As part of its bankruptcy proceedings, defunct solar company Solyndra will auction off thousands of items from its California production facility on Nov. 2 and 3. But taxpayers won’t see a dime of the proceeds, due to the Energy Department’s decision to subordinate taxpayers to Solyndra’s private financiers in repayment of their investments.
As I explained in a Friday column in the Washington Examiner, DOE has developed an unprecedented interpretation of the law to allow Solyndra’s private investors to recoup $75 million of their investment before taxpayers are repaid.
Heritage Global Partners, which is conducting the auction, told Scribe that the money raised “will not be anywhere near” $75 million, meaning the proceeds will go entirely towards repaying Solyndra’s private investors (though later asset sales may exceed that threshold).
DOE’s legal position is without precedent in the history of its loan guarantee program, as I explain in the Examiner:
Two Treasury Department officials who testified before a House Energy and Commerce subcommittee last week said they had never before seen taxpayers subordinated to private investors in the repayment of a government loan.
Until Solyndra, that is. In February 2011, the Energy Department helped refinance the struggling solar company’s loan in a way that gave private lenders priority in repayment of their loans.
Under the restructuring agreement, the first $75 million of private investment would be repaid before taxpayers saw a dime. Reps. Fred Upton, R-Mich., and Cliff Stearns, R-Fla., who chair the House Energy and Commerce Committee and its investigative subcommittee, respectively, said the restructuring agreement “violated the plain letter of the law.”
The upcoming asset sale includes thousands of pieces of office equipment, computers, power tools, assembly line machinery, and even solar panels. But because the expected returns from the auction do not exceed $75 million, the government won’t recoup any of the taxpayer money used (unsuccessfully) to prop up the company.
*****UPDATE: Contacted about these revelations, Rep. Cliff Stearns (R-FL), who chairs the House Energy and Commerce investigative subcommittee, called the news “a sobering reminder that taxpayers are on the hook for a half billion dollars because of DOE’s misdeeds.”
What's deeply disingenuous is when the President takes money from the people for "government investments" we have no control over and the President demands "we want our money back" doesn't compute to include "we" the people. EVER! Government "investment" spending with tax payers money, should be deemed by the people as unethical and not permitted because any risk our money takes by government investment or FORCE is put on us to suffer the consequences. ALWAYS!
Cronyism is the most insidious form of corruption. This time it "only" cost a few hundred million, but the combined affect is seriously harming our nation.
Consider also what just happened in a federal court in Texas. A Dallas business owner was involved in a civil dispute and paid millions of dollars to lawyers, and when he objected to additional fees after settling the case, they had a “friendly” judge seize all of his possessions, without any notice or hearing, and essentially ordered him under “house arrest” as an involuntary servant to the lawyers. The business owner has been under this "servant" order for 10 months and is prohibited from owning any possessions, prohibited from working, etc..
…and some quotes from the judge:
THE COURT: "I'm telling you don't scr-w with me. You are a fool, a fool, a fool, a fool to scr-w with a federal judge, and if you don't understand that, I can make you understand it. I have the force of the Navy, Army, Marines and Navy behind me."
THE COURT: "You realize that order is an order of the Court. So any failure to comply with that order is contempt, punishable by lots of dollars, punishable by possible jail, death"
http://www.lawinjustice.com has an explanation of this case.
Simply put, the current administration, shadily put their employers (us) interests at the bottom of the heap.
Even in non-governmental business dealings, the laws of Agency in each state obligate the agent to the
interests of those who pay them. All government officials involved in this mess should be held accountable both criminally and civilly. This government is totally out of control.
That's Obama buying more votes…. Since when is a secured loan subordinate to an unsecured "investment"???? More of Obama's totally unexplainable logic! Oh… he never said he was going to be logical… just "CHANGE"! Well, how about change from common sense!
The law was violated by government executives structuring this loan. People should be fired for this, not transferred to another position. There should be a trial if the law was clearly violated and the perpetrators should be jailed.
Where is the Dept of injustice to inforce the law???/oh, wait, that means holdershiite,……….
As politics becomes entwined with business and both become entwined with philosophical agenda there can be no other outcome; The business community will win because that is what they do, win. In this instance, on the surface, it sounds as if they are somehow cheating. The actual sequence was that private enterprise posted a bit more cash as a last ditch effort to keep a bad business alive with the proviso they would be repaid first should the effort fail. The alternative was to let the operation fail earlier and expose the absurdity/stupidity of government investment sooner. The crime is allowing either idealist or politicians to make a decision about MY money.
The government was never hired to be an investment banker, nor a commodities broker. But that is what it has become. If any President in the history of our Republic had been well enough informed regarding investments, we would not be in the financial straits in which we find ourselves.
The President and Congress, as my agents, have been derelict in their duty to the Principals. This failure to adhere to the fiduciary responsibility is actionable at law, I believe. Too many acts of all three branches of government are outside the bounds of Constitutional Authority. I would suggest that prior to any elected or appointed official taking the oath of office, the Declaration of Independence, and the Constitution of the United States of America should be read aloud and such reading be recorded. Just a thought. Thank you, Robert Walker
Here: Read all about the not-so-distant past /history of federal subsidies for assorted BIG players in the energy industry sector. http://www.nytimes.com/2011/10/16/opinion/sunday/…
Is anyone surprised? This is what they do – repay Obama's friendsand unions first.
History shows Obama isn't the only one who's been passing out tax credits, tax cuts and outright grants to assorted players in the energy sector. But, oh, he's in trouble for this now?
http://www.nytimes.com/2011/10/16/opinion/sunday/…