With the Solyndra scandal already beyond the boiling point, the Department of Energy pushed through nearly $6 billion more in green energy loans in the final hours of the maligned program. One of those was to another California based company, SunPower, who just three weeks earlier had publicly announced plans to build its 320,000 square foot manufacturing plant in Mexico.
The Mexico plant will produce solar panels to be shipped back to California for a proposed "solar ranch" in San Luis Obispo County that will have a grand total of 15 permanent presumably American jobs. That works out to $82.6 million per job created.
Like Solyndra, SunPower is in a perilous financial condition. SunPower's stock price has tumbled 94% from the once glory-days of 2007 when the company was worth $13 billion. Based on July 2011 financial reports, the current market capitalization of the company is $800 million and it owes $820 million in debt. You can find a further explanation of what that means in the dictionary under "insolvent."
In addition to financial woes, SunPower and its officers are defendants in a federal lawsuit in which the plaintiffs include the Austin (Texas) Police Retirement System, the Arkansas Teachers Retirement System and various other institutional investors. The lawsuit alleges that SunPower deceived "the investing public by making false statements contrary to nonpublic information known to the insiders." In addition, there have been a number of lawsuits filed against SunPower in California state courts alleging "gross mismanagement, breach of fiduciary responsibility, unjust enrichment and abuse of control," according to Human Events.com who broke the story earlier this week.
The "unjust enrichment" referred to above is illuminating. On April 28, SunPower announced the sale of 60% the company to French owned, Total Oil. The deal was struck at a price of $23.25 per share. On May 24 SunPower CEO Thomas H. Werner exercised a stock option for 428,343 shares at $3.30 per share. Subsequently on June 15 – the day the deal with Total Oil closed – Werner sold 478,084 shares at the $23.25 strike price and pocketed $11,115,453. The stock price has tumbled ever since hitting bottom October 4 at $6.60, just days after the announced $1.24 billion loan from the DOE. As of this writing, SunPower Class A stock is trading at $8.31.
Despite the monumental financial and legal problems in addition to the publicly announced plans to set up manufacturing operations to Mexico, SunPower did have a very large ace up its sleeve. Just like Solyndra, the company had cultivated friendships with very powerful Democrat green energy supporters.
Rep. George Miller (D-CA), the top ranking Democrat on the House Education and Workforce Committee and a member of the Democrats' Leadership in the House has been an unabashed cheerleader for SunPower – and coincidentally, his son is also SunPower's Washington lobbyist. Although SunPower didn't score a visit from Barack Obama or Joe Biden as Solyndra did, Miller managed to showcase the company to Secretary of Interior Ken Salazar who said "the path to a clean energy economy starts here." Well, not exactly Mr. Secretary – it will start 350 miles to the south; in Mexico.
The $1.24 billion for SunPower came through the DOE's 1705 loan program that was funded with Stimulus dollars – the brain child of Barack Obama that was supposed to create 3.5 million American jobs. If you're wondering how in the world a financially troubled company, mired in litigation, with majority interest owned by a foreign company, manages to get a $1.24 billion loan to keep it on life support – well, you are not alone.