to the money behind those of Solyndra's private investors.
William McQuillen reports for Bloomberg News:
The Obama administration let $385 million in taxpayer support for Solyndra Inc. take a back seat to funds from new investors in an unsuccessful effort to keep the solar-panel manufacturer operating.
The Energy Department decided the January refinancing represented the "highest probable net benefit" for the government, according to a government document obtained by Bloomberg News. Investors provided the company $75 million that became senior debt, ahead of all but $150 million of the federal government's stake.
Solyndra said on Aug. 31 that it will file for bankruptcy reorganization next week in Wilmington, Delaware. The administration's agreement to subordinate the government aid to new investment may add fuel to criticism by Republicans who have said President Barack Obama spent too much money pushing a favored company in the name of green energy.
It was not as if the government did not have an inkling that this boondoggle was a big loser. Late last year, the Obama team knew the company was on its last legs absent more money. The coffers barely had enough to meet the payroll. Team Obama agreed to place the interests of new private investors above ours.
The document traces Solyndra's mounting financial troubles and the Obama administration's decision to maintain its bet on the future of the Fremont, California-based company.
By December 2010, "Solyndra had only about a month of cash on hand and faced bankruptcy absent continued funding" from the department, according to the papers.
After "a due-diligence effort" to "determine if the company still had a viable business," the Energy Department concluded it "believes that the restructuring plan represents the best possible course of action to achieve the highest return on its invested capital."
So far, the public awaits the identity of the new investors.
Obama should have pulled the plug on this venture, but agreed to subordinate taxpayer claims to what would be left of this carcass to those claims by private investors. There may be some value left to this company if it liquidates, but apparently that will all go to the new investors and not towards paying anything owed to the taxpayers. In fact, it appears the new investors may come out whole and the taxpayers will be the ones left holding the bag. Was Obama hoping this lifeline would last long enough to keep this company viable until after the election?
One more revelation that shows spin artists at work. Most reports have stated that George Kaiser was a major investor. Spokesman for Kaiser deny this claim. Well...turns out that the George Kaiser Foundation is the major investor (holding 35.7 percent of the company). Well...excuse me! Those protestations of innocence are just not credible. Of course, foundations set up by those millionaires and billionaires that Obama relies upon for big donations are often just clever tax-avoidance schemes, so the rebuttal is weak. This is just one more attempt at obfuscation that, combined with White House stonewalling -- shows that Kaiser, Obama and the Department of Energy want to keep us in the dark about the latest abuse of the taxpayer to serve crony capitalists and Obama's billionaire donor base.
Wasn't it Obama who said politics was all about rewarding friends?