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J. Patrick Coolican:

The Solyndra hippies are stealing our money

Updated Thursday, March 22, 2012 | 12:58 p.m.

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J. Patrick Coolican

Here’s the predictable response to President Barack Obama’s trip to Boulder City’s Copper Mountain Solar plant on Wednesday: Solar is for hippies; government doesn’t create jobs; Solyndra, Solyndra, Solyndra.

From the top.

Solar:

The government’s investment in the solar industry has begun to pay off, showing rapid growth. As Michael Grunwald noted last year in Time, during one two-month period in 2011, we added 7,000 megawatts of solar projects to the U.S. pipeline, which he notes is the equivalent of seven nuclear reactors.

Michael Yackira, the CEO of NV Energy, told me last year that the price of solar cells dropped 20 percent during the first five months of 2011 alone.

Nonsense. Drill now!

Government and innovation and jobs:

As Ted Nordhaus and Michael Shellenberger of the Breakthrough Institute recently wrote in the San Francisco Chronicle, much of the important technology we use today can be traced to government, especially the Department of Defense. Microchips, the Internet, GPS and jet turbines are all heavily reliant on the Pentagon.

They cite UC Davis sociologist Fred Block, who looked at R&D Magazine’s annual list of the top 100 innovations and found the percentage relying in some way on government funding had increased during the past few decades; in 2006, 77 of 88 domestic winners were at least partially funded by government.

Socialism!

Solyndra:

The angry man on the radio told me I should be outraged about Solyndra.

Solyndra is the solar company that received a government loan guarantee and went bust. Of 40 companies that received loan guarantees totaling nearly $40 billion, two went bad, including Solyndra, which had some Democratic heavies among its financial backers, though Republicans were also investors. The White House ignored warnings that the company could be beaten by Chinese competition and then asked that a layoff announcement be postponed until after the 2010 election. The loan default was for more than $500 million.

A fiasco, no doubt, but we should have some perspective. Remember the $6.6 billion of American currency on shrink-wrapped pallets that went missing from Iraq?

Of course not. It wasn’t on your channel.

Obama gave a fairly listless campaign speech masquerading as an official event in the solar fields of Boulder City.

The sun beat down on my head. I kept applying sun screen, and it occurred to me that this would be another election cycle with almost no dialogue or argument about global warming and what to do about it.

My statement about two companies having gone bad in the federal clean energy loan program is, as the Nixon Administration might say, "inoperative." I grabbed some reporting from last fall and new failures have emerged.

Here's The New York Times, reporting on a government audit released last month: "The audit, led by Herbert M. Allison Jr., a former financial executive and senior Treasury Department official, found that the government could lose as much as $3 billion of the total loan commitments so far of $24.3 billion granted to 30 companies under two Energy Department programs."

And here's CBS News reporting on other troubled companies in the program.

Still and all, a drop in the bucket compared to botched wars in the Middle East or tax subsidies for oil companies.

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  1. Just because a massive rip off occurred in a totally unrelated matter does not excuse the Solyndra mess or the doubling down on it when it was an obvious failure. Cronyism and corruption and washing/reimbursing campaign contributions thru govt energy grants to cronies anywhere is not excusable.

    Hippies? Who was this guy Eric Cartmann?

    MUCH of what we see as advanced tech comes from NASA. We need to continue to push advanced tech but we also need to know that a lot of things being touted as advanced solar or hybrid tech is only first generation stuff. Continued tech needs to occur as most of the planets success in this sphere comes from our space and military programs.

    Look at the Mars Rover which is solely powered by solar and is like the energizer bunny.

    Big oil is not going anywhere soon nor is the Chinese massive use of oil. Nor can we balance the Chinese massive ground, air, and water pollution from their ongoing industrial revolution; by destroying our economy in the name of the environment.

  2. Well done Mr. Coolican, I laughed out loud at your "angry man on the radio" comment.
    Dennis Hill, Do you know the factual reasons for Solyndra's failure or just the conservative propaganda. Hint: Why are we instituting tariffs on Chinese made solar panels?

    http://www.nytimes.com/2012/03/21/busine...

    So because pollution is happening elsewhere we should pollute here is your message Dennis? Really?

