We have what smells of corruption in the executive branch and CNN.com relegates pieces on it in their second/third tier pages. MSNBC.com slots the stories under "Oil & Energy."
Sometimes it seems like the MSM is ESPN to Obama's Texas.
We have what smells of corruption in the executive branch and CNN.com relegates pieces on it in their second/third tier pages. MSNBC.com slots the stories under "Oil & Energy."
Sometimes it seems like the MSM is ESPN to Obama's Texas.
The SF.com Retard Remover...it makes the postards you have on ignore disappear completely:
http://173.203.71.50/sfcom_retard_remover.user.js
might find something on it at foxnews.com
Atheist.
A good article on why Solyndra could be considered fraud. A long read, but stuff from Andrew McCarthy is always good since he was a former federal prosecutor.Originally Posted by Veritas
The Solyndra debacle is not just Obama-style crony socialism as usual. It is a criminal fraud. That is the theory that would be guiding any competent prosecutor’s office in the investigation of a scheme that cost victims — in this case, American taxpayers — a fortune.
Fraud against the United States is one of the most serious felony offenses in the federal penal law. It is even more serious than another apparent Solyndra violation that has captured congressional attention: the Obama administration’s flouting of a statute designed to protect taxpayers.
Homing in on one of the several shocking aspects of the Solyndra scandal, lawmakers noted that, a few months before the “clean energy” enterprise went belly-up last week, the Obama Energy Department signed off on a sweetheart deal. In the event of bankruptcy — the destination to which it was screamingly obvious Solyndra was headed despite the president’s injection of $535 million in federal loans — the cozily connected private investors would be given priority over American taxpayers. In other words, when the busted company’s assets were sold off, Obama pals would recoup some of their losses, while you would be left holding the half-billion-dollar bag.
As Andrew Stiles reported here at NRO, Republicans on the Oversight and Investigations subcommittee say this arrangement ran afoul of the Energy Policy Act of 2005. This law — compassionate conservatism in green bunting — is a monstrosity, under which Leviathan, which can’t run a post office, uses your money to pick winners and losers in the economy’s energy sector. The idea is cockamamie, but Congress did at least write in a mandate that taxpayers who fund these “investments” must be prioritized over other stakeholders. The idea is to prevent cronies from pushing ahead of the public if things go awry — as they are wont to do when pols fancy themselves venture capitalists.
On the Energy Policy Act, the administration’s malfeasance is significant, but secondary. That’s because the act is not a penal statute. It tells the cabinet officials how to structure these “innovative technology” loans, but it provides no remedy if Congress’s directives are ignored.
The criminal law, by contrast, is not content to assume the good faith of government officials. It targets anyone — from low-level swindlers to top elective officeholders — who attempts to influence the issuance of government loans by making false statements; who engages in schemes to defraud the United States; or who conspires “to defraud the United States, or any agency thereof, in any manner or for any purpose.” The penalties are steep: Fraud in connection with government loans, for example, can be punished by up to 30 years in the slammer.
Although Solyndra was a private company, moreover, it was using its government loans as a springboard to go public. When the sale of securities is involved, federal law criminalizes fraudulent schemes, false statements of material fact, and statements that omit any “material fact necessary in order to make the statements made . . . not misleading.” And we’re not just talking about statements made in required SEC filings. Any statement made to deceive the market can be actionable. In 2003, for example, the Justice Department famously charged Martha Stewart with securities fraud. Among other allegations, prosecutors cited public statements she had made in press releases and at a conference for securities analysts — statements in which she withheld damaging information in an effort to inflate the value of her corporation and its stock. That’s exactly what President Obama did on May 26, 2010, with his Solyndra friends about to launch their initial public offering of stock. The solar-panel company’s California factory was selected as the fitting site for a presidential speech on the virtues of confiscating taxpayer billions to prop up pie-in-the-sky clean-energy businesses.
By then, the con game was already well under way. Solyndra had first tried to get Energy Act funding during the Bush administration, but had been rebuffed shortly before President Bush left office. Small wonder: Solyndra, as former hedge-fund manager Bruce Krasting concluded, was “an absolute complete disaster.” Its operating expenses, including supply costs, nearly doubled its revenue in 2009 — and that’s without factoring in capital expenditures and other costs in what, Krasting observes, is a “low margin” industry. The chance that Solyndra would ever become profitable was essentially nonexistent, particularly given that solar-panel competitors backed by China produce energy at drastically lower prices.
Yet, as Stiles reports, within six days of Obama’s taking office, an Energy Department official acknowledged that the Solyndra “approval process” was suddenly being considered anew. Eventually, the administration made Solyndra the very first recipient of a public loan guarantee when the Energy Act program was beefed up in 2009 — just part of nearly a trillion dollars burned through under the Obama stimulus.
