From Economic Promise to Financial Ruin, The Story of Solyndra.
Over one thousand workers have been laid off as a California factory has been closed
While this scenario has sadly been repeated numerous times over the last several years, the failure of this particular company is especially interesting because it was touted as an ideal example of the success of the Recovery Act.
President Obama visited Solyndra’s Fremont California factory in 2010 and told of how just the one year before, the ground was just an empty lot. The President explained how Solyndra had received a loan as part of the economic stimulus package.
Now the factory is closed. Jobs have been lost. Families have been hurt.
The Obama administration had arranged for Solyndra to receive $535 million dollars from the stimulus fund. The company’s loan application was given priority and did not have to undergo the scrutiny of other corporations seeking stimulus funds. Solyndra did not have to pass the standards established to protect taxpayers. Both Solyndra and the Obama administration had estimated four thousand jobs would be created by the government loan. Since receiving the funding, Solyndra had created 585 jobs.
Now the company has filed for bankruptcy and the workers are unemployed. Solyndra’s CEO Brian Harrison has stated raising capital in the current economic environment was not possible and the closing of the company was both unexpected and unfortunate.
Members of Congress and government “watchdog” groups have questioned the swiftness of Solyndra’s loan approval. The investigation continues and it has been reported Solyndra executives will plead the Fifth Amendment when they appear before members of the House Energy and Commerce Committee. The company’s headquarters has been raided by the FBI. Inspector generals from the Treasury and Energy Department and officials from the House Energy and Commerce Committee are investigating Solyndra.
Several questions arise out of this chain of events.
Why did the Obama administration work to have Solyndra’s application for stimulus funds approved without facing the same qualification standards as other companies? Could this rush to approve the funds have been influenced by the amount on donations made to the Democratic Party by the law firms representing Solyndra officials?
The law firms of Orrick, Harrington and Sutcliffe and Keker and Van Nest have a history of donating to Democratic campaigns. Since 1990, employees of Orrick, Harrington and Sutcliffe have donated over $1.3 million dollars to various political campaigns. More than 95 percent of those donations went to Democrats with $184,000.00 to Obama. Employees of Keker and Van Nest have given $527,301.00 in donations. Most of which had gone to Democrats. Over the past three elections cycles, employees of this firm have donated more than $315,000.00 to Democrat candidates including $64,900 directly to the campaign of Barack Obama.
Solyndra has paid a great amount of money to lobbyist to work on their behalf. In the past three years, Solyndra has paid 1.3 million dollars to lobbying companies that worked to influence government policy to benefit the company. The lobbyists worked to pass legislation such as the Renewable Energy Act of 2010, the Solar Manufacturing Jobs Creation Act and the Renewable Energy Incentive Act
Why had Solyndra CEO Brian Harrison reported to Washington lawmakers in June of this year that the company would double its revenue in 2011? He had stated they were selling over 10,000 solar panels each week. Upon learning of Harrison’s claim, Elliot Gansner, a solar product broker based in San Francisco, had reported Solyndra was just a niche product in the solar industry. He had difficulty imaging how Solyndra had generated such a high amount of sales.
While Harrison had touted the success of Solyndra in Washington, the company’s filings with the Securities and Exchange Commission showed net losses every year since the company’s inception in 2005. Records of the SEC also show Solyndra had applied for a second government loan of $469 million dollars.
Is the Solyndra case just an isolated incident of a company that was deemed worthy of a multi-million dollar loan at the taxpayer’s expense but failed due to economic conditions beyond their control or fiscal mismanagement? Or are there many other instances of funds from the economic stimulus act given to companies based on their political relationship and substantial donations to the Democratic Party? Has the Obama administration begun a practice of awarding government loans to companies based on their associations with major campaign donors and not their ability to repay the loans?
May the taxpayers learn the truth about the Solyndra case and receive full accountability about all loans awarded by the Economic Stimulus Act.