For months, along with researcher Christine Lakatos, I’ve been reporting on, first, the junk-bond rated projects (such as Solyndra) that received fast-tracked approval from the DOE and, then the failed and troubled stimulus funded companies. Solyndra was just the tip of the iceberg.
Embarrassment after embarrassment has come to light as the projects touted as the hope for America’s future have filed for bankruptcy, sent money and jobs overseas, and faced technical difficulties.
According to GAO March 2012 statistics (and emphasized in the June 19th Congressional hearing), "For the 460 applications to the Loan Guarantee Program (LGP), DOE has made loan guarantees for 7 percent and committed to an additional 2 percent."
And of the 26 projects that got the loans, 22 were junk-bond rated—meaning private investors wouldn’t fund them. So why did we, the taxpayers?
Of the 26 loans issued through just the 1705 LGP to 21 firms, virtually all of them have meaningful political ties (bundlers, donors, supporters, etc). Our research showed that at least 90% of the projects had close ties to the White House and other high ranking Democrats. Despite the obvious connection, President Obama has repeatedly denied any involvement—preferring to blame “career bureaucrats” who could take the fall with no political consequence.
In March, Energy Secretary Steven Chu, testified that, “We looked at the loans on their own merits.” Also, back in November 2011, he said: “I am aware of no communication from White House to Department of Energy saying to make the loan or to restructure.”
Just last week, on October 26, President Obama affirmed Chu’s position when he said: “Decisions made in the loan program office are decisions, by the way, that are made by the Department of Energy, they have nothing to do with politics.”
However, late Wednesday, the House Committee on Oversight and Government Reform released a new report of “over 150 emails that contradict statements by the President, Secretary Chu, and White House and DOE officials.” The emails reveal a series of questionable practices, including coercion, cronyism and, cover ups.
The Committee has been asking for the emails and additional testimony since the Solyndra story broke in September of 2011, but the DOE has been refusing to cooperate. Emails were finally leaked from former DOE employees. Some of the incriminating evidence includes the following:
- From an email dated March 1, 2010 from David Schmitzer, DOE LPO Director of Loan
Origination to LPO Credit Advisor McCrea and others: “Jonathan just said at our staff meeting that, opposite the message received on Thursday, AREVA is now a “go” (seems on Friday POTUS himself approved moving it ahead).” - From an email dated June 25, 2010, LPO Executive Director Jonathan Silver encourages LPO Credit Advisor Jim McCrea to remind a Treasury official of White House Interest in now bankrupt Abound Solar: "You better let him know that WH wants to move Abound forward. Policy will have to wait unless they have a specific policy problem with abound.”
- From an email dated September 9, 2010 from LPO Credit Advisor McCrea to
DOE contractor Brian Oakley: "Pressure is on real heavy on SF [Shepherds Flat] due to interest from VP.”
We know that the Obama Administration operates from a “culture of corruption,” now we see that there is also a culture of deception within the White House walls. The White House green lies are bigger than innocent, little white lies; they are expensive green lies that have produced $34.7 billion in red ink for the taxpayers.
The Obama green energy program is the largest, most expensive, and deceptive case of crony capitalism in American history.
Back Story
As I was busy being "proud of myself" for making it on The Daily Caller (October 30th) with a "hit" piece featuring my "Obama Green-Energy Failures," I heard Newt Gingrich "On the Record with Greta Van Susteren” (Fox News Channel). Lo and behold, Gingrich had this to say, after noting that the rumor [more incriminating Benghazi emails were forthcoming], if true, would have a substantial impact on the presidential election, Gingrich pointed to another possible “October surprise” in the coming days.
“The other big story, I think, that is going to break is on corruption and extraordinary waste in the solar power grants and direct involvement by the Obama White House, including the president, in the solar panel grants involving billions of dollars, and I suspect that’s going to break Wednesday and Thursday of this week,” Gingrich added.
The next day, I received the above bombshell Intel in my inbox around 4:30 PM, and I was immediately in contact with Marita via emails, text, and on the phone –– thus we threw up this breaking news at Townhall.com [Emails Catch White House Lie on Green-Energy Loans], divulging just Emails Contradict President Obama, Administration Officials on Energy Dept. Loan Program.