For a while after Solyndra tanked, the administration stonewalled the House subcommittee’s investigation, but we now know that minions in the Energy Department and the Office of Management and Budget had enormous qualms about the Solyndra loan. They realized that the company was hemorrhaging money and, even with the loan, would lack the necessary working capital to turn that equation around. Yet they caved under White House pressure to sign off in time for Vice President Joe Biden to make a ballyhooed announcement of the loan in September 2009. An OMB e-mail laments that the timing of the loan approval was driven by the politics of the announcement “rather than the other way around.”
Why so much pressure to give half a billion dollars to a doomed venture? The administration insists it had nothing whatsoever to do with the fact that Solyndra’s big backers include the George Kaiser Family Foundation. No, of course not. George Kaiser, an Oklahoma oil magnate, just happens to be a major Obama fundraiser who bundled oodles in contributions for the president’s 2008 campaign. Solyndra officers and investors are said to have visited the White House no fewer than 20 times while the loan guarantee was being considered and, later, revised. Kaiser, too, made several visits — but not to worry: Both he and administration officials deny any impropriety. You’re to believe that the White House was just turning up the heat on OMB and DOE because Solyndra seemed like such a swell investment.
Except it didn’t seem so swell to people who knew how to add and subtract, and those people weren’t all at OMB and DOE. Flush with confidence that their mega-loan from Uncle Sam would make the company attractive to private investors, Solyndra’s backers prepared to take the company public. Unfortunately, SEC rules for an initial public offering of stock require the disclosure of more than Obama speeches glowing with solar power. Companies that want access to the market have to reveal their financial condition.
In Solyndra’s case, outside auditors from PricewaterhouseCoopers (PWC) found that condition to be dire. “The company has suffered recurring losses from operations, negative cash flows since inception, and has a net stockholders’ deficit,” the PWC accountants concluded. Even with the gigantic Obama loan, Solyndra was such a basket case that PWC found “substantial doubt about its ability to continue as a going concern.”
The “going concern” language is not boilerplate. As Townhall finance maven John Ransom explains, it is a term of art to which auditors resort when there is an extraordinary need to protect themselves and the company from legal liability. Angry investors who’ve lost their shirts tend to scapegoat the loser company’s accountants. In truth, even if the accountants affixed a neon “going concern” sign to the company’s financial statements, investors would have no one but themselves to blame. But it is unusual: The language is absent from the statements of many companies that actually end up going bankrupt. Auditors reserve it for the hopeless causes — like Solyndra.
With no alternative if they wanted to make a play for market financing, Solyndra’s backers disclosed the auditors’ bleak diagnosis in March 2010. The government had thus been aware of it for two months when President Obama made his May 26 Solyndra speech — the speech Solyndra backers were clearly hoping would mitigate the damage.
As president, Obama had a fiduciary responsibility to be forthright about Solyndra’s grim prospects — in speaking to the American taxpayers whose money he had redistributed, and to the American investors who were about to be solicited for even more funding. Instead, he pulled a Martha Stewart.
The president looked us in the eye and averred that, when it came to channeling public funds into private hands, “We can see the positive impacts right here at Solyndra.” He bragged that the $535 billion loan had enabled the company to build the state-of-the-art factory in which he was then speaking. He said nothing about how Solyndra was continuing to lose money — public money — at a catastrophic pace. Instead, he painted the brightest of pictures: 3,000 construction workers to build the thriving plant; manufacturers in 22 states building an endless stream of supplies; technicians in a dozen states constructing the advanced equipment that would make the factory hum; and Solyndra fully “expect[ing] to hire a thousand workers to manufacture solar panels and sell them across America and around the world.”
Not content with that rosy portrait, the president further predicted a “ripple effect”: Solyndra would “generate business for companies throughout our country who will create jobs supplying this factory with parts and materials.” Sure it would. The auditors had scrutinized Solyndra and found it to have, from its inception, a fatally flawed business model that was hurtling toward collapse. Obama touted it as a redistribution success story that would be rippling jobs, growth, and spectacular success for the foreseeable future.
It was a breathtaking misrepresentation. Happily, it proved insufficient to dupe investors who, unlike taxpayers, get to choose where their money goes. They stacked what the administration was saying against what the PWC auditors were saying and wisely went with PWC. Solyndra had to pull its initial public offering due to lack of interest.
But fraud doesn’t have to be fully successful to be a fraud, and this one still had another chapter to go. As the IPO failed and the company inevitably sank in a sea of red ink, Solyndra’s panicked backers pleaded with the administration to restructure the loan terms — to insulate them from their poor business judgment, allowing them to recoup some of their investment while the public took the fall.
