They Won’t Change It: Solyndra Investors To Receive “Tax Windfall”

August 29, 2012

They Won’t Change It: Solyndra Investors To Receive “Tax Windfall”

Solyndra Investors Will Avoid “Hundreds of Millions of Dollars” in Future Income Taxes, Despite Owing Taxpayers More Than $500 Million

A year after the Democrat’s failed stimulus “poster child” Solyndra declared bankruptcy, court documents indicate that Solyndra investors could receive a “tax windfall” allowing them to avoid hundreds of millions of dollars in taxes, despite having wasted $500 million taxpayer dollars on a now bankrupt stimulus project.
Evidence shows how Dems used stimulus projects like Solyndra to prop up investors and political considerations over taxpayers, ignoring countless warnings that their staff issued about these loans’ high risk.
Solyndra and other Obama administration pet projects have now become shining examples of how the Democrats’ political favoritism and reckless addiction to spending continues to burn taxpayers.

A year after the Democrat’s failed stimulus “poster child” Solyndra declared bankruptcy, court documents indicate that Solyndra investors could receive a “tax windfall” allowing them to avoid hundreds of millions of dollars in taxes, despite having wasted $500 million taxpayer dollars on a now bankrupt stimulus project.

UNDER DEBT RESTRUCTURING, INVESTORS WOULD EVADE “HUNDREDS OF MILLIONS OF DOLLARS IN FUTURE INCOME TAXES:” “Nearly a year to the day after the solar company filed for bankruptcy owing taxpayers more than $500 million, Solyndra is poised to restructure under a deal that government lawyers fear could provide a tax windfall to the investors. The investment companies, Argonaut Ventures and Madrone Capital Partners, may be able to use net operating losses at Solyndra to avoid “hundreds of millions of dollars in future income taxes” unrelated to the solar-panel manufacturer, according to a recent court filing by Obama administration lawyers.” (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

SOLYNDRA INVESTORS WILL BE ABLE TO USE SOLYNDRA LOSSES TO AVOID TAXES ON FUTURE INCOME COMPLETELY UNRELATED TO THEIR FAILED SOLYNDRA INVESTMENTS: “It will, however, hold ‘tax attributes’ consisting of more than one-half billion dollars in net operating losses,” the government filing states. “The equity holders … may then, assuming they meet the other requirements of the Internal Revenue Code, use those net operating losses to reduce their income tax liabilities on income earned from other sources completely unrelated to Solyndra.” (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

SPECIAL DEAL ALLOWED INVESTORS TO BE PAID BACK BEFORE TAXPAYERS IN CASE OF DEFAULT: “In addition to earlier financing, both companies provided $75 million to Solyndra last year in a controversial restructuring deal approved by the Department of Energy (DOE) that allowed the financiers to be paid back before taxpayers in case of a default.” (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

TAXPAYERS UNLIKELY TO RECEIVE THE $528 MILLION OWED TO THEM BY SOLYNDRA: “Taxpayers are expected to receive little of the $528 million that Solyndra still owes to the federal government, but DOE officials have defended the restructuring, saying it was the best chance of keeping Solyndra in business. Republicans said that the restructuring only caused taxpayers to lose more money and that the arrangement violated federal rules.” (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

Evidence shows how Dems used stimulus projects like Solyndra to prop up investors and political considerations over taxpayers, ignoring countless warnings that their staff issued about these loans’ high risk.

SOLYNDRA INVESTORS INCLUDE BILLIONARE OBAMA BUNDLER GEORGE KAISER: “…on Feb. 28, Solyndra announced it had raised $75 million from its private investors, including George Kaiser, a major 2008 Obama campaign bundler.” (Darren Samuelsohn, “Biden Aide Sought Info on Solyndra Investors, Emails Show,” Politico, 11/2/2011)

OFFICIAL “CITED POLITICAL CONSIDERATIONS” IN PUSHING FOR APPROVAL FOR A LOAN, SAYING “OBAMA WILL LOOK LIKE A HERO”: “The White House and Chu have repeatedly asserted that the Energy Department staff made all loan decisions based on merit, without regard to politics or donors. In the new e-mails, Silver cited political considerations in pressing for the administration to approve at least one loan applicant. Silver wrote on June 12, 2011, to David Lane, counsel to White House Chief of Staff Bill Daley, arguing that approving a loan to a solar-generation facility called Project Amp would help Obama politically. Project Amp then planned to buy from Solyndra, which investors hoped would help the struggling solar-panel maker. ‘Why are the most senior people in the Administration worrying about a $200 million deal? Don’t we have bigger problems?’ Silver wrote. ‘Obama will look like a hero if we do this to a constituency that is now worried about him.'” (Carol D. Leoning and Joe Stephens, “Energy Department Loan Program Staffers Were Warned Not To Use Personal Email,” The Washington Post , 8/14/12)

GAO ISSUED “AN UNUSUALLY BLUNT ASSESSMENT” OF THE LOAN PROGRAM, ACCUSING ENERGY DEPT. OF “FAVORING SOME AND DISADVANTAGING OTHERS”: “That’s when the Government Accountability Office issued an unusually blunt assessment of the Energy Department’s loan program in general, concluding that the department had ‘treated applicants inconsistently, favoring some and disadvantaging others.'” (Matthew Most and Brian Ross, “Solyndra Collapse A ‘Waste’ Of Half A Billion By Obama, GOP Critics Say,” ABC News , 9/1/11)