  3. Remarkable! Just plain remarkable how the left hates "big" business unless, of course, it's their "big" business. Their mantra? It's "greedy" Wall Street & corporations that are behind all the ills we face, unless, of course, it's their businesses upon which they lavish huge loans and big bailouts! And when the businesses they favor with "crony capitalism" fail? Well, that's no big deal. It's always the "other" guy at fault. This is why the November elections are crucial in stopping this mad dash to European style Socialism by Emperor Osama Obama and his fellow travelers. Vote smart this November and run their tails out of Washington, D.C., folks!

  4. Jimmy, Never mind a spell checker don't you have a context checker? Were you OK with the $6.6 billion that disappeared under the Bush mis-administration?

    Jerry,
    Unlike you I am not a blind cheerleader for "big" business and think when they break laws and harm people they should be held accountable and when they do ethical things that should be pointed out as well. Other than that your comment veers into brain damaged territory.

  5. Comment removed by moderator. - -

  6. Your welcome,
    It is frustrating dealing with the neuronally challenged and nice to know there are some smart people like you online.

  7. It was more than two Coolican, several, representing billions in loan garuntees are on the ropes. Solar is crapping out not growing.

    Solar is expensive and ineffective right now

    http://reason.com/blog/2012/03/22/obama-...

  8. Europe is cutting back on their subsidies because it has been a 2 dacade long flop.

    Cooligan hasn't met a government subsidy he didn't like...

    Do you really think the internet we have today is all thanks to the government?

  9. Abound Solar - $400 million
    EnerDel - $116 million
    BeaconPower - $43 million
    First Solar - $1.5 billion (not dead but losing money and laying off employees)
    EverGreen - $486 million
    SpectraWatt - $500,000 government grant
    Sun Power - $1.2 billion (not dead but now holds more debt than the total value of the company)

    There are several more

  10. I see PRG is posting propaganda material from the laughably named "Reason" magazine. I'll stick with credible and reliable academic research and he can stick with propaganda. Meanwhile the world moves on. I wonder if PRG knows the failure rate for private venture capitalists?

  11. 1 of 2

    There are three key points to be made about Solyndra and the involvement of the Obama Administration:

    (1) The Federal government guaranteed a huge private loan to Solyndra, $500+ Million. One of the Obama-appointed officials involved in making the loan, a man, was married to a woman lawyer who was a partner in the law firm which represented Solyndra. Her online professional resume touts her expertise as an "energy lawyer". There is a pretty decent paper trail showing the law firm used its "juice" in the form of this couple to push the Solyndra loan along to closing with the Federal guarantee.

    (2) When Solyndra ran into cash flow problems, and needed to borrow more money to pay its bills, the Feds would not lend more money and the new private lender wouldn't make the new loan unless the Federal government "subordinated" its lien on the company's assets securing the original loan to a lien securing this new private loan. Subordination of a loan means the lender agrees to move from "first in line to get paid" to "second in line to get paid" when a failing company's assets are sold. No self respecting banker ever subordinates his bank's loan/lien to the loan/lien of another banker. That's Banking 101. Stupid, stupid, stupid. Yet, the idiots in the Department of Energy and White House, including Solyndra's lawyer's hubby, agreed to subordinate the loan/lien the Federal government guaranteed, because they didn't want Solyndra to fall into bankruptcy and embarrass their department or the Obama Administration's for their push for renewable energy as one means of propping up the economy. Around that time Solyndra's founder quit as CEO and a "new" CEO was brought in. It's hard to tell whether the "new" CEO knew he was going to end up with a professional "black eye" when the firm ultimately failed.

  12. 2 of 2

    (3) Despite the cash from the new private loan, a few months later Solyndra ran out of money and laid off most of their employees, including a friend of mine's brother (which is why I watched this case so closely). Even though he was laid off and stiffed out of his last paycheck, my friend's brother was told not to talk to anyone about the company or he'd "never get another job in Silicon Valley" again. What was VERY ODD was that despite the layoffs, Solyndra didn't file bankruptcy right away, as the financial press had expected. My bankruptcy lawyer friends in California were telling me that "Nobody wanted to take the case because it might end up being very ugly". Finally, a junior partner in a big bankruptcy law firm took the case, and she talked Solyndra's chief financial officer into signing a declaration, under penalty of perjury, describing why Solyndra failed economically. When I read that "First Day Declaration", I saw some "holes" in terms of a complete narrative of what went wrong with Solyndra's short lived business plan. Just a few days after the bankruptcy filing, there was a search warrant raid of Solyndra's offices, as well as a raid of the new CEO and CFO's houses. The company's founding CEO had cleverly bailed out before the S hit the fan. So yes, the bankruptcy law community was right. The case became ugly because the company's bankruptcy lawyer put the CFO in the terrible position of having testified, in writing, under penalty of perjury, and then being on shaky ground in "taking the 5th" after his house and office were raided a few days later. Ultimately, all of Solyndra's assets were sold off to pay that new private lender described in (2) above, and the Federal government got nothing from the asset sale and instead became liable to pay $500+ Million on its original loan guarantee.

