Monday, April 1, 2013

SoloPower: Another Department of Energy “Junk Loan” Teetering with Over $250 Million of Taxpayer Money

At the end of 2012, we calculated that "Obama’s green energy failure list" topped 52, meaning that at least $15 billion of "green" taxpayer money is either gone or was at risk. 

This estimate –– 23 bankruptcies and 29 that were facing difficulties –– came from tracking various stimulus related ($100 billion in "green earmarks) Department of Energy (DOE) loans, grants and special tax breaks, as well as other alternative energy funds handed out by the Obama administration through various programs and agencies. And the Brookings Institute puts the Obama administrations' "total government spending (both stimulus and non-stimulus) on green initiatives at $150 billion through 2014."

However, out of the clean-energy dirt ashes, new calculations are emerging (with our list to be updated this summer), of which we already reported that from the stimulus-created 1705 loan program (DOE’s “junk bond” portfolio), three have gone under while four were facing various issues that included financial and, believe or not, environmental.

Total Green Corruption List of Bankrupt, and here are the three from the 1705:
  1. Solyndra: Received $535 million DOE loan and $25.1 million in California tax credit. Bankrupt: September 2011
  2. Abound Solar: 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
  3. Beacon Power: Received more than $25 million in DOE grants and a DOE loan for $43 million. Bankrupt: October 2011
Total Green Corruption List of Troubled, and here are the four from the 1705:
  1. BrightSource Energy –– $1.6 billion 
  2. First Solar –– Tied to three large DOE loans worth $3 billion, plus suspicious Export-Import bank funding 
  3. Nevada Geothermal –– $78.8 million, plus $69 million in federal stimulus-funded grants 
  4. NextEra Energy Genesis Solar Project –– $681.6 million
Lately we discover that another DOE risky investment is ready to bite the dust. No surprise here, because SoloPower was one of the worst rated loans –– substantial risk –– right along with Beacon Power that took $78 million of taxpayer money down the drain with it.

SoloPower, in August 2011, received $197 million loan guarantee to “support the retrofit of an existing building to operate a thin-film solar panel manufacturing facility in Portland, Oregon,” while claiming they would create 270 construction and 450 permanent jobs.

To make matters worse, SoloPower also snagged $40 million of Oregon taxpayer money and “despite the warning signs, the state of Oregon is continuing to put taxpayer money at risk. In December, the agency Business Oregon issued SoloPower a $20 million tax credit. The company sold the tax credit for $13.5 million in cash," reported Fox News last month. 

While in September 2012, SoloPower opened its Oregon plant with a bang along side an optimistic (and adamant defender) CEO Tim Harris, however, it seems that its power is waning –– “The first production line was never completed,” and “in January, the company had a round of layoffs.”

Fox News goes on, “A management shakeup soon followed -- gone are the chief executive, president and chief-technology officer. The company is now trying to raise money by selling some of its equipment through a third party and is attempting to restructure its $197 million federal loan guarantee.”

July 2011, S&P Gives SoloPower Dismal Credit Rating, Warns that SoloPower Will Fail to Meet its Debt Obligations

But why would Oregon heed warning signs when the DOE ignored the huge "red flag" hovering over SoloPower, which came at least seven months prior to its $197 million loan approval –– a warning that also came from S&P in July 2011, giving it a dismal credit rating of CCC+.

According to this House Oversight investigation, released a year ago (The Department of Energy’s Disastrous Management of Loan Guarantee Programs), SoloPower, a European firm, was seeking to build a solar factory in Oregon, and “they received this [$40 million from the State of Oregon and $197 million from the DOE]  federal assistance despite a rather dire prediction of SoloPower’s prospects by Standard & Poor’s (S&P).” In other words, states the report, “S&P predicted that SoloPower will fail to meet its debt obligations.”

