When Green Investments Go Bad
By Gary Gerard,
dumbhoosier.com
A few weeks ago I wrote about some government-funded
“green” boondoggles.
Solyndra, the solar panel outfit that got $535 million
U.S. tax dollars and then went bankrupt a couple years
later, is run by big Obama donors.
Then there was the $773 million loan from the Department
of Energy to a company to produce special high-quality
steel for the Chevy volt. Problem is, the company is the
giant Russian Severstal owned by Alexei Mordashov. He
ranks in the top 50 richest people in the world with a net
worth of $19 billion. This firm will compete, of course,
with U.S. interests.
Then there’s Fisker Automotive. That outfit got $529
million in federal money to build electric cars. The
company decided to build a plant that employs 500 people.
Really nice, except it’s in Finland. The company says it
couldn’t find anywhere in the U.S. to build the cars.
Also, a $1.2 billion Energy Department loan guarantee went
to SunPower Corporation in Richmond, Calif. The company
has promised to create 15 permanent positions. Those are
some pricey jobs at around $80 million apiece.
At the time the company claimed its huge federal subsidy,
its market cap was $800 million and it had $820 million in
debt. It’s share price had fallen from $133 in 2007 to $8,
and, of course, investors had filed a class-action suit
claiming the company made false claims.
Beacon Power Corp. is a Massachusetts company that
received a paltry-by-comparison $43 million Energy
Department loan guarantee last year.
They just filed for bankruptcy protection in the U.S.
Bankruptcy Court in Delaware.
Ironically, Beacon filed for bankruptcy two days after the
White House ordered an independent 60-day evaluation of
the Energy Department’s loan programs.
The evaluation is aimed at ensuring effective management
and monitoring. Too late, apparently, for the Beacon loan.
All these decisions to loan bazillions of dollars to these
companies seem to be motivated more by politics than
common business sense.
Well, there’s a new kid in town – Brightsource Energy Inc.
These guys won a $1.4 billion loan guarantee from the DOE
in 2009. They want to build solar power plants in the
Mojave Dessert. It was the largest-ever loan guarantee for
a renewable energy project by the feds.
Brightsource “will generate 392 megawatts of electricity
at the complex, which will use thousands of mirrors to
focus the power of the sun to create steam that drives
electrical turbines. It’ll produce enough power for about
140,000 homes,” the DOE said.
“This is an investment in American jobs and the clean,
renewable energy our economy needs,” Energy Secretary
Steven Chu said in a statement. “We’re not going to sit on
the sidelines while other countries capture the jobs of
the future.”
This was in February 2010.
In May of this year, President Obama nominated John
Bryson, BrightSource chairman of the board of directors,
to become the next Secretary of Commerce.
And resourcefulearthnews.org calls BrightSource
“Robert Kennedy Jr.’s green company that got a $1.4
billion taxpayer bailout.”
That article notes that Sanjay Wagle, a former employee of
Robert Kennedy Jr. at BrightSource, raised money for
Barack Obama’s 2008 presidential campaign.
As president, Obama appointed Wagle to the DOE to
advise on grants to energy companies. During the bailouts
of 2009, Wagle’s former company, BrightSource, received
the $1.4 billion deal.
According to biggovernment.com:
“From an objective vantage point, investing taxpayer
monies in BrightSource was a risky proposition at the
time. BrightSource, whose largest shareholder is Kennedy’s
VantagePoint Partners, was up to its eyes in $1.8 billion
of debt obligations and had lost $71.6 million on its
paltry $13.5 million of revenue.
“Even before BrightSource rattled its tin cup in front of
Obama’s DOE, the company made it known publicly that its
survival hinged on successfully completing the Ivanpah
Solar Electrical System, which would become the largest
solar plant in the world, on federal lands in California.
“In its Securities and Exchange Commission filings,
BrightSource further underscored the risky nature of the
Ivanpah venture and, more broadly, the company’s
viability:
“Our future success depends on our ability to construct
Ivanpah, our first utility-scale solar thermal power
project, in a cost-effective and timely manner… Our
ability to complete Ivanpah and the planning, development
and construction of all three phases are subject to
significant risk and uncertainty.”
Only time will tell if this Brightsource outfit winds up
bankrupt like Solyndra, but it certainly is not a far
stretch.
This Brightsource project is supposed to create 1,400
jobs. Let’s concede for the sake of argument that it
doesn’t go bankrupt and delivers on that promise. That’s 1
million tax dollars per job.
Wasn’t it Obama who said he was going to put an end to
crony capitalism? Wasn’t it Obama who said he was going to
operate the most transparent administration in history?
Yeah, it was.
So how is it that the Obama administration is funneling
billions of taxpayer dollars into the high-risk “green”
pet projects of wealthy venture capitalists?
Kind of removes the risk factor from the rich guy and
dumps it firmly in the lap of the taxpayer, doesn’t it?
You always hear the left raging about no-bid defense
contracts to Haliburton or subsidies to giant ag
conglomerates or oil companies.
How are these “green” fiascos any less heinous? A rip off
is still a rip off, regardless of who the perpetrator is.
Especially when all of us taxpayers are the victims.
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