Cronyism*
Besides the obvious contradictions, coercion, and cover up, since April this year, we had already chronicled many of the green-energy, crony-corruption stories –– the driving forces behind the majority of the loans that flew out of the DOE. In fact the three firms/projects found in the "smoking gun" emails released by the House Oversight Committee –– that we decided to highlight in our breaking story –– we had already reported on since April 2012.
AREVA acquired
Ausra Inc.* –– $2 billion (covered in my 2010 Green Corruption piece, and then again October 7, 2012 with Marita in our Romney
to Obama: “You Pick the Losers." column)
In March 2010, this Kleiner Perkins Caufield & Byers (KPCB) investment that “develops and deploys utility-scale solar technologies,” was acquired by AREVA Inc, the French state-owned nuclear giant. Two months later, in May of 2010, the DOE offered AREVA Enrichment Services, LLC a conditional commitment for a $2 billion loan guarantee (from the 1703 LGP) to support the Eagle Rock Enrichment Facility in Idaho Falls, Idaho. As rumors of AREVA “suspending its Idaho uranium enrichment plant” circulated in late 2011, AREVA CEO Luc Oursel did confirm: “the company has been hit by financial problems that will affect the Eagle Rock Enrichment Facility and others worldwide.” Further, according to John Stossel's Green Energy Myth July 2012 tally, “Shareholders of AREVA lost over 60% of their money last year [2011]. Why did we enrich the French? Who knows, but it's awfully fishy when we find our usual green cronyism suspects hovering around "government green" like vultures—Kleiner Perkins, where John Doerr and Al Gore are both partners and 2008 Obama supporters. Meanwhile billionaire John Doerr –– considered "a very big-ticket Obama donor" by New York Magazine –– influenced the 2009-stimulus, sits on the president's job council, and in February 2011 hosted a star-studded billionaire Silicon Valley dinner for the president. He just so happened to rake in billions of stimulus money for his KPCB clean-energy portfolio, including Fisker Automotive listed above. Other investors in Ausra close to Obama are Khosla Ventures and Gore's Generation Investment Management firm, but let's leave those cans of worms closed for now.
Ausra Connections:
- As mentioned Kleiner Perkins as well as Al Gore's Generation Investment Management firm (GIM) also tied to the Spanish company Abengoa that received more than $2.8 billion in loans and grants—making them the second largest recipient of the $16 billion doled out through the DOE 1705 loan guarantee program.
- Khosla Ventures, where billionaire Vinod Kholsa, another big VC winner in the green taxpayer funded giveaway, that includes Ausra (listed here), Coskata that snagged a $250 million DOE loan as well as Nordic WindPower (also a Goldman Sachs investment) for $16 million, plus more. Vinod Khosla, an affiliated partner of Kleiner Perkins, whose firm Khosla Ventures has also invested in some of the same companies as Kleiner Perkins, which include; AltaRock Energy Inc., $25 million grant from the stimulus; Amyris Biotechnologies, $25 million grant from the stimulus; and Mascoma Corporation has received state and federal grants from the DOE since 2006, totaling over $170 million and as recent as 2008, received another $49.5 million in funding from the DOE and the state of Michigan. According to Scwheizer's Throw Them All Out, "Kholsa had been the head of Obama's India Policy Team during the 2008 election and contributed to Democratic candidates.
Abound Solar* (covered in my July 25, 2012 piece, and then again with Marita in our September 30, 2012 Obama Never Admits Green Failure column)
Received part of a $60 million grant
under the Bush administration, and was awarded a $400 million loan under
Obama in December of 2010. Abound was awarded a $9.2-million loan from
the Export-Import Bank in July 2011. Bankrupt: June 2012
President Obama, in July 2010,
praised Abound Solar, which was to make advanced solar panels in two
locations: Colorado and Indiana. He believed these plants would be huge
job creators: “2000 construction jobs and 1500 permanent jobs.” In
December 2011, CEO Craig Witsoe called Abound Solar the “anti-Solyndra”
saying that his company “doing well and growing.” However, just months
after that optimistic report, Abound Solar filed bankruptcy—blaming
cheap imports from China. Todd Shepherd, an investigative reporter for
Colorado Watchdog found
that “Abound’s problems appear to have been rooted in the quality of
its own products, the competitiveness of the business model, and its
inability to retain top talent.”
