As I mentioned at the end of my Abound Solar report, this piece of the green corruption scandal will cause your head to explode! Beacon Power Corporation is one of the three renewable energy projects funded with $16 billion worth of excessively risky loans by the Department of Energy (DOE), which have since gone bankrupt.
I also covered the July 18th House Oversight hearing that revealed (amongst other things), shady email practices by former DOE Loan Advisor Jonathan Silver.
In fact, this is Part Four of DOE “Junk” Loans and Cronyism, exposing the 90 percent that have "meaningful" ties to President Obama and other high-ranking Democrats –– or both! As previously pointed out, there were 460 applications submitted, and only 7 percent were winners. It turns out that 21 firms represent the 26 projects (the 7%) that were funded by the DOE's 1705 Loan Guarantee Program, of which 23 were junk rated.
Of course if you ask the DOE, they were all based on "merit."
Beacon Power Corporation is on that DOE “junk bond" portfolio with one of the worst ratings –– CCC+ conducted by S&P in April 2010 that incorporated their anticipated $43 million loan guarantee.
As revealed in the March 20, 2012 House Oversight investigation, “Before its demise, Beacon Power relied on funding from the federal government. DOE gave Beacon Power over $25 million in grants. However, the largest investment came when DOE announced a conditional $43 million loan guarantee to Beacon Power on July 2, 2009, to create a 20 megawatt flywheel energy storage plant in Stephentown, New York.”
Despite the fact that S&P ran two default scenarios with dismal conclusions, and its own internal analysis, the DOE “ignored these warnings and finalized the loan guarantee in August 2010.” And, as predicted, just over a year later, Beacon went bust!
Unlike Solyndra ($535 million) and Abound Solar ($400 million), it wasn’t a huge loan, yet as you will see, this story consists of at least $170 million of taxpayer money –– not exactly chump change. Nonetheless, like Solyndra (Ener1 and SpectraWatt, to name a few) Beacon Power had the nerve to pay their executives bonuses in the midst of their fall. According to ABC News, “In March 2010, the Massachusetts energy storage company paid cash bonuses of $259,285 to three executives in part due to progress made on the $43 million energy loan” –– and the ink wasn't even dry yet.
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