Obama’s Green Energy – Spreading the Wealth To Billionaires
by Dr. Kevin McNamee June 9, 2019
The alternative energy loan and grant program was originally created in 2005 during the Bush administration but it was not very active due to the law required companies receiving loans or grants have a sizable amount of their own money in the game, a “down payment” on projects. The 2009 stimulus bill removed that provision. Wealthy investors in green-tech companies could now get large government “investments” with very little of their own money at risk.(1)
Peter Schweizers’s book Throw Them All Out explains the goal of President Barrack Obama’s green energy plan was to create “green jobs” but according to the federal government’s records, many of the grants and loan guarantees created few or no jobs. Often taxpayer money was given to politically connected companies for projects that were already under way or even completed. Government grants and loans were given to companies that were money loser that needed government funds to stay in business or turn a profit.(2)
President Obama moved tax money taken from all, rich and poor, and gave it to billionaires under the guise of an economic stimulus plan to create jobs and to develop alternative energy. Washington handed out billions of dollars in cash and federal loan guarantees. This overwhelming amount of money has been directed to wealthy financial backers of President Obama and the Democratic Party has been almost entirely unreported by the media.(3)
Now the grants and loan guarantees provide access to taxpayer capital and it serves as a federal government “seal of approval” which opened up access to other private capital such as stock holder money. The crony-capitalist road to riches was simple and became the pattern of other companies: invest in a green-tech company, secure a much larger investment from the federal government, take your company public, make lots of money and get out.(4,5)
Many Department of Energy green energy grant and loan recipients served on the President’s campaign finance committee, or functioned as campaign donation “bundlers” or were major contributors themselves. They raised and donated millions for Obama’s 2008 campaign. In return, the companies they owned or lead received billions in government-backed loans and outright grants which are tax free.(6)
At least ten members of Obama’s finance committee and more than a dozen of his campaign bundlers were grant and/or guaranteed loan recipients. Several politicians who supported Obama launched alternative energy companies and obtained grants. Department of Energy granted $16.4 billion of the $20.5 billion in loan guarantees to companies either run by or primarily owned by Obama financial backers (bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party).(7)
After 2008, Steve Spinner became the “chief strategic operations officer” for the Department of Energy’s Loan Program Office. He served on the Obama campaign’s National Finance Committee. Spinner, who controlled billions of taxpayer-guaranteed loans for the DOE, was neither a dedicated scientist, engineer nor had civil servant background with financial knowledge. Prior to his appointment to the Loan Program Office, Mr. Spinner was a campaign bundler functioning as liaison to Silicon Valley to raise campaign funds for President Obama.(8)
Jonathan Silver served as the DOE executive director, responsible for staffing the programs, and leading organization analysis, and negotiation. Silver’s wife served as financial director for the Democratic Leadership Council. His business partner, Tom Wheeler, was an Obama campaign fund raiser bundler. Jonathan Silver managed the loans with advice from his strategic advisor, Steve Spinner.(9)
The grants originated in the office of Cathy Zoi who served as the assistant secretary of energy for efficiency and renewable energy. She previously worked in the Clinton White House as chief of staff on environmental policy then as the CEO of former Vice President Al Gore’s Alliance for Climate Protection.(10) When Zoi left the DOE in 2011, she became head of a new green-tech investment fund being established by George Soros, the investor whose firms received taxpayer money through Zoi.(11)
The Government Accountability Office was critical of the loan guarantee and grants awarded by the DOE saying the process appears “arbitrary” and lacks transparency. GAO’s examination of the first eighteen approved loans found that none were properly documented. Officials “did not always record the results of analysis” of these loan applications. For example, electric car loan program “lacks performance measures.” Loan officials did not keep notes so it is difficult to understand how loan decisions were made.(12)
Gregory Friedman, who is not a political appointee, chastised the alternative energy loan and grant program for their absence of “sufficient transparency and accountability.” He testified that contracts have been steered to “friends and family.”(13)
Obama White House memos said these grants and guaranteed loans were very lucrative for key political financiers. Several huge checks or loan guarantees were given to small companies with revenues of less than $1 million.(14)
A memorandum for the President from senior White House officials explained that the grants and loans were an economic boon to the companies involved. Many companies had “relatively small private equity (as low as 10%), while generating “an estimated return on equity of 30%.” If these companies were in the private sector, they would be hard-pressed to negotiate that sort of arrangement. The government money made the difference between success and failure. A wind farm can cost 55% less with the government grant or loan than a company that did not get government support. The solar energy companies had their costs cut in half due to the government grants. The White House memo to the President made it clear that the DOE grants and loans selection received White House review and input allowing it to pick winners and losers.(15)
First guaranteed loan provided by the Obama administration for alternative energy was the massive $573 million for Solyndra, a solar energy company. It received a low interest rate loan that if the company could not pay for it, the government would. Solyndra lost money on every solar panel sold and was never profitable. Oklahoma billionaire investor owned 35% of the company and was as a campaign fund raiser bundler for the 2008 Obama presidential campaign. One investor told the Wall Street Journal: “There is a perceived halo around the loan. If we get the loan, then we can definitely go public an cash out.” Terms of the taxpayer-backed loan, investor Kaiser and other investors will be paid before the government. Secure government money, go public and get out.(16)
Sample of $16.4 Billion of the $20.5 Billion Loan Guarantees Awarded to Companies that Supported President Obama and /or the DNC, Leucadia Energy(17) At time of funding, had 1 employee and $120,000 in annual revenue. Chairman and CEO: Ian Cumming’s served on Obama’s 2008 National Finance Committee and 2008 Democratic National Convention Committee $260 million for industrial capture project $1.6 billion in loan guarantees for coal gasification project $1.6 billion for synthetic gas project Outcome: Projects have not been completed. Created 3 jobs.
