The Phony Solyndra Solar Scandal

The conservatives make the accusation that an Obama donor named George Kaiser is a major investor in Solyndra, and Solyndra received the loan guarantee as a result of Kaiser’s (and others) campaign contributions, in order to personally profit. The problem with this is that George Kaiser was not an investor in Solyndra, the Kaiser Family Foundation was. According to Tulsa World,

In an emailed statement to the Tulsa World, a representative of the George Kaiser Family Foundation said the organization made the investment through Argonaut.

“George Kaiser is not an investor in Solyndra and did not participate in any discussions with the U.S. government regarding the loan,” the statement said. “GKFF invests in a globally diversified portfolio across many different asset classes.”

The Kaiser Family Foundation is a philanthropic organization, which means Kaiser (or anyone else) could not personally profit from a successful investment by the foundation. One of the areas of focus of the foundation is the National Energy Policy Institute, so Solyndra was a natural investment for the Foundation:

National Energy Policy Institute (NEPI) is a GKFF effort to establish a rational energy policy that will effectively reduce U.S. dependence on foreign oil. American political leaders have espoused energy independence for decades. NEPI’s goal is to move beyond total oil dependence and to supplant consumption of imported oil through increased domestic energy supply, reduced foreign oil and gas demand and lower carbon emissions to include enhancement of traditional sources of domestic oil, gas and coal.

The conservative Wal-Mart Walton Family, however, were private investors through their Madrone Capital, and at the time that the Bush administration started pushing the Solyndra loan were in a position to peronally profit from this investment. If any accusation of an expectation of personal enrichment obtained from political connections should be investigated, it is this one. Will the Republican House look into the connections between the Walton family and Bush administration officials, and the Bush administrations efforts to provide loans to Solyndra?

The Government Didn’t Lose

Even though Solyndra went into bankruptcy the government didn’t “lose.” The purpose of the government’s involvement was to help trigger the development of green-energy manufacturing in the United States, not to help individual companies. This was not a direct investment in a company with the expectation of a profit for the government. In the bigger picture of promoting American leadership in the emerging green-energy industry the government’s loan guarantee was a success. Even though Solyndra’s investors lost out our country retains the trained skilled employees, the intellectual property, the innovators funded, the suppliers, and the factory. As components of a national effort to trigger a key strategic industry, those are all still there and in the US.

It isn’t the government’s job to make sure the investors make money, the government’s job is to work to keep all of these components of an industry here and to grow new ones here, and this is what has been accomplished. When a VC makes an investment, a company failing just goes on the books as a loss. But our government has succeeded even if Solyndra’s investors lost money because the country as a whole benefits. All these employees are trained, all the researchers can take what