Crony Capitalism: More Solyndras
“Second Energy Department-Backed Company Goes Bankrupt,” reported the Hill the other day. Beacon Power of Massachusetts got a $43 million loan guarantee from the Energy Department before it went belly-up trying to make a buck in the energy-storage business.
You can add that to the half-billion-and-change the Solyndra flop has left taxpayers on the hook for. Solyndra was supposed to be a one-off, according to administration supporters who blame the unique economics of the solar industry and Solydra’s approach to it, rather than the folly of corporate welfare, for the flop. Wonder what excuse they’ll come up with for Beacon.
Then there’s Nevada Geothermal Power, whose auditor fears for its continued existence despite more than $60 million in federal grants and an Energy Department loan guarantee of $79 million. No doubt this is yet another totally unique situation, just like the others.
One of Solyndra’s backers was the Kaiser Family Foundation. Billionaire George Kaiser gave heavily to the Obama campaign and conferred with Obama aides more than a dozen times. Now comes word that “the Obama administration restructured a half-billion-dollar federal loan to [Solyndra] in such a way that private investors — including [Argonaut Ventures LLC] — moved ahead of taxpayers for repayment in case of a default, government records show. . . . Argonaut is an investment firm of the George Kaiser Family Foundation.”
But don’t throw anything across the room in disgust just yet — because it gets worse. Comes now word that another “green” company with cozy campaign ties has enjoyed special treatment at the hands of the Obama administration.
Vehicle Production Group makes wheelchair-accessible cars that run on compressed natural gas. This year it received a $50 million loan through the administration’s clean-energy loan program. Another backer? The Perseus investment firm, whose vice chairman, James Johnson, was (a) an Obama campaign-finance “bundler,” (b) the head of Obama’s vice presidential selection committee, and (c) the former chairman of Fannie Mae. Gretchen Mortgensen, author of “Reckless Endangerment,” has called him the “founding father of regulation manipulation.”
What’s more, the chairman of Perseus, Frank Pearl, met with a member of the White House’s disabilities council to make sure Vehicle Production Group “was on their radar screen.” Yet he insists that politics played absolutely no role in the federal loan.
It’s entirely true that the previous administration also played similar games, and that Republicans in Washington didn’t seem to mind at the time. But that’s hardly an excuse for the Obama administration’s own crony capitalism. Principled conservatives should have spoken up loudly, regardless of party affiliations, against the political allocation of economic resources, which has contributed greatly to much of the nation’s economic misery. Principled liberals should do so now.”