President Obama denounced “corporate welfare” for oil companies one year to the day after Solyndra declared bankruptcy despite receiving $535 million in taxpayer money from Obama’s Energy Department.
Obama told the Democratic National Convention that he does not want oil companies to “collect another $4 billion in corporate welfare from our taxpayers.” Those taxpayers will not recover the money given to Solyndra by the Energy Department’s loan guarantee program because Obama’s team decided to restructure the loan so that the private investors would be repaid before the taxpayers.
“White House Chief of Staff Jack Lew, then-Director of OMB, had a chance to stop DOE’s misguided restructuring, and he failed to heed his own analysts’ warnings,” said House Energy and Commerce Committee investigators Fred Upton, R-Mich., and Cliff Stearns, R-Fla., in a statement today. “Our investigation showed White House officials ignored numerous red flags in the pursuit of fawning headlines, and taxpayers are sadly paying the price.”
Solyndra was the flagship of the DOE loan program, before it went under. “Solyndra expects to hire a thousand workers to manufacture solar panels and sell them across America and around the world,” Obama said during his visit. “And this in turn will generate business for companies throughout our country who will create jobs supplying this factory with parts and materials. So there’s a ripple effect. It’s not just localized to this area.”
Today, glass tubes used at the company comprise part of a modern art exhibit in California.
The solar company’s failure received attention not just because of the corporate welfare, but because of the appearance of campaign cronyism that surrounded its rise and fall.
“[T]he president took a half a billion dollars of taxpayer money and devoted it to an enterprise that was owned in large measure by his campaign contributors,” Republican presidential candidate Mitt Romney said when he visited the factory this year. “This is a serious conflict of interest. This ought to be a big story, and I think there are a number of people among the president’s team who don’t want that story to get out. ”
This week, court documents revealed that George Kaiser — the Obama bundler who invested so heavily in Solyndra — stands to receive more corporate welfare than the initial loan provided.
“Investment funds that were early backers of Solyndra LLC stand to reap up to $341 million in tax breaks from its bankruptcy,” Reuters reported Tuesday. “The U.S. government, which lent Solyndra $528 million and may never recover the money, had demanded that the company reveal the value of future tax breaks available to Madrone Partners and Argonaut Ventures, a fund which is controlled by a foundation linked to Democratic fundraiser George Kaiser.”