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Brightsource DOE Funding Exposes Obama Cronyism

Posted By Romina Boccia On May 17, 2012 @ 10:30 am In Energy | Comments Disabled

A congressional hearing on May 16 exposed further details on just the kind of political maneuvering that was going on between the Obama Administration and beneficiaries of Department of Energy (DOE) loan guarantees. Emails revealed during the hearing are the tip of the iceberg in a corrupt federal funding process that first came under congressional scrutiny with the failure of Solyndra [1].

Solar company BrightSource Energy received an even bigger loan guarantee from DOE than Solyndra did. In April 2011, the company received $1.6 billion [2]for its Ivanpah project in California—more than triple the size of Solyndra’s loan guarantee of $535 million! BrightSource’s CEO, John Woolard, claims [3] that at its peak, the project would create 1,400 jobs. That would amount to $1.43 million for every job created.

John McArdle reports that in an email sent 15 months before the BrightSource loan was finalized, Woolard wrote an email to Matt Rogers, then DOE’s top adviser on the administration of stimulus funds. Woolard wrote, according to Greenwire:

…that Peter Darbee, head of Pacific Gas & Electric Co., “talked directly to Obama about the program’s challenges and the bad situation it puts him in. DOE credibility is thin and I am currently trying to put off [communication] with the Hill until we talk.” Rogers replied that he appreciated the heads-up and was “working it on this end.”

Merely a month before the BrightSource loan came through, another email exchange occurred between then-BrightSource Chairman John Bryson (who was nominated by President Obama to serve as Commerce Secretary in May 2011 and was confirmed to the post last October) and Jonathan Silver, who was in charge of the DOE loan program. The email was addressed to then-White House Chief of Staff Bill Daley but was never sent to him, over concerns that it might not be appropriate.

“The White House needs to focus on finalizing the loan guarantee for what would be the largest solar thermal project in the world,” Bryson wrote in the draft.

“We need a commitment from the [White House] to quarterback loan closure between [the Office of Management and Budget] and DOE by March 18 to avoid having our project jeopardized by larger budget politics.”

Even before these emails appeared, BrightSource became known as heavily politically connected [4]. In his new book, Throw Them All Out [5], Peter Schweizer reported that Sanjay Wagle, a major player in BrightSource’s largest shareholder, Vantage Point, and an Obama fundraiser, “was installed at the Department of Energy [6] (DOE), advising on energy grants.”

These revelations demonstrate that federal processes to supply loan guarantees and other subsidies are steeped in political favoritism. The only solution to get this cronyism out of government is to get government out of the business of picking market winners among its political friends. This can be done by ending all energy subsidies [7] and freeing up energy markets for companies to compete to create the most value for consumers.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/05/17/brightsource-doe-funding-exposes-obama-cronyism/

URLs in this post:

[1] the failure of Solyndra: http://blog.heritage.org/2011/09/16/morning-bell-solyndra-scandal-ends-green-jobs-myth/

[2] $1.6 billion : http://oversight.house.gov/hearing/the-obama-administrations-green-energy-gamble-what-have-all-the-taxpayer-subsidies-achieved/

[3] claims: http://www.businessweek.com/news/2012-05-16/loan-guarantee-winners-back-loans-as-republicans-complain

[4] heavily politically connected: http://freebeacon.com/stimulus-funded-solar-firm-cancels-ipo/

[5] Throw Them All Out: http://www.amazon.com/Throw-Them-All-Peter-Schweizer/dp/0547573146/?tag=wwwbreitbartc-20

[6] was installed at the Department of Energy: http://blog.heritage.org/2011/11/16/kennedy-jr-gets-taxpayer-cash-for-green-company/

[7] ending all energy subsidies: http://www.heritage.org/research/reports/2011/07/no-more-energy-subsidies-prevent-the-new-repeal-the-old

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