“I had a friend who said you [Obama] don’t just pick the winners and losers, you pick the losers,” – Gov. Romney to President Obama during a recent Presidential debate. 

“These are decisions, by the way, that are made by the Department of Energy,” President Obama said. “They have nothing to do with politics.”

President Obama spent over $90 billion on green technology development through his economic stimulus plan, but about 50 of those firms are either bankrupt (23) or are having difficulties (27), and many of the latter are in financial trouble.  Over $15 billion of taxpayer money is either gone or at risk and the percentage of political cronyism is at almost 60 percent (29 of the 50 companies had/have political connections, mostly to President Obama and Democratic officials).[i] For instance, Abound Solar, who went bankrupt in June 2012, received help from the White House when it applied for a loan from the Department of Energy (DOE) based on documented emails.[ii] Other beneficiaries of White House cronyism were Solyndra and Fisker Automotive.

Abound Solar

According to the Daily Caller, Abound Solar sold defective or underperforming products, and company personnel claimed DOE officials knew their panels were faulty before they received taxpayer dollars. Virtually all of the panels Abound manufactured underperformed, putting out between 80 and 85 percent of the promised wattage and leading to tens of thousands of panels having to be replaced, particularly towards the end of the company’s life.

Abound’s $400 million loan guarantee from DOE closed in December 2010, two months after the company knew its solar panels were faulty and catching fire. In a June 2010 email, DOE Loan Program Executive Director Jonathan Silver informed an agency credit advisor “that the WH (White House) wants to move Abound forward.” And, in another message, James McCrea, the loan program credit adviser, describes an atmosphere of “transaction pressure under which we are all now operating….” Abound Solar received $70 million of its loan guarantee before filing for bankruptcy in June 2012.

Pat Stryker, a wealthy philanthropist whose Bohemian Companies has significant investment in Abound Solar, donated substantial sums to federal Democratic candidates and causes and to President Obama’s two campaigns for the White House and to his Inaugural Committee, and had visited the White House in October 2009.[iii]

Abound Solar is now under investigation by the Weld County, Colorado district attorney for financial misrepresentation and consumer fraud because the company was falsifying documents and failing to disclose product flaws to investors and customers. A whistleblower employee of Abound stated, “The solar panels worked fine as long as you didn’t put them in the sun.”[iv]


In September 2011, the Washington Post reported that based on emails, the White House tried to rush federal reviewers for a decision on a half-billion-dollar loan to Solyndra, a solar panel manufacturer, so Vice President Biden could announce the approval at a September 2009 groundbreaking ceremony. Solyndra received a $535 million loan guarantee from DOE that closed in September 2009 and 2 years later, the company was bankrupt. Solyndra also received $25.1 million in a tax credit from the state of California. Solyndra’s biggest investors were funds operated on behalf of the family foundation of Tulsa billionaire and Obama fundraising bundler George Kaiser, who has been a frequent visitor to the White House.[v]

The pressure from the White House came after DOE approval, but before the Office of Management and Budget (OMB) had completed its financial review. An email from an OMB official referred to “the time pressure we are under to sign-off on Solyndra,” while another email complained, “There isn’t time to negotiate.” Further, in August 2009, before the loan was approved, email exchanges between DOE staff members pointed out that a credit-rating agency predicted that the project would run out of cash in September 2011—about the same time that Solyndra went bankrupt.[vi] The Government Accountability Office, as early as July 2010, concluded that DOE “lacked appropriate tools for assessing the progress” of its loan program and that the department treated applicants inconsistently, “favoring some applicants and disadvantaging others.”

While the DOE loan guarantee for Solyndra was $535 million, it has been determined that the loss could be as high as $849 million, more than 50 percent higher. In order to attract more private investment to the company, DOE approved a deal subordinating its repayment interests to two creditors, providing them with tax write-offs of more than $350 million, which would bring the total loss to American taxpayers for Solyndra as high as $849 million. The two private creditors in this deal were Argonaut Ventures I LLC, the main investment vehicle for the George Kaiser Family Foundation, and Madrone Partners LP, an investment fund associated with the family that controls Walmart.

DOE allowed these investors to get first dibs in the case of bankruptcy in exchange for $75 million to keep Solyndra in business. According to a fair reading of the law, DOE’s deal was in violation because American taxpayers are supposed to get first dibs in recovering any losses from bankruptcy. To break the rule, DOE produced a legal analysis claiming that this prohibition applies only when a loan originates, not when it is modified, as was the case with the Solyndra deal. For further discussion, click here.

