Growing Solyndra loan scandal

Growing Solyndra loan scandal

October 19th, 2011 in Opinion Free Press

The scandal surrounding the use of federal tax dollars to make a half-billion-dollar loan to a now-bankrupt solar panel maker is getting worse.

It is bad enough that the California-based company, Solyndra Inc., got the $528 million loan in the first place. Washington shouldn't be propping up different sectors of the energy industry -- whether they be traditional energy such as oil and nuclear or alternatives such as wind and solar.

But the preferential treatment that solar panel manufacturer Solyndra got from the federal government makes this particular loan even more alarming.

Officials at the U.S. Treasury Department recently testified before Congress that the huge loan to Solyndra was restructured in such a way as to protect private investors -- and force taxpayers to foot the bill if the loan went into default. So when Solyndra declared bankruptcy, U.S. taxpayers were on the hook for the company's half-billion-dollar loan, while private investors were assured of being repaid.

The Treasury officials -- including one who had been with the department nearly three decades -- testified that they had never before seen the government restructure a loan so as to repay private investors before repaying taxpayers in the event of default.

What makes this look still more troubling is that one of the main investors in Solyndra was a group headed by billionaire George Kaiser, who is a big fundraiser for Barack Obama. Prior to Solyndra's collapse, Obama heavily touted the company as a model for solar energy production.

But if bankrupt Solyndra is a "model" for anything, it is that the federal government shouldn't be squandering taxpayer dollars on risky energy programs. Such programs are not helping our economy, and they are saddling our people with higher debt.