ABCnew.com 03/07/12 Ronnie Greene & Matthew Moskiwatch
“Green Firms get Fed Cash, Give Execs Bonuses, Fail”
President Obama's Department of Energy helped finance several green energy companies that later fell into bankruptcy -- but not before the firms doled out six-figure bonuses and payouts to top executives, a Center for Public Integrity and ABC News investigation found.
Take, for instance, Beacon Power Corp., the second recipient of an Energy Department loan guarantee in 2009. In March 2010, the Massachusetts energy storage company paid cash bonuses of $259,285 to three executives in part due to progress made on the $43 million energy loan, Securities and Exchange Commission records show. Last October, Beacon Power filed for Chapter 11 bankruptcy.
EnerDel, maker of lithium-ion battery systems, landed a $118.5 million energy grant in August 2009. About one-and-a-half years later, Vice President Joe Biden toured a company plant in Indiana and heralded its taxpayer-supported expansion as one of the "100 Recovery Act Projects That Are Changing America."
Two months after Biden's visit, EnerDel corporate parent Ener1 paid $725,000 in bonuses to three executives -- including $450,000 to then-CEO Charles Gassenheimer, who led Biden on the tour. This January, Ener1 filed for Chapter 11 bankruptcy protection.
The bonuses and bankruptcies come against a growing wave of trouble for companies financed with Energy Department dollars. Of the first 12 loan guarantees the department announced, for instance, two firms filed for bankruptcy, a third has faced layoffs and a fourth deal never closed.
The nonprofit Citizens Against Government Waste counts nearly 20 energy companies that have gotten federal loan guarantees or grants that have run into financial trouble ranging from layoffs to losses to bankruptcies. An outside consultant hired by the White House said the Energy Department's loan pool includes $2.7 billion in potentially risky loans and suggests the agency hire a "chief risk officer" to help minimize problems.
Solyndra, bankruptcy records show, was among the companies doling out thousands in executive payments -- in its case, just months prior to its late August collapse and early September bankruptcy. As a criminal investigation and House inquiry continue into the company's implosion, the government must navigate bankruptcy proceedings in hopes of recovering a piece of its $535 million investment.
Secretary Steven Chu declined an interview request. The department has long defended the green energy movement as a way for government to help spur development of cutting-edge products that aid the environment and economy. Sometimes, they say, investments in potential game-changing technologies simply don't work. The potential default rate, they say, is within the parameters set by Congress.
Common Sense Review
The Obama admin spends money like drunken sailors (no offense to drunken sailors). I am constantly amazed on the “buddy system” of govt we have. How as taxpayers can we have trust and faith in a govt who misspends tax dollars on the nirvana idea that if we live in this concept of “Green” that the world will be at peace and tranquility?
Wake up! Those with power fuel this falsehood to keep us in a daze while they usurp the means to keep themselves in charge of the masses..
The last line tells the tale… “The default rate is within the parameters set by Congress.”
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