Back in 2011 I wrote several times about the failure of Solyndra, the solar panel company that was well connected to the Obama administration. Then, as with so many stories, the topic passed out of the headlines and I lost touch with it. Today, the Washington Post and other papers bring news of a newly released federal investigative report:
Top leaders of a troubled solar panel company that cost taxpayers a half-billion dollars repeatedly misled federal officials and omitted information about the firm’s financial prospects as they sought to win a major government loan, according to a newly-released federal investigative report.
Solyndra’s leaders engaged in a “pattern of false and misleading assertions” that drew a rosy picture of their company enjoying robust sales while they lobbied to win the first clean energy loan the new administration awarded in 2009, a lengthy investigation uncovered. The Silicon Valley start-up’s dramatic rise and then collapse into bankruptcy two years later became a rallying cry for critics of President Obama’s signature program to create jobs by injecting billions of dollars into clean energy firms.
And why would it become such a rallying cry for critics? Well, consider the hyperlink the Post inserted at that point in the article: "[Past coverage: Solyndra: Politics infused Obama energy programs]" And what did that article report?
Meant to create jobs and cut reliance on foreign oil, Obama’s green-technology program was infused with politics at every level, The Washington Post found in an analysis of thousands of memos, company records and internal e-mails. Political considerations were raised repeatedly by company investors, Energy Department bureaucrats and White House officials.
The records, some previously unreported, show that when warned that financial disaster might lie ahead, the administration remained steadfast in its support for Solyndra.
The federal investigators "didn’t try to determine if political favoritism fueled the decision to award Solyndra a loan" -- that was accommodating of them -- "but heard some concerns about political pressure, the report said."
“Employees acknowledged that they felt tremendous pressure, in general, to process loan guarantee applications,” the report said. “They suggested the pressure was based on the significant interest in the program from Department leadership, the Administration, Congress, and the applicants.”
As I wrote at the time, this story has all the hallmarks of government decision making:
- officials spending other people’s money with little incentive to spend it prudently,
- political pressure to make decisions without proper vetting,
- the substitution of political judgment for the judgments of millions of investors,
- the enthusiastic embrace of fads like “green energy,”
- political officials ignoring warnings from civil servants,
- crony capitalism,
- close connections between politicians and the companies that benefit from government allocation of capital,
- the appearance—at least—of favors for political supporters,
- and the kind of promiscuous spending that has delivered us $18 trillion in national debt.
It may end up being a case study in political economy. And if you want government to guide the economy, to pick winners, to override market investments, then this is what you want.