Congress has been investigating the company, which received a $535 million government loan guarantee in March 2009 and announced August 31 that it is filing for bankruptcy. Yesterday's FBI raid is the first hint of a larger government probe, which is being conducted in cooperation with the Department of Energy's Inspector General. The FBI declined to comment. A Solyndra spokesman said it was surprised by the raid and is cooperating.Political connections can come back to bite you, when the politicians you were connected to need to gnaw through that connection and run like hell.
ADDED:
“Officials from the Department of Energy have for months been sitting in on board meetings as ‘observers’ at Solyndra, getting an up-close view as the solar energy company careened towards bankruptcy after spending more than $500 million in federal loan money.” Probably felt just like being back at the federal government, which is careening toward bankruptcy after spending more than $15 trillion in loan money . . .
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84 comments:
Even gnawed through, Obama is going to have a really hard time getting away from this one.
It directly tanks any proposal emphasizing "green jobs" and undermines attacks against Republicans on corporate cronyism.
Almost all of Obama's bullet points these days have an asterisk next to them pointing to a Democrat oriented scandal.
How many other of these are happening right now? $700 billion is a lot of corruption. We are all in the wrong line of work, and most of us here on the wrong side of the political spectrum to be in the money. I'm gonna reinvent myself. who's with me?
Political connections can come back to bite you, when the politicians you were connected to need to gnaw through that connection and run like hell.
Apt. The main problem being, of course, that the connection is up for re-election.
You mean Eric Holder didn't put the kibosh on this?
You mean a bunch of rogue FBI agents have taken the law into their own hands?
Those guys probably applauded when Rick Perry said he had no problem sleeping nights regarding all the executions he's endorsed.
PS This is going to be an interesting counterpoint to the Gibson Guitar mess.
Maybe they were just raiding Solyndra to destroy the evidence.
Let's give Obama credit where credit is due.
I don't think he even mentioned his green jobs kickback scam in last night's speech. Didn't hear or read the entire speech.
What the hell else could he do?
In the wake of the Solyndra scam, he can't really keep pushing that fantastic green job agenda.
WTF? How will half billion dollar scams work if the FBI investigates them.
This is bad news for the Dems.
But at least the Dems keep the wisdom rule: Never steal anything small.
Late to this, but what exactly is the scam?
No one can really be surprised, can they?
The more government inserts itself into the private economy, the more we'll see graft and corruption. It's happened everywhere else - why should we think we'd be immune?
We shouldn't. And anyone with a passing knowledge of the Davis-Bacon Act and project labor agreements knows this has been happening since the '30's - but there the beneficiaries of graft and corruption are labor unions, the victims taxpayers, and the theft is by statute.
Late to this, but what exactly is the scam?
Obama kicked back a $550 million loan guarantee to one of his biggest campaign contributors to start a solar panel biz.
The biz is belly up.
The campaign contributor has become impossibly rich as a result of the subsidy.
Taxpayers left holding the bag.
This is what, I believe, you prefer to call investment or stimulus.
I've got a lot of government contracting experience and the wife is a Fed Contracts lawyer attorney. In our experience, contractors make a strong effort to favorably influence source selection types BEFORE the proposal is requested, but keep a large distance after to avoid any possible claim of influence.
Having said that, the number of meetings between WH officials and Solydindra Principals while their request for a 1/2 billion was underway, combined with calls between the WH and DOE (and emails apparently) calls into question the question of appearance of conflicts.
Garage is right.
The Obama White House tried magical thinking.
The plant to produce solar panels at three times the cost to produce them in China could have worked.
But the damn Chinese would not self impose a tariff on themselves.
There is a rumor that the Chinese also build coal powered Electrical Plants faster than Obama has closed them in the USA.
But CO2 is pollution magical thinking keeps rolling along too.
Who could have known that?
Maybe they were just raiding Solyndra to destroy the evidence.
With the FBI zooming in and grabbing evidence, won't the House investigation have a harder time proceeding? Could that be the reason for the raid?