January 2011 Emails: James C. McCrea, Senior Credit Advisor of the Loan Programs at the Department of Energy –– SoloPower “Completely Uninspiring Transaction”

Even the incriminating 10/31/21 email dump reveal that in January 2011, James C. McCrea, Senior Credit Advisor Loan Programs Department of Energy, “hated” this project.
On January 10, 2011, Brian From Scully Capital, Subject line: Draft Powerpoint Presentation –– writes an EMAIL to Emilio J. Ghersi (Senior Investment Officer of the DOE LGP), and a few others. “All, Please find attached the draft consolidated presentation for SoloPower. There are a few bracketed items that remain to be addressed…Thanks, Brian”

After getting input from Emilio J. Ghersi later that evening, Brian forwards to James C. McCrea, along with a message. “Jim, Here is the latest powerpoint. Generally, we’re in good shape and will have a draft final paper tomorrow. Unless you see something that alarms you, we should be okay for Wednesday. Regards, Brian.”

Late that evening, January 10, 2011, Jim McCrea responds to Mr. Scully. “I ran through this, made some changes in red and added a bunch of comments. This is a completely uninspiring transaction. There is just not a compelling story on it and nothing in the presentation gives you a sense that this is real as opposed to completely wishful thinking. If I were on Credit Committee, no way would I vote for this one. I don’t know what to do about that but the more I see of this space, the less I like it and I hated it to begin with!!!!” Signed, “Jim.” 
The next day, January 11, 2011, Scully counters to McCrea, “Thanks. We’ll incorporate / address the comments. Given the number of solar PV firms in the system, it would be good to have some more selective criteria. Stion is far worse and yet it’s still moving along.”

NOTE: Stion Corporation, a leading manufacturer of high-efficiency thin-film solar modules, based in California, by the way, is a Khosla Ventures green investment, and where you'll find billionaire venture capitalists Vinod Khosla –– another Obama green crony that raked in massive amounts of green funds, of which I briefly covered in my Bank of Obama: Kleiner Perkins (John Doerr and Al Gore), the Mother of All Green Energy Stimulus Money Winners.

Stion Corp so far is a double winner of the DOE's SunShot Initiative, which begin in 2007, and is funded out of the Energy Efficiency and Renewable Energy (EERE), of which we know that the 2009-Recovery awarded the EERE $16.8 billion for its programs and initiatives.

In November 2012, Stion snagged a $2 million award from the "Tier 2 grant under the Sunshot’s Incubator 7 Program," which was "a follow-on to the Tier 1 award given to Stion in February 2011." Prior to all that free money from the DOE, in January 2011, Stion announced their plans for a new facility in Mississippi, which stated, "[Stion] will build a new production facility in Mississippi as part of an incentive agreement with the state that includes a $75 million loan and other tax and training incentives."

But I digress...

SoloPower Enjoys Bipartisan Cronyism 

At this time we can place SoloPower on President Obama’s green energy failure list in the troubled category, and eventually move them to our ever-growing bankruptcy inventory. Additionally, we can add them to the long list of green energy projects and firms that were winners of billions of taxpayer money, which have meaningful political ties to the president and other high-ranking Democrats, and thus far we have chronicled 23 of the 26 DOE's 1705 "junk bond" portfolio. However, this time (like one other) we have Republican connections in the mix, as revealed in the March 2012 House Oversight report:
What Solopower lacked in economic value, it made up for in political connections. Unlike other 1705 loan guarantee recipients, Solopower exerted bipartisan political influence on DOE through strong ties to both the Bush and Obama Administrations. Solopower itself built the ties to the Obama Administration. Bruce Khouri, who served on the Board of Directors and now serves as the Chief Commercial Officer, donated $28,500 to the Democratic National Committee’s “Obama Victory Fund” in 2008. Lou DiNardo, who served as interim CEO236 and now serves as Chairman of the Board of Directors, previously worked as a General Partner at VantagePoint Venture Partners where DOE stimulus advisor Sanjay Wagle worked. Solopower, based in San Jose, California, developed an ally in Democratic San Jose Mayor Chuck Reed. Mayor Reed sent letters to DOE and talked with DOE’s Jonathan Silver in person to advocate for and attempt to speed up Solopower’s loan guarantee.

