12 Sep

The Solyndra Presidency [Reader Post]

                                       

Don't think of them as solar panels, Joe. Think of them as favors returned

May, 2010

President Obama tours Fremont’s Solyndra, promotes clean energy

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.

(emphases mine)

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.

And

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.”

“Mr. President, this is where we take taxpayers’ money and turn it into manure”

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.

About DrJohn

DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education. DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed. Except for liberals being foolish.
This entry was posted in Barack Obama, Culture of Corruption, Economy, Environment, Liberal Idiots, Obamanomics, Politics and tagged , , , , , . Bookmark the permalink. Monday, September 12th, 2011 at 2:05 pm
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19 Responses to The Solyndra Presidency [Reader Post]

  1. Nan G says: 1

    ABC News noted:

    “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.

    Now, ask yourself, were they really spending $6 to make each unit?
    Or were Obama’s buddies pocketing huge salaries that were being averaged into each unit?
    Was the Davis-Bacon Act to blame?
    You know,
    When any dime of federal money goes into any project every worker MUST get prevailing UNION wages.
    How can Solyndra account for $535 Million being spent in 15 months?
    We almost found out.
    But in June 2010 Solyndra executives withdrew a planned $300 million initial public offering and with the withdrawal they also withdrew all of the financial statements they had made public.

    Remember when Barney Frank was making a big stink about how we should ignore ratings firms like Standard & Poor’s?
    In March 2010 PricewaterhouseCoopers LLP warned that Solyndra, the recipient of $535 million in federal loan guarantees, had financial troubles deep enough to “raise substantial doubt about its ability to continue as a going concern.”
    But Solyndra was spending $1/2 million to lobby lawmakers(like Barney) into ignoring warnings like that.

    So, Democrat Henry Waxman of California and Diana DeGette of Colorado said in a letter Sept. 8 that Solyndra Chief Executive Officer Brian Harrison assured them in a meeting less than two months ago [July 2011] that the company was in a “strong financial position.”
    Sure.
    Take his word for it over that of an accounting firm that works with facts and figures.

    ReplyReply
  2. James Raider says: 2

    All Obama voters should be proud that the money of taxpayers is being so diligently managed, and that taxpayer interests are so intelligently represented in all negotiations.

    Sadly, this is representative of all negotiations being undertaken by these clowns when facing the Chinese, Putin, Iran, General Motors, Goldman Sachs, etc., etc.

    And where is the MSM on this, as on anything this Administration does? . . . . Still tingly.

    BTW, Nan G, I agree, in the non-existing “margins” some of the cost was a kickback. A 2 year old would have understood that if that 2 year old had really been negotiating in good faith, but the question is, . . . what form did it take and how was it delivered.

    ReplyReply
  3. Ivan says: 3

    Pity the Republicans are asleep at the switch, again, and as usual.

    Too bad we don’t have a real opposition party in DC to oppose Obama.

    ReplyReply
  4. Wm T Sherman says: 4

    It costs them $6 to make a unit.
    They’re selling it for $3.

    They could have made it up on volume.

    If we’d just given them a chance.

    ReplyReply
  5. MataHarley says: 5

    Leaving the predictable cozy relations between politicians, energy policy, free flowing money to favored causes and nefarious back room deals that may enrich partisan individuals aside, Seeking Alpha puts the fiscal realities for Solyndra’s demise into perspective.

    Short version? Cheap Chinese competition, decline in global demand, and a reduction in the cost of the traditional, but very expensive, refined silicon in the production process. With the drop in the prices of that polysilicon, it sort of defeated Solyndra’s grand purpose of reducing manufacturing costs with their alternative solution. Basically, if the demand for solar panels were high, even the more expensive manufacturers outside of China had a chance… and perhaps Solyndra better than most because of a cheaper manufacturing process. But when demand went down, as well as the price of the polysilicon, Solyndra… no doubt along with others… would be unable to compete in the limited market place.

    In other words, Obama and buds really don’t make for good stock investment advisors. While all events may not have been genuinely foreseeable, global economics pointed to a likely decline in demand. People just didn’t have money to spend for expensive and sexy solar energy. But while Obama and his minions couldn’t see the writing on the wall, apparently the private investors who did step up to the plate couldn’t either. Blinded by ideology, I guess.