Yes.
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I don't think he even mentioned his green jobs kickback scam in last night's speech. Didn't hear or read the entire speech.
He didn't mention green jobs or environmental anything. It was notable in its absence.
traditionalguy said...
But at least the Dems keep the wisdom rule: Never steal anything small.
Heh. I once worked with a salesman who got into some sort of trouble and thought he could solve the problem with auto theft. When next I met him (5 years later, with time off for good behavior), he told his former boss the one lesson prison had taught him: "Whether you steal a Rolls Royce or a Yugo, the charge is Grand Theft Auto regardless. So you get a better risk-benefit ratio if you steal the Rolls."
I work in the electrical construction/solar industry and it was obvious a couple years ago that Solyndra was doomed. They made cylinder type solar cells that were not cost or efficency competitve with the rest of the market. Who ever thought loaning them all that money was a good idea?
Does a loan guarantee mean that the money was actually provided?
I've never quite understood that.
I suppose it does -- the bankruptcy suggests they got the loan -- guaranteed by the government who is now on the hook for it -- spent all the money and then went belly up. Well, at least they provided some work for a loan officer at a bank.
Here is the mistake Solyndra made: Never try to scam a grifter who is richer, more powerful and more ruthless than you are.
Was this maybe Obama funneling tax payer money into his re-election campain through government programs? I hope that is what the FBI is investigating.....
I don't think he even mentioned his green jobs kickback scam in last night's speech. Didn't hear or read the entire speech.
ST that's a good point. I missed the last ten minutes or so, but I don't remember any mention of green jobs or green economies either.
Congress announces they are launching an investigation.
Eric Holder raids Solydra and puts all evidence under seal.
He's Fast....and Furious.
With the FBI zooming in and grabbing evidence, won't the House investigation have a harder time proceeding? Could that be the reason for the raid?
Yes.
YES. The evidence will be tied up until, oh, say, after the 2012 election.
"Late to this, but what exactly is the scam?"
Don't know yet. But theoretically raiding and confiscating evidence requires a court-approved warrant, so at least one judge is convinced there was something illegal going on. This is gonna be juicy.
Hopefully MSM types who've been browbeaten in the past by Rahm Emmanuel and his penis won't be cowed into not investigating this. Breitbart and Drudge: the new Woodward and Bernstein.
In all fairness to the FBI, they have been pretty politically agnostic since Hoover and Nixon.
As I understand it, they were taking their direction from the DoE IG, not Holder.
The operative question will be, how long the IG stays around before he gets fired....
A corrupt democrat from Chicago? I am shocked!
Here's a couple good articles to get up to speed:
Bruce Krasting Blows Obama's Solyndra Scandal Sky High
Solyndra employee: from day one, everyone knew that our solar panels were uncompetitive... including President Obama
Breitbart and Drudge: the new Woodward and Bernstein.
Well, that's going to draw a GM one-sentence comment surely.
The Obama White House tried magical thinking.
Here is the scam:
The company never made money and was losing money at a rapidly accelerating pace year after year from 2007 forward. They had no substantial business plan and had incestuous relationships with other companies of similar instability. Daisy chain of mythical contracts.
The main funding was from venture capitalists and private investors. They planed to go public in Dec 2009 through an IPO.....
http://seekingalpha.com/article/211350-lessons-from-solyndra-s-failed-ipo
However, once they got the big bucks from Uncle Sugar, there was no need to proceed with an IPO whose required SEC filings would expose much of the internal workings (graft, corruption, scams and incompetence) not to mention their completely unsustainable business model.
So....once they received the money from Uncle Sugar, they pulled the IPO....washed the money and declared bankruptcy.
Then.....unlike GM where the government intervened and totally fucked the debt holders, the venture capitalists and investors who hold debt will get paid from the remaining assets (provided by Uncle Sugar/you and me dumb taxpayers) and walk away whistling a happy tune.
