When I first heard “Solyndra” my initial thought was that it was some sort of sci-fi thing, like Soylent Green or Solaris. However, it turns out that it (or rather was) a solar energy company.
Solyandra failed, which is not all that unusual for businesses involved in “new” technology. However, what makes this case somewhat special is that Obama and Biden made the company a show pony for their green energy and jobs plans. Obama even visited the company to praise them in person. However, as with Soylent Green and Solaris, things were not as they seemed.
Even before Obama visited the company it was known that it had lost $558 million in its five years of operation. An audit of the company had, in fact, indicated that it was likely to fail. As such, Obama was essentially saying that a shambling zombie of a company was full of life and vigor. Obviously, the Obama administration failed to do its basic homework before he went to praise this company. This, is, of course, a significant failure and damages his reputation.
If Solyndra had merely been praised, then this situation could have been dismissed as a minor embarrassment for Obama. However, the government loaned the now bankrupt company $535 million and might have to write that off as a loss. The FBI is apparently investigating the company and it remains to be seen if any misdeeds (other than incompetence) were committed.
There are other companies that are receiving similar loans and this situation raises serious and legitimate doubts about the process by which loans are determined. After all, if Solyndra was given millions and touted as a poster child while it was, in fact, already dead, then it is natural to wonder how many more Solyndra like scenarios are out there.
While loans to businesses can be a good idea and can pay off, it is clear that the assessment process needs to be carefully considered. While there is always risk in business, especially in “new” technology, there is a very important distinction between legitimate risk and handing money to a company that is driving off a cliff.
This situation could have easily been avoided and it does raise questions about the possibility of corruption within the administration. After all, Obama backer George Kaiser was a major investor ($75 million) who was able to get a special deal in regards to being given priority over all the other creditors-including the government.
It is unfortunate that this will provide ammunition to those who oppose alternative energy and government support for new business. We need both, but we need the process to be handled properly and the Obama administration has let us down.