Editor's Corner

Solyndra, Obama’s Enron, or Worse? A Forensic Viewpoint

When Enron collapsed, if you recall, the media attempted to lay its collapse, and the loss of hundred of millions in employee 401Ks, at the feet of George W Bush.

You see, Bush and Ken Lay, Enron’s founder, were pals. Cronyism. Case closed.

Yes, it is true, they were pals, but it was also true that Enron had been as active if not more so during the Clinton Administration, doing the lobbying necessary to get special favors from the World’s Greatest Crony. But you could only find these facts on the back page of the New Delhi Times. Not in America. (The facts are always out there, the Right just has to work harder to find out where the Left has buried them.)

Ken Lay, because he was a pal of GWB, had to become the corporate poster boy for thievery. Much like Nixon in Watergate, Lay was the getaway driver in one of the biggest heists in American corporate history, destroying the retirements of all Enron’s employees. The courts have their rules of evidence but the media had theirs. They would have exonerated all the thieves at Enron just to get to Bush.

But the courts hung with the evidence and decided Skilling and Fastow had pulled off this heist and sent them up for it.

They also punished Ken Lay, mind you, but for a much lesser charge, only he died before he could be sentenced.

But everyone in America knew who Ken Lay was, and they believed “he did it.” No one had any idea who Skillings and Fastow were.

I always thought Ken Lay got a bum rap.

The Manufacturer’s Ethos

Why I think this is that I am a manufacturer, and had the run of a billion dollar company with thirteen production facilities. I can build a factory in my sleep, the same way Henry Gondorf could build a con, and have been involved in production processes in at least fifty production facilities around the world, in some of the most archaic conditions you can imagine.

I have a very special place in my heart for builders and producers, especially those who start a thing from scratch. The guy who started Solyndra is a fellow named Dr Christian Gronet. He says he had developed a new and better and more efficient way to produce and install solar panels. (Sadly no one wanted them.)

All production operates on a simple theory that a bunch of supplies come in the front door and a finished product goes out the back door, and what goes on inside is called production process.

So when Rush Limbaugh says that Solyndra, Obama’s poster child for his Green Energy policy had gone belly up “without producing a single thing”  my ears perked up. No way, I thought.

Solyndra was being spun as one of those crony capitalist companies that simply used the goodhearted nature of the federal government to abscond with at least a bunch of the $536m they’d been lent. Rush Limbaugh confirmed that meme.

So I looked deeper. Turns out this company has been around awhile. And they already had a factory making solar panels before Obama. In 2009, according to one of their press releases they had sales of approx $100 million, and $140m in 2010. (I don’t know if that reflects a profit or a loss, but since the dotcoms, that’s seemed to matter little to analysts.)  Just this past June (2011) Solyndra announced the completion of a 3 megawat rooftop system in Belgium. Their home page shows a list of customers as well as a product line of five different products, from roofs to greenhouses.  Their biggest projects seemed to have been in Europe.

In September 2009 (not Bush’s fault), they obtained a $536m loan guarantee from the Department of Energy (Carter’s fault) to build a huge new manufacturing facility, total price tag, $735m (sounds a little steep to me), the rest to be picked up by private investors, among them George Kaiser, a known Obama “bundler” who had raised millions for Obama’s campaign.

You can look here and here to see  details as to how the government money was used for and the jobs created.

On Dec 2009, Solyndra filed registration with the SEC for a public offering (which means things were still looking good, at least on paper), but in March, 2010, just three months later, according to Bloomberg, Price Waterhouse issued a warning based on an audit that they may not be able to continue as a going concern. But then, in May…

either ignorant of the warning, or unconcerned by it, President Obama visited Solyndra and declared it to be the poster child of his green dreams for America.

Things turned downhill for Solyndra quickly, while the new factory was still under construction. The Chinese were undercutting them in price, they said. In early 2011 they had to shut down half of their existing factory, and finally, last month, Aug 2011, they shut down all operations and filed for bankruptcy.

Then of course there was the FBI raid a week ago, seizing/securing all Solyndra files. And hearings began in the House Energy and Commerce Subcommitee. As I write this government officials are being quizzed about their role in the original loan, and next week they are expected to take testimony from Solyndra’s  CEO and CFO, assuming the FBI raid won’t cause them to seek the protection of the 5th Amendment.