Fisker Automotive

Fisker Automotive was provided with a $529 million DOE loan, but failed to reach milestones in delivering its Karma model, an electric vehicle with a showroom cost of over $100,000. Fisker was backed by wealthy venture capitalists that contributed large amounts to President Obama and other Democrats. Among the highest profile backers is the Silicon Valley venture capital firm Kleiner, Perkins, Caufield and Byers (KPCB), of which Al Gore is a senior partner. According to the Wall Street Journal, Al Gore, a supporter of Fisker, purchased one of the first Karma models.[vii] According to the Center for Responsive Politics, employees of KPCB donated $2.6 million to candidates and political action committees, favoring Democrats over Republicans by a very wide margin.[viii]

Insiders Getting Rich Before Companies Tumble

An analysis of SEC filings of 15 publicly traded companies that received taxpayer assistance found that executives and corporate leaders pocketed tens of millions after receiving government funds before their stock prices plummeted.  For example, a biofuel company, Amyris, Inc. received $24.3 million to turn plant sugars into diesel fuel, which helped push its stock price above $30 a share.  Amyris’ company personnel netted $21 million in stock sales after the firm went public in September 2010. Currently, Amyris’ stock sells for less than $3 and it has closed 2 of its 3 plants.[ix]

Another biofuel manufacturer, Solazyme, received $21.8 million from DOE. Its stock traded at more than $25 a share at one point, but is worth less than $9 now, after its company personnel realized $18.4 million in capital gains.

A123 Systems, an electric-car battery manufacturer, received a $249 million grant from DOE in 2009, before going bankrupt in October 2012. When it went public in September 2009, its stock was worth more than $25 a share. Its officers and directors made more than $11 million in stock sales.

Solyndra was not included in the analysis of the 15 companies because it spent its over $500 million in taxpayer-guaranteed loans before it could even go public. First Solar is also not included because it sold much of its $3 billion in federal loan guarantees to third parties before it laid off 30 percent of its workforce and its stock price plummeted by more than 90 percent from its high in 2011. Since 2009, First Solar’s head officer received more than $329 million in stock sales since 2009.

Government support sends signals to other investors that the purchase of stock or an investment may be a worthy thing, because of the explicit “government stamp of approval.”  However, it appears as though many of these companies were not well vetted by the government, which may have misled investors into believing that markets or profit making potential for the companies were much better than they were in reality.  Because the size of the energy markets around the world are so enormous, the stakes are that much higher, as chronicled in an article concerning one green capital investment firm, the aforementioned Kleiner, Perkins.[x]


President Obama’s “clean energy” program is costing taxpayers billions and, in some cases, gaining company insiders riches. Unfortunately for taxpayers, the technologies funded are highly speculative. But, making matters even worse, is documented pressure from the White House for government agencies to accelerate approval for the loans that has made the approvals even riskier. These loans have increased our national debt without gaining much in clean energy. The numbers of bankruptcies are high and are climbing.

[i] Green Corruption, Green Alert: Tracking President Obama’s Green-Energy Failures, the list, October 20, 2012, http://greencorruption.blogspot.com/2012/10/green-alert-tracking-president-obamas.html#.UJKQn2_BGSq

[ii] National Legal and Policy Center, Emails Show White House Exerted Pressure for DOE Loan to Abound Solar, October 29, 2012, http://nlpc.org/stories/2012/10/29/emails-show-white-house-exerted-pressure-doe-loan-abound-solar

[iii] National Legal and Policy center, Surprise! Another DOE Solar ‘Bet’ Produces Green Job Losses, March 1, 2012, http://nlpc.org/stories/2012/03/01/surprise-another-doe-solar-bet-produces-green-job-losses

[iv] Energy and Commerce Committee, Rep. Cory Gardner on Obama Administration’s Bad Colorado Bet – Abound Solar now Subject of Criminal and Congressional Investigations, October 26, 2012, http://energycommerce.house.gov/icymi/rep-cory-gardner-obama-admins-bad-colorado-bet-abound-solar-now-subject-criminal-congressional-investigations

[v] Washington Post, Solyndra loan; White House pressed on review of solar company now under investigation, September 13, 2011, http://www.washingtonpost.com/politics/white-house-pushed-500-million-loan-to-solar-company-now-under-investigation/2011/09/13/gIQAr3WbQK_story.html

[vi] Washington Post, Solyndra loan; White House pressed on review of solar company now under investigation, http://www.washingtonpost.com/politics/white-house-pushed-500-million-loan-to-solar-company-now-under-investigation/2011/09/13/gIQAr3WbQK_story.html

[vii] Wall Street Journal, Gore-Backed Car Firm Gets Large U.S. Loan, September 25, 2009, http://professional.wsj.com/article/SB125383160812639013.html?mg=reno-wsj

[viii] National Legal and Policy Center, Integrity of Fisker Capital Funding is Questioned, February 14, 2012, http://nlpc.org/stories/2012/02/14/integrity-fisker-equity-fundraisers-questioned

[ix] The Examiner, Examiner Editorial: Insiders get rich on Obama’s green energy stimulus, October 31,2012, http://washingtonexaminer.com/examiner-editorial-insiders-get-rich-on-obamas-green-energy-stimulus/article/2512237#.UJPtvUpkiIc

[x] Upstart Business Journal, Behind the Green Doerr, April 16, 2007, http://upstart.bizjournals.com/executives/features/2007/04/16/Behind-the-Green-Doerr.html?page=all

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