This goes way beyond making lousy investments, in trying to pick winners and losers, the Obama administration chose companies who had already lost, like Solyndra they took our money and invested in green energy projects despite warnings that they were going bankrupt.
Most surprising, perhaps, is how bad off the government knew some of the investments were before committing all that money. Take Beacon Power, a green energy storage company. We were surprised to learn what the Energy Department knew before committing $ 43 million of your money. Documents obtained by CBS News show Standard & Poor’s had confidentially given the project a dismal outlook of triple C-plus. Would you put your personal money into an investment that’s triple C-plus?
ECONOMIST PETER MORICI: Not on purpose.
MORICI: It is a junk bond, but it’s not even a good junk bond. It’s well below investment grade.
ATTKISSON: The Energy Department was investing tax dollars in something that’s not even a good junk bond?
MORICI: Exactly. This level of bond has about a 70 percent chance of failing in the long-term.
The letter sent by Standard and Poor’s to the Energy Department pulled no punches, this company was going under:
Beacon Power Docs
Below is the video of the and the remaining part of the transcript of the story. What this story demonstrates is the lack of concern the progressives who run our government have for our tax dollars.
ATTKISSON: In fact, Beacon did go bankrupt two months ago and it’s unclear whether taxpayers will get all their money back. And the feds made other loans when public documents indicate they should have known they could be throwing good money after bad. It’s been four months since the FBI raided bankrupt Solyndra. It received a half billion tax dollars and became a political lightning rod. Republicans claiming it was a politically motivated investment.
We counted 12 clean energy companies that are having trouble after collectively being approved for $ 6.5 billion in federal assistance. Five have filed for bankruptcy. The junk bond rated Beacon, Evergreen Solar, SpectraWatt, AES, a subsidiary of Eastern Energy and Solyndra. Others are also struggling with potential problems. Nevada Geo-Thermal, a home state project personally endorsed by Senate Majority Leader Harry Reid warns of potential defaults in new S.E.C. filings reviewed by CBS News. It was already having trouble paying the bills when it received $ 98.5 million in Energy Department loan guarantees. Sun Power landed a $ 1.2 billion loan guarantee last fall after a French oil company took it over. On its last financial statement, Sun Power owed more than it was worth. First Solar was the biggest S&P 500 loser in 2011 and it’s CEO was cut loose, even as taxpayers were forced to back a whopping $ 3 billion in company loans. Nobody from the Energy Department would agree to an interview. Last November at a hearing on Solyndra, Energy Secretary Steven Chu defended the government’s attempts to bolster america’s clean energy prospects.
ENERGY SECRETARY STEVEN CHU: In the coming decades, the clean energy sector is expected to grow by hundreds of balances of dollars. We’re in a fierce global race to capture this market.
ATTKISSON: Economist Morici says even somebody as smart as the Secretary Chu, an award winning scientist shouldn’t be playing venture capitalist with tax dollars.
MORICI: Tasking a Nobel Prize mathematician to make investments for the U.S. government is like asking the manager of the New York Yankees to be the general in charge of America’s troops in Afghanistan. It’s that absurd.
ROSE: A couple of questions. Does the government believe that this kind of economic support to these companies is a success story?
ATTKISSON: Yes, I think they do. The Energy Department, which wouldn’t agree to an interview, would tell you that this program is high risk by design. All of the programs are. They understand they’re putting tax dollars at risk. But they’ve built into the program $ 2.4 billion in potential losses. That’s already factored in. And they understand there’s a, what they say, a valid debate over whether this is the government’s role. But, they point out that both Democrats and Republicans in Congress and Democrats and Republican Presidents have support of the idea.
ROSE: And how do the companies explain the failure?
ATTKISSON: The companies are saying that- the ones that failed, there’s nothing much to say about that. The ones still in business say they are different from Solyndra. There’s not many similarities, That their project have more support, that the projects are sound even though they’ve hit bumps across the way. And in some cases they have guaranteed markets for their clean energy products. I should mention that AES, one of the companies, said that it has canceled the loan and the House Energy- the House Oversight Committee is investigating all of this.
HILL: Sharyl, thanks.