Hudson Clean Energy Partners, the biggest investor in Solopower, had strong ties to the Bush-era DOE. Craig Cornellius, a member of the Board of Directors at Solopower and Managing Director at Hudson Clean Energy Partners, and Alexander Karsner, a member of the Hudson Clean Energy Partners Advisory Board, both worked in renewable energy positions for DOE during the Bush Administration. Another Managing Partner for Hudson Clean Energy Partners, Neil Auerbach, donated tens of thousands of dollars to Republicans in 2008. Hudson Clean Energy Partners also retained BlueWater Strategies to lobby both branches of Congress and the White House. According to BlueWater Strategies’ website, Andrew Lundquist, founder and Managing Partner, “led George W. Bush’s transition team for the Department of Energy” and “served as a senior advisor and strategist on energy issues for the President and Vice President.”

With its ties to DOE officials in both the previous and current Administrations, Solopower had people on both sides of the political aisle that could use their influence to pressure DOE into issuing and finalizing Solopower’s loan guarantee.

$34.5 Billion DOE Loans and the Rest of Secretary Chu's $16 Billion "Junk Bond" Portfolio

Since 2009, the Energy Department, through three separate programs (Section 1703Section 1705, and Advanced Technology Vehicles Manufacturing (ATVM) has guaranteed –– along with pressure and influence from the White House ––– $34.5 billion of taxpayer money that thus far has funded 33 projects.

Created under the trillion-dollar stimulus package, those at the DOE have doled out in excess of $16 billion though the 1705 program to 26 projects, of which 22 of the loans were rated “Junk grade” due to their poor credit quality. The remaining ended up on lowest end of the "investment" grade of categories, giving the DOE’s 1705 loan portfolio an overall average of BB-, which explains the term DOE's "junk bond" portfolio frequented throughout my work.

We've already proven that the DOE's $16 billion “junk bond” portfolio reeks of cronyism and corruption, due to the fact that virtually all of them are politically connected to the president and other high-ranking Democrats, and in many cases, to both. 

Political buddies, which primarily comprise of Obama's campaign backers, bundlers, top donors as well as liberal allies. Adding to the mix are members of the president's fired Job Council; those that helped craft the 2009 economic stimulus package; and at least a dozen inside the Energy Department, and we find a much bigger scandal.

Plus, we've exposed various DOE email interactions that show how top White House and DOE Officials, as well as the president himself, lied about their participation in the approval of, and the fact that all the loans were based on "merit." Quite the contrary: emails that reveal the Energy Department's Den of Deception, which include a series of questionable practices, including coercion, cronyism and, cover-ups.

While 46 percent of the $34.5 billion went to fund the stimulus-created 1705 program, 30 percent went to the 1703, which handed out $10.3 billion for two projects; AREVA and Georgia Power –– both are suspect, and the former I’ve already written about a few times. Meanwhile 14 percent of the monies was filtered through the ATVM, which means that $8.4 billion went to five auto companies, of which three are directly tied to President Obama, and "both Ford Motor Co. and Nissan were heavily engaged in negotiations with the administration over fuel economy standards for model years 2012-2016 at the time DOE was considering their applications."

Bottom line is that the entire DOE Loan Guarantee Program was used as political payback –– all green-government subsidies for that matter –– a "pay to play" scheme, whose participants (winners) are those in cahoots with, or get on board with the president and his left-wing allies green agenda.

This time "the climate coalition" is armed with a political propaganda machine, a powerhouse of left-wing Big Green groups, and plenty of high-powered clean- energy (dirty) lobbyists. Let's not overlook President Obama's wealthy "green cronies" –– Big Banks, Big Energy and Venture Capitalists, which all enjoy special access and influence, and as they fly around in their corporate jets masking themselves as Captain Planet, they claim that they are saving our planet, when in reality they are padding their bank accounts.

