‘There are no guarantees in the business world about success and failure. That is just the way business works,” White House spokesman Jay Carney told reporters last week. He was answering a question about the bankruptcy of Solyndra, a solar panel manufacturing firm.
Department of Energy spokesman Damien LaVera disagreed, instead declaring the Obama administration’s $535 million loan guarantee to the now-bankrupt Solyndra as a victory. “The project that we supported succeeded,” said LaVera. “The facility was producing the product it said it would produce, and consumers were buying the product.”
“We have been fighting about the proper size and role of government since the day the framers gathered in Philadelphia,” President Barack Obama told University of Michigan graduates last spring. So, is it the proper role of government to act as a venture capitalist?
Taxpayers are not expected to get back any of the $527 million that the Treasury Department gave directly to Solyndra. And not only has Solyndra failed to create the 4,000 jobs that Energy Secretary Steven Chu promised when he gave the company the very first Energy Department stimulus award of its kind, but the 1,100 employees that Solyndra had employed are now jobless as well.
Many individuals invest in solar companies, but they tend to be a bit more careful when they do it with their own money. “We’ve been very selective in this market, waiting for companies to have real revenues,” Horizon Technology Finance CEO Rob Pomeroy said. “Then we keep our loan levels low, in a secured position.”
The Obama administration took a different approach. Solyndra had been in existence just four years when Chu announced the loan. The company had only been shipping solar panels for one year at that point. He even praised the department’s loan officers for “accelerating the process” and allowing the “barriers to success” to be removed.
Not everyone was impressed with Chu’s haste. The Government Accountability Office audited the Solyndra loan and nine others in the program last year, concluding that the stimulus grants treated applicants inconsistently, favoring some and disadvantaging others.
The Obama administration claims politics played no role in any of the Energy Department grants, but George Kaiser, an Oklahoma billionaire who raised more than $50,000 for Obama, was Solyndra’s prime financial backer. California investment banker Steve Westly, another Obama bundler, has seen more than a half-billion dollars in energy grants awarded to other firms he has invested in.
In all, the Energy Department has invested $18 billion taxpayer dollars in more than 40 different companies. Just last month, they guaranteed an $852 million loan to the Genesis Solar Project, which promises to create
800 temporary construction jobs and 47 permanent operating jobs. That is more than $1 million per job.
No capitalist would have invested his own money this way. But Obama believes he must spend your money on solar firms because the free market won’t dare. As he told an audience at Cooper Union in 2008, “The American experiment has worked in large part because we have guided the market’s invisible hand with a higher principle.” So far, these higher principles have added more than $4.1 trillion in U.S. debt.
Conn Carroll is associate editorial page editor of The Washington Examiner.