Logo credit: Sloane
Just keeping you up to date on all the Obama boondoggles du jour…
*The Wall Street Journal reports that Solyndra violated the terms of its government loan…
Solyndra LLC had such steep financial problems in late 2010 that the company violated terms of its loan-guarantee agreement with the Department of Energy and technically defaulted on its $535 million loan, according to people familiar with the matter.
Report on Solyndra
The failed solar-panel maker, which is under numerous criminal and congressional investigations, ran so short of cash in December 2010 that it was unable to satisfy certain terms of its U.S. loan agreement, these people said. The agreement required Solyndra to provide $5 million in equity to a subsidiary building its factory but cash-flow problems prevented those payments.
WSJ’s Ryan Tracy reports a new Congressional report says warnings about Solyndra’s competitive abilities came out before the government awarded the company a $535 million loan guarantee and the company’s subsequent collapse.
The Energy Department ultimately restructured the loan agreement to help keep the company afloat and Solyndra continued to draw money from its loan.
Solyndra’s cash-flow problems in late 2010 had previously come to light but it was not known that the company technically defaulted on its loan and violated its agreement with the U.S. government.
*The Congressional Research Service report is here.
*California state officials are pushing to freeze awards from a program that gave a $25.1 million tax break to Solyndra LLC.
Six years ago, Senate Finance Committee investigators mounted an inquiry into an exotic variety of nonprofit organization that they feared affluent families were using to warehouse wealth while simultaneously earning themselves lucrative tax breaks.
One nonprofit group singled out for scrutiny was a low-profile organization based in Tulsa. That group, the George Kaiser Family Foundation, later became the biggest investor in Solyndra, the solar company that collapsed last month after burning through a half-billion dollars in taxpayer money.
Congressional interest in the nonprofit group was so high in 2005, in fact, that an attorney for then-committee Chairman Charles E. Grassley (R-Iowa) used it in an internal memo as a case study into whether the tax loophole should be closed. The memo, previously unreported, pointed out that in 2002 the foundation distributed just 0.2 percent of its assets to charity. That was acceptable under the law because GKFF, as it is known, was founded to financially “support” another nonprofit group, the Tulsa Community Foundation.
*Sean Higgins at IBD reports that “Department of Energy is set on Thursday to announce whether nine federal loan guarantees amounting to $6.5 billion for green energy projects will get final approval.” That’s a whopping $23 million per green job. IBD’s chart of the loan applicants:
*Eco-topia! Solyndra built itself a green Taj Mahal on the public dime:
The glass-and-metal building that Solyndra LLC began erecting alongside Interstate 880 in Fremont, California, in September 2009 was something the Silicon Valley area hadn’t seen in years: a new factory.
It wasn’t just any factory. When it was completed at an estimated cost of $733 million, including proceeds from a $535 million U.S. loan guarantee, it covered 300,000 square feet, the equivalent of five football fields. It had robots that whistled Disney tunes, spa-like showers with liquid-crystal displays of the water temperature, and glass-walled conference rooms.
“The new building is like the Taj Mahal,” John Pierce, 54, a San Jose resident who worked as a facilities manager at Solyndra, said in an interview.
Remember the first Rule of Holes? When you’re in one, STOP DIGGING!
Update: Down the drain…
The Energy Department announced Wednesday that is has finalized more than $1 billion in loan guarantees for two separate solar projects.
The decision comes several weeks after Solyndra, a California-based solar manufacturer, received a $535 million loan guarantee from the Obama administration in 2009 filed for bankruptcy and laid off 1,100 workers, setting off a firestorm in Washington.
DOE announced a $737 million loan guarantee to help finance construction of the Crescent Dunes Solar Energy Project, a 110-megawatt solar-power-generating facility in Nye County, Nev. The project is sponsored by Tonopah Solar, a subsidiary of California-based SolarReserve.
…The Energy Department also announced that it had finalized a separate $337 million loan guarantee to Sempra Energy for a 150-megawatt photovoltaic solar generation project in Arizona.
The project will result in 300 construction jobs, DOE said.
The Solyndra loan guarantee, unlike the two announced Wednesday, was used for a solar panel manufacturing facility.