I had some clients at the time who were all hot to trot to invest in "green" energy. My advice was don't do it until there is a clearer path to these companies actually making profits. Pie in the sky. It is a fad.
And certainly avoid start up companies that haven't made any earnings ....ever!!. Green energy is a start up industry with NO proven track. If you MUST go with a company that has substance (other sustaining business models that make money) and is expanding ancillary subsidiaries into green. Basically, it is a scam until proven profitable. "And here, please sign this disclosure that I recommended that you do not invest in this company/concept." so when it crashes I have covered butt and you can't sue me.
I'm so glad I'm not in the business anymore.
haven't made any earnings
Er.....make that profit. They had earnings....just not enough.
Obama kicked back a $550 million loan guarantee to one of his biggest campaign contributors to start a solar panel biz.
Is there something wrong with that? This is hardly news in politics. I think this is what conservatives call "free speech".
I think there can be no doubt that the FBI is shutting down the Congressional investigation until after the next election. Now no one can come before Congress until the ongoing investigation is "completed."
WARNING! Toxic Dose of Irony. Obama's "historic" speech lacked the word "energy", while millions of Californians went without power last night during an "unprecedented" blackout and could not hear his speech.
Green vaporware. Yeah, that's the ticket.
garage mahal said...
Late to this, but what exactly is the scam?
I was listening to that bombastic blowhard, Michael Savage, two nights ago, only because he comes on after Mark Levin (who, unlike Obama, is a real constitutional expert) and I was too lazy to get up and turn off the radio.
A woman called in who said she has been an employee of Solyndra for a long time. She claimed it was common knowledge among the employees even before the loan guarantees were granted that they could not compete with the Chinese. Seems the ChiComs had already developed a process that lowered costs to one third or less than what Solyndra could do.
Plus, they only have to pay their workers two handfuls of rice a day, a health plan with a 100% co-pay, and a guaranteed defined-benefit pension of one handful of rice every day upon retirement at 97 years of age (with no inflation adjustments).
Is there something wrong with that? This is hardly news in politics. I think this is what conservatives call "free speech".
For the very first time, garbage, you made me laugh.
I didn't exactly laugh my ass off.
More like a couple of chuckles.
Oh, pish posh. It's only half a billion dollars. Really just a drop in the bucket in the grand scheme of things.
Just the lifetime earnings of a couple hundred hillbillies out in the hinterlands. Now get back to work before garage has to get his whip out -- there's money to be made, that garage and the rest of your betters knows how to "invest" better than you.
kb said...
I work in the electrical construction/solar industry and it was obvious a couple years ago that Solyndra was doomed. They made cylinder type solar cells that were not cost or efficency competitve with the rest of the market. Who ever thought loaning them all that money was a good idea?
Van Jones?
Besides, the idea isn't to succeed, the idea is to create as many people beholden to the Democrat Party as possible.
Obama's "historic" speech lacked the word "energy", while millions of Californians went without power last night during an "unprecedented" blackout and could not hear his speech.
I woulda been some kind of pissed if that had happened to me. The Saints gave 'em a good fight.
Is there something wrong with that? This is hardly news in politics. I think this is what conservatives call "free speech".
The scandal part of it will probably end up coming from the way in which the loans were secured. There is something about the "due diligence" that was not done properly and I would bet that's where the investigation is going.
Aside from that, GM, go back and watch POTUS' speech at the Solyndra plant back in 2010. He's hanging his hat pretty hard on their company and holding them out as a shining example of American innovation, engineering, unicorn-production, etc. If that is case, ie, Obama was right about it, then we're in deeper shit than I thought.
Sorry for the crude copy-and-paste link, but I'm internet-retarded:
http://pajamasmedia.com/tatler/2011/09/07/there-they-go-again/
They're "investing" $800 million more, into yet another idiotic solar project.
But this one will employ...get ready for it...47 people.
By coincidence, that is precisely the number of people that our small business employs, with a few million dollars worth of equipment and real estate. (We're careful not to go over that 50 threshold, lest we qualify for FMLA and a half-dozen other federal penalties for small business growth.)
