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News that the Treasury Department’s Inspector General has opened an investigation to determine whether three solar companies inflated the cost of their work to increase the payments they would receive from the government should send shivers down the spine of the taxpayer-subsidized green energy industry.
The Washington Post reports that SolarCity, SunRun and Sungevity have received subpoenas from the Treasury Department’s office of inspector general for financial records to justify more than $500 million in federal grants and tax credits the firms tapped for performing work. The probe seeks to determine whether the companies accurately reported the market value of their costs when applying for federal reimbursement, which was calculated at one-third of the costs.
The solar companies received money through the Treasury’s $13 billion program, known as the 1603 program, which used funds from President Obama’s stimulus initiative to offer cash grants to clean-energy developers. The three companies, SolarCity, SunRun and Sungevity, have been by far the largest recipients among companies installing solar panels on homes.
SolarCity is the most interesting of the names on the list. Its Chairman, Elon Musk, is an Obama supporter who has used taxpayer funds, not once, not twice but three times to enrich himself. Musk has been able to parlay his political donations and lobbyist contracts with the Obama Administration into loan guarantees and grants. Musk spent $480,000 from 2007 to 2011 to lobby Congress, the White House, EPA and DOE and his company Tesla Motors received a $465 million loan guarantee from DOE’s ATVM program. Tesla’s public offering made Musk nearly $600 million. Likewise, Musk’s company SpaceX has a lifeline of government contracts with NASA that total nearly $1 billion.
Musk’s model for enrichment was replicated this past week as the government-funded SolarCity went public. In a sign that while the public’s appetite for “green investment” may be waning, the stock’s initial price was cut in half in order to hit the
Elon Musk, while brilliant, has become a shining example of crony capitalism in the age of Obama. If you put enough money in the Washington, DC political machine, you can walk out with enough government contracts and loans to enrich yourself greatly. It’s a great gig if you can get it but it certainly not what the Founding Fathers had in mind when they founded the country.
Whether the Treasury Department finds that Musk’s company violated the law remains to be seen. What is more troubling, however, his is continued use to taxpayer funds to make himself rich. That, unfortunately, is not only legal in the world of President Obama, but encouraged.
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I wouldn’t be too hard on Musk; although he is obviously playing the system, he is doing that because that is the hand he was dealt. It’s undeniably true that he and his employees at SpaceX are launching and retrieving cargo at a phenomenally lower price than any previous competitor (even counting all the money that SpaceX has received). His goal is to break the crony monopoly that existed for 40 years which kept launch costs high. He’s making deals with the devil to do it.
I am not as critical on Elon Musk as I am on many others in the Green Scam Economy.
A. He is a true venture, risk taker having rolled over much of his own money (from the sale of PayPal) in every venture. He may not be Steve Jobs, but he is the style of high rolling entrepreneur that made this country great. Tesla quickly tapped the private capital markets to raise additional capital and it drew on many private funds before it went public.
B. Tesla got its government loans under the early Bush-sponsored battery only fund. This was MUCH different animal than the Fisker, Solyndra, A123, Volt sleeze that Obama and his Chicago thugs pulled. The Tesla money was used early on to develop next generation battery (i.e. basic science) technology that was then put into Lotus-supplied shells. I understand this is shades of grey and picking winners and losers is not the role of government, but I am for basic science funding and this fit within the outside of those margins.
C. Tesla is making the Model S in the United States in a retrofited Toyota plant. Fisker and others were built overseas.
All in all, Elon is playing the cards that are being dealt to him, and he is put upping a lot of his own money, which is by no means a sure payoff.
I think it is important for conservatives, libertarians, etc. to look into things a little bit more before dumping all of Obama’s stupidity in one bucket.
@James Bond:
If you are assisted cheek-by-jowl by NASA, have all the free money from the government you could ever want, why it’s simple to build a rocket to space at a tenth the expected costs– I’m surprised it wasn’t one- hundredth. Take all the engineering support and subsidies away then let’s see how cheap the launch was.
Besides, Tesla has developed one of the fastest production cars in the world.
@El-lobo: The fact is, that the pre-existing crony monopoly of Lockheed and Boeing got many hundreds of times more of our taxpayer money from NASA than did Elon Musk, and they were not able to deliver cargo to the Space Station for any price.
Also, Musk is being paid for specific deliverables; if he doesn’t deliver, then he doesn’t get paid. On the other hand, the pre-existing crony monopoly of Lockheed and Boeing have been feeding on “cost-plus” contracts for 40 years, where they get paid for all their “costs”, plus some extra money for profits, whether they actually deliver anything or not.
All in all, signing small money contracts with small companies like SpaceX with specific deliverables spelled out in the contracts is miraculously already producing space missions such as we haven’t seen from American companies for the past 40 years. This is the better way to go (unless you are a paid spokesman for those companies that are being displaced, of course).
That’s like the scammer known as Angus King, aka Senator Angus King.
His buddies at Yale were able to suck extra money from the DOE for their scam wind farm in Roxbury, Maine.
Breitbart is reporting that Musk just purchased a $17 MILLION mansion. Guess it pays to play with Barack Hussein Obama, Jr.
But my God, can you just hear the outrage from the left if Musk was a Romney supporter? At least he wouldn ‘t have gotten all that taxpayer money building cars nobody wants except other wealthy liberals who believe in wealth redistribution, well, that is, except for their wealth.
SO those are the moneys we hear are circulating and recirculating back to the origin , naming OBAMA,
it’s a forever pool of money with players such as those named above, all on the pockets of people’s money, he call it yes redistrIbution?
to my word it is the most criminal actions done within AN WILLING GOVERNMENT AND A FEW LIBERALS COMPANIES, FOREVER PLAYING CRAP GAMES, WHILE THE PEOPLE GET RUIN, JOBLESS AND CHOKES
BY INTITELMENTS FROM OBAMA POLICIES ON A MULTIPLE SCALE,
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