Obama Pays Off Political Allies, Costs Taxpayers Over Half a Billion Dollars

By Chris Mays, Policy Committee

Executive Summary:

Scandals and charges of crony capitalism are mounting against President Obama’s Administration. The House Energy and Commerce Committee has released documents showing that a $535 million loan to Solyndra was rushed through in order to accommodate the White House. Not only will taxpayers be stuck with this expense, it raises the question how many more loans like this have been rushed through the approval process.

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President Obama has shown once again his willingness to reward political allies at the cost of the American taxpayer.

In 2009, President Obama’s administration approved a taxpayer-funded loan to California Silicon Valley-based solar panel manufacturer Solyndra.  The administration awarded Solyndra a staggering $535 million.  The President touted Solyndra as the future of “green tech,” making personal visit to Solyndra’s Fremont, CA facilities.

Two years later, Solyndra closed its doors in the dead of night and laid off over 1100 workers.

How could something like this happen?  Simple: crony capitalism.  The infusion of taxpayer funds was requested by President Obama’s political allies, including George Kaiser – a major Solyndra shareholder.  Kaiser and other Solyndra investors made numerous trips to the White House throughout 2009, prior to the loan award.  The Solyndra loan was then fast-tracked from within the White House to fit with the President’s schedule for touting “shovel ready jobs.”

More distressing are recent reports that in early January 2009, Bush Administration officials noted several warning signs about Solyndra.  In one email, a DOE staffer goes on to ask “how we can advance a project that hasn’t funded working capital requirements and that generates a working capital shortfall of $50 [million] when working a capital assumptions are entered into the model?”

Solyndra’s collapse has not deterred the Obama Administration, as it continues to offer hundreds of millions of taxpayer dollars to so-called green companies.  A small car company backed by former Vice President Al Gore, for example, has secured its own half-billion dollar loan for an electric car company that will manufacture cars in Finland.  The American taxpayer is now apparently subsidizing businesses and jobs in Finland.

These issues reveal seemingly oblivious proclivity to waste taxpayer dollars.  It is bad enough that President Obama’s administration appears unable to perform simple due diligence before spending taxpayers’ money.  Worse still is that every dollar the Administration spends on these failed companies is a dollar it first takes from productive, taxpaying companies and individuals.  A dollar that could be better put to use employing Americans in the private sector.

Obama’s government has no business investing in private companies.  By doing so, it destroys the free market, steals from the taxpayers, and replaces the private sector’s economic preferences for its own.  It is clear, however, that Obama’s preferences lead only to economic ruin.