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Solyndra Round-Up: Adventures in Venture Socialism

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By Doug Powers  •  September 17, 2011 01:45 PM

**Written by Doug Powers

Learning that Solyndra investors were placed ahead of taxpayers when it comes to who gets paid back in the event of a loan default wasn’t a big surprise. After all, the auto bailouts were also structured in a way so that the unions were taken care of first with taxpayers stuck playing second fiddle (if any fiddle at all), but that doesn’t make the news from the latest example of “venture socialism” gone awry any less maddening.

From the Associated Press by way of Forbes:

WASHINGTON (AP) — The Obama administration restructured a half-billion dollar federal loan to a troubled solar energy company in such a way that private investors — including a fundraiser for President Barack Obama — moved ahead of taxpayers for repayment in case of a default, government records show.

Administration officials defended the loan restructuring, saying that without an infusion of cash earlier this year, solar panel maker Solyndra Inc. would likely have faced immediate bankruptcy, putting more than 1,000 people out of work.

Even with the federal help, Solyndra filed for Chapter 11 bankruptcy protection earlier this month and laid off its 1,100 employees.

As it turns out, the same year Solyndra’s $535 million loan was approved, they quickly went back to the well for an amount that would have made the total of the two loans a cool billion:

Failed solar panel maker Solyndra’s Securities and Exchange Commission filings show that seven months after the Obama administration’s Department of Energy approved a $535 million federal loan guarantee, Solyndra applied for a second one valued at $469 million.
[…]
It’s unclear if the now-bankrupt and scandal-embroiled green energy company actually received a second loan. Department of Energy officials did not immediately respond to The Daily Caller’s request for comment, and the company’s SEC filing left the question open.

A story in the Wall Street Journal quotes an investor as saying the goal of the loan(s) was to provide Solyndra credibility so they could go public and “cash out.” That way, when the loan came due, taxpayers would be on the hook instead of the private investors.

The Solyndra loan falls under the umbrella of the “stimulus,” but these days Sheriff Joe Biden seems to have misplaced his badge.

More on Solyndra here, here, here and here.

Other related stories:

Chicago Tribune: Solyndra scandal reeks of the Chicago way

Gainesville Sun: Bankrupt company made UF Museum’s solar array

LA Times: Second Obama fundraiser linked to Solyndra

**Written by Doug Powers

Twitter @ThePowersThatBe

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