Despite the hundreds of millions of dollars lost in the Solyndra scandal, Energy Secretary Steven Chu gave himself “an A-” when he “testified before Congress after a series of bankruptcies from companies floated by green-tech stimulus loans” and was asked what “grade he would give himself as a steward of public funds.” But it turns out that Chu’s Energy Department was much more reckless in its lending decisions than the private lenders that the Obama Administration has blamed for the financial crisis (even as the Administration has expanded the role of the government-sponsored mortgage giants and federal affordable-housing mandates that helped spawn the housing crisis), manifested in “an 85 percent failure rate on its process check.” As Ed Morrissey notes, a recent report from the Government Accountability Office (GAO)
looked at the handling of $30 billion outstanding in loan guarantees and future commitments and discovered that the DOE rarely follows its own written procedures for vetting and auditing applications. In fact, in many cases, the Loan Guarantee Program (LGP) couldn’t even find the data managers needed to administer the loans properly . .
In the case of Solyndra, the Obama administration ended up overriding the expressed concerns of DOE auditors to grant the solar-tech firm $535 million in taxpayer guarantees, all of which disappeared in the company’s collapse. In almost every case study investigated by the GAO, important steps got skipped in the reviews that determined whether loan applications would be granted. In other cases, the documentation was so poor that the GAO couldn’t figure out what the LGP did . . . the process had at least an 85 percent failure rate on its process check. . .
With $30 billion in taxpayer money at risk, the DOE under Steven Chu didn’t bother to conduct the reviews it claimed it would on applications for loan guarantees, didn’t keep records of what reviews they did accomplish, and signed off on loans with incomplete documentation and inadequate oversight of the risk. The result — perhaps $6.5 billion immediately at risk, according to CBS, and possibly most of the $30 billion. . . Political connections existed with Solyndra specifically, but the DOE may have felt political pressure to sign off on loans quickly in order to get Obama’s stimulus started. . . the DOE under Chu has been anything but a careful steward of taxpayer money.
As Morrissey notes, Obama has also fostered financial irresponsibility by expanding federal bailouts “to include the real-estate speculators that helped inflate the housing bubble.” (The speculator bailouts are being done partly with taxpayer money, and partly at the expense of innocent mortgage investors who have never been accused of any wrongdoing). The Administration has also forced some banks to make risky loans to borrowers of certain races, potentially contributing to future bank failures and bailouts.
As The Washington Post noted earlier, energy programs have been “infused with politics at every level” during the Obama administration. It hastily approved subsidies for Solyndra, whose executives are now pleading the 5th Amendment, despite obvious danger signs and warnings about the company’s likely collapse. (Later, federal officials successfully pressured Solyndra to delay its announcement about upcoming layoffs until just after the 2010 election, to avoid embarrassing the Obama administration.) CBS News reported that there were 11 more Solyndras in the Obama Administration’s green-energy programs.
The Obama Administration has used green-jobs money from the stimulus package to outsource American jobs to countries like China: “Despite all the talk of green jobs, the overwhelming majority of stimulus money spent on wind power has gone to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University’s School of Communication in Washington, D.C.” As the Investigative Reporting Workshop noted, “79 percent” of all green-jobs funding “went to companies based overseas . . . In fact, the largest grant made under the program so far, a $178 million payment on Dec. 29, went to Babcock & Brown, a bankrupt Australian company.” This just one of many ways in which the Obama administration has used taxpayer money to outsource American jobs to foreign countries.