Posted by Steve Markowitz on October 5, 2011
In mid-September, the large Swiss bank UBS, announced that one of its traders went rogue and lost $2.3 billion of the bank’ s money from unauthorized trades. Within days of the announcement, UBS’s CEO, Oswald Grübel resigned. Today, UBS accepted the resignations of François Gouws and Yassine Bouhara, co-heads of their Global Equities group. In addition, UBS announced plans to take “appropriate disciplinary action” against other employees for the scandal.
The resignations and other UBS actions are appropriate for scandal of this magnitude. Shareholders, honest bank employees and bank customers should expect no less. It is telling to compare UBS’s responses to their scandal to that of the US government’s lack of response to the Solyndra scandal.
Solyndra lost $535 million in government guaranteed loans in less than two years. The loans were approved by the Obama Administration even though economists and accountants indicated in advance that Solyndra was on shaky financial grounds. The Obama Administration, however, is unapologetic. In fact, they have indicated that government will continue making loans to green energy companies.
The fact no one in the government involved with the Solyndra debacle lost his or her job is typical for politicians and bureaucrats. They often approve the spending of taxpayer money based on political expediency and crony capitalism. This arrogant behavior will continue as long as the government is allowed to spend money it does not have and is allowed to intervene in the economy in ways that the Constitution does not allow.
Posted in Government Ineptness, Solyndra | Tagged: François Gouws, Global Equities, Obama, Oswald Grübel, Scandal, Solyndra, UBS, Yassine Bouhara | Leave a Comment »
Posted by Steve Markowitz on October 4, 2011
As news concerning the Solyndra bankruptcy is dribbled out, it looks as if there is more to the story than just bad judgment. Yesterday, in an interview by ABC News, President Obama attempted to create the narrative that Solyndra’s failure was a business result that could not be foreseen by the government prior to making its investment. This is a callous attitude given the $535 billion of taxpayer money lost in the venture.
In the ABC interview, when questioned about the taxpayers’ losses, Obama said “hindsight is always 20-20” and that the Solyndra loans “went through the regular review process and people felt like this was a good bet.” This explanation is not supported backed by the facts.
Recently released e-mails indicate that the White House was warned about the possible failure of Solyndra in the first part of 2010 and prior to President Obama’s visit to the company. One email from Ron Klain, chief of staff to Vice President Biden, went to Obama confidante Valerie Jarrett and raised the possibility that Solyndra and other green energy companies could go “belly-up” before the next presidential election in 2012. In addition the Office of Management and Budget stated their concerns about Solyndra’s failure to proceed with a planned IPO and a warning it received from their auditor about being able to continue as a “going concern”, as well as stating: “I am increasingly worried that this visit could prove embarrassing to the Administration in the not too distant future, given 1) what we just heard today from DOE that Solyndra is delaying their IPO at least until the end of the year, and 2) what the auditors said about Solyndra making it through the year absent new financing“.
Perhaps the most damning email came from a California venture capitalist and Obama supporter Steve Westly, who emailed Valerie Jarrett at the White House stating that Obama backing of Solyndra could “haunt him in the next 18 months if Solyndra hits the wall, files for bankruptcy, etc.” Within a few months from this email, Solyndra violated the terms of its government guaranteed loan. However, instead of pulling loan, the government restructured it to allow the private investors to be paid ahead of the U.S., if the Solyndra was ever liquidated.
It is evident that the White House ignored warnings from multiple sources that the taxpayer’s loan to Solyndra was a bad bet. The only question is whether this was done due to bad judgment or some nefarious reason.
While the facts do not support it, putting the best spin on this story indicates that the Solyndra debacle was the result of bad judgment and inept government. Given this most kind interpretation, President Obama should take responsibility for the failure to protect the taxpayers. However, what has become an Obama trademark, he is unapologetic. This is a remarkable attitude given the magnitude of taxpayer funds lost in Solyndra.
Posted in Government Ineptness, Solyndra | Tagged: Bankruptcy, Biden, Loan, Obama, OMB, Ron Klain, Solyndra, Steve Westly, Valerie Jarrett, White House | Leave a Comment »
Posted by Steve Markowitz on October 1, 2011
As information surrounding the Solyndra debacle becomes public, it is obvious that there was more than just bad judgment that resulted in the loss of $535 million of taxpayer funds. On Thursday, energy Secretary Steven Chu admitted he made the decision to allow the remainder of the $535 million federal loan to go to Solyndra after it was in technical default of the terms of the loan.
In April 2010, Solyndra auditors question whether the company could continue as a “going concern”, specifically referencing its cash flow problems. That was one month prior to President Obama’s visit to the company when he publicly endorsed Solyndra. A few months later, Solyndra informed the Department of Energy that their cash flow problems placed them in default of the government’s loan provisions. Instead of stopping the loan and cutting taxpayer losses, Chu relaxed the loan’s terms that allowed the company to receive the remainder of the $535 million.
In justifying the bonehead move, a Chu spokesman stated that the Energy Secretary proceeded with the loan because it gave Solyndra “the best possible chance to succeed in a very competitive marketplace and put the company in a better position to repay the loan.” This is no excuse for throwing good money after bad.
On the same day that Chu offered his lame excuse, it was announced that a criminal probe of Solyndra is ongoing. The government is supposedly attempting to determine if the company lied to them in seeking the loan. Whether or not there was criminal behavior here, it is likely that this probe was initiated to take some of the heat off of government bureaucrats and politicians who approved the loan.
Energy Secretary Chu is a Nobel laureate in physics who comes from an academic background. While this resume confirms a high IQ, it also shows that he has no expertise in either business or solar energy. To allow such a governmental bureaucrat to spend the people’s money is an outrage.