Abound Solar UPDATES
- October 8, 2012: Bankrupt green loan loser Abound Solar now under investigation in Colorado –– Michelle Malkin
- October 11, 2012: House Committee Launches Document Probe Into DOE, Abound Solar –– The Heritage Foundation October 25, 2012: Colorado officials continue Abound Solar fraud investigation –– The Daily Caller
- October 27, 2012: EMAILS SHOW WHITE HOUSE DROVE FAILED GREEN-LOAN IN COLORADO –– The Complete Colorado by Todd Shepherd
- October 29, 2012: Emails Show White House Exerted Pressure for DOE Loan to Abound Solar –– National Legal and Policy Center
Those that gained financially and politically:
- 2008 billionaire heiress Pat Stryker, early investor in Abound (then AVA); 2008 Obama bundler and Democrat donor (and Obama donor for 2012)
- Democratic Congressman Paul Kanjorski’s nephew Russell
- Then-Colorado Democratic Congresswoman Betsy Markey (tied to cap-and-trade)
- At the state level, then Democratic Colorado Governor Bill Ritter strongly supported Abound Solar and its application for a DOE loan guarantee, gave letter to Secretary Chu.
- Republican ties: Abound Solar is also backed by Invus Public Equities Advisors LLC, which was co-founded by Raymond Debbane, who has donated to Republican candidates including Representative Darrell Issa. Also, Abound, formerly known as AVA Solar won part of a $60 million grant under the Bush administration.
Shepherds Flat* (I covered in my July 2012 piece entitled, General Electric Making “Bank” off Obama's “Green” Stimulus Money; Over $3 Billion and Counting)
EXCERPT:
General Electric, CEO Jeffrey Immelt, Chair of Obama’s Job Council and the Billions They Raked in Through the 2009 Obama Stimulus Package
Whereas General Electric (GE) is a heavy donor to both Republicans and Democrats, and Immelt himself "plays the role of typical corporate donor who hedges his bets on both sides of the fence," in 2008, GE gave the Obama campaign $529,855, marking them a top Obama donor. Nevertheless, GE is a major player on the clean-energy scene as well as in this green energy scheme. Even The New York Times recognized GE’s “green power,” noting that in 2009, GE lobbied Congress to help expand the “clean-energy subsidy programs, and it now profits from every aspect of the boom in renewable-power plant construction,” including “hundreds of millions in contracts to sell its turbines to wind plants built with public subsidies.” In fact, you'll be "blown away" by the billions of "wind energy grants" that blew out of the stimulus package back in February 2010, of which GE is contracted to at least 26% of them as the "Turbine Manufacturer."
In late 2009, it was reported that GE became "one of the newer smart meter players," and that they "had been working with utility Oklahoma Gas & Electric on a 6,600 smart meter trial, and had procured "a contract with Pepco Holdings (PHI)," which received Smart Grid Investment Grants totaling $168 million. GE also has a big contract with Florida Power and Light," also the recipient of a $200 million stimulus grant.
Yet, this is just the beginning of the GE "green bucks"...
While a recent "news flash" was published by the Republican National Committee, confirming via Recovery.gov that "General Electric received over $1.2 billion worth of stimulus loan guarantees, awards, contracts and grants" (the majority of which were for renewable energy projects), they missed billions more. Two large 1705 loan guarantees that I had outlined in April of this year, as well as a forthcoming $490 million cash grant and a $54.6 million loan from the Federal Railroad Administration (FRA). Add in some smaller government subsidies and awards for a multitude of green projects, programs, and through some of their "green alliances," that I found during my 2011 research, and GE's "green tab" exceeds $3 billion in direct (some indirectly) taxpayer cash, and counting. ;
Let's take a look at GE's two projects from the 1705 Loan Guarantee Program, both of which are included the DOE's risky investment portfolio.
- 1366 Technologies Inc, Rating B by Fitch, Sept 2011 –– $150 million
- Caithness Shepherds Flat, LLC –– Rating BBB- by Fitch; Oct 2010 for $1.04 billion (or $1.3 billion)
Later, another close associate of, and big donor to the president invested in Caithness. As uncovered by Peter Schweizer in his book, Throw Them All Out, "Google's CEO at the time, Eric Schmidt, served as an informal advisor to President Obama.” Still, Schmidt, Google Executive Chairman, was an Obama donor in 2008, and since April 2009, is a member of the president's Science and Technology Advisory Council (PCAST). Interestingly, Google’s $814,540 contribution to Obama’s campaign made it the fifth largest donor in 2008. As of late, Google has aimed its "search engines" at green technology, many of which have received government "help" –– BrightSource, Solar City, Telsa Motors, and others, but we’ll stay focused on GE.
