Abound Solar, the solar panel manufacturing company famous for going bankrupt last year after receiving millions of dollars in taxpayer-backed loans, is making headlines again: according to recent media reports, the price tag on the clean up of the company's "unknown hazardous waste" is as high as $3.7 million.
Unfortunately, much of this drama could have been averted if the U.S. government had not propped up the firm in the first place.
Abound Solar’s business was in-large part supported by help from government entities such as the Export-Import Bank (Ex-Im Bank), which help facilitate the purchasing of its product through a loan of $9.2 million to an Indian company. At the time of the loan, Abound Solar had questionable financial health, meaning most banks would have obviated from providing any financial backing involving such a company. Yet, the Ex-Im Bank decided in its infinite wisdom that it should step-in and do what most other financial institutions would not do and provide assistance to Abound Solar by providing a risky loan to another company directly engaged in business with the solar company.
While there are certainly more pressing issues at hand, like the debt ceiling and another budget showdown, Congress must address the future of the Ex-Im Bank. And unlike the debt ceiling and potential shutdown, there is a reasonable amount of room for both sides to come together concerning the Bank, considering Republicans have consistently opposed it, Democrats have recently begun to express reservations about its actions and President Obama himself once called it “little more than a fund for corporate welfare.”
The fact that the Ex-Im Bank was willing to get involved with companies such as these should raise alarms, but the fact that the federal agency has a record rife with similar mistakes is what should push Americans to call on our elected officials to wind-down this corporate welfare program. The Export-Import Bank is a federal government agency that is authorized by Congress and the loans are backed by the American taxpayer. One might think that such an agency would be somewhat risk-adverse considering that the Bank is operating on behalf of the American public, but when it comes to investing in questionable energy companies the Ex-Im Bank has a lengthy rap sheet that includes providing financial backing to companies such as Enron and Solyndra.