Financial turmoil grips two more ‘green energy’ companies receiving federal loan guarantees
Two “clean energy companies” which Barack Obama and Harry Reid have touted as creators of “green energy jobs” have joined Solyndra on the growing list of federal loan recipients facing financial turmoil and default. And a new poll indicates that voters don’t support the idea of agenda-driven federal loans to chosen corporations.
Beacon Power Corp., a Massachusetts based energy storage company, filed for bankruptcy on Sunday, just one year after the company received a $43 million loan guarantee from the Department of Energy.
And The New York Times reports that Nevada Geothermal Power, another recipient of millions in DOE loan guarantees, is struggling financially: Its auditor reported last week that he has “significant doubt about the company’s ability to continue as a going concern.”
Nevada Geothermal received a DOE loan guarantee of $79 million, plus at least $66 million in grants.
The controversial DOE loan program has already produced an even bigger default: Just two months ago, solar panel manufacturer Solyndra filed for Chapter 11 protection after receiving a $535 million loan guarantee, effectively leaving taxpayers on the hook for the whole amount.
Executives, board members and investors involved with all three companies are closely linked to Obama, Reid and other prominent Democrats. Kai Anderson, a lobbyist for Nevada Geothermal’s partner corporation, Ormat Technology, is a former Senate aide to Harry Reid. Ormat’s CEO Paul Thomsen is another former Reid aide.
Beacon Power’s bankruptcy and the financial turmoil at Nevada Geothermal, hard on the heels of Solyndra’s bankruptcy filing, creates additional political humiliation for the Obama administration. Obama got considerable political mileage early in his presidential term by announcing the loans for creation of “green energy” jobs.
A new survey commissioned by Heritage Action for America reveals that public attitudes about energy are not supportive of these grand plans.
Nearly three quarters of voters (72 percent) oppose the federal government choosing which companies within a particular industry will receive financial subsidies, with a majority (53 percent) strongly opposed.
Nearly two thirds (65 percent) of respondents agreed that Solyndra’s bankruptcy demonstrates why the federal government should not pick winners and losers in the marketplace, regardless of the industry or company involved.
And six out of ten respondents told pollsters that when private investors don’t want to risk losing their money investing in a company, the government shouldn’t invest in it either.
Obama supporters’ defense in the early days of the Solyndra scandal was that more than 90 percent of Energy Department loans were not in default. But most of those loans are only in the beginning stages of 20- or 30-year terms. The Beacon Power and Nevada Geothermal cases may point to still more defaults coming in the future.
Much like George Kaiser and other Solyndra investors and executives, Beacon Power’s CEO and other executives donated generously to Obama and other Democratic Party candidates. But unlike with Solyndra, they gave zero dollars to Republicans.
According to the Center for Responsive Politics, Beacon Power president and CEO F. William “Bill” Capp donated $500 to Obama’s presidential campaign. He also donated to Democratic Massachusetts Rep. Niki Tsongas, and to the failed Massachusetts Senate campaign of Democrat Martha Coakley, whom Republican Scott Brown defeated in a special election for the late Sen. Ted Kennedy’s open Senate seat.
Beacon government relations director Matthew E. Polimeno donated $750 to Rep. Tsongas and $250 to Coakley. Beacon Power CFO James M. Spiezio also donated $250 to Coakley.
Through their companies, these donors were rewarded with $17,200 of Energy Department funds for every dollar they donated to Democrats.
Since Nevada Geothermal’s parent corporation is based in Canada, it would be unusual to see political contributions from the company’s executives to American candidates. But the Center for Responsive Politics also reports that Nevada Geothermal vice president of development and operations Max Walensiak donated $500 to Harry Reid’s successful Senate re-election campaign.