Crony Capitalism Is Alive and Well
It appears we are not at a loss for problems in the Obama Administration. The IRS is the gift that keeps giving; Ed Snowden vows that more information will be forthcoming on how the NSA intrudes into our lives; and now it is rumored that the First Family’s upcoming trip to Africa may cost taxpayers between $60 -$100 million. An amount which seems incomprehensible in light of the sequester, the deficit, and implementation of Obamacare.
Yet, there is another issue that disappeared off the radar screen since the IRS scandals and NSA moved to the front pages. Just last month, the Department of Energy (DOE) announced it will spend another $150 million in tax credits for clean energy projects. In 2009, the DOE attempted to provide a similar tax break for green energy companies by offering an original $2.3 billion in taxpayer credits, but the project failed and left $150 million in taxpayer dollars unused. DOE announced that the agency in charge of overseeing the completion and success of this project is the IRS. Given the current IRS difficulties, this will not instill confidence in the general public.
Since 2009, several companies who have received stimulus tax credits, are encountering costly problems and leaving many projects incomplete. For example, Abound Solar, a Colorado-based solar panel manufacturer, declared bankruptcy in June 2012 after the installed panels failed to harvest solar energy and presented a threat to the environment. In 2012, another stimulus recipient, First Solar, was forced to lay off 30% of its workforce due to questionable business practices. Only after cashing its $16.3 million check from the federal government.
Perhaps the most egregious example of the Obama Administration’s wasteful stimulus spending is REC Solar Grade Silicon. This Norwegian based company received the largest tax credit of $154.8 million and recently announced layoffs in February. The results of these huge stimulus benefits have failed to yield viable companies, increased job growth, or sustainable green technologies. Despite this evidence, the DOE is still working on a list of qualifying green energy providers, which will be published by July 23rd.
Another disturbing fact surrounding the failed green energy stimulus efforts is the breakdown of the specific investments. In three cases, executives of green energy companies used the taxpayer credits to create profits resulting in larger executive compensation. Executives at Amyris (recipient of $24.3 million), Solazyma (recipient of $21.8 million), and First Solar (recipient of $3 billion) exploited taxpayer funds to sell off company stock, contributing to larger payouts to themselves.
The stimulus package in general, and more specifically green energy initiatives, were implemented with the promise of decreasing unemployment, renewing the economy and investing in future technologies. Sadly, these promises remain unfulfilled. Let’s hope with a clearer lens focusing on various government agencies, increased oversight can improve accountability and ensure taxpayer dollars are used more effectively.
