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Obama Slams Private Equity, But His Own 'Investors' Do Quite Well

Posted By Lachlan Markay On May 31, 2012 @ 10:31 am In Ongoing Priorities,Scribe | Comments Disabled

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President Obama and his surrogates have repeatedly insisted that federal backing for green energy companies like Solyndra is somehow superior to private equity investing, since federal bureaucrats are concerned with more than enriching investors.

But “investors” in an Obama presidency – i.e. his top supporters – have reaped the benefits of many of his administration’s green energy projects, at the expense of taxpayers who see no substantive return.

Take Fisker Automotive, the Energy Department-backed electric vehicle manufacturer that announced last year that it would assemble its luxury Karma model in Finland, despite having drawn nearly $200 million of its $529 million federal loan.

Fisker now says [2] it may never assemble cars in the United States. In an interview with ABC News published Wednesday, a company spokesman warned that if DOE does not reopen the taxpayer spigot, Fisker may consider “other options” for the location of the assembly plant for its newest model, the Atlantic.

If the company opts to assemble the car overseas, American taxpayers will have sunk nearly $200 million into a company that created jobs that no American will fill.

That’s not to say that no American will have benefited from the federal loan to Fisker. The folks at California venture capital firm Kleiner Perkins Caufield & Byers will enjoy returns on their investment in the company even if it does assemble the Atlantic overseas.

Kleiner Perkins is teeming with political connections [3] and ties to the Obama White House. One of its senior partners is none other than former Vice President Al Gore.

Less known members of the Kleiner Perkins team still enjoy strong relationships with Obama and other administration officials. Partner John Doerr hosted the president [4] at his Silicon Valley home for a meeting with top technology executives last year. Other attendees included Google chairman Eric Schmidt and Facebook CEO Mark Zuckerberg.

Doerr isn’t just an Obama supporter. He has played an active role in forming green energy policy over the last few years. He sat on the president’s Economic Recovery Advisory Board, and even submitted detailed recommendations [5] for green energy subsidies to Congress in the weeks before Obama took office.

Other Kleiner Perkins executives have also been key supporters of the president. Partner David Blood helped organize [6] a $2,300-a-head fundraiser for then-Senator Obama during his 2008 campaign. Obama has received $19,000 in contributions from the company’s employees, according to the Center for Responsive Politics.

The president disdainfully discusses private businessmen seeking nothing more than a higher return for their investors. But some of the administration’s forays into venture capitalism – such as its work with Fisker – have enriched key Obama “investors” without yielding much for the American people.

Washington Post columnist Marc Thiessen detailed even more examples in a recent column [7].


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

URL to article: http://blog.heritage.org/2012/05/31/obama-slams-private-equity-but-his-own-investors-do-quite-well/

URLs in this post:

[1] Image: http://blog.heritage.org/wp-content/uploads/fisker-karma.jpg

[2] now says: http://abcnews.go.com/Blotter/fisker-build-electric-cars-us/story?id=16458585&page=2#.T8dp-bAeOeZ

[3] teeming with political connections: http://www.nationalreview.com/articles/283183/fisker-s-political-connections-lachlan-markay

[4] hosted the president: http://www.noisypost.com/off-beat/a-dinner-worth-1-trillion.html

[5] submitted detailed recommendations: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/01/08/MN041558UP.DTL&ao=2

[6] helped organize: http://www.telegraph.co.uk/news/worldnews/1583828/Rupert-Murdochs-daughter-to-hold-Barack-Obama-fundraiser.html

[7] recent column: http://www.washingtonpost.com/opinions/forget-bain-obamas-public-equity-record-is-the-real-scandal/2012/05/24/gJQAXnXCnU_story.html

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