My purpose here:

As I said, I am very prejudiced in favor of producers. And despite the fact that the entire green energy field is not my idea of a viable business model for many years to come (the market usually lets us know when it’s ready for a new energy source), there are a lot of fine scientists and engineers out there trying to find solutions to problems…which sadly only the government says we have, and not the marketplace. They are dreamers, much like Maud Frickert’s simpleton brother Maynard, who scotch-taped 132 pigeons to his arms, and tried to fly off of Miller’s Bluff.

But this does not make them crooks.  On its face no one in Solyndra has done anything illegal, or criminal…so far.

This is not to say producers, builders and dreamers won’t break the law or cheat or cut corners to get to a goal. Some will, some won’t. They are not like Ayn Rand’s builders, who were more like Plato’s philosopher-kings in The Republic than capitalists as we know them. But from what I’ve seen with a cursory look over the documentss cited above, unless they cooked the books in applying for the DOE loan, I can find no criminality in the company’s failure. As the Chinese would say, “bad joss.”

They just failed. The market dried up. Someone could do it cheaper. None of these are crimes. Happens everyday in America.

And as for Obamas pal,  the “bundler” Kaiser, unless his stake was mighty high indeed, I can see no profit in his intervention in the loan process…yet.

Now if an audit shows hundreds of millions misdirected, such as Solyndra taking money dedicated for the new plant and used instead to pay old debts on the company’s on-going operations, (sort of what Congress has done with Social Security) or is simply missing, then all bets are off.

But for now, instead of being another Enron, what I think I’m seeing here is the tip of another Travelgate iceberg, where the White House, acting through the Justice Department, will attempt to frame Solyndra and its officers for criminal conduct just to be able to direct attention away from

1) its own missed signals in granting the loan in the first place, and then

2) going out to California in May, 2010 to tout this company as the green wave of the future, leaving, of course Obama’s scarlet tat needled in its forehead when he flew home later in the day

In other words, it seems we may be seeing another frame-up of an innocent company who failed

and whose failure reflected badly on the President.

I don’t think this is Obama’s Enron. It’s worse. It’s a cheap coverup.

Since the American media is slowly coming around to see that Obama is wrong for its long term purposes, let’s see how they play this. But don’t let either of them hang innocent men.

vassarbushmills
Citizen With Bark On
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bobmontgomery
Member

In addition to the criminality and the malfeasance and whatever occurred, consideration needs be given to the point that if this was the poster child, if this was the best technology, if this had that much capital infusion, and it could not take off, then what does it say about the rest of the ‘green energy’ industry? And more pressing, word has it that there is still $19 billion in the fund that WH officials are trying to rush out the door.

texasgalt
Editor

This whole thing is absurd. Nobody with 100m in sales should be borrowing 735m to build a new plant. WTH kind of a plant has a price tag like that?

Best case scenario this is gross incompetence. And I doubt anything goes to heck that fast without the CEO, COO, CFO or somebody suspecting they were doomed. Those books should be gone over to the nth degree to see where the money went.

I’d love to take a crack at their GL.

redneck hippie
Editor

I want to know everything there is to know about the Obama Kaiser connection.

NewLedger & Francis Cianfrocca dive into that. Well worth a listen:

https://newledger.com/2011/09/solyndra-scandal-looks-more-and-more-like-obamas-watergate/

And yes, the books need to be microscopically and proctoscopically examined. And then examined again. How many departments are investigating so far? I’ve lost track.

Anyone doubt the coverup is well under way at the WH, justice, treasury, etc?

LadyImpactOhio
Member

Well, hate me if you want. But I am a *casualty of war* in the Enron debacle.

Yea, I receive half my annual income from a teacher’s union. One who was duped into buying into Enron as they were going down the tubes.

As a consequence, my widow’s pension is in the dumper.

I blame many people on this front. Poor judgement, poor investments. Poor management. These people don’t give a flying you-know-what who they hurt in the process. And it’s always the innocents who have no say in the matter.

Pamela
Member

I keep coming back to this topic. I think there are multiple threads which lead to multiple doors with Ladies, Tigers and a few right hungry Demons wanting a feed.

I’ll lay odds one of the last things B-boy does before leaving his only term in office, is pardon any and all people who profited from their ill-gotten gains.

Jack Savage
Member

Hmmm…I get your point…but…

This reeks to high heaven on both sides of the fence, and the explanations thus far are unsatisfactory. It just seems like a classic case of crony capitalists meeting people desperate to to anything that might hint of success.

Anytime a private company has to go to the government for funding rather than to the market, red flags should be flapping all over the place.

In 2004, plenty of people were warning about the rapid decline of the price of photovoltaic technology. This affair may not be criminal, but it certainly was avoidable.