Tag Archives: Crony Capitalism

News

Another green energy firm goes bankrupt after getting $43 million loan from taxpayers

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From Fox News.

Excerpt:

An energy company that received a $43 million loan guarantee through the same federal program that backed Solyndra has followed the path of the failed solar firm and filed for bankruptcy.

Beacon Power Corporation filed for Chapter 11 bankruptcy on Sunday in U.S. Bankruptcy Court in Delaware. The company, which develops energy storage systems based on what are known as “flywheels,” had received the federal guarantee for a 20-megawatt energy storage plant in Stephentown, N.Y., back in August 2010.

[…]The Massachusetts-based company also received $29 million in grants from the Energy Department and the state of Pennsylvania through separate programs for a plant in Hazle Township, Pa.

Beacon Power Corporation has not responded to a request for comment from FoxNews.com.

[…]Sen. Jeff Sessions, R-Ala., ranking member of the Senate Banking Committee, called the revelation of the bankruptcy another example of “the reckless abuse of taxpayers’ dollars in the pursuit of green jobs.” He also suggested that crony capitalism had a hand in the decision to give Beacon a loan.

One of the most controversial aspects of the Solyndra case — aside from the sheer size of the $535 million guarantee — was a decision earlier this year to prioritize private investors over taxpayers in case of bankruptcy. Republicans have accused the administration of giving precedence to investors in the companies who are also Obama backers.

“As with Solyndra, the head of Beacon Power appears to have been a supporter of President Obama’s,” Sessions said in a statement.

“Increasingly, we are moving away from our capitalist heritage and towards a system where most Americans play by the rules while some are able to rig the game in their favor. The real divide is not split along income lines, but between the politically-connected and those—whether businesses or individuals—who just want the freedom to earn a living.”

[…]Campaign finance records show top Beacon officials contributing to Democratic candidates. Capp apparently was an Obama supporter, giving at least $500 to the Obama campaign in 2008. He also donated to Rep. Niki Tsongas, D-Mass.

Beacon employee Matthew Polimeno has donated $750 since 2008 to Tsongas’ campaign and another $250 to the failed campaign of Massachusetts Democratic Senate candidate Martha Coakley. CFO James Spiezio also donated $250 to the Coakley campaign in 2009.

Marsha Blackburn is also involved in investigating the $535 million loan to Solyndra.

Solyndra is another Democrat-connected company that went bankrupt after getting taxpayer dollars from the Obama administration.

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Commentary

Which politician received the most money from Wall Street in the last 20 years?

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The Daily Caller explains how Barack Obama has received the most money from Wall Street bankers of all politicians in the last 20 years. (H/T Neil Simpson)

Excerpt: (with links removed)

Despite his rhetorical attacks on Wall Street, a study by the Sunlight Foundation’s Influence Project shows that President Barack Obama has received more money from Wall Street than any other politician over the past 20 years, including former President George W. Bush.

In 2008, Wall Street’s largesse accounted for 20 percent of Obama’s total take, according to Reuters.

When asked by The Daily Caller to comment about President Obama’s credibility when it comes to criticizing Wall Street, the White House declined to reply.

[…]In fact, the Sunlight Foundation, a nonpartisan watchdog group that tracks lobbyist spending and influence in both parties, found that President Obama has received more money from Bank of America than any other candidate dating back to 1991.

An examination of the numbers shows that Obama took in $421,242 in campaign contributions in 2008 from Bank of America’s executives, PACs and employees, which exceeded its prior record contribution of $329,761 to President George W. Bush in 2004.

According to the Center for Responsive Politics, Wall Street firms also contributed more to Obama’s 2008 campaign than they gave to Republican nominee John McCain.

“The securities and investment industry is Obama’s second largest source of bundlers, after lawyers, at least 56 individuals have raised at least $8.9 million for his campaign,” Massie Ritsch wrote in a Sept. 18, 2008 entry on the Center for Responsive Politics’s OpenSecrets blog.

By the end of Barack Obama’s 2008 campaign, executives and others connected with Wall Street firms, such as Goldman Sachs, Bank of America, Citigroup, UBS AG, JPMorgan Chase, and Morgan Stanley, poured nearly $15.8 million into his coffers.

Goldman Sachs contributed slightly over $1 million to Obama’s 2008 presidential campaign, compared with a little over $394,600 to the 2004 Bush campaign. Citigroup gave $736,771 to Obama in 2008, compared with $320,820 to Bush in 2004. Executives and others connected with the Swiss bank UBS AG donated $539,424 to Obama’s 2008 campaign, compared with $416,950 to Bush in 2004. And JP Morgan Chase gave Obama’s campaign $808,799 in 2008, but did not show up among Bush’s top donors in 2004, according to the Center for Responsive Politics.

