Unless you are a confirmed cynic, you may find the following story hard to believe and more than a bit infuriating.
In September 2009, President Obama's Energy Department issued a $535 million ''stimulus'' loan guarantee to Solyndra Inc. for expansion of its solar energy business. In May 2010 Obama made a highly orchestrated visit to Solyndra's solar panel factory and proclaimed Solyndra representative of a ''brighter and more prosperous future'' for America.
In August 2011 Solyndra declared bankruptcy and laid off 1,100 workers. Its office was raided by the FBI and boxes of records were removed. Solyndra officers on Sept. 23 pleaded the Fifth Amendment before a congressional committee.
George B. Kaiser, a Texas billionaire and large Obama fundraiser, is a significant investor in Solyndra. The U. S. Government Accountability Office found that the Energy Department loan approval was given before completion of mandatory financial and energy evaluations. Solyndra lobbyists were in close contact with the White House and met at least three times with top Obama aide Valerie Janett. Steven Chu, the Secretary of Energy, was pushing his personnel for fast approval.
Unlike other federal guaranties, no commercial bank lender was involved. The funds were loaned directly to Solyndra by a branch of the U. S. Treasury from the 2009 Obama stimulus package.
In January 2010, Solyndra's business plan was in serious trouble. It could only sell solar panels far below cost. This was publicly known and in March 2010, before President Obama's visit, Solyndra's accountants formally expressed doubt about its ability to survive. Unbelievably, not only did the Obama administration continue to fund the project, reaching a total of $527 million, but it permitted the government loan to be restructured so that claims of private investors (including Obama fundraiser George B. Kaiser) jumped ahead of the U.S. in the right to collect on default. This occurred after Solyndra was in default of its loan obligations to the government.
To cap off this tawdry tale, the entire business plan of Solyndra was based on the fact that its solar panels did not use the usual polysilicon but a less expensive material. However, before the loan guarantee was issued, the price of polysilicon had dropped from over $400 a kilogram to about $50 a kilogram, as had been reported by the Congressional Research Service. Therefore, the Solyndra project was doomed before the guarantee was issued.
Solyndra was the first solar panel recipient of funds from the Obama stimulus plan, but not the only one. Two others, Evergreen Solar and Stirling Energy Systems Inc., are also in bankruptcy. You might think that this record would cause at least a pause and re-examination of this program. Far from it. The Energy Department issued $1.1 billion in new loan guarantees for solar projects on Sept. 27, and was rushing to issue more before the $18 billion program expired on Sept. 30.
How can one explain what seems to be totally irrational behavior by supposedly intelligent people, or this callous disregard for taxpayers' dollars when the federal deficit and debt are threatening our entire economy and the fabric of our society? It is not like we are in imminent danger of running out of fuel. We have recently discovered more fuel resources in the U. S. than ever before. Nor are solar panels some new and exciting bonanza. They work on the photovoltaic effect known since 1839 and on silicon based pv cells developed by Bell Labs in 1954. They have had a history of commercial application for decades. There is no lack of private money available for solar energy development where it is feasible and cost effective. Nor does this tale seem to be a case of garden variety graft where pockets are lined.
Is the only rational explanation that this administration is not rational on the subject of environmentalism? To them, is the green revolution an article of faith, in effect a religion, a form of zealotry that brooks no logical argument?
If not, how does one explain their behavior? If so, not only is this an insidious form of corruption, but will it not discredit other sensible efforts for environmental improvement?
This is aside from the question of whether the administration now in Washington just doesn't care about loading another few billion dollars of debt on the American people if it can get a good photo op.
Letson is an attorney in Warren. He was previously General Counsel of the U.S. Department of Commerce. He was also Vice President and General Counsel of Westinghouse Electric Corporation.