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Another Stimulus Backed 'Green Energy' Company Goes Bankrupt

Posted By Lachlan Markay On June 28, 2012 @ 4:28 pm In Scribe | Comments Disabled

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Another stimulus-backed green energy company has filed for bankruptcy, further fueling criticism of Energy Department programs that backed highly-risky investments on the taxpayer dime.

Like Solyndra and a number of other green energy investments made under this administration, Abound Solar had a very poor credit rating, but enjoyed a wealth of political connections.

Abound announced Thursday that it will file for bankruptcy protection after drawing $70 million for a $400 million Energy Department loan made through President Obama’s stimulus package. Abound is the fourth stimulus-backed company to declare bankruptcy, following Solyndra in August 2011, Beacon Power later that year, and battery maker Ener1 in January.

Abound was a risky bet from the get-go. Fitch rated the company [2] a “highly speculative” investment, and gave it a letter grade of “B”, meaning it had a “junk” bond rating.

The company lagged in meeting its DOE performance targets, and the Department cut off its access to stimulus funds in March after Abound laid off 200 employees. Internal emails [3] sent in 2010 show that Abound had to remove an entire rooftop of defective solar panels from the headquarters of one of its top investors, Bohemian Companies, a venture capital firm owned by Pat Stryker.

Stryker is particularly noteworthy, given her extensive ties to Democratic causes and politicians, including President Obama. Like so many beneficiaries of the green energy portions of the stimulus, Abound enjoyed significant political clout.

Stryker made Forbes’s 2011 list [4] of the country’s top liberal political spenders. She donated $50,000 to Obama’s 2008 campaign, and bundled another $87,000 for him, according to a report [5] from the House Oversight and Government Reform Committee. She also gave $37,000 to the Obama Victory Fund, the report notes.

Stryker is particularly active in Colorado politics, where she “helped bring about a Democratic revival,” according to New York Times reporter Matt Bai [6].

In 2009, then-Colorado Governor Bill Ritter (D) personally advocated [7] federal support for Abound in a letter to Energy Secretary Steven Chu. After leaving the governor’s mansion in 2011, Ritter took a $300,000 a year job [8] at the Center for the New Energy Economy at Colorado State University. Stryker’s Bohemian Companies is a major CNEE financier.

The political connections don’t stop there. Abound’s former Vice President of Marketing [9], Russ Kanjorski, is the nephew of former Rep. Paul Kanjorski (D-PA), and held his post at Abound when the company received its DOE backing.


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URL to article: http://blog.heritage.org/2012/06/28/another-stimulus-backed-green-energy-company-goes-bankrupt/

URLs in this post:

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

[2] rated the company: http://abcnews.go.com/Blotter/abound-solar-400m-fed-loan-low-rating/story?id=15833266#.T-ypuRceOeZ

[3] Internal emails: http://watchdog.org/18501/abound-solar-email-raises-new-questions-about-doe-loan/

[4] Forbes’s 2011 list: http://www.forbes.com/forbes/2011/1010/forbes400-11-networks-data-driven-liberal-spenders-bruner-oconner.html

[5] report: http://oversight.house.gov/wp-content/uploads/2012/03/FINAL-DOE-Loan-Guarantees-Report.pdf

[6] Matt Bai: http://books.google.com/books?id=iGLOWjRBLJAC&printsec=frontcover&dq=matt+bai&hl=en&sa=X&ei=-zC8T5TKN8iE6AGzo6Qf&ved=0CDcQ6AEwAA#v=onepage&q=stryker&f=false

[7] personally advocated: http://www.bizjournals.com/denver/stories/2009/05/18/story5.html?page=all

[8] $300,000 a year job: http://www.denverpost.com/legislature/ci_18773784

[9] former Vice President of Marketing: http://www.linkedin.com/pub/russell-kanjorski/3/b74/484

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