If you haven’t been following the Solydra debacle, you can start here, or here at The Washington Post. The latest news is even more damning, as newly obtained e-mails seem to point to the Obama Administration encouraging the Office of Budget and Management (OMB) to speedily approve the loan:
The August 2009 e-mails, released exclusively to The Washington Post, show White House officials repeatedly asking OMB reviewers when they would be able to decide on the federal loan and noting a looming press event at which they planned to announce the deal. In response, OMB officials expressed concern that they were being rushed to approve the company’s project without adequate time to assess the risk to taxpayers, according to information provided by Republican congressional investigators.
Solyndra collapsed two weeks ago, leaving taxpayers liable for the $535 million loan.
One e-mail from an OMB official referred to “the time pressure we are under to sign-off on Solyndra.” Another complained, “There isn’t time to negotiate.”
Additional records note that the Department of Energy suspected Solyndra would run out of money in September 2011 (the models got something right for a change).
This is why the government should not be involved in picking winners and losers in the marketplace. There is significant evidence that suggests that due diligence was not done and that this specific loan was pushed for political motivations. This is almost inescapable in government.
If the private sector is not interested in financing projects like this, there is almost always a reason — that they are unlikely to be profitable.
Finally, though the source could lack credibility, this post is interesting as it claims an employee at the plant called in explaining that everyone knew the project wouldn’t be profitable:
This is one of the more interesting things the caller said:
While we were out there, while we were building it – cause it is a half a billion dollar plant – everyone already knew that China had developed a more inexpensive way to manufacture these solar panels. Everyone knew that the plant wouldn’t work. But they still did it. They still built it.
Keep a skeptical eye as you read, as that could possibly be fake, but it does appear to be accurate in that China was producing similar technologies for much cheaper.