Published October 26, 2012
Another solar company that received taxpayer support before going bankrupt is facing tough questions from Congress and a criminal investigation -- following in the footsteps of solar-panel firm Solyndra.
The company facing scrutiny is Abound Solar, based in Longmont, Colo. Colorado's Weld County has launched a securities fraud investigation following allegations that Abound may have misled investors and a bank before securing funds.
"Our goal is if crimes were committed to make sure individuals are held accountable," said Weld County District Attorney Ken Buck.
It's a stunning turnaround for a company that appeared to be on a roll. In December of 2010, Abound had just secured a $400 million federal loan guarantee. Like Solyndra's more than $500 million loan, it was part of President Obama's green energy stimulus program.
Eighteen months later, though, Abound was filing for bankruptcy protection after burning through $70 million from taxpayers. Company employees have since come forward saying Abound officials knew their solar panels were defective and sold them anyway in order to meet benchmarks, so the company could get the Department of Energy loan.
"We heard from one employee, a whistleblower employee, who made the statement; the solar panels worked fine as long as you didn't put them in the sun," said Republican Colorado Rep. Cory Gardner.
Abound and the Department of Energy blamed the company's failure on competition from China. But now the House Committee on Energy and Commerce wants to know what the DOE knew about Abound's quality problems and when they knew it. The committee has asked Energy Secretary Steven Chu to turn over all documents related to the Abound loan including an independent engineering analysis done two months before the loan was finalized that reportedly should have raised red flags.
Todd Shepherd, who works as an investigative reporter for the Independence Institute, a Libertarian think tank, has interviewed several former employees and concludes it was clear by the fall of 2010 that the panels had catastrophic defects, such as a tendency to catch fire and much lower output than promised.
"Either people at Abound knew they couldn't produce a good product and they misled the DOE," said Shepherd, "or the DOE knew how bad the product was and they were willing to overlook it simply because the politics of green energy is such a feel good political movement."
But Shepherd suggests political payback may be partially why Abound secured the federal loan in the first place. One of the company's early and significant investors was Bohemian Companies, based in Fort Collins. Bohemian Companies is chaired by Pat Stryker, a major Democratic donor. According to the Center for Responsive Politics, Stryker has donated $500,000 to Democrats over the last five years including $50,000 to President Obama's inaugural fund and $35,800 to his victory fund in 2008.
"She is listed in the White House logs three times," said Shepherd, "and all those times come around key points in the process of Abound Solar getting this loan."
Stryker was far from the only backer of Abound. The loan also had support from several Republicans including Indiana Gov. Mitch Daniels. Abound had plans of opening a manufacturing plant in his state.
Officials at the Department of Energy declined to discuss the ongoing investigations surround Abound and its federal loan other than to say they are fully cooperating.