Under the Obama Energy Department, a lot of people are winning big by losing the taxpayers’ money. In the government-sponsored green energy industry, working Americans have effectively handed millions in salaries and bonuses to executives of companies on the road to bankruptcy.
At the most famous failed solar company, Solyndra—to which the Obama administration gave a $530 million loan guarantee—several executives were making nearly half a million dollars a year, including large bonuses taken in the months before the company filed for bankruptcy. For them, the failed endeavor was extremely lucrative.
Solyndra was hardly the only taxpayer-backed firm that paid big bonuses while stumbling to bankruptcy, however. As ABC News and the Center for Public Integrity recently uncovered in a report, Beacon Power, which received a $43 million loan guarantee, paid bonuses of about $260,000 to three individuals before going bankrupt last year. Another company, Ener1, the recipient of a grant worth $118 million, paid its CEO a $450,000 bonus. In January, it, too, filed for bankruptcy.
Supposedly, the Department of Energy approved these loans to foster an industry which the market didn’t come close to supporting. Certainly most Americans, if they knew about the program at all, did not imagine leaders at these startups paying themselves millions in taxpayer dollars.
In 2009, after bailing out many of the country’s financial institutions, President Obama made executive compensation a major political issue, proposing rules to limit it for firms that had received the taxpayer money. He observed that “what gets people upset — and rightfully so — are executives being rewarded for failure. Especially when those rewards are subsidized by U.S. taxpayers.” He said these words just weeks before his administration made its half-billion dollar commitment to Solyndra.
Later that same year, President Obama demanded executives at AIG return their bonuses, asking “How do they justify this outrage to the taxpayers who are keeping the company afloat?”
I have a couple questions of my own.
Why isn’t the President just as concerned about the looting of failed energy startups at taxpayer expense?
Why isn’t he demanding that executives at Solyndra and the other bankrupt green energy firms return their bonuses, since we were keeping those firms afloat with gigantic and unjustified loans?
In truth, the real scandal goes far beyond bonuses and salaries. Many of these companies were dependent on an enormous amount of government support all along—far more than just a little boost to get them going.
Two numbers give you a sense of the scale of the bad energy bets the Obama administration is making. Several weeks ago, in my newsletter on the transition to liquefied natural gas as a less expensive source of fuel, I reported that Chesapeake Energy had invested more than $150 million to build a national network of LNG truck stops—an investment by a private company to be supported by genuine demand.
President Obama, on the other hand, is putting taxpayer money into dozens of risky ventures. Last week yet another green energy firm, Solar Trust of America, declared bankruptcy after having received a $2.1 billion loan guarantee from the Department of Energy.
That loan guarantee is more than the value of Regal Entertainment, the nation’s largest chain of movie theaters, and about the value of HSN, the Home Shopping Network. It’s one heck of a loan for a startup. And it put taxpayers on the hook for 14 times the amount Chesapeake invested in its far more viable project to build a nationwide natural gas highway.
Of course, there could be a lot more where all this came from. The Energy Department’s current loan program has approved nearly $35 billion in total—more than $110 from every American citizen. Feel like you’re getting your money’s worth?