In April 2012, I launched my blog –– now called The Green Corruption Files –– and here we are a year later, of which we've already covered the entire ATVM program (Cruising Down the Green Cronyism Road). Furthermore, out of Secretary Chu's $16 billion "junk bond" portfolio (you know the one that Mr. Chu in March 2012 adamantly defended, claiming that the loans were ALL based on "merit"), we've covered all but three of the 26 –– each accompanied with their very own crony, corruption story, and along the way we discovered that many also snagged tons more green-government subsidies. Moreover, many of my Green Corruption exposés have led to additional green energy cash winners and much more of Obama's clean-energy dirt.

Here’s what’s left:
  • Exelon (Antelope Valley Solar Ranch) –– Rating BBB- by Fitch; Sept 2011 for $646 million
  • Mesquite Solar I, LLC (Sempra Mesquite) –– Rating BB+ by Fitch; Sept 2011 for $337 million 
  • Prologis (Project Amp) –– Rating BB by Fitch; Sept 2011, over $1.1 billion (or $1.4 billion) 
NOTE: Sneak peek on Exelon and Prologis can be found in my March 22, 2013 post: Left-wing Billionaire George Soros: Obama’s "Agent of Green"

In case you missed any...

#1. SolarReserve Inc, LLC (Crescent Dunes) –– Rating BB by Fitch; Sept 2011 for $737 million
#2. BrightSource Energy, Inc
  1. Ivanpah I and Ivanpah III –– Rating BB+ by Fitch 
  2. Ivanpah II –– Rating BB by Fitch; Apr 2011, total $1.6 billion
  • July 6, 2012: Shining the Light on BrightSource Energy's $1.6 Billion Shady DOE Deal: Special Seven, Part Two
  • February 7, 2013: Obama’s Last Commerce Secretary –– as part of Obama's Jobs Council Closed: Mega-Rich Member Penny Pritzker "Rumored" for Commerce Job, “Related” to Two Large Green Corruption Stories 
  • November 4, 2012: Busting Open Energy's Den of Deception 
  • February 23, 2013: Citi’s Massive ‘Green” Money Machine
  • Also part of my March 22, 2013 post, Left-wing Billionaire George Soros: Obama’s "Agent of Green"

Senator Harry Reid Tied to Five DOE Loans, which includes SolarReserve and BrightSource 

#3. Nevada Geothermal Power Company Inc – Rating BB+ by Fitch; Sept 2010 for $78.8 million

#4. Ormat Nevada, Inc –– Rating BB by S&P; Sept 2011 for $280 million
  • July 15, 2012: Senator Harry Reid’s Part in Green-Energy Crony-Corruption, Part Three of The Special Seven 
#5. LS Power (Transmission Line project) –– Rating BB+ by Fitch; Feb 2011 for $343 million
#6. Abound Solar –– Rating B by Fitch; Dec 2010 for $400 million
  • July 26, 2012: Recent Oversight Hearing Reveals Shady Email Practices by Former DOE Loan Advisor Jonathan Silver; Abound Solar Blames China for its Demise

#7-9. Abengoa with Three Projects
  1. Abengoa Bioenergy Biomass of Kansas LLC –– Rating CCC by Fitch; Aug 2010 for $132.4 million 
  2. Abengoa Solar, Inc (Solana) –– Rating BB+ by Fitch; Dec 2010 for $1.45 billion
  3. Abengoa Solar, Inc (Mojave Solar) –– Rating BB by Fitch; Sept 2011 for $1.2 billion 
  • August 4, 2012: How Democrats Say "Crony Corruption" in Spanish: Abengoa 
  • August 8, 2012: How Democrats Say "Crony Corruption" in Spanish: Abengoa UPDATED VERSION 
  • January 8, 2013: Bank of Obama: John Doerr and Al Gore of Kleiner Perkins, the Mother of All Green Energy Stimulus Money Winners

