In late May, when President Obama was in California for his fourth fundraiser for Sen. Barbara Boxer, D-Calif., he also made a point of dropping by Silicon Valley to praise his own stimulus package.
"It is here that companies like Solyndra are leading the way toward a brighter, more prosperous future," Obama said of a solar energy company that had recently received taxpayer backing. Obama spoke of the company in glowing terms and used it as an example of how the stimulus package is creating jobs all over America.
But even if Solyndra is a good example of what the stimulus package can do, it might not be the kind of example Obama wants to publicize. Jim McTague of Barron's noted over the weekend that, two months before Obama's glowing speech, PricewaterhouseCoopers released a fear-filled note in its audit of the company, which has accumulated losses of $558 million in its five-year lifetime. The firm noted that Solyndra "has suffered recurring losses from operations, negative cash flows since inception and has a net stockholders' deficit that, among other factors, raise substantial doubt about its ability to continue as a going concern."
Obama seemed almost unaware of this when he spoke.
"We can see the positive impacts right here at Solyndra," he said. "[T]hrough the Recovery Act, this company received a loan to expand its operations. This new factory is the result of those loans. Since the project broke ground last fall, more than 3,000 construction workers have been employed building this plant. Across the country, workers in 22 states are manufacturing the supplies. ... Solyndra expects to hire 1,000 workers to manufacture solar panels. ..."
In September 2009, months before the scathing PricewaterhouseCoopers audit, the Department of Energy had announced $535 million in taxpayer-backed loan guarantees for Solyndra. Before the ink was dry on that deal, Solyndra applied for yet another loan guarantee, this time of $469 million. That application is pending.
In case you're not familiar with federal loan guarantees, here's how they work: If the company doesn't pay back the loan, then taxpayers do it for them. So if you've ever been tempted to roll the dice on a high-risk investment, don't bother. The government did it for you.
How did Solyndra come so far, even getting an Obama eulogy? It is no corporate titan. According to the Federal Election Commission, its employees have contributed less than $10,000 to political candidates.
But Solyndra has hired people that people in Washington listen to, spending $140,000 on lobbyists in just the first quarter of this year. Solyndra's most prominent representative in Washington is Steven McBee, a former Democratic Hill aide whose firm did $11 million in business last year. He has contributed $235,000 to politicians and political action committees (mostly Democrats) since 1999.
As it sought approval for its first Department of Energy loan, Solyndra called upon Deana Perlmutter, then wife of Rep. Ed Perlmutter, D-Colo. This year, according to lobbying disclosure forms, the company is bringing on an additional new firm, the Washington Tax Group, featuring one Republican donor-lobbyist and one Democrat.
The company's issues: the stimulus, the second stimulus, an energy subsidy bill and the cap-and-trade bill. As our lobbying editor Tim Carney likes to say, this is the new American business model. Hire a lobbyist to put your hand in someone else's pocket.
Solyndra was the very first company to receive a Department of Energy loan guarantee under the stimulus bill. When it was awarded, Vice President Biden said the project was "exactly what the Recovery Act is all about." Energy Secretary Steven Chu said it would help "spark a new industrial revolution that will put Americans to work."
Despite its auditors' misgivings, Solyndra may do just that. Obama had better hope so, anyway.
David Freddoso is The Examiner's online opinion editor. He can be reached at firstname.lastname@example.org.