SOLYNDRA INVESTOR: “WHILE THAT’S GOOD FOR US, I CAN’T IMAGINE IT’S A GOOD WAY FOR THE GOVERNMENT TO USE TAXPAYER MONEY”: “But privately, at least one investor was concerned, writing in an email that while Solyndra won a loan of more than $500 million, it had revenues of less than $100 million and wasn’t yet profitable: ‘… while that’s good for us, I can’t imagine it’s a good way for the government to use taxpayer money…’” (Jim McElhatton, “Emails: Solyndra Took Sales Pitch Directly to Obama,” The Washington Times, 8/2/2012)

OBAMA OFFICIALS KNEW SOLYNDRA WASN’T A GOOD DEAL FOR TAXPAYERS: “Officials at the Treasury Department and the White House Office of Management and Budget often argued that government subsidies to clean-energy companies gave them too great of a return on investment, or an ‘unjust enrichment,’ Chu wrote. ‘Many times, they felt that a ‘better deal’’ could have been brokered by DOE and asked us to renegotiate,’ he said.” (Carol Leonnig and Joe Stephens, “E-mails About Clean-Energy Loans Provide New Details On White House Involvement,” The Washington Post, 8/8/2012)

NOW-WHITE HOUSE CHIEF OF STAFF “MAY HAVE DISREGARDED WARNINGS” THAT OBAMA ADMIN EFFORTS “TO PROP UP SOLYNDRA WERE UNWISE OR ILLEGAL”: (Bob King, “Solyndra Report May Implicate Lew, Washington Post Writes,” Politico, 8/2/2012)

ILLEGAL LOAN RESTRUCTURING ALLOWED INVESTORS TO BE PAID BACK BEFORE TAXPAYERS IN CASE OF DEFAULT: “In addition to earlier financing, both companies provided $75 million to Solyndra last year in a controversial restructuring deal approved by the Department of Energy (DOE) that allowed the financiers to be paid back before taxpayers in case of a default… Republicans said that the restructuring only caused taxpayers to lose more money and that the arrangement violated federal rules.” (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

Solyndra and other Obama administration pet projects have now become shining examples of how the Democrats’ political favoritism and reckless addiction to spending continues to burn taxpayers.

DEM OFFICIALS PUSHED for More Risky Taxpayer-Funded Loans Just Months Before Solyndra Declared Bankruptcy: “U.S. Energy Secretary Steven Chu was set to assure President Barack Obama in mid-2011 that all loans in the department’s clean-energy program would be repaid, just two months before the bankruptcy of recipient Solyndra LLC. A draft prepared by Energy Department officials for Chu to brief Obama on June 27, 2011, also pushed to continue the program, slated to expire three months later, according to documents released today by the Republican-led House Committee on Oversight and Government Reform.” (Mark Drajem, “Chu Set to Tell Obama Loans Healthy Before Solyndra Failed,” Bloomberg Businessweek, 8/9/2012)

CHINESE COMPANY TO BUY US BATTERY MANUFACTURER A123 SYSTEMS AFTER IT RECEIVED $249 MILLION FROM TAXPAYERS IN ENERGY GRANT: “China’s largest automotive parts supplier is poised to take control of U.S. battery maker A123 Systems (AONE.O), which received $249 million green-technology grant from the Obama administration in 2009. China’s Wanxiang Group Corp plans to invest up to $450 million in A123 Systems, taking an 80 percent stake in the U.S. company, A123 said on Wednesday.”(A. Ananthalakshmi and Paul Lienert, “China’s Wanxiang To Take Control Of Battery Maker A123,” Reuters, 8/8/12)

ABOUND SOLAR FILES FOR BANKRUPTCY AFTER GETTING $70 MILLION IN STIMULUS FUNDS: “A solar manufacturing company that received nearly $70 million from the Obama administration is shutting down and filing for bankruptcy protection, the Energy Department said Thursday … Abound Solar won approval in 2010 for a $400 million loan guarantee to aid construction of solar manufacturing facilities in Longmont, Colo., and Tipton, Ind. But amid growing problems for domestic solar panel manufacturers, the company began missing milestones laid out by the department in its loan guarantee agreement.” (Andrew Restuccia, “Another Solyndra? DOE: Loan Recipient Closing,” Politico, 7/3/2012)

$535 MILLION LOST ON NOW-BANKRUPT SOLYNDRA: (Jim Snyder and Brian Wingfield, “Solyndra $535 Million Loan Guarantee Mostly Lost to Taxpayers, Chu Tells Lawmakers,” Bloomberg, 11/17/2011)

BEACON POWER GOES BANKRUPT AFTER RECEIVING $43 MILLION OBAMA STIMULUS LOAN: (Tom Hals and Roberta Rampton, “Beacon Power Bankrupt; had U.S. backing like Solyndra,” Reuters, 10/31/2011)

AMONIX INC CLOSES AFTER RECEIVING $20 MILLION FROM TAXPAYERS: “The Amonix solar manufacturing plant in North Las Vegas, subsidized by more than $20 million in federal tax credits and grants, has closed its 214,000-square-foot facility about a year after it opened.”(Hubble Smith, “Amonix Closes North Las Vegas Solar Plant After 14 Months, Heavy Federal Subsidies,” Las Vegas Review-Journal , 7/18/12)

“REPORT: ENERGY LOANS COULD COST $3B” FROM “HIGH-RISK” GREEN PROGRAMS: (“Report: Energy Loans Could Cost $3B,” Associated Press, 2/10/2012)

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