The House Oversight, March 2012 investigation reveals internal memos of concern over the fact that the Caithness Shepherds Flat project was receiving “an excessive amount of public subsidy (where grants, tax credits and loan guarantees provided 65% of the funding for the project), and that private parties did not have sufficient ‘skin in the game.’”
Further, it goes on to state, “Four months after the DOE approved the Caithness loan, President Obama named Jeff Immelt, the CEO of GE, as the Chairman of Obama’s Job Council” –– a council stacked with Democratic donors, and several Obama bundlers, both for the 2008 and 2012 campaigns.
It also discloses “General Electric’s broad access to loan guarantees,” and it gives a very illuminating account. “Since Immelt’s appointment as Chair of the Job Council, two additional government-backed transactions have occurred." "First the poorly rated 1366 Technologies, sponsored in part by GE, received a direct $150 million loan commitment from the DOE for its solar manufacturing plant." Second was the Federal Railroad Administration (FRA) that loaned $54.6 million to Kansas City Southern Railway Company (KCSR) "to purchase thirty new General Electric ES44AC diesel-electric locomotives" –– a loan that raised red flags in the House investigation.
More to come...
However, another incriminating factor that struck me in the new report (memo) released by House Oversight is that "DOE officials were aware of Senate Majority Leader Harry Reid’s tough reelection in 2010 and moved projects that were important to Senator Reid forward."
- In a December 5 2009 email, Loan Program Office Senior Credit Advisor Jim McCrea forwarded an article about Senator Reid’s reelection campaign to LPO contractor Paul Barbian and stated: “Since this is not going to go into the DOE, and just to be clear, the translation is: Reid may be desperate. WH may want to help. Short term considerations may be more important than longer term considerations and what’s a billion anyhow?”
- In a May 4 2010 email, LPO Executive Director Jonathan Silver wrote in an email “I need some stats on how many projects we have funded or have in DD [due diligence] as a percentage of totals. Reid is constantly hit at home for not bringing in the federal dollars.”
- Throughout 2010 LPO emails indicate that projects in Nevada were prioritized because they were “high profile,” “tied to larger events,” or because they had Senator Reid’s support. These projects included the $343 million SWIP project (Email #10, attached), the $98.5 million Nevada Geothermal project (Email #11, attached), and the $737 million SolarReserve Tonopah project.
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| Jonathan Silver, executive director of the Department of Energy Loans Programs Office, left, and Jeffrey Zients, deputy director of the Office of Management and Budget (OMB), testify during a House Energy and Commerce Committee hearing on Solyndra LLC in Washington, D.C., U.S., Sept. 14, 2011. (Andrew Harrer/Bloomberg via Getty Images) |
In July 2012 I covered Silver with very incriminating evidence of green corruption, and reported it in my piece, Recent Oversight Hearing Reveals Shady Email Practices by Former DOE Loan Advisor Jonathan Silver; Abound Solar Blames China for its Demise, complete with Silver's background, left leaning connections, and cozy ties with Al Gore and other winners of DOE loans, like BrightSource Energy.
And in April 2012, Chu in my Green Corruption: Department of Energy “Junk Loans” and Cronyism, noting that in a gripping line of questioning, Ohio Representative Jim Jordan confronted this issue head on during that same hearing where he pressed Secretary Chu on nine of the firms that received loans, revealing their political connections. Chu countered that the loans were based on merit. Yet Jordan was perplexed, “so if you weren’t helping your buddies, and you were basing your decisions on the merits of the loan, how do you explain the fact that 23 of 27 recipients of the loan guarantees were rated as junk status investments?” Jordan concluded, “If it wasn’t your political buddies, it had to be incompetence.”
At first glance, we have plenty more cronyism and corruption to piece together with these "smoking gun" emails (and we will), and 100's of more emails to read. Still, it would be a worthy endeavor to investigate if Silver or Chu perjured themselves (or any other CEO as well as any former or current DOE Official for that matter), during any of the (five) House Oversight Committee hearings that have been conducted since 2011 –– my hunch, yes!
Stay tuned...
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