Obama’s close relationship with JP Morgan Chase was highlighted earlier this year when he tapped Bill Daley, a former top executive with the bank, to replace Rahm Emanuel as his chief of staff.

Wall Street’s generosity to Obama didn’t end with his 2008 campaign either. Wall Street donors contributed $4.8 million to underwrite Obama’s inauguration, according to a Jan. 15, 2009 Reuters report.

So far Wall Street has raised $7.2 million in the current electoral cycle for President Obama, according to the Center for Responsive Politics. Obama’s 2012 Wall Street bundlers include people like Jon Corzine, former Goldman Sachs CEO and former New Jersey governor; Azita Raji, a former investment banker for JP Morgan; and Charles Myers, an executive with the investment bank Evercore Partners.

This ought to put to rest the myth that Wall Street is composed of greedy Republicans. But it will only work for people who care about the facts.

I blogged before about the Wall Street bailout that Obama pushed through – remember that? Do you think that maybe he was paying off the people that got him elected? Is that what “stimulus” spending really means? Is Solyndra just another example of “stimulus” spending to bail out the people who got him elected?

News

E-mails show that Democrats were about to approve a second loan to Solyndra

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Federal subsidies per unit of electricity
Federal subsidies per unit of electricity

From the Washington Post – e-mails reveal that the Obama administration was planning to approve a second green jobs loan for Solyndra, just as they were going bankrupt.

Excerpt:

Newly released e-mails show the Obama administration’s Energy Department was poised to give Solyndra a second taxpayer loan of $469 million last year, even as the company’s financial situation grew increasingly dire.

The department was still considering providing the second loan guarantee to the solar-panel manufacturer in April and May 2010, at a time when Solyndra’s auditors were already warning that the company was in danger of collapsing.

Details of the plan are revealed in e-mails released this week by Democrats on the House Energy and Commerce Committee, which is investigating the original loan. On Wednesday, the probe intensified as committee Republicans requested that the White House provide all documents, dating back to President Obama’s inauguration, that would show communications between staff members and other officials regarding Solyndra’s original $535 million federal loan guarantee.

Republican leaders said that documents obtained in recent weeks show that Obama’s “closest confidantes” monitored the loan, and that his campaign donors offered advice on the company.

“Documents reveal a startlingly cozy relationship between wealthy donors and the president’s confidantes, especially in matters related to Solyndra,” Cliff Stearns (R-Fla.), chairman of the committee’s investigations panel, said in a statement.

E-mails already made public in the eight-month investigation have kept the White House and the Energy Department on the defensive for weeks, showing in part that Valerie Jarrett and Lawrence H. Summers, top Obama advisers at the time, took part in discussions about Solyndra.

The Energy Department provided Solyndra with its first taxpayer-backed loan guarantee in September 2009. Documents released this week show that White House career staffers, who first questioned the loan that fall, by April 2010 were using gallows humor to describe the prospect of giving Solyndra a second round of help. That spring, industry analysts were publicly questioning how the Silicon Valley start-up could be spending cash so quickly from the federal loan and $933 million in private capital.

I got the above story from Powerline blog, and they noted something else interesting.

Excerpt:

In related news, the Inspector General of the Department of Labor released a report on the $500 million green jobs training program that was part of the original “stimulus” act. The IG’s findings are not pretty:

ETA and grantees have reported achieving limited performance targets for serving and placing workers. Grantees have reported serving 52,762 (42 percent) of the targeted 124,893 participants with 61 percent of training grant periods having elapsed, and have reported placing 8,035 participants (10 percent) into employment out of the target of 79,854 participants 17 months after the grants were awarded. Of the 52,762 participants served, grantees reported that 20,818 (39 percent) were individuals who already have jobs and enrolled in training in order to retain their jobs, obtain new work, or otherwise upgrade their skills. In addition, according to interviews conducted early in 2011 with regional officials, grantees have expressed concerns that jobs have not materialized and that job placements have been fewer than expected for this point in the grant program.

“Jobs have not materialized”? Really? This is no surprise to anyone who understands what a boondoggle the whole “green jobs” initiative is. The report’s grimmest finding relates to job retention: the forecast for the training program was that 69,717 trainees would find jobs lasting for at least six months. So far, the actual number is 1,336. Sure, as time goes by some additional trainees may hit the six-month mark, but as of the time period covered in the report, only 6,662 had found jobs at all. With over 60% of the grant period gone by, only one-third of the amount allocated has been spent by the grantees.

Is this what Obama means by “economic stimulus”? I think that “stimulus” might be the word that Democrats use to mean “paying off the people who get you elected with taxpayer money”.

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