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Thursday, September 22, 2011

Solyndra: A Case Study in Economics and Corruption

Imagine having a great idea, starting a company, and then being given $528 Million to launch it. Then imagine declaring bankruptcy in two years. If that money was given to you by private investors who demanded accountability, you'd be arrested. But, what if that $528 Million was given to you by an entity that sets the rules, an entity that isn't accountable to anyone and doesn't really want to hold you accountable because it's not really their money? The answer is that recklessness thrives when accountability is absent. That's exactly what happened at Solyndra. The unaccountable entity is the Barack Obama administration and the money was yours.

Via Washington Post:
Former employees of Solyndra, the shuttered solar company that exhausted half a billion dollars of taxpayer money, said they saw questionable spending by management almost as soon as a federal agency approved a $535 million government-backed loan for the start-up.

A new factory built with public money boasted a gleaming conference room with glass walls that, with the flip of a switch, turned a smoky gray to conceal the room’s occupants. Hastily purchased state-of-the-art equipment ended up being sold for pennies on the dollar, still in its plastic wrap, employees said.

As the $344 million factory went up just down the road from the company’s leased plant in Fremont, Calif., workers watched as pallets of unsold solar panels stacked up in storage. Many wondered: Was the factory needed?

“After we got the loan guarantee, they were just spending money left and right,” said former Solyndra engineer Lindsey Eastburn. “Because we were doing well, nobody cared. Because of that infusion of money, it made people sloppy.”

Solyndra’s ability to secure federal backing also made the company eager for more assistance, interviews and records show. Company executives ramped up their Washington lobbying efforts, hiring a former Senate aide to work with the White House and the Energy Department. Within a week of getting a loan guarantee commitment from the Energy Department, Solyndra applied for another, worth $400 million. It never won final approval.

On Friday, company executives are scheduled to appear before a House committee investigating how Solyndra obtained its loan and whether the Obama White House rushed its approval for political reasons. Chief Executive Officer Brian Harrison and Chief Financial Officer Bill Stover were supposed to face a grilling about the company’s spending and collapse, but they announced Tuesday that they would assert their Fifth Amendment rights because of a criminal probe of the company by the Justice Department.
Wait, who heads the Justice Department again? Oh, yeah, Eric Holder. Makes you wonder how much of what the FBI removed from Solyndra offices was more about covering this thing up than in actually investigating what happened.

An interesting side note here is how scathing this WaPo article is. The Obama administration is not supposed to be treated like this by the mainstream media.

h/t Weasel Zippers

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