Solar Trust of America(18) $2.1 billion for a solar facility. $6 billion put in by Citigroup Global Partners and Deutsche Bank Louis Susman, Vice chairman of Citigroup was on Obama’s National Finance Committee and fund raiser. Later Obama appointed him ambassador to Great Britain. Seth Waugh, CEO of Deutsche Bank North America was Obama’s campaign bundler.
Solar Reserve(19) $737 million loan guarantees Michael Froman was head of CitiAlternatives, largest investor also served with Obama at Harvard Law School. He introduced Senator Obama to major Democratic Party players and later an Obama policy advisor.
Peco Energy(20) $200 million for smart-grid network Owned by Exelon who’s executive Frank Clark and board member John Rogers Jr. were on Obama campaign’s National Finance Committee. Outcome: Created 102 jobs
Basin Electric Power Cooperative(21) $100 million for “smart meters” to monitor energy consumption. Powerspan overseeing work, Powerspan, executives Daniel Weiss and Zeb Rice served on President Obama’s National Finance Committee. George Soros was a Powerspan investor and early Obama supporter Outcome: Created 8 jobs.
Hydrogen Energy California, LLC(22) $308 million for joint venture between BP and Rio Tinto BP gave more to Obama’s political campaigns than to any other candidate over the past twenty years. Outcome: Created 23 jobs.
First Wind(23) $115 million for wind energy projects in Utah and New York $117 million for wind energy project in Hawaii Both projects were underway when the funds were awarded.
David Shaw, founder of hedge fund D.E. Shaw, head of President Obama’s National Economic council. Outcome: Created 125 jobs Sapphire Energy(24) $135 million for an algae biorefinery to create “super algae” to convert into energy Major investor ARCH Venture Partners founding partner, Bob Nelsen, served on Obama’s National Finance Committee.
Vantage Wind Energy, LLC(25) $60 million $68 million for Beech Ridge Energy Wind Farm Wholly owned by Invenergy, LLC, a Chicago-based company headed by CEO Michael Polsky who is a major donor to Obama president campaign and DNC.
Summit Texas Clean Energy, LLC(26) $1.5 billion CEO is Eric Redman, a former Democratic senator staffer, and major DNC donor. Project manager is former Dallas Mayor Laura Miller, a former newspaper reporter and environmental activist, daughter of former head of Neiman Marcus. She never worked in the energy industry. Outcome: Created 8 jobs.
ZeaChem(27) $25 million to modify a “demonstration sale” biorefinery. Major investors, Globespan Capital’s Jonathan Seelig is a Democratic donor. PrairieGold Venture Partners headed by Paul Batcheller is a former aide to then-Senator Tom Daschle. Outcome: Created 2 jobs.
Solazyme(28) $21.7 million Founded by Jerry Fiddler a large Democratic donor and contributor to the Obama Victory Fund and DNC. Outcome: Created 13 jobs
Famous sociologist Max Weber said “Either one lives ‘for’ politics’ or one lives ‘off’ politics…. He who strives to make politics a permanent source of income lives ‘off’ politics as a vocation.” Today some people are living very well thanks to crony capitalism in Washington. Politicians have made politics a business.(29)
It appears that President Obama found the best form of payoff and patronage for rich friends and supporters is to give them billions of dollars in taxpayer cash.(30)
1. Schweizer, P., Throw Them All Out, Houghton Mifflin Harcourt, Boston, 2011, p. 83-842. IBID, p. 823. IBID, p. 774. IBID, p. 845. IBID, p. 866. IBID, p. 777. IBID, p. 79-808. IBID, p. 809. IBID, p. 8110. IBID, p. 8111. IBID, p. 10312. IBID, p. 8213. IBID, p. 8214. IBID, p. 8315. IBID, p. 8316. IBID, p. 8617. IBID 86-8718. IBID, p. 8719. IBID 87-9020. IBID 9221. IBID 92-9322. IBID 93-9423. IBID 9424. IBID 94-9525. IBID 9526. IBID 9527. IBID 10228. IBID 10329. IBID p. xiv-xv30. IBID, p. 76
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