If you thought the green company graft ended when the Department of Energy’s Cash by Suckers program expired at the end of September, you are mistaken.
The Cash by Suckers program was the DOE program under which failed solar company Solyndra stuck taxpayers with a half-a-billion dollar bill.
Yet despite the expiration of one program, the US government is still giving money to so-called “green” companies under another Obama program. But rather than giving money as loan guarantees as the DOE was doing, this money is an outright gift to private companies with no strings attached by the US Treasury.
According to a press release by US Geothermal, the company just received a bridge loan in anticipation of a $10 million cash grant from the United States Treasury under its Section 1603 program.
The Section 1603 program was designed to pay for “green” purchases under the, ahem, American Recovery Act. In essence, it makes the $10 million received by US Geothermal a gift from US taxpayers to the company.
And that’s just the tip of the government’s green largesse for US Geothermal, a company that generates power through geothermal energy. At the end of August the company received a $100 million loan guarantee under Obama’s Cash by Suckers program just as the program was set to expire. Interestingly the project lender for the US Geothermal loan isn’t a private bank, as usual, but rather the Federal Financing Bank, a bank wholly-owned by US taxpayers.
Generally under the DOE loan program the taxpayers have only been on the hook for 80 percent of the loan.
But in the case of US Geothermal via the Federal Financing Bank, the US government is effectively on the hook for the entire $100 million loan because US taxpayers own the bank.
The Solar Energy Industry Association, the lobbying arm for the nationwide solar scheme, says that the US government has thus far “awarded 3,156 grants (2,982 for solar electric technology and 174 for solar heating & cooling technology) for more than 6,300 projects totaling $1.33 billion and supported over $4.44 billion in solar investment in 46 states,” under the Section 1603 program.
When they talk about supporting solar investment what they really mean is that they gave solar investors gifts of $1.33 billion courtesy of the US taxpayer.
In fact, the Washington Post recently detailed how the US government has spent $171 billion in various energy schemes since 1961 with little or nothing to show for it.
“Not a single one of these much-ballyhooed initiatives is producing or saving a drop or a watt or a whiff of energy,” writes Steven Mufson in the Post, “but they have managed to burn through far more taxpayer money than the ill-fated Solyndra.
Chris Edwards of the Cato Institute’s Downsizing Government echoes the claim of waste when he writes:
Federal energy research has a poor track record. With regard to fossil fuels research, for example, the Congressional Budget Office has concluded: “Federal programs have had a long history of funding fossil-fuel technologies that, although interesting technically, had little chance of commercial implementation. As a result, much of the federal spending has not been productive.” That is a polite way of saying that these programs have been a waste of taxpayer money.
So why has the Obama administration continued to pin their hopes on jumpstarting the economy with green schemes that fail the economy and the taxpayer?
Because the schemes fill political coffers.
According to Heritage, a new book by Hoover Institution fellow Peter Schweizer shows that 80 percent of the money from the DOE Cash by Suckers program went to companies that were supporters of Obama.
According to Schweizer:
[A]n examination of grants and guaranteed loans offered by just one stimulus program run by the Department of Energy, for alternative-energy projects, is stunning. The so-called 1705 Loan Guarantee Program and the 1603 Grant Program channeled billions of dollars to all sorts of energy companies…
…In the 1705 government-backed-loan program [alone], for example, $16.4 billion of the $20.5 billion in loans granted as of Sept. 15 went to companies either run by or primarily owned by Obama financial backers—individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party.
Indeed, Goldman Sachs, which has contributed close to $40 million in political donations since 1989 with 60 percent of it going to Democrats, owns 5 million shares of US Geothermal.
Still, don’t bank on the company, even with government help.
Officers have been selling the stock since last year at prices above $1.00 while institutions have liquated 4.8 million shares recently.
The stock has traded down to .48 cents recently with a market capitalization of about $40 million on total revenue of $3 million.
How do you pay interest on a $100 million loan with $3 million in revenues? A $10 million gift from the federal government is a good start. But as to the rest?
Go ask our Investor-in-Chief Obama.
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