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Must-Read From ABC: “Green Firms Get Fed Cash, Give Execs Bonuses, Fail”

March 6th, 2012 by Mark Truman · No Comments

ABC News has a must-read story today on the results of the Obama administration’s green energy financing program, titled, “Green Firms Get Fed Cash, Give Execs Bonuses, Fail.

ABC reports, “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.

“At least two other firms that benefited from Energy Department funding — one a $500,000 grant, the other a $535 million loan guarantee — handed out hefty payouts to executives and later went bankrupt.”

ABC points out, “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. . . . One company executive said the Energy Department explicitly allows for federal funds to be used to pay out executive bonuses. . . . Solyndra executives, bankruptcy records show, pocketed thousands in payments just months before the company dismissed 1,100 workers. At least 17 company executives received two sets of payments — ranging from $37,000 to $60,000 per payment — on the same days in April and July 2011. The insider payments, reported last year in the San Jose Mercury News, came as the company catapulted toward bankruptcy in early September.”

Incredibly, ABC reports, “Beacon Power’s bonuses were specifically linked to executives’ progress in landing the company’s $43 million Energy Department loan guarantee in 2009. Securing the loan was among the measures used to establish how much executives would pocket in bonuses, company SEC filings show. ‘The DOE loan application was approved by the credit review board, making us the first public company and the second of 16 applicants to receive the commitment,’ the document notes.”

ABC summarizes, “At least six Energy Department loan and grant recipients — from electric car maker Fisker Automotive to electric-car battery maker A123 Systems to Colorado-based Abound Solar — have laid off workers or suffered financial woes. Those setbacks come on top of the companies that have already filed for bankruptcy.”

It’s amazing considering this story and all the previous ones of the failures of the Obama administration’s Energy Department pumping taxpayer money into Solyndra, Beacon Power, EnerDel, and others, and recalling that just last week, President Obama doubled down on his pledge to continue this type of spending. And yet the president has refused the permit for the Keystone XL pipeline, which wouldn’t cost taxpayers a dime, and could put thousands of Americans to work right away.

As ABC noted, “To watchdogs, the pattern of firms awarding bonuses only to file for bankruptcy raises questions about how well the Energy Department chose its winners, and how thoroughly it kept an eye on them once selected. ‘Giving a bonus to the executives under these circumstances is rewarding failure with our money with no chance of getting it back,’ said Leslie Paige, spokeswoman for the nonpartisan Citizens Against Government Waste. ‘Taxpayers need some representation here. They didn’t really get it.’”

Related:

Yet Another Obama “Green Energy Investment” Lays Off Workers; WSJ: “Another Green Subsidy Favorite Goes Belly Up”

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