A great deal if you happen to be one of the president's campaign bundlers.
Last week Al Gore called capitalism “unsustainable.” It was a silly pronouncement, but considering the way that the Obama administration is manipulating the economy to benefit its “green energy” buddies, the ex-vice president may have stumbled across a greater truth: Obama’s crony-capitalism is clearly unsustainable.
In a blockbuster story published last week, Washington Post reporters Carol D. Leonnig and Joe Stephens outlined more of the details of the incestuous relationship that the administration and green energy companies share. With $80 billion of stimulus money set aside for so-called clean energy projects there was a huge temptation to cross ethical boundaries separating the private and public sectors and it appears that few people involved in the business were able to resist that kind of temptation.
For example, the Post story explains how venture capitalist Sanjay Wagle served on an Energy Department panel that decided which companies would receive a chunk of the $80 billion pie, even though Wagle’s former firm – Vantage Point Venture Partners – received $2.4 billion of those funds over the past three years. According to the Post:
Wagle’s former employer had invested in several companies that received federal money: Brightsource, which won a $1.6 billion federal loan for a solar-generating plant; Tesla Motors, which won a $465 million loan to build electric cars; and biofuels firm Mascoma, which in 2011 received $80 million for a Michigan ethanol plant.
Overall, the Post investigation unearthed $3.9 billion in federal grants, and financing flowed to 21 companies backed by firms with connections to five Obama administration staffers and advisers. It’s easy to conclude that’s just the tip of a very big iceberg.
Ironically, these latest troubling revelations come just as the poster-child of the president’s failed energy policy is falling apart. The wind lobby was unable to convince Congress to extend production tax credits for wind power generation. Without that revenue, wind power cannot compete in the free market as even industry advocates themselves admit. Like failed solar power companies such as Solyndra and Ener1, the wind industry faces tough times ahead, despite billions upon billions of government subsidies.
Other players identified in the Post story include:
• David Sandalow, a former Clinton administration official and Brookings Institution fellow. Sandalow had been paid $239,000 for consulting work for a venture capital firm, Good Energies, in 2008 before joining the Energy Department as assistant secretary for policy and international affairs. SolarReserve, a company backed by Good Energies, was the recipient of a $737 million government loan.
• David Danielson, another venture capitalist who joined the Energy Department. Three companies backed by his former firm, General Catalyst, were awarded a total of $105 million in government funding.
• Steven J. Spinner was a loan advisor who worked in the Energy Department. His wife worked for the law firm Wilson Sonsini in California. Wilson Sonsini’s “clean-tech” clients were awarded a total of $2.75 billion in Department of Energy grants. According to the Post, Spinner helped raise half a million for Obama in the 2008 cycle and has pledged to do the same this year.
• Steve Westly, founder of the Westly Group, is another venture capitalist and an Obama fundraiser. Westly served on Energy Secretary Steven Chu’s advisory board. Companies backed by Westly’s firm received $600 million in government funding.
• David Prend of Rockport Capital Partners held a 7.5% stake in Solyndra. Prend was appointed to an advisory position to the National Renewable Energy Laboratory during the Bush administration. He stayed on during the Obama regime, and also chaired a panel that helps advise the department on solar energy. In addition to his investment in Solyndra, Prend is also tied to Ener1, the electric car battery company that received over $100 million in government funding that has since filed for bankruptcy.
The administration denies any impropriety of course. It seems that these cozy relationships are meaningless and didn’t influence any of the favorable funding decisions at all. It’s all just a series of happy coincidences apparently.
So the story goes. On the other hand, there is the undeniable fact that the Obama administration has been using its power to drastically change American energy policy. By forcing droves of coal-fired power plants to shut down, the president is both raising the cost of electricity and creating an artificial need for new sources of energy. But that’s not enough, for green energy isn’t competitive enough to make sense even in such a skewed market. And thus the impetus for the kind of crony capitalism that has so tainted this administration. It’s a great deal if you happen to be one of the president’s buddies, but it’s about as unsustainable an economic plan as one could design.
Freedom Center pamphlets now available on Kindle: Click here.