Panel: Green jobs company endorsed by Obama and Biden squandered $535 million in stimulus money
Solyndra, Inc. was supposed to have showcased the effectiveness of the Obama administration’s stimulus and green jobs initiatives, but instead it has become the center of congressional attention for waste, fraud and abuse of such programs.
According to a Feb. 17 letter signed by Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Oversight Subcommittee Chairman Cliff Stearns, Florida Republican, to Energy Secretary Steven Chu, the Fremont, Calif.-based solar panel manufacturer should never have received a $535 million loan guarantee from the stimulus.*
The company became the first recipient of an Energy Department loan guarantee under the stimulus in March 2009, which was intended to “finance construction of the first phase of the company’s new manufacturing facility” for photovoltaic solar panels.
The Energy Department estimated in a March 20, 2009 press release that the loan guarantee would create 3,000 construction jobs and a further 1,000 jobs after the plant opened.
And President Barack Obama and Vice President Joseph Biden each personally showcased Solyndra as an example of how stimulus dollars were at work creating jobs, during appearances at the company over the course of the following year.
Biden personally announced the closure of Solyndra’s $535 million loan guarantee in a Sept. 9, 2009 speech, delivered via closed-circuit television, on the occasion of the groundbreaking of the plant.
The vice president justified the federal government’s investment in Solyndra in front of employees and other dignitaries, including Secretary Chu and former Calif. Gov. Arnold Schwartzenegger, saying the jobs the company intended to create would “serve as a foundation for a stronger American economy.”
“These jobs are the jobs that are going to define the 21st century that will allow America to compete and to lead like we did in the 20th century,” Biden said.
According to Biden’s speech, the $535 million loan guarantee was a smaller part of the $30 billion of stimulus money the administration planned to spend as part of its Green Jobs Initiative.
Obama made similar claims in a May 26, 2010 speech at the plant, but the 1,000 jobs he and Biden touted in their respective speeches failed to materialize.
Instead, Solyndra announced on Nov. 3 it planned to postpone expanding the plant, which put the taxpayers on the hook to the tune of $390.5 million taxpayers**, or 73 percent of the total loan guarantee, according to the Wall Street Journal.
It also announced that it no longer planned to hire the 1,000 workers that Obama and Biden had touted in their speeches and that it planned to close one of its older factories and planned to lay-off 135 temporary or contract workers and 40 full-time employees.
A closer look at the company shows it has never turned a profit since it was founded in 2005, according to its Securities and Exchange Commission (SEC) filings.
And Solyndra’s auditor declared that “the company has suffered recurring losses, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, [that] raise substantial doubt about its ability to continue as a growing concern” in a March 2010 amendment to its SEC registration statement.
“While we understand the purpose of the Loan Guarantee Program is to help private companies engaging in clean energy products to obtain financing by providing loan guarantees, subsequent events raise questions about Solyndra was the right candidate to receive a loan guarantee in excess of half a billion dollars,” Upton and Stearns wrote.
A June 2010 Wall Street Journal report indicating that Solyndra’s majority owner, Oklahoma billionaire George Kaiser, was a major fundraiser for the 2008 Obama-Biden campaign has stimulus opponents such as Citizens Against Government Waste crying foul.
“We have said this is pork-barrel spending since the beginning,” Leslie Page, spokeswoman for Citizens Against Government Waste, told The Daily Caller. “And the one thing about pork is its corruptive influences.”
Kaiser flatly denied he had anything to do with the loan guarantee when he was asked by the Journal, but Page nonetheless sees cronyism in the loan guarantee because personal involvement of the president and vice president in the project.
“This seems like a quid pro quo, and it raises a lot of questions,” Page said.
Other stimulus critics say Solyndra shows just how flawed the program has been from the beginning and how it has failed to create jobs and needs further oversight.
“It would have been a lot more effective to put money into the hands of the private sector,” said Alex Cortes, chairman of the Restore the Dream Foundation and DefundIt.org. “This is just another example of the failure of the stimulus.”
Solyndra is just the tip of the iceberg, according to Cortes, who plans to raise awareness of other stimulus pork projects such as an approximately $800,000 television ad campaign in New York aimed at promoting healthy eating habits.
“While that’s all well and good … it doesn’t do anything to create jobs,” Cortes said.
And Mattie Corrao, government affairs manager with Americans for Tax Reform, said the Solyndra loan shows how hollow Obama’s promise to keep close track over how stimulus money has been spent has been.
“[The administration] is trying to pretend we’re creating jobs and hoping the taxpayers are dumb enough and blind enough to believe the lie,” Corrao said. “But after two years of unemployment about 9 percent, people aren’t going to believe it anymore.”
Solyndra did not respond to a request for comments.
*Correction: The sentence originally stated the money was squandered.
**Correction: The article originally stated the postponement cost $390.5 million, instead of put the taxpayers on the hook for $390.5 million.