It should go without saying that the duty of soi-disant public servants is to serve the public. In this instance, the proper course was clear. As structured, the loan gave the public first dibs on Solyndra’s assets if it collapsed, and, as we’ve seen, the law requires it. There was no good reason to contemplate a change.
In addition, as Andrew Stiles relates, OMB had figured out that there was no economic sense in restructuring: Solyndra was heading for bankruptcy anyway, and an immediate liquidation would net the government a better deal — about $170 million better. The case for leaving things where they stood was so palpable that OMB openly feared “questions will be asked” if DOE proceeded with an unjustifiable restructuring. So, with numbing predictability, the Obama administration proceeded with an unjustifiable restructuring. In exchange for lending some of their own money and thus buying more time, Solyndra officials were given priority over taxpayers with respect to the first $75 million in the event of a bankruptcy — the event all the insiders and government officials could see coming from the start, and that hit the rest of us like a $535 billion thunderbolt last week.
The administration’s rationalization is priceless. According to DOE officials, the restructuring was necessary “to create a situation whereby investors felt there was a value in their investment.” Of course, the value in an investment is the value created by the business in which the investment is made. Here, Solyndra had no value. Investors could be enticed only by an invalid arrangement to recoup some of their losses — by a scheme to make the public an even bigger sap.
The word for such schemes is fraud.
I'm talking about actual media, not some nutter's blog article that Cruiser posted as a troll.
And Sapp, I've read that article and others like it. The corruption at work in this deal is egregious but it's not getting covered. I can't understand why.
The SF.com Retard Remover...it makes the postards you have on ignore disappear completely:
http://173.203.71.50/sfcom_retard_remover.user.js
Unless or until you find a company with patent-protected proprietary technology, tech investments are wastes of money. Why? Because you can do the job more cost effectively and with lower capital costs overseas. I spent 20 years in chip/hard drive/screen and solar and it holds true over and over again.
If you must play in this arena, look at US equipment makers. Go after the people who make the machines that make the widgets. Those require know-how. The chip fabs or screen plants really don't. They just require $3 bill or so to build. After that it's a matter of seeing if you can sell your widgets fast enough to make your finance repayments.
Solyndra, like ethanol, made no sense except for government subsidies.
"I don't know karate, but I know ka-razor!" - James Brown
We have heard a lot about it locally, because Tulsa's resident billionaire Kaiser was a big investor in this.
Don't worry, the gov't does not let a company publicly embarrass the sitting president and get away with it.
Sure you do.
It is and always has been the corrupt, biased Media. If the Media was objective then Obama never would have been elected.
Veritas:
I think there are a number of things at play.
1. Honestly this is not a huge deal. Hell we waste billions on failed weapons systems all the time. A half a billion is a lot of money but by comparison it is nothing compared to the billions stolen by say....foreign dictators.
2. I have really tried to dig into this thing and look at from the standpoint of being a commercial lender. The business model was not that bad (at the time) and the fact that they had private investment, had increased sales by 40% when things started going south and secured additional financing to stay afloat says to me that the private sector thought it would work. What no one really saw happing is the collapse in the poly silicon pricing and the $30 billion dollar investment by the Chinese government in competing technologies. The playing field between the US and China is not level and we are getting our *** kicked because we refuse to press the Chinese to re-value the Yuan and put tariffs on products that they are dumping on the US market. The Chinese attracted over $54 billion dollars in new green energy investment in 2010. The US fell to third with $39 billion and is still falling. The Chinese are going to own this market because they are going to destroy the competition.
Finally, I would like to add that this all looks bad given 20/20 hindsight. For four years this looked to be a very promising technology.
3. This project was not rushed as some would have us to believe. Bush tried to get it done and the loan was remanded back to DOE "without prejudice" to tighten up some technical issues. The loan was not denied.
I believe, the Bush administration probably supported it because a number of Bush cronies had money in the deal....for instance the Walton's venture capital firm Madrone Capital Partners... Ditto for Obama (Kaiser, Goldman Sachs). Unfortunately, this stuff goes on all the time and by Washington standards is small potatoes.
4.The company had an investment grade of B+ which would have met that it was a speculative investment with potential high returns or losses. Generally this is where you will see VC and government funding.
5. The government does have a place in the business market and there are lots of successful loan programs. The SBA has started thousands of great companies. There are research triangles that utilized private, federal and educational resources to fund ground breaking technologies. If we were to stop government investment in private enterprise our nation would not be able to compete on the world markets. The DOE has a loan failure rate of 2%....not a bad track record. By comparison the SBA failure rate is about 11.9% right now and you do not hear anyone wanting to defund that program. The historical failure rate for SBA loans is much less in good economic times.