47 people. For just $800 million. Let that sink in.
Solyndra just doesnt have the same ominous tone as Haliburton.
Obama speaking at Solyndra....logs of over 20 visits by Solyndra big wigs to the White House....$500 million in Porkulus....bankruptcy...FBI raid.
The campaign ad tying Obama to waste and crony capitalism writes itself.
I'm no longer a WSJ subscriber, so I didn't read the whole article behind the paywall. I don't know if what follows was referenced by the WSJ.
However, zerohedge.com ran a Bloomberg story yesterday suggesting this one gets even stinkier. Apparently, there was a balance sheet restructuring this past spring before the bankruptcy in which the party who negotiated on behalf of the taxpayer loan guarantee agreed to have the taxpayer's priority interest subordinated to all other debt -- including that invested by the principal's foundation. In other words, the foundation (whose principal is a huge Obama bundler of campaign contributions) stands in front of taxpayers when it comes to collecting recovery proceeds from the liquidation of the assets. P.U.
Issa or the inspector general or whoever investigates this is going to have a field day.
Con men have always started up new sure fire businesses using OPM.
Accidentally the business would succeed for a short time in a rare instance.
Their knee jerk reaction to an intelligent attorney is visceral hatred. It's like the old "Raid's Here" commercials.
That is a good way to spot them. Really, it works.
Their marks were usually widows who wanted love from the con man. His #1 trick is to say if you don't trust me you don't love me.
This time the con men found a bigger con in DC to burrow into and NO Honest Men were there to spot them.
The line is still, "if you don't trust me you don't love Obama."
Once again the widows on Soc. Sec. and Medicare will lose this time as inflation and death panels fill in for the stolen monies.
"... Aside from that, GM, go back and watch POTUS' speech at the Solyndra plant back in 2010..."
I do enjoy the irony of when garage calls conservatives partisan hacks but its just 'politics as usual' when Bambi is saddled with his own Haliburton.
Nothing too see here!
Good thing it wasn't a government student loan - only option would have been default and then a raid by the Department of Education, garnished wages and no tax refunds for eternity....
Drew said...
I don't think he even mentioned his green jobs kickback scam in last night's speech. Didn't hear or read the entire speech.
He didn't mention green jobs or environmental anything. It was notable in its absence."
He may have not talked about it, but they are in there:
Innovative Offshore Wind Plant System Design Studies: Seven projects will receive $3.4 million to develop conceptual designs and assessments of offshore wind plant systems that enhance energy capture, improve performance and reliability, and reduce the cost of energy from integrated wind plant systems.
Offshore Wind Market and Economic Analysis: One project receiving $510,000 will reduce financing costs and increase investor confidence by supporting offshore wind market analysis to inform stakeholder decision-making regarding individual projects, industry issues, and energy policy.
Environmental Risk Reduction: Three projects receiving $5.7 million will work to expedite the permitting process by performing ecological studies and predictive modeling and validating innovative technologies for avian and bat studies.
Manufacturing and Supply Chain Development: One project will receive $350,000 to assess the current domestic supply chain infrastructure and recommend strategies for national manufacturing infrastructure development to support offshore wind deployment.
Transmission Planning and Interconnection Studies: Four projects will receive $2.5 million to study and plan for the integration of offshore wind energy into the electrical transmission and grid interconnection, thereby increasing technical viability of commercial-scale offshore wind integration.
Optimized Infrastructure and Operations: Four projects will receive $1.2 million to support the assessment of ports, vessels, and operations that will be involved with offshore wind energy efforts.
Impact on Electronic Equipment in the Marine Environment: One project will receive $500,000 to evaluate the potential effects of offshore wind energy facilities on electronic navigation, detection, or communication equipment such as airborne radar, Global Positioning Systems (GPS), shipboard radios, and SONAR (Sound Navigation and Ranging).