The elitist Progressives who run the Democrat Party, and have some power within the Republican Party, continually overestimate the benefit of academia-based IQ’s at the expense of experience and common sense. Given the growing number of governmental failures from this group, epitomized most recently by the Solyndra debacle, it is time for the American electorate to reconsider priorities for resumes of future political leaders. With the recent huge upset victory of Herman Cain in the Republican Florida straw poll, there is evidence that this logic is already taken root.
Posted in Energy, Solyndra | Tagged: Cain, Chu, default, Energy Secretary, Loan, Obama, Solyndra | Leave a Comment »
Posted by Steve Markowitz on September 21, 2011
Solyndra, the Californian-based green-energy, declared bankruptcy earlier this month. Before doing so they blew through $535 million of taxpayer money received via a loan guarantee from the US Department of Energy.
There is a questionable relationship between Solyndra and the White House. A Solyndra investor was also a supporter and donator to the President. The huge government loan to Solyndra was pushed by some in the White House. In addition, President Obama prompted the company, even making a well-publicized visit to their manufacturing facility. But most troubling, Solyndra’s investors got preference over the government’s loans. In other words, they get ther money out of the failed company before American taxpayers.
Given the above, it is not surprising that Congress wants to look into this mess. The House Energy and Commerce Committee called on Solyndra’s CEO, Brian Harrison, and its CFO, W.G. Stover, to testify on the matter Friday. However, yesterday these executives informed the Committee that they would invoke their Fifth Amendment rights and decline to answer questions. In other words they are clamming-up. While this is their Constitutional right, it sure smells fishy. What do they have to hide if it just a case of a business gone bad?
The Solyndra matter is not the only potential scandal brewing for the Obama Administration. Congress is also looking into LightSquared, a company attempting to build a wireless network. In order for this network to begin to operate, it requires FCC (Federal Communications Commission) approval since there is evidence that the desired frequencies would interfere with global positioning devices (GPS), which has national security implications, among others.
Recently, it has been reported that Air Force General William Shelton was pressured by the White House to change his testimony towards one more favorable to LightSquared. In addition, The Center for Public Integrity, a public watchdog group, has indicated that LightSquared not only lobbied the White House for meetings, but mentioned donations to the President and other Democrats. This is the beginnings of another story with an odor.
Pay-to-play is known to be standard operating procedures in Obama’s home city of Chicago. Add to this a government spending binge through Stimulus programs and you have quite a corruptive ambiance in this Administration.
Posted in Corruption, Solyndra | Tagged: Air Force, Brian Harrison, Congress, Donations, FCC, Fifth Amendment, GPS, House Energy and Commerce Committee, LightSquared, Loan, Obama, Solyndra, US Department of Energy, W.G. Stover, White House, William Shelton | 2 Comments »
Posted by Steve Markowitz on September 16, 2011
On August 31, 2011, this Blog posted a story about a green energy firm’s bankruptcy, Solyndra, Another US Government Backed Green Company Declares Bankruptcy. At that time it seemed this was just another case of inept government wasting taxpayer money (over $500 million). However, as the story has been unfolding it seems more nefarious motivations were involved.
Shortly after the Solyndra bankruptcy story broke it was reported company officials made nearly 20 visits to the White House during a two-year period. In addition, George Kaiser, a well-known Democrat fundraiser and investment manager in Solyndra, also visited the White House during this period on multiple occasions. Most disconcerting, Solyndra’s investors received preference for their funds. In other words, these investors would receive money from the failed company prior to the government (i.e. taxpayers). This is highly and highly unusual arrangement.
More recently, memos and e-mails are being released as a result of congressional hearings on the Solyndra bankruptcy. Early e-mails indicate pressure from the White House to get the loan approved.
Today, a damaging White House memo was released back indicates the Obama Administration had concerns about Solyndra’s financial health even as it was touting the investment to the public. On January 31, 2011, the White House’s Office Of Management and Budget (OMB) sent an e-mail expressing concerns about the potential political fallout from the failure of Solyndra stating; “The optics of a Solyndra default will be bad. The timing will likely coincide with the 2012 campaign season heating up.”
During January 2011, the Administration was also pushing the release of an additional $67 million to Solyndra, even though the OMB e-mail stated: “Questions will be asked as to why the administration made a bad investment, not just once (which could hopefully be explained as part of the challenge of supporting innovative technologies), but twice (which could easily be portrayed as bad judgment, or worse).”
The OEM e-mail at the very least indicates that the White House understood that the Solyndra loan was bad business. It remains to be seen whether even worse motivations were involved. Solyndra ultimately received nearly $530 million in taxpayer funds.
Another damaging e-mail was released today, as reported by The Associated Press. It shows that questions concerning Solyndra’s viability were being raised just prior to President Obama’s May 2010 trip to the Solyndra factory. White House official Greg Nelson, who was involved in planning the President’s trip, responded to the expressed concerns by will stating in an e-mail: “Seems B.S“.
It remains to be seen how large the Solyndra scandal will become. It will have political implications for President Obama at some. But this President seems unfazed either by the potential for scandal or the failure of the Solyndra investments. There are 15 renewable energy loan guarantees for companies that remain open prior to the end of the Stimulus Program on September 30, 2011. The Obama administration is moving full steam ahead to complete them prior to the deadline.
Posted in Solyndra | Tagged: Bankruptcy, George Kaiser, Green Energy, Greg Nelson, Obama, Office of Management and Budget, OMB, Scandal, Solyndra, Timu, White House | Leave a Comment »