The bottom line is this nothing but a chew toy for the Republican Party. It is not a story that is going to have a lot of legs. A business borrowed money and it failed.....nothing new. Now all bets are off if the founders walked away with millions in taxpayer dollars in a secret bank account.
DC has no business trying to pick the companies that are likely to grow...they can pick sectors for tax incentives but not the companies...
Post on, Trollmaster!
How can there be too many children?
That is like saying there are too many flowers.
Mother Teresa
-------------------
(Or, too many tax-payers!)
Diver,
You as a Delaware liberal are NOT a good judge of what Booosh favored??? "Guess" as you might.
Liberal Demoncratic talking points....$500 Million = "no big deal".....everybody does it.....etc.
"In hindsight...." - You have never been generous with your assessment of a Repubican political mistake in the past, on either forum.
The government has no place in the business community picking winners and loosers based on who donated to what political partry in the past election. This is Chicago style politics! I lived in PA and WV, so I can understand how you feel it is "business" as usual.
And, the facts about who knew what, when, about the nature of the Solyndra loan blows your theory and justification right out of the water, where no snorkel is required to breathe; and no mask required to see the light!
Political cronyism at its worst!
Not, hope & change!
Last edited by soonercruiser; 9/25/2011 at 09:39 PM.
How can there be too many children?
That is like saying there are too many flowers.
Mother Teresa
-------------------
(Or, too many tax-payers!)
And this is your opinion as a life long Federal employee?
This and all the "Green" jobs are a joke-----The avg cost per green job created by these loans is over $10,000,000 per job----It is stupid as is Barack's entire green agenda
And now the executives of Solyndra are pleading the fifth...
http://af.reuters.com/article/commod...78J1KE20110920
DD,
are you sure you're not Frank Drebin?? Cause you have the "Nothing to see here." down pat...
Tell me what was illegal? There was nothing illegal about the loan. Now there could be issues when they sought money from private investors at a later date but I doubt the will get jail time.And now the executives of Solyndra are pleading the fifth...
http://af.reuters.com/article/commod...78J1KE20110920
DD,
are you sure you're not Frank Drebin?? Cause you have the "Nothing to see here." down pat...
I would take the 5th at that dog and pony show as well.
Last edited by diverdog; 9/20/2011 at 09:42 PM.
Skip to the 3:00 minute mark..
Brahahaha. Is that the best you got? Two right wing hacks in an Obama hatefest? Seriously thanks for the best laugh I have had all day.
There is a laugher here.. Unfortunately it is your "independent" credibility...
When a person quotes a specific law, it is pretty easy to look up. It doesn't matter what "right wing hacks" say, it matters what the law says. And what does the law say concerning loan guarntees? It is pretty straight forward..
Yet the loan was restructed by the Obama administration less than 6 months after it was approved to do exactly the opposite and put Obama's cronies first in line.shall be subject to the condition that the obligation is not subordinate to other financing.
You have been consistently wrong or misinformed on this subject.
You complained about the Chinese giving $30 billion in green subsidies and we can't compete.... Well Obama gave $40 billion in subsidies as part of the stimulus.. This loan was part of that. Why didn't you acknowledge that?
You stated that Obama didn't pressure the OMB on this loan... The facts show that they did and that the OMB was not happy about it.
You state that Solyndra was in pretty good shape and was getting private investors... Yet their attempt at an IPO was abandoned because they couldn't find enough sucker.. er.. investors.
You say they looked good until the polysilicon fell out and that nobody saw it coming.. Fair enough. Except the bottom of the polysilicon market started falling out in February of 2008 until it hit a low in May of 2009. A year and a half before Solyndra had taken a single dime, they were done. By 4 months before the loan was it was completely clear they could not compete. If the Bush Administration(or any administration) would have given that loan guarantee in a structure that followed the law in January of 2008 there wouldn't be any scandal right now. But at the point this loan was given it was already clear that Solyndra was cooked. Their business plan was no longer viable. That is why their IPO failed when they couldn't find any suckers.... Except the one they had already found, the American taxpayer.
I'm sure you noticed that all of my links with supporting information is 75% from the NYTimes and 25% from the Washington Post. I didn't even post anything from ABCNews or CBS when both have had devastating articles on this issue.
You are far from "independent" in this matter and are in full Obama defense and considering where I pulled this information from, that puts you in a very small, far-left minority.
Only about 10 days earlier they said they would testify.
http://republicans.energycommerce.ho...yndraEmail.pdf
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