Published November 16, 2011
As the White House rejects charges that the Obama administration was motivated by politics in its decisions on green energy loans, scrutiny is increasing over the preference given to Democratic donors seeking federal loans.
Recent emails suggest that politics did play a role in administration decisions regarding its energy loan guarantee programs. But beyond the timing of political announcements, the Solyndra investigation has churned up questions about the White House's overall strategy of doling out taxpayer money.
The rolls of green energy subsidies show that beyond a few headline-grabbing cases, several well-connected Democrats obtained taxpayer assistance for environmentally friendly projects.
Among the recipients are:
-- Solyndra, which received $535 million in loan guarantees and whose chief investor was the George Kaiser Family Foundation. George Kaiser was an Obama campaign bundler.
-- Brightsource Energy, which received $1.6 billion and whose senior adviser is Robert Kennedy, Jr., an early Obama backer;
-- Solar Reserve, which got a $737 million loan, and whose major investor is a company run by Michael Froman, who was a deputy assistant to the president. Froman bundled up to $500,000 for the president's 2008 campaign;
-- Granite Reliable Wind Generation, which received a $168.9 million loan. The company's majority owner is a firm formerly led by Nancy Ann DeParle, now a White House deputy chief of staff and former head of the president's health care communications team during the reform debate; and
-- Abound Solar, which received a loan guarantee worth $400 million. A key investor is billionaire heiress Pat Stryker, who gave $87,000 to Obama's inauguration committee, and hundreds of thousands more to Democratic causes.
Peter Schweizer, author of the book, "Throw Them All Out," wrote that at least 10 members of Obama's finance committee and more than a dozen of his campaign bundlers took money from administration loan programs.
Schweizer told Fox News that he believes that many of those who were chosen to receive loan guarantees, were picked almost solely for their success in raising money for the Obama campaign.
Obama used the alternative energy program as an opportunity to make his campaign contributors "even more wealthy than they are," he said.
"This is a payoff to people who are your political backers and supporters. And this is really a wealth transfer from middle class taxpayers to billionaires," Schweizer said, adding that about 75 percent of the loans and grants doled out by the federal government has gone to "Obama-connected companies" even though the acceptance rate in the program is less than 10 percent.
Nick Loris, an economic and energy policy analyst at the Heritage Foundation, said the problem lies with the government playing the role of venture capitalist.
"This is a problem of when the government becomes involved in economic decisions that are best left for the private sector. It reduces the incentive to lower costs and innovate," he said.
He added that the Energy Department had an enormous amount of power because it received so much of the 2009 stimulus money.
"The real question needs to be the merit of the loan guarantee program, why is the government picking winners and losers in the market place when there is a huge demand for electricity, there's huge demand for transportation fuels. That profit incentive (alone is enough) to drive new technologies into the market place ... and I think really the question needs to be why do we have this program in the first place," Loris said.
On Tuesday, the House Energy and Commerce Committee released emails about the loan to Solyndra, the failed solar energy company that has become the poster child for criticism over the loan program.
One of the emails -- dated Oct. 30, 2010, just days before the midterm election -- conveys how the Department of Energy wanted Argonaut Equity, the biggest investor in Solyndra, to hold off on news of pending layoffs until Nov. 3, the day after the election.
"DOE continues to be cooperative and have indicated that they will fund the November draw on our loan (app. $40 million) but have not committed to December yet," wrote one Solyndra investor adviser. "They did push very hard for us to hold our announcement of the consolidation to employees and vendors to Nov. 3rd -- oddly they didn't give a reason for that date."
The Energy Department and White House have steadfastly maintained that loan guarantees were made strictly on their merits.
"The Republican report cites internal email from Argonaut about the timing of a press release. But as the 180,000 pages of documents that the Department of Energy turned over to the committee indicate, the department's decisions about this loan were made on the merits, based on extensive review by the experts in the loan program -- and nothing in this Republican Committee memo changes that," said Energy Department spokesman Damien LaVera.
However, the Government Accountability Office and the Energy Department's inspector general both issued critical reports in March on the department's loan program. According to the IG report, investigators found that loan guarantee program could not always readily demonstrate "how it resolved or mitigated relevant risks prior to granting" the loans. It noted that key documents were missing from three of 18 electronic files despite federal requirements for inclusion and included only limited data for 12 additional projects.
Energy Secretary Steven Chu is expected to testify Thursday on the program to the House Energy's oversight subcommittee. He told NPR this week that the loan guarantee program analysis improved under his watch.
"We did no cut corners. We made it more thorough and diligent," he told the public radio network, adding that the application process went through professionals and "outside people" who looked at he landscape and market conditions.
But that answer does not seem credible to House Republicans, including oversight subcommittee Chairman Cliff Stearns, R-Fla., who issued a statement Wednesday saying that the committee wants to hear from Chu why "all the warnings, from inside and outside the Department of Energy, were ignored and this risky bet was allowed to happen."