Although Jonathan Silver stole my attention in the recent House Oversight hearing that ironically seemed to be lacking in committee members, Abound Solar deserves some notoriety. Abound is now the third major bankruptcy recorded from the $16 billion 1705 Loan Guarantee Program –– and they won’t be the last. A DOE portfolio, where “23 of the loans were rated Junk grade due to their poor credit quality, while the other four were rated BBB, which is at the lowest end of the investment grade of categories.”
To get you up to speed on Abound, just over two years ago, during his weekly radio address, President Obama touted Abound Solar as a huge jobs creator project, stating that it would create “2,000 construction jobs and 1,500 permanent jobs” between Abound’s two plants in Colorado and Indiana. Then in December of 2010, Abound Solar was awarded a $400 million loan guarantee from the 1705 DOE Loan Guarantee Program, despite the fact that in November 2010, it was rated “B” by Fitch: highly speculative, worse than Solyndra’s rating of BB-. And in July 2011, Abound was awarded $9.2 million loan from the Export-Import Bank, you know, the federally funded bank that makes riskier loans financed with taxpayer money.
Since the end of February of this year, troubling Abound reports circulated; massive layoffs and a compelling case for a pay to play scheme surfaced, causing more energy headaches for the DOE and the White House. When March came, the House Oversight investigation confirmed that cronyism most likely ruled the Abound loan. May rolled around with another green energy Oversight hearing, including the appearance of then CEO Craig Witsoe, explaining Abound troubles, but no mention of a bankruptcy on the horizon. Because two months later (Jun 28, 2012), Abound went down!
This was after Witsoe, in December 2011, made sure to inform American taxpayers that his company was the “anti-Solyndra.” Well, the silver lining may be that the taxpayer loss will only be about $70 milllion, but what about that $9.2 million?
During the course of the hearing, Abound blamed China for their demise. As reported by The Washington Times, Witsoe told the committee, “With over $30 billion in reported government subsidies, Chinese panel makers were able to sell below cost and put Abound out of business before we were big enough to pose a real competitive threat to China’s rapidly growing market share.”
However, Witsoe forgot to mention, “While cheap imports from China have crippled much of the U.S. solar panel market, Abound’s problems appear to have been rooted in the quality of its own products, the competitiveness of its business model and its inability to retain top talent,” as documented this month in The Daily Caller by Todd Shepherd, an investigative reporter for Colorado Watchdog.
Congressman Jordon asserted (as he has done at previous green energy hearings), “The close political and financial ties many of these companies had to the Obama administration are remarkable,” and Issa labeled it as a “scandal, that will go on…”
Yet, the House Oversight Democrats perceive a different scenario; Congressman Elijah Cummings (D-MD), called the Republican questioning “an alleged conspiracy in search of the facts.” Meanwhile Congressman Kucinich “sees no scandal at all,” and was more concerned about China’s “solar panel selling plot” than the DOE’s shady email practices.
In full disclosure, according to Bloomberg (confirmed during this hearing), Abound Solar “is also backed by Invus Public Equities Advisors LLC, which was co-founded by Raymond Debbane, who has donated to Republican candidates including Representative Darrell Issa.” Also, “Abound, formerly known as AVA Solar won part of a $60 million grant” under the Bush administration.
Well, I wasn’t born yesterday. The Republican Party is not immune to crony capitalism. In the summer of 2010, I covered a high profile venture capitalist who got his foot in the green door under the Bush administration, a firm I will revisit due to their close relationship to the Obama administration. However, there is a much larger cronyism, corruption scandal going on here, as presented in my April 2012 release, Department of Energy junk loans and cronyism; and plenty more to expose in the coming weeks.
Through months of analysis of just one DOE program (the 1705 Loan Guarantee, created by the Obama administration via the 2009 stimulus package), I found that over 90 percent have meaningful ties to President Obama (at least 16), and other high ranking Democrats, or both. Senator Harry Reid alone is connected to four. This study included the March 2012 House Oversight investigation coupled with years of my personal research.
Still, the Abound loan didn’t come without its share of Democrat political ties, as illustrated within the pages of the House investigation, released March 20, 2012:
Abound Solar has ties to Democratic politicians at the federal level and the state level in Colorado. Bohemian Companies, LLC, founded by Pat Stryker, became an early investor in Abound Solar (at the time AVA Solar) in October 2008. In addition to the initial funding, the CEO of Bohemian Companies, Joseph Zimlich, has served as both a director and a board member of Abound Solar. Pat Stryker is a major Democratic donor who Forbes included on its 2011 list of top liberal spenders. In 2008, Stryker donated $50,000 and bundled $87,500 for President Obama’s 2009 inauguration, and has given $35,800 to the 2012 Obama Victory Fund. Abound Solar also developed ties to Congressional Democrats. The company hired then Democratic Congressman Paul Kanjorski’s nephew Russell as its vice president for marketing. Abound Solar supported the 2009 cap and trade bill in the House of Representatives and funded an advertisement thanking then-Colorado Democratic Congresswoman Betsy Markey for her vote in favor of the bill. At the state level, then Democratic Colorado Governor Bill Ritter strongly supported Abound Solar and its application for a DOE loan guarantee. When Energy Secretary Chu visited Colorado, Governor Ritter handed Secretary Chu a letter urging him to approve Abound Solar’s loan guarantee because it would allow the company to expand and hire new workers.
No jobs here; not even a CEO.
No Smoking Gun Found at Abound; What About those “Burnt” Emails?
While this piece of the clean energy dirt received little media attention, a few reports have claimed, “no smoking gun found at the Abound hearing,” which leaves me pondering if maybe they skipped the hearing and went to a “Silver Gore Party.”
What about those “burnt” emails found at the Abound scene?
Chairman Issa appeared on Fox News the day after the July 18th hearing, and summed up a few key points that he had sternly addressed during the hearing. When asked about Abound, here is what Issa had to say, “Thanks for covering yet another failed solar project –– one that again went outside the bounds and the rules for making the loan, and the American people are paying for it.”
Issa went on, “I think the most important thing that we saw was the discovery of Jonathan Silver and his various other Department of Energy employees deliberately producing an outside web of private emails in which they exchanged documents, strategized on how to get these loans approved, and so on…”
What do you think they are doing?
Issa’s answer, “I say it was pretty transparent, they’re being opaque…by circumventing these systems, they’re taking things out of what is statutorily required to be there…”
As we wait for additional green energy House Oversight hearings, anticipating more Silver Emails to surface out of the abyss, stay tuned. Marita over at Townhall.com, and I will be completing the final installment of the Special Seven series, and I will be preparing to expose the Dozen DOE Insiders.
Next though, is the other DOE loan that went bankrupt, besides Solyndra –– The Beacon Bust, another DOE risky loan worth $43 million of taxpayer money. And you’ll never guess which Obama bundler is connected to that one.