#10. Beacon Power Corporation –– Rating CCC+ by S&P; Aug 2010 for $43 million
  • August 15, 2012: Beacon Bust Tied to Obama Bundler and VP Hunter, the Infamous Washington Fixture, James A. Johnson 

#11 & 12. NextEra Energy Resources, LLC with Two Projects
  1. Genesis Solar (environmental issues) –– Rating BBB+ by S&P; Aug 2010 for $681.6 million (or $852 million) 
  2. Desert Sunlight –– Rating BBB- by Fitch; Sept 2011 for $1.2 billion (or $1.46 billion) 
  • August 18, 2012: NextEra Energy: Third Largest Power Company in the World is the Third Largest Recipient of DOE Risky Loans; CEO Sits on President Obama's Jobs Council 
  • January 22, 2013: Big Wind Energy Subsidies: A Hurricane of Carnage, Cronyism and Corruption (NextEra: A Gust of other Stimulus Grants) 
  • February 23, 2013: Citi’s Massive ‘Green” Money Machine 
#13. Solyndra, Inc (went bust) –– Rating BB- by Fitch; Sept 2009 for $535 million
  • September 21, 2012: Obama’s Green Cronies Made DNC Cameo: Bundlers and Big Donors Tied to Billions of Stimulus Funds
Goldman Sachs with Two Large DOE Loans

#14. Cogentrix of Alamosa, LLC –– Rating B by Fitch; Sept 2011 for $90.6 million

#15. U.S. Geothermal, Inc (Malheur County, Oregon) –– Rating BB by S&P; Feb 2011 for $97 million
  • January 8, 2013: Bank of Obama: John Doerr and Al Gore of Kleiner Perkins, The Mother of All Green Energy Stimulus Money Winners 

General Electric with Two DOE Loans 

#16. 1366 Technologies Inc, Rating B by Fitch, Sept 2011 –– $150 million 

#17. Caithness Shepherds Flat, LLC –– Rating BBB- by Fitch; Oct 2010 for $1.04 billion (or $1.3 billion)
  • July 12, 2013: General Electric Making “Bank” off Obama's “Green” Stimulus Money; Over $3 Billion and Counting 
  • December 23, 2012: The Green Five: Spreading the Wealth to Obama’s Ultra-Rich Jobs Council Members -- Part One, 10/31/12 DOE Emails Prove White House Pressure on $1.3 Billion Loan to General Electric Wind Project  
  • February 23, 2013: Citi’s Massive ‘Green” Money Machine 

Shepherds Flat and the following three were part of my Big Wind Storydetailing the "Sweetheart Deals" found in the Department of Energy’s four risky wind projects

#18. Granite Reliable Power, LLC –– Rating BB by Fitch; Sept 2011, over $135 million
#19. Kahuku Wind Power LLC –– Rating BB+ by Fitch; July 2010 for $117 million

#20. Record Hill Wind, LLC –– Rating BB+ by S&P; Aug 2011 for $102 million

#21 & 22. NRG with Two Projects
  1. NRG Solar, LLC (Agua Caliente) –– Rating BB+ by Fitch; Aug 2011 for $967 million 
  2. NRG Energy (California Valley Solar Ranch) –– Rating BB+ by Fitch; Sept 2011 over $1.2 billion
  • March 22, 2013: Left-wing Billionaire George Soros: Obama’s "Agent of Green" NOTE: This post includes, NRG Energy (a Fortune 500 and S&P 500 Index company) and its Subsidiaries was the Recipient of Most of 1705 Stimulus Loans: $5.2 Billion of Taxpayer Money and Counting
#23. SoloPower Inc. –– Rating CCC+ by S&P 7/11/2011; Aug 2011 for $197 million

Stay tuned for more Green Corruption Files...

Two Women –– one Citizen & one energy Columnist –– join forces on One Mission: to expose one piece of the Green Corruption scandal at a time.


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