Awesome! I would hate for the seas to start rising as fast as unemployment has
"Is there something wrong with that? This is hardly news in politics. I think this is what conservatives call "free speech"."
That Garbage. Always good for a laugh. If he really believes that we should hear no more, ever, about the Koch brothers [or Richard Mellon Scaife or whoever] again.
Evidently, if you donate [and get others to donate] bit bucks to a Democrat then it is okay to get huge govt-guaranteed loans, get the money, go bankrupt, keep the money, and watch the taxpayers pay.
Maybe we need a taxpayers union. Then Obama would care more about us. [Nah. We'd be way less than 50% of the electorate, and mostly vote Republican at that.]
And, yes, Solyndra *did* get the loans.
What, did the FBI run out of lemonade stands to bust up?
Can't say the Obama admin isn't focused on education! On the bright side several juvenile entrepreneurs learned about the word 'kickback'.
And, yes, Solyndra *did* get the loans.
So what? Instead of guessing what I think, tell us what's wrong with that.
In my many years of raising capital for people I have never once taken on an assignment that required the government's involvement. This cost me considerably during the S&L crisis and I was sorry then that I did not participate in the RTC sales that enriched many of my cohorts. But generally speaking you can be sure that if the govt. is involved in a private enterprise the private enterprise is not as enterprising as will be required for it to be profitable.
I do enjoy the irony of when garage calls conservatives partisan hacks but its just 'politics as usual' when Bambi is saddled with his own Haliburton.
Nothing too see here!
Hoosier Daddy, you took the words right out of my mouth.
See also: Presidents diddling interns
Late to this, but what exactly is the scam?
Don't worry about it. Just shut up and keep paying your taxes.
Garage: There is nothing wrong with borrowing money and not paying it back. Done all the time. But when that happens do not blame the bankers who loaned the money, blame the borrowers.
I saw the photos of the raid. They didn't look like real FBI agents. I think they were impostors getting their hands on the evidence to clean it up. Pass it on.
Democrats ruin things. They then blame Bush, whine, lie, and inevitably run and hide behind the pro-democrat media mommy skirt.
It would be nice if Democrats were not judged by their so-called good intensions, but by their miserable failures.
Obviously, we need to raise taxes and
MoveOn to a tax payer funded bailout.
It's all for the collective left and the left's collective economic stupidity/corruption/ illiteracy/ good intensions.
Click here to make sure your hard-earned money goes to the new energy economy, former governor Bill Ritter's(D) sweet juicy pension and other econoimc black holes.
We can tax and spend ourselves rich.
Maybe Solyndra had stolen an iPhone 5 prototype!
This is the Hope&Change! that you voted for.
I don't know about you, but this makes me cringe: “Officials from the Department of Energy have for months been sitting in on board meetings as ‘observers’ at Solyndra
DOE employees have enough time to attend Solyndra board meetings?
Was this maybe Obama funneling tax payer money into his re-election campain through government programs? I hope that is what the FBI is investigating.....
I doubt anybody was stupid enough to actually put a quid pro quo in writing.
If Obama gave me a half billion dollars I might look much more favorably on the prospect if his reelection.
DOE employees have enough time to attend Solyndra board meetings?
Outside of the part that used to be the Atomic Energy Agency, what do they do?
Eric:
Good question.
You guys do know my question was sarcastic.
The fact is I go nuts whenever I see a news story with a govt ribbon-cutting ceremony and I see about 50 govt drones in suits standing around like they actually put even a single rivet in the new bridge or highway. Why the heck are so many drones still on the govt payroll?
This is one of the reasons to have limited governnment.
The US Government has used my future income to guarantee the loans of their buddies who are invested in some pie-in-the-sky but politically correct business.
Garage: There is nothing wrong with borrowing money and not paying it back. Done all the time. But when that happens do not blame the bankers who loaned the money, blame the borrowers.
They'd not likely have received the loans (or equity - as our guarantee is apparently subordinate to the investors' equity), if the government had not provided a guarantee. The government chose to guarantee a politically correct, but unviable business. Its the government's fault here.