    Solyndra had put in an application with the SEC to enter as an IPO back in December 2009. As Nan G pointed out, the green tech outfit wasn’t exactly greeted with a thumbs up reception. Solyndra had posted a letter on April 3rd to it’s customers and supplies, saying this wasn’t unusual for a new IPO potential entry. Their withdrawal to become publicly traded, opting instead for private venture capital, was a stated skepticism in the public capital markets. Ironic, considering that 2010 was far from a queasy roller coaster year for stocks.

    … or perhaps, just an excuse. Probably saving grace for an unsuspecting shareholders who would be losing their shirts at this moment.

    Like drj says… this POTUS is clueless about business and economics. And he sure can’t pick a winner. Which is why most are calling Solyndra Obama’s “Enron”. It is just one more category where voting in someone with no administration or business experience plays out negatively for the nation at large. Ya just can’t expect a community organizer to be an effective stock broker for the nation’s purse.

    But there is a small silver lining to the Chinese vs US solar industry… according to a study by the Greentech Media and the SEIA, the US has a trade surplus for the needed ingredients for Chinese (an other locations) manufacturing. To the tune of about $2.5 bil globally.

    As for George Kaiser, Forbes had him as #20 of richest Americans back in 2008. Considering the amount of people he employs thru various enterprises – like Kaiser-Francis Oil Company and the Bank of OK, N.A. – not to mention his philanthropy thru both George Kaiser Family Foundation and benefactor to the Jewish community in OK (his family fled Hitler’s Nazi Germany) – I’d still like to keep him around to create jobs and for general do-good’ing… even if he again contributes to the bozo in chief. I’ll put his contributions to the American business society over his $50K contributions to Obama any day.

    ReplyReply
  6. MataHarley says: 6

    @Ivan: Pity the Republicans are asleep at the switch, again, and as usual.

    Too bad we don’t have a real opposition party in DC to oppose Obama.

    Desperate to keep the same ol’ tune on the record player, aren’t you, Ivan?

    To point out the obvious to the oblivious…. the $535 million was via ARRA funds. Only two GOP lawmakers supported the ARRA passage… Olympia Snowe and Susan Collins. Predictable turncoats on just about all O’legislation. Other than those two, every other GOP Senator, plus all the GOP in the House – along with 10 Dems crossing the aisle – voted NO.

    This is hardly an accurate portrayal of the GOP “asleep at the switch” if they were awake enough to vote against the bill.

    Or perhaps Ivan would like to explain what an impotent GOP minority could have done to stop the ARRA… and as a byproduct, the idiot funding of Solyndra… other than cast their nays, as they did?

    I’m not much impressed with the convictions of the GOP, nor their unorganized political presentations in opposition. But in this case, they did everything in their power as a weak minority to stop the bill. I can’t fault them for that. Anyone who does is just desperate to complain.

    ReplyReply
  7. Nan G says: 7

    Here are a few of the latest headlines regarding how the media is treating Obama’s Solyndra problem:

    Obama team backed solyndra
    aid as auditors were wary
    Bloomberg News

    New DOE loans support
    green Obama-backers
    Daily Caller

    Obama abused the public
    trust to fund pet solar firm
    Washington Examiner

    Solyndra Investigation Begins Critical Look
    at Federally Funded Green Ventures
    FOX News

    Obama Officials Sat In
    On solyndra Meetings
    ABC News

    FBI solyndra raid:
    misuse of federal loans?
    Associated Press

    The Solar Dole
    Investor’s Business Daily

    FBI serves search warrants
    at solyndra
    San Francisco Chronicle

    solyndra officials made numerous trips
    to the White House, logs show
    Daily Caller

    Obama Bundler George Kaiser Made
    Multiple Visits to White House
    in Months Prior to $535 Million
    Loan Guarantee to solyndra
    Big Government

    Ezra Klein Defends
    Failed solyndra Investment
    Big Journalism

    Solar deal needs probe,
    not witch hunt
    Sacramento Bee

    This is not going away like the New Black Panther voter intimidation did.
    This is not going away like Obama’s bad choices for Cabinet members and Czars did.
    This is not going away like Obama ignoring the findings of his own bi-partisan debt commission for more than a year.
    This is getting more coverage than Fast & Furious/Gunrunner did partly because of the money.

