...By law Secretary Chu wasn’t allowed to subordinate the taxpayers’ money. The Energy Policy Act of 2005 specifically states that the loan guarantee “shall be subject to the condition that the obligation is not subordinate to other financing.” It was the clear intention of Congress that taxpayers should be reimbursed first.
For a company that had already been declared in default and had a collapsed business model because the Chinese were selling their solar panels for less, one might question the sanity of private investors who gambled on Solyndra in December of 2010. Were they after Solyndra’s intellectual property (IP) rights? As a private investor and the dominant financier, could Argonaut’s support of President Obama have helped them secure Solyndra’s IP assets?
By December of 2010, these private investors were placed in first position to get the choice parts of the business – intellectual property, including proprietary information, processes, and patents – when Solyndra went under. To be fair, I’d guess that these assets likely aren’t worth billions, but one could certainly speculate they’re at least worth $75 million, which legally belonged to the taxpayers.
Without question, $170 million – at the very least – was wasted. If DOE had simply let Solyndra fail in December 2010, taxpayers wouldn’t be on the hook for $95 million of the loan guarantee that had yet to be dispersed in addition to the $75 million that was subordinated....
When it comes to lending, Secretary Chu is incompetent at best. We never should have made the Solyndra loans to begin with, and subordinating was incompetence on stilts if not worse. There may have been some crony capitalism involved too, but it is hard to escape the evidence of incompetence which the administration is still trying to avoid.
Comments
Post a Comment