Crony Capitalism, no it’s crony SOCIALISM!
We’ve documented how President Obama has taken care of his buddies in the UAW by forcing a non-traditional bankruptcy that left secured bondholders – mostly pension funds and individual 401K retirement accounts – with zero and protected UAW contracts and handed the union virtual control of the board of directors, all the exact opposite of what would have happened in a traditional bankruptcy. Were jobs “saved”, there were likely a few saved, but the GM marque was not at risk despite the bleating of Obama’s ignorant friends. Cost to taxpayers? Somewhere between $23B and $60B depending on GM’s eventual share price when the government sells its shares, if it ever does.
Today we’re going to look at Chapter 2 of Cash for Cronies, this version is run by the US Department of Energy.
You have certainly heard about Solyndra. The DoE dumped $535M in taxpayer funds into a loan guarantee for the “Green” company just months before they filed for bankruptcy and closed their doors. The benefactor of that loan guarantee just happened to be George B. Kaiser, a major Obama campaign cash bundler. He was a major investor in the firm and when the DoE wrote the terms of their loan guarantee, the US Taxpayers were put behind Kaiser and other private investors in terms of recovery. He took the risk, we took the loss. Making matters even worse is the fact that the DoE had reams of information before the loan guarantee was finalized that would have led any reasonable person to believe that their finances were beyond shaky and their product cost was not competitive nor was it fixable. But Barack protected his man.
Well guess what? Yep, Titanic, meet Iceberg.
Thanks to examiner.com, the DoE, shortly after Solyndra went bust, granted a $737M loan guarantee to Crescent Dunes Solar Energy, a company in Harry Reid’s home state of Nevada. And that’s nowhere near the end of the story. Just days before the expiration of the DoE’s loan guarantee program expired on September 30 of last year, they blessed a $150M guarantee to 1366 Technologies in Massachusetts for a solar manufacturing project (like Solyndra), and $1.2B to Abengoa Solar in California. The DoE was playing “Beat the Clock” with taxpayer funds left over from the 2009 stimulus-that-didn’t.
Then there’s SunPower. The Daily Caller highlights their piece of the action.
The company, SunPower, received its $1.2 billion loan guarantee in September, immediately before the program’s deadline.
SunPower isn’t as financially sound as the public was led to believe when it secured a loan guarantee twice the size of Solyndra’s $535 million loan. Just this week — less than a month after taxpayers landed on the hook for SunPower’s $1.2 billion loan guarantee — company executives announced that they expect to lower their 2011 earnings projections.
The company also carries $820 million in debt, which is $20 million more than its market capitalization.
Another $1.2B to a company that is already carrying a debt that’s greater than their market cap. But hey, the US is carrying a national debt now that is greater than our GDP, so SunPower really fits right in with the way this Administration does business. And, speaking about the way the Obama Administration does business, let’s talk about some cronies, from The Daily Caller,
Last October, President Barack Obama’s Interior Secretary Ken Salazar and California Democratic Rep. George Miller toured SunPower’s plant in California. Both touted the company. Miller said SunPower was an example for “renewable energy” production and “America’s future economic growth.”
But, Miller failed to mention how his son, George Miller IV, is SunPower’s top lobbyist in California. Miller’s son was pushing for the $1.2 billion loan guarantee taxpayers are on the hook for now. Miller is a powerful Democratic congressman, and currently serves as the ranking minority member of the House Education and Workforce Committee.
Hey, I’m shocked.
Oh, and let’s not forget Abengoa, mentioned earlier. Bloomberg hits the nail on the head with the bottom line of these solar schemes.
Abengoa SA (ABG), a Spanish engineering company, received regulatory approval to sell utility PG&E Corp. the output from its 250-megawatt solar-thermal project in California’s Mojave Desert amid concern over its high cost.
The 25-year contract is more expensive than PG&E’s other procurement options, though its other benefits for the utility “warranted approving the project,” the California Public Utilities Commission said today in an e-mailed statement…
“For the amount we’re spending on this we could get 500 megawatts of power,” Joe Como, director of the commission’s Division of Ratepayer Advocates, said today in a telephone interview. “This is not a new technology, it’s a very old technology, and the indications are that the prices are never going to come down on it.”
This one is a double edged sword. It sticks the taxpayers AND the rate payers.
Bottom line, while the Obama Administration is working diligently to raise the price of a gallon of gas, they’re simultaneously throwing money at an industry that is not commercially competitive and even if they are successful at generating power, rates will be going up to pay for the privilege of being green.
Kermit, where are you?