And, yes, Solyndra *did* get the loans.
So what? Instead of guessing what I think, tell us what's wrong with that.
Loans should be given to companies/people that are
Credit worthy
Show an ability to repay
Show a willingness to repay
Have a business plan that makes sense/or a job that provides income
Be made on an impartial basis and not as a result of bribery or kickbacks
And preferably have some collateral so that when the loan goes bad the lender (in this case the tax payers) have some chance of recovery
Since none of those things existed in this situation, the entire process is suspect (to say the least)
I know....wasting my pixels on this answer since it will go wooosh over garage's head.
The 4 C's of lending
Capacity, Collateral, Captial and my personal favorite Character.
The Department of Energy's job is to limit the production of energy in this country, and they are good at it.
Last summer I was in the Valley, and passed by the Solyndra factory in Fremont several times. Big fancy architect-designed factory, big sign, ostentatious, in-your-face as you drive up the 880. Empty parking lot during daytime. At the time, I was busy with other things, and just said "Huh! What's up with that?"
The very opposite of the successful Valley startup. Which starts small with VC seed money, which means they are desperate to keep their operating costs low as they grow. So they occupy cheap digs, and keep expanding into more cheap digs. Nondescript tilt-ups in Santa Clara, with small signs, and packed parking lots.
All the evidence was right there, and I didn't see it. Like most socialist show enterprises (e.g. Chevy Volt) Solyndra has been a fraud from the get-go.
I know our hostess here would rather read books about middle-aged men with mid-life crises who become infatuated with teenage girls; but the Solyndra saga could have been ripped from the pages of Atlas Shrugged. George Kaiser = Orren Boyle.
Congratulations, American taxpayer. You bought a fancy factory in Fremont, stuffed architects and business droids pockets with money, and let George Kaiser launder some of your money into Democratic campaign coffers. Kaiser will get all his money back, and the American taxpayer gets the shaft.
Let that be a lesson to you. If the VC's won't invest in it, you shouldn't either.
Apparently President Obama "sat in" on White House meetings about giving government financing to the company. Culture of corruption, anyone?
Garage: "Late to this, but what exactly is the scam?"
White House and specific Presidental influence for a half billion dollars of federal money to a company with no track record and a flawed business plan.
Sound scammy enough?
It does not matter whether George Kaiser was a contributor, or used the loan as a means for further campaign financing.
The scandal here is the waste of half a billion dollars via the White House and the President annointing a company for a huge federal benefit. In a high risk area. With subordinate financing that no private lender would dream of giving. With a total lack of understanding of the business risks involved. With reckless promotion of a flawed and easily commoitized technology.
Flat out irresponsible and stupid is scandal enough. The campaign donation angle, if proved, only adds spice.
At its core this is the problem with the Obama Presidency: dumb and dumber.
Garage: "Late to this, but what exactly is the scam?"
Liberal Democrats have difficulty recognizing government graft and corruption the same way fish have difficulty recognizing water.
Back in the day I would get, every 6 months or so, some bright idea from a stockholder or pal of our CEO for a green energy project. I would evaluate for potential and never found anything worthwhile, but dang! I should have kept some of them (er, stolen them, that is) and lived off the federal gravy train of grants. The feds have been subsidizing solar, wind, thermal gradient, and other potential energy sources since the 1970s that I know about. You'd a thunk in 40 years we'd have some efficient energy from these sources. Do we not have our best and brightest working on this stuff?
I blame poor oversight from the government.
This Solyndra story ought to be getting far more attention than it is. Argonaut, the lead investor in Solynda, and the prinicipal is a huge Obama supporter, is about to legally walk away with assets valued at $850 million, over $500 million of which were financed by taxpayers. Argonaut's investment is only $100 million.
Taxpayer expected recovery value: Zero. Zilch. Nada.
http://www.zerohedge.com/contributed/more-solyndra-%E2%80%93-next-move
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