More Solyndra-style failure: Obama-tied Amonix Inc lays off most of company
Some of President Barack Obama’s top donors and fundraising bundlers are partners in Amonix Inc., the latest Solyndra-like corporate crash. The company has announced a layoff of 200 workers — two-thirds of its workforce — despite a federal green-technology tax credit of $5.9 million in 2010.
The investors include John Doerr’s venture capital firm Kleiner Perkins Caufield & Byers, Daniel Weiss’ Angeleno Group LLC and Steve Westly’s eponymous Westly Group, according to Amonix’s website.
These three investors have also invested heavily in Obama and other Democrats — and the president’s aides are now trying to minimize the political damage.
According to a database maintained by the Center for Responsive Politics, Doerr has donated $171,900 since 2008. Weiss has donated $26,480 and Westly has donated $181,250. Nearly all of those contributions went to Democrats.
Together, the three have also bundled at least $700,000 for Obama.
Obama publicly lauded Amonix in 2010 as an example of a company deserving federal support and private-sector investment.
Former Massachusetts Gov. Mitt Romney and other GOP figures are portraying these mutual favors as “crony capitalism,” and the charges are adding up to a real political headache for the administration.
They’re such a headache that the Obama campaign’s first televised issues ad sought to shield the president from the fallout by criticizing its critics.
“Secretive oil billionaires are attacking President Obama with ads fact-checkers say are not tethered to the facts,” said the January ad, which highlighted criticism from David and Charles Koch. The Kochs are libertarians who run an huge oil-services company and are funding a political campaign against Obama.
On Sunday, Obama’s chief campaign adviser, David Axelrod, used the same aggressive tactic to to deflect criticism of Obama’s spending program.
When asked on ABC’s “Meet the Press” about the green-tech spending, Axelrod countered by saying that “leveraged buyouts of the sort that Governor Romney profited off of are quite different, Where you buy a company, load it down with debt, strip it down, let it go bankrupt and then make money off of fees on the bankruptcy.”
“That’s quite different” from Obama’s investment plans, he said.
Obama’s 2010 endorsement of Amonix came in the form of a flattering mention during a speech in Las Vegas, not far from the firm’s manufacturing plant.
“A solar panel company — a solar power company called Amonix received a roughly $6 million tax credit for a new facility they’re building in the Las Vegas area, a tax credit they were able to match with roughly $12 million in private capital,” Obama said, while touting his policy of subsidizing green-tech companies.
“The only problem we have is these credits were working so well, there aren’t enough tax credits to go around,” Obama said. “When we announced the program last year, it was such a success we received 500 applications requesting over $8 billion in tax credits, but we only had $2.3 billion to invest.”
The Amonix downsizing is the latest in a string of failures that include the high-profile bankruptcy of solar-cell maker Solyndra in California, November layoffs at a battery-maker A123 in MIchigan, and the January bankruptcy of Ener1.
Obama’s green-tech program gave those companies $535 million, $118.5 million , and $249 million, respectively.
The donors have a shared interest in federal funding for green-tech companies, but they also compete among themselves for available government dollars.
Westly had a stake in Amonix in May 2010 when he warned Obama adviser Valerie Jarrett that a planned federal government visit to Solyndra might backfire. “If it’s too late to change/postpone the meeting, the president should be careful about unrealistic/optimistic forecasts that could haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy,” Westly wrote to Jarrett.
His premonition proved right: Solyndra’s collapse has so undercut political support for green-tech spending that Obama was forced to admit error while defending it in his State of the Union speech.
“Some technologies don’t pan out; some companies fail,” he said Jan. 24. “But I will not walk away from the promise of clean energy. … I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here.”