Crony Capitalism Alert: Ex-Im Bank Props Up Failing Solar Company with Big Loans

Posted: Jul 23, 2012 6:20 PM
First Solar is the recent beneficiary of guaranteed loans from the Export-Import Bank. The Export-Import Bank is a government corporation that operates within the Executive Branch, with the mission of financing the foreign purchase of domestic goods. The unaccountable bank has rightly been labeled as corporate welfare by House conservatives, but was reauthorized by the Republican majority a few months back. The bank’s recent loan guarantee to support First Solar calls into question the wisdom of that reauthorization. First Solar, as pointed out by Ashe Schow at Heritage Action , is the last company a government bank should be supporting with taxpayer dollars:

Last December, First Solar, a solar panel manufacturer which received a $1.46 billion loan guarantee from the Department of Energy, announced that they would lay off 100 employees. Then, in April of this year, the company announced another round of layoffs totaling 2,000 employees. But First Solar’s troubles weren’t over, in early May, the company reported 1st quarter losses of 8 cents per share, a 12% revenue decline.

The Export-Import bank, not deterred by First Solar’s recent history, guaranteed two loans to Indian companies that totaled $57.3 million so that these two companies could then purchase solar panels from First Solar. These loans should raise red flags. Either the Export-Import bank is simply engaging in crony capitalism by propping up a failing company that fits the Obama Administration’s agenda, or the bank truly thought that First Solar deserved the loan strictly on its merits. So the Export-Import Bank is either engaging in blatant crony capitalism or utterly incompetent. Yet, Congress continually reauthorizes the bank so that taxpayers can bail out Obama’s favorite green companies.

This post was authored by editorial intern Kyle Bonnell.