    The moral of the Solyndra story is that if you or me, lacking "juice", wanted to start a solar panel factory, the Federal government would blow us off if we asked for a loan guarantee. However, because Solyndra had someone with juice on the inside of the Obama Administration, the $500+ Million loan guarantee was made by the Feds, and sadly the people who "juiced" the loan guarantee were morons who lacked the basic business law training to avoid making the mistake of subordinating away the first lien. Obama's "point man" on energy programs was a former sports/fitness executive whose sole qualification was that he had been a contribution bundler for Obama's election campaign. Sadly for the U.S. taxpayer, one can go to Harvard Law School, not take any business or banking courses before graduating and before running for President. I'll take a Harvard MBA over a Harvard Law grad any time, as a business decision maker on my behalf.

  13. Comment removed by moderator. - -

  14. Dennis, no energy company should receive subsidies. The government should not be in the business of picking winners and losers. I'm against corporate welfare. Period.

  15. Mark,

    Private venture capital failure rate is high. But they are risking their own money, not taking money of others by force and handing it over to the politically well connected. There is ample evidence that government due diligence is terrible (no matter what party is in power).

  16. The only thing correct about this article is the sarcastic headline.

  17. Mr. Coolican....

    Nail on the head, Patrick.

    Give me the warm power of the Sun
    Give me the steady flow of the waterfall

    Give me the restless power of the wind
    Give me the comforting glow of the wood fire

    But please - take all your atomic - poison power
    away

    From the 'No Nukes' Concerts (MUSE) 1979
    Damnable Hippies the Doobie Brothers with John Hall & James Taylor

    http://www.youtube.com/watch?v=DB44z6Klh...

  18. I look forward to the anticipated flood of posting by Patrick_R_Gibbons against conservatives since he wrote this occurs "no matter what party is in power". The Republicans have a current majority in the House but for some reason (perhaps some kind soul could point me in the correct direction) I just haven't seen Pat's posts taking the Republicans to task in any kind of visible way. There must be hundreds here somewhere to balance the large number of posts about the use of government 'force' against poor honest business billionaires.

  19. Coolican writes "A fiasco, no doubt, but we should have some perspective. Remember the $6.6 billion of American currency on shrink-wrapped pallets that went missing from Iraq?"

    Essentially the author's argument is that it is okay for the Obama administration to steal taxpayer money and give it to their campaign donors/friends as the administration before them did the same.

    This kind of acceptance of corruption is eating away at the country, and with time will lead to its fall.

    Those to support politicians like Ron Paul are essentially the ones who wish to make a stand against such corruption (of which both Bush and Obama are guilty).

  20. Thank you, Cynical Observer, for your openness providing some inside observations regarding Solyndra. This act was very kind of you, one hopes and believes that the truth will set us free of the darkness that shrouds so many disdeeds.

    If the US Government would have invested all that money that was tragically placed into a corporation, Solyndra (that is not a person in reality), and placed whatever green power generation to any and every US Citizen who has a dwelling that NEEDS power, they would at the very least, have had COLLATERAL and the ability to get something back should things so south as it did with Solyndra.

    Let's take care of our People/Citizens, in the United States of America, and not be propping up corporations of cronnies.

    Blessings and Peace,
    Star

  21. AMEN, truthiness!

    MUSE...
    Musicians United for Safe Energy.
    Man, do I miss the 'brotherhood' that both entertained us and brought us together.
    Peace!

  22. 3/23/12 News Report "White House Was All Hands on Deck as Solyndra Collapse Neared":

    http://thehill.com/blogs/e2-wire/e2-wire...