Catching up on all the crony capitalism in the renewable energy sector:
The Washington Post published a long exposé on the investments strategies of former Vice President Al Gore, who has made lots and lots of money off of his investment companies, some of which specializes in industrial sectors that receive generous money from the government. I assume that his success here is a complete coincidence and has nothing at all to do with his former position as Vice President, which did not provide him with the connections to know who to ask for money:
Just before leaving public office in 2001, Gore reported assets of less than $2 million; today, his wealth is estimated at $100 million.
Gore charted this path by returning to his longtime passion — clean energy. He benefited from a powerful resume and a constellation of friends in the investment world and in Washington. And four years ago, his portfolio aligned smoothly with the agenda of an incoming administration and its plan to spend billions in stimulus funds on alternative energy.
The recovering politician was pushing the right cause at the perfect time.
Fourteen green-tech firms in which Gore invested received or directly benefited from more than $2.5 billion in loans, grants and tax breaks, part of President Obama’s historic push to seed a U.S. renewable-energy industry with public money.
From 2 million to 100 million in 11 years? This is what I’d like people to discuss when they talk inequality: the government making the rich richer by giving them huge piles of money for “renewable” energy.
Gore’s investments coincided with the government’s largest investment in clean tech. A full 10 percent, estimated at $80 billion to $90 billion, of the 2009 stimulus package was devoted to clean energy.
Like thousands of other companies, those Gore invested in entered the competition for a piece of the pie. (An administration official said more than 80 percent of applicants the first year were turned away.) Several companies in Gore’s portfolio emerged as winners. Of the 11 companies he mentioned in his 2008 slide show, nine received or directly benefited from stimulus or clean energy funding.
Rep. Fred Upton (R-Mich.), who chairs the Energy and Commerce Committee and is a leading critic of clean tech funding, said Gore’s portfolio “is reflective of a disturbing pattern that those closest to the president have been rewarded with billions of taxpayer dollars . . . and benefited from the administration’s green bonanza in the rush to spend stimulus cash.”
Over 80 percent of applicants are turned away, yet Gore somehow managed to invest in nine of the winners.
Moving on, The Washington Examiner writes about another profiteer of the green stimulus slush funds — and an Obama donor — who is under investigation from the IRS:
Vice President Biden snickered during last week’s debate at the suggestion there was waste, inefficiency or cronyism in the 2009 stimulus bill.
If he can stop cackling for long enough, Biden, the self-proclaimed “stimulus sheriff” should sit down with the IRS officials and the federal inspector general who are investigating a solar company owned by leading Obama donor and subsidy recipient Elon Musk.
Musk, as he cashes in on his solar investment by taking his company SolarCity public this month, had to make an awkward admission in his financial filings with the Securities and Exchange Commission.
The Internal Revenue Service is auditing SolarCity, the SEC filings reveal, and at the same time the Treasury Department’s inspector general is investigating the company. The question at hand: Did President Obama’s Treasury Department inappropriately give stimulus money to Musk’s company.
Obama’s stimulus transformed a long-standing tax credit for renewable energy investment into a direct grant from Treasury, worth 30 percent of a company’s investment in a renewable project. Musk’s company has applied for approximately $325 million in these stimulus grants, according to the SEC filing.
Treasury found that SolarCity repeatedly overstated the value of its investments, the SEC filings indicate. In those cases, Treasury awarded smaller grants than SolarCity had tried to claim. Now the department’s IG and the IRS are doing a broader audit of the projects for which SolarCity and other large solar companies got stimulus cash. Investigators want to know if the companies regularly overstated the value of their investments and thus got overly generous taxpayer grants.
Note that this is an audit from the IRS, which does not yet indicate that the company in question has done anything wrong, but as the article points out, the audit was launched due to admissions made by the company in official filings.
Finally, Solyndra is again in the news, because it is suing a Chinese solar company, perhaps in order to save face. Bloomberg has the details:
Solyndra LLC, the bankrupt solar- panel maker that received a $535 million U.S. government loan guarantee, accused Suntech Power Holdings Co. (STP) and other Chinese panel makers of driving it out of business by running an illegal cartel.
Solyndra, which filed for bankruptcy protection in August 2011, is seeking compensation “for the loss of the $1.5 billion value of its business and more which defendants destroyed,” according to a complaint filed yesterday in federal court in San Francisco.
The defendants schemed with each other, raw material suppliers and certain lenders to flood the U.S. market with solar panels at below-cost prices, the Fremont, California-based company said in the complaint. Panel prices for Wuxi, China- based Suntech, the biggest solar-panel maker, and two other companies moved in tandem, falling 75 percent in four years in the U.S. market, Solyndra said.
“It is obvious that this lawsuit is a misguided effort by Solyndra to find scapegoats for its failure to commercialize its technology at a competitive price point,” E. L. “Mick” McDaniel, managing director of Suntech America, said in an e- mail. The allegations are “baseless” and Suntech will fight them, he said.
The problem with their lawsuit is that it is complete nonsense. Solyndra chose to manufacture solar panels using a different method than other conventional solar manufacturers, and this backfired on them when the price of silicon, a significant input in each solar panel, dropped precipitously.
Of course, if we could stop the government from handing out piles of money to companies and instead let the market work, we wouldn’t have all these problems.