Solar company with $1.2 billion taxpayer loan guarantee, political connections exhibits signs of financial trouble
As failed solar panel manufacturer Solyndra rides through the investigative ringer in Congress, revelations of another politically-connected company that received what appears to be a less-than-virtuous $1.2 billion loan guarantee are surfacing.
The company, SunPower, received its $1.2 billion loan guarantee in September, immediately before the program’s deadline.
SunPower isn’t as financially sound as the public was led to believe when it secured a loan guarantee twice the size of Solyndra’s $535 million loan. Just this week — less than a month after taxpayers landed on the hook for SunPower’s $1.2 billion loan guarantee — company executives announced that they expect to lower their 2011 earnings projections.
The company also carries $820 million in debt, which is $20 million more than its market capitalization.
House Energy and Commerce subcommittee on Oversight and Investigations chairman Rep. Cliff Stearns says the revelations are troubling.
“There is great cause for alarm over political influence contaminating the DOE loan guarantee program,” Stearns told The Daily Caller. “The documents that the White House dumped last Friday reveal a disturbing prevalence of wealthy donors and bundlers littered throughout the loan guarantee process, with direct access to the President’s West Wing inner circle.”
Stearns adds that, because “billions of taxpayers dollars are at stake” in the loan guarantee process, the committee has doubled down on information requests from Energy Secretary Steven Chu.
“The politicization of the loan guarantee process is quite troubling and is a subject our investigation does not take lightly — we are looking into this and will see where it leads us,” Stearns said. “After failing to respond to our September 20th request, we also have asked Secretary Chu for a second time to provide financial details and DOE communications on every loan guarantee to ensure loans were indeed awarded on the merits and were proper candidates for federal support.”
The Department of Energy maintains the SunPower loan guarantee was solid, though.
“This project underwent many months of rigorous technical, financial and legal due diligence by non-political career employees who scrutinized every aspect of the project,” DOE spokesman Damien LaVera told TheDC. “It was approved for one reason only: because it meets all the requirements of the program — helping America win the clean energy race and create entire new industries for American workers.”
How the company got the loan guarantee, and the players involved paint a picture of what at least appears to a combination of political favoritism and crony capitalism.
Last October, President Barack Obama’s Interior Secretary Ken Salazar and California Democratic Rep. George Miller toured SunPower’s plant in California. Both touted the company. Miller said SunPower was an example for “renewable energy” production and “America’s future economic growth.”
But, Miller failed to mention how his son, George Miller IV, is SunPower’s top lobbyist in California. Miller’s son was pushing for the $1.2 billion loan guarantee taxpayers are on the hook for now. Miller is a powerful Democratic congressman, and currently serves as the ranking minority member of the House Education and Workforce Committee.
Miller’s congressional office has not returned TheDC’s requests for comment on what role he and his son had in securing the loan guarantee. SunPower has not returned TheDC’s requests for comment on that revelation or any others.
The tour of SunPower by Miller and Salazar was only the beginning.
In April of this year, Chu offered SunPower a conditional commitment for the loan guarantee. At that point, there was no taxpayer money on the line per se.
Less than a month after SunPower received the conditional commitment from the Obama administration, a French oil giant, Total S.A., bought majority ownership — 60 percent — of the company. SunPower investors backed the move. A Total S.A. executive told the New York Times the company believed in solar energy, and its move was an attempt to capitalize on it.
“We believe the winners in the solar industry will be fully integrated, financially solid, advanced technology and worldwide,” Total Gas & Power President Philippe Boisseau said. “SunPower has the technology. We already have some of the technology, but we’ve also got the market and the finance. It’s a full industrial combination.”
The Obama administration — which says it was continuing to vet SunPower after it granted the company a conditional commitment for the $1.2 billion loan guarantee — saw the company as promising and continued to move forward.
Then, right before the Obama administration signed the deal giving SunPower its $1.2 billion loan guarantee, SunPower and Total S.A. sold the project — which taxpayers are now responsible for — to NRG Energy, Inc. The loan guarantee still went through, despite the sudden pullout from Total S.A.
Mere weeks before finalizing the deal with the Department of Energy, SunPower announced it was opening a new facility in Mexicali, Mexico — instead of another one in the United States — in order to manufacture solar panels there too.
SunPower latched onto more than just Democrats — the company curried favor with Republicans too. In April 2010, for instance, then Republican Gov. Arnold Schwarzenegger praised the company. “I can think of no better way to celebrate Earth Day than to highlight action that is good for both California’s environment and its economy,” Schwarzenegger said, according to ReCharge News. “SunPower is not only enabling homes and businesses to conserve energy and save money by going solar, they are also creating jobs at a time when they are needed most.”
President George W. Bush’s Federal Energy Regulatory Commission head Pat Wood II is a member of SunPower’s board of directors.