Department of Energy
Another example of the poor job government does in picking winners and losers is emerging. Solyndra, a solar panel company, was the first to go under, taking with it half a billion in taxpayer money.
Now we have the specter of another “green jobs company” that received guaranteed government loans doing the same. But this one seems to have consumed over twice the amount of money that Solyndra did.
SunPower is its name and right now, bankruptcy seems to be its game.
How well did the government, via the Department of Energy, do this time?
The Energy Department says on its website that the $1.2 billion loan to help build the California Valley Solar Ranch in San Luis Obispo County, a project that will help create 15 permanent jobs, which adds up to the equivalent of $80 million in taxpayer money for each job.
The DoE also claims:
“This project underwent many months of rigorous technical, financial and legal due diligence by career employees in the DOE loan program,” Energy spokesman Damien LaVera said in a statement to FoxNews.com. “It was approved for one reason only: because it meets all the requirements of the program – helping America win the clean energy race and create entire new industries for American workers.”
Did it indeed undergo such “rigorous” analysis? Well if so, then they should have known all about this:
But SunPower posted $150 million in losses during the first half of this year and its debt is nearly 80 percent higher than the market value of all its outstanding shares. The company is also facing class action lawsuits for misstating its earnings.
It truly makes you wonder how bad a company would have to be not to get a DoE loan (obviously it would have to be a “clean energy” company, because those are the “winners” this administration has chosen to fund).
Oh, and then there’s this:
The company is also politically connected. Rep. George Miller’s son is SunPower’s top lobbyist. The elder Miller, a powerful California Democrat, toured the plant last October with Interior Secretary Ken Salazar, and reportedly said, "We’ve worked hard to make renewable energy a priority because it represents America’s future economic growth. Today, businesses like SunPower are moving forward, hiring 200 people for good clean energy jobs in the Easy Bay."
It’s not clear what role, if any, either of them played in securing the loan. Miller’s office did not respond to a request for comment.
An Energy Department official denied crony capitalism was a factor in the loan guarantee.
“The notion that political connections played any role in this application is simply false,” the official said. “This application was approved based on the exhaustive due diligence of the career professionals in the loan program, and nothing else.”
Of course. Because there was such a sound financial basis to approve such a loan, wasn’t there?
And politicians wonder why people are more and more cynical and less trusting of our government all the time?
How many times have we said the government shouldn’t be involved economically in picking winners and losers? And how many times have we seen examples of the government doing precisely that and the program ending up a disaster.
Solyndra, for instance. But political agendas rarely yield to the laws of economics so it is fairly easy to predict how they’ll end. The Obama administration’s “green jobs” agenda – again see Solyndra for the latest prime example – is a consummate failure. And a look at where that agenda is headed serves as an example of why what has been said right here (and many other places) continues to be true.
But in case you’ve missed it or are inclined to wave off what we might say here, here’s a guy from CATO:
Jerry Taylor, senior policy analyst for the free-market Cato Institute, says the whole program shows that the federal government should not be picking private-sector winners and losers.
"It’s a lot of money for very few jobs if you do the math," Taylor said. "If nobody in the private sector is willing to invest their capital, that’s a pretty good signal."
What is he talking about? Take a look at the chart.
Yes, those are Department of Energy numbers for the number of jobs that will be created for $6.5 billion in loan guarantees for the 9 companies in question. That’s right, $6.5 billion in guarantees will create 283 permanent jobs. That’s $23 million of your dollars (or borrowed money) per job.
Where’s the private investment? Why are these companies having to seek federal loan guarantees so they can get loans? If they’re viable, as Jerry Taylor points out, the private sector should be willing to invest in them.
Why aren’t they?
In fact, why, given that it appears the private sector is not willing to do so, is the DoE even considering these loans?
Because there’s an agenda at stake here. This isn’t about market viability or sound economics, it’s about trying to save an agenda that promised 5 million green jobs, remember.
And this is what you get. A failed Solyndra and 9 companies the private sector won’t invest in which may create 283 jobs. May. Government estimates about programs it supports have never been known to be overly optimistic, have they?
$23 million a pop for 283 jobs that may or may not materialize.
The fact that they’re even considering these loan guarantees tells you all you really need to know about how clueless they are.
And there are people that still wonder why there is a growing body of us out here wanting smaller, less costly and less intrusive government that binds itself to the limits of the Constitution?
The Daily Caller is reporting that Solyndra, famed for going belly up and putting the taxpayers on the hook for half a billion dollars, applied for an additional DOE loan for $469 million.
Failed solar panel maker Solyndra’s Securities and Exchange Commission filings show that seven months after the Obama administration’s Department of Energy approved a $535 million federal loan guarantee, Solyndra applied for a second one valued at $469 million.
“On September 11, 2009, we applied for a second loan guarantee from the DOE, in the amount of approximately $469 million, to partially fund Phase II,” Solyndra wrote in a report it filed with the SEC on December 18, 2009. “If we are unable to obtain the DOE guaranteed loan in whole or in part, we intend to fund any financing shortfall with some combination of the proceeds of this offering, cash flows from operations, debt financing and additional equity financing.”
This application went in right after it received the original $535 million from the DOE. So, the question is, what happened to that application? Well, so far, it seems that no one can say.
It’s unclear if the now-bankrupt and scandal-embroiled green energy company actually received a second loan. Department of Energy officials did not immediately respond to The Daily Caller’s request for comment, and the company’s SEC filing left the question open.
So, did Solyndra get that second loan or not? Are we on the hook for more than a billion dollars? It seems like if the answer was "no", the DOE or Obama Administration would be fairly keen on letting us know that.
I’m really curious about this now.