Obama Energy nominee will be hit with green energy loan questions
Posted By Michael Bastasch
On 3:16 AM 03/08/2013
President Barack Obama's nominee to replace former Secretary of Energy Steven Chu, physicist Ernest Moniz, would if confirmed be the head of a department that has been the center of a green energy loan controversy that has drawn intense criticisms for its high-profile failures and allegations of cronyism.
During former Secretary Chu's tenure, the Energy Department became been the subject of controversy over green energy loan guarantees which critics say were handed out to companies based on political considerations rather than economic ones.
"The green energy loan program was essentially a recycling program designed to send taxpayer dollars to the administrations financial supporters,"Peter Schweizer, author and Hoover Institution research fellow, told The Daily Caller News Foundation.
Schweizer reported in his book that more than 70 percent of DOE loans went to Democratic donors, and that the loan program might be "the greatest and most expensive example of crony capitalism in American history."
The Obama administration has continually rebuffed claims that politics played a role in issuing $34.5 billion in government-backed loan guarantees.
"I am aware of no communication from White House to Department of Energy saying to make the loan or to restructure," former Energy Secretary Chu testified before Congress.
"And these are decisions, by the way, that are made by the Department of Energy, they have nothing to do with politics," President Obama told KUSA's Kyle Clark last year. (RELATED VIDEO: Local news anchor grills Obama)
However, the watchdog group Cause of Action found that 95 percent of Department of Energy loan recipients with less than $1 billion in annual revenues made political donations to both political parties, while only 32 percent of the companies that didn't receive loan guarantees made political donations.
"The evidence is stark," said Dan Epstein, executive director of Cause of Action, told The Daily Caller News Foundation. "Ninety-five percent of those who won were paying big bucks. It shows that there's a correlation between winning taxpayer dollars and making the contribution, and losing taxpayer dollars and not making the political contribution."
Cause of Action is also involved in two lawsuits against the Energy Department on behalf of two green businesses who argue that the department relied on political connections to award loan guarantees, and that DOE leaked confidential business information to government-backed competitors.
"This case is about fighting government cronyism," Epstein said.
Companies like Solyndra and Abound Solar were involved with big Democratic donors. Both companies filed for bankruptcy.
Solyndra received a $535 million loan guarantee and filed for bankruptcy in August 2011, laying off 1,100 workers. It was reported that billionaire George Kaiser an Obama supporter and one of Solyndra's primary investors along with various Solyndra executives and board members donated $87,050 total to the president's election campaign.
Abound Solar received a $400 million loan guarantee, but only drew on $70 million of the loan before filing for bankruptcy. A Daily Caller News Foundation investigation later revealed that Abound was selling underperforming solar panels. (RELATED: Government-subsidized solar company selling faulty equipment)
Obama bundler Pat Stryker was an early investor in Abound Solar. Stryker has given more than $440,000 to Democratic groups and candidates in the last three elections, according to the Center for Responsive Politics.
Also, emails released by COMPLETECOLORADO.COM suggest there was political pressure from the White House in DOE's decision to award Abound Solar a $400 million in taxpayer dollars.
However, it's not just green energy companies that have allegedly gotten preferential treatment. Analysis by Earth Track and Synapse Energy Economics found that loan guarantees for two Georgia nuclear reactors face potential Solyndra-like problems facing the project, including political involvement.
"[I]t is clear that top officials are engaged and interested in trying to make the Vogtle loan guarantee work," said Max Chang, a report author and associate at Synapse Energy Economics.
"Given the findings of various reviews of the Solyndra loan process, the massive scale of the Vogtle conditional loan guarantee, its complexity, and the limited experience of DOE in handling loans of this size, any hint of political involvement is of particular concern," Chang said.