    ReplyReply
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  9. Blake says: 8

    You see, this is how our rezident-in-chief gets rich- I would bet my life that he got some kickback from all this money. He needs to be investigated, found guilty, and impeached- oh, and add the “fast& furious” to those charges, since that was intended to be a shell game where the kenyan-in-chief could begin, through “executive orders” to eliminate, or at least tighten the second amendment.

    ReplyReply
  10. Nan G says: 9

    Lest any think that this set back for Solyndra is causing Obama to put the brakes on forking taxpayer dollars over to his green friends, think again.
    Relatively few companies succeed in winning DOE loans but……
    http://online.wsj.com/article/SB125383160812639013.html

    1. A tiny car company (Fisker Automotive Inc.) backed by former Vice President Al Gore has just gotten a $529 million U.S. government loan to help build a hybrid sports car* in Finland that will sell for about $89,000.
    Fisker claimed that most of its DOE loan will be used to finance U.S. production of a $40,000 family sedan that has yet to be designed.
    DOE’s Rogers said, “This is a very attractive, very across-party-lines kind of vehicle. All of the detailed due diligence [was] done by independent review teams.”

    *The four-door Karma, powered by a lithium-ion battery, will be able to run solely on electric power for 50 miles, and will achieve an average fuel economy of 100 mpg over the span of a year. Production is scheduled to start in December, with about 15,000 vehicles a year expected to hit the U.S. market starting next June.

    2. Scott Redmond*, CEO of XP Vehicles Inc., said he met with DOE officials twice in Washington after applying for a $40 million loan to develop a $15,000 to $25,000 hybrid, and that both times he was told his application looked good. Since receiving a rejection letter from DOE in August, Redmond said, he has been unable to get a full explanation as to why his request was turned down.

    *Scott Redmond gave to the Swift Boat Vets and POWs for Truth campaign.

    3. Four companies that Steve Westley, a managing partner at clean technology investment firm The Westley Group, has invested in received more than $500 million in loans, grants and stimulus money from the Department of Energy after Westley contributed $500,000 to the Obama campaign. The companies in Westley’s portfolio that received federal funding are Tesla Motors, RecycleBank, EdeniQ and Amyris Biotechnologies.

    No pattern emerging that anyone can see.

    ReplyReply
  11. chundog says: 10

    SEC filings are pretty much all greek to me, but if it gives anyone else more insight into this mess, here is Solyndra’s S-1 filing with the SEC from December 2009.
    @Nan g – is this the info you were referring to?

    http://www.sec.gov/Archives/edgar/data/1443115/000119312509255919/ds1.htm

    ReplyReply
  12. Nan G says: 11

    @chundog:
    Yes, it is the filing from when solyndra attempted to ”go public.”
    After they withdrew their offering they also pulled this filing.
    I had heard that someone still had it and would put it online.
    I guess someone did.
    Thanks.

    ReplyReply
  13. chundog says: 12

    @Nan g- Let us know if you find anything interesting in it.

    ReplyReply
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  15. Mr. Irons says: 13

    I love it, the Obama admin is now trying to claim that the application for the “Loan” for the 500 billion started in Bush’s last year of Presidence… yet the bill for the application process did not exist till after Obama was inaugurated and the ARRA bill was passed and then signed by Obama… so how can a Loan whose legal works was in the ARRA bill be filled out before a bill is penned, vetted, voted on, passed, then signed by Obama in 2009 be Bush’s fault?

    ReplyReply
  16. Nan G says: 14

    The Daily Caller today reported on an email from February 2011 shows that the now-bankrupt solar energy company Solyndra denied receiving money from the federal government.

    “Your story today on Solyndra has several inaccuracies I wanted to point out,” Solyndra spokesperson David Miller wrote to TheDC on February 22, 2011. “For sake of accuracy … [T]he federal government has not spent a dime on Solyndra.”

    He went on to write that the congressional investigators were incorrect, and that the federal government would only have to pay anything “in the unlikely event Solyndra can’t pay back its loans.”

    Unlikely, my foot!
    Another newly unemployed solyndra worker was interviewed as saying he saw and helped solyndra throw out, on average, $100,000 worth of solar panels EVERY DAY!
    Not a prudent business model to never improve your mistake ratio.

    My hubby’s print shop has a big sign commending everyone for however many days they go without having to trash parts of a job.
    I recall it getting up to 16 days in a row once.

    ReplyReply
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