President Barack Obama, in a trip designed to highlight both green jobs and the urgent need for clean energy as oil gushes in the Gulf of Mexico, toured solar manufacturer Solyndra Wednesday morning and then addressed a select crowd of 250 people at the Fremont company’s new factory.
The visit, Obama’s second to the Bay Area since becoming president, shone a huge spotlight on Solyndra, a Silicon Valley company that has largely tried to stay out of the limelight as it prepares for its initial public offering of stock.
Calling the spill in the Gulf “heartbreaking,” Obama stressed that the country is paying a price for the ways it produces, uses and wastes energy.
“Our dependence on foreign oil endangers our security and our economy,” Obama said. “Climate change poses a threat to our way of life — in fact, we’re already beginning to see its profound and costly impact. And the spill in the Gulf, which is just heartbreaking, only underscores the necessity of seeking alternative fuel sources.”
Obama noted the entrepreneurial spirit that defines California and said Solyndra is an example of a company “leading the way toward a brighter and more prosperous future.”
And how was this begun?
Last year, the Department of Energy gave Solyndra a $535 million loan guarantee funded through the American Recovery and Reinvestment Act. Five-year-old Solyndra was the first company to receive a loan guarantee, and it has become a poster child for the success of federal stimulus spending and its ripple effects on the economy.
It’s become a poster child for certain, but hardly in that manner.
Adds Chris Gronet, Solyndra’s founder:
“There’s no way we could have put this factory in the United States without the DOE loans,” said Gronet, adding that Solyndra has applied for a second loan guarantee through the Department of Energy.
Solyndra filed for bankruptcy on September 5, but not before Obama had Solyndra’s loans restructured which, as with Chrysler, shuffles the deck of creditors and leaves billionaire George Kaiser, a big Obama campaign contributor, as first draw.
Republicans are already dancing on the grave of Solyndra, the solar panel manufacturer that received a $535 million federal loan in 2009 and collapsed on Wednesday. Here’s more music they can dance to: Sources tell me the Obama administration restructured the loan this winter, so taxpayers probably won’t even be the first creditors to get paid after Solyndra files for bankruptcy next week. The first $75 million will go to two Solyndra investors who poured in extra cash when the company nearly went bust in January. And one of them is a venture associated with the billionaire George Kaiser, an Obama campaign bundler.
When Solyndra announced that round of fundraising this February, it noted that the DOE had refinanced terms of the $535 million loan to extend the payment period. Under an “inter-creditor agreement” cited in the bankruptcy filing, the investors in the $75 million financing are considered first lien holders. That leaves Obama officials to confront the prospect of waiting behind private companies.
This in spite of the riskiness of the venture:
But records show the advantageous terms came in spite of red flags about the risks of investing in Solyndra. In 2008, as the loan agreement was moving forward, an outside rating agency gave the deal with a B+ grade, a less than optimum score, according to records obtained by iWatch and ABC under the Freedom of Information Act. That same year, the records show, Dun & Bradstreet assigned the company’s credit appraisal as “fair.”
The loan to Solyndra was peculiar from the start.
A politically connected solar company that pocketed a half billion dollar government loan, only to shut its doors, fire workers and file for bankruptcy, benefited from a series of breaks in securing the federal funds — including an interest rate lower than other green energy projects, iWatch News and ABC News found.
The $535 million loan to Solyndra Inc., issued by the U.S. Department of Treasury’s Federal Financing Bank, included a quarterly interest rate of 1.025 percent, the government bank reported in July. Of 18 Energy Department loans cited in the bank’s report, Solyndra’s rate was lowest. Eight other Energy Department projects, each also backed by the Federal Financing Bank, came with rates three or four times higher, the report shows.
And it turns out that “White House officials” were “personally involved” in the funny money.
“We have learned from our investigation that White House officials monitored Solyndra’s application and communicated with [Department of Energy] and Office of Management and Budget officials during the course of their review,” the letter says.
Solyndra was a frequent visitor to the West Wing:
Not only does the now-bankrupt solar energy firm Solyndra have a cozy financial relationship with the Obama administration, company representatives also made numerous visits to the White House to meet with administration officials, The Daily Caller has learned.
According to White House visitor logs, between March 12, 2009, and April 14, 2011, Solyndra officials and investors made no fewer than 20 trips to the West Wing. In the week before the administration awarded Solyndra with the first-ever alternative energy loan guarantee on March 20, four separate visits were logged.
Obama made certain that his big time campaign donor gets his money back first, and we taxpayers “suck hind teat” as my father would say.
We now learn that Department of Energy officials have been “sitting in” on board meetings:
Officials from the Department of Energy have for months been sitting in on board meetings as “observers” at Solyndra, getting an up-close view as the solar energy company careened towards bankruptcy after spending more than $500 million in federal loan money.
And catch this:
Questions about the loan have been simmering for months. In 2009, the Energy Department put Solyndra’s application on a fast-track for approval, and announced the award with great fanfare. The generous terms of the government loan included the lowest interest of all the green projects benefitting from Energy Department help, iWatch News and ABC News found.
And as part of the deal, the Energy Department agreed that if the company went bust, private investors could recoup their losses before the government. Republicans in Congress called the investment “a bad bet” and said it “put taxpayers at unnecessary risk.”
“..as part of the deal, the Energy Department agreed that if the company went bust, private investors could recoup their losses before the government.”
The problem with Solyndra is clear enough that even a democrat should have understood it:
“Here’s the bottom line,” Lynch said. “It costs them $6 to make a unit. They’re selling it for $3. In order to be competitive today, they have to sell it for between $1.5 and $2. That is not a viable business plan.”
Prices for solar products plummeted because of competition from China. Now who could have seen that coming?
Neither Barack Obama nor anyone around him has any business sense whatsoever.
Solyndra is a metaphor for the Obama Presidency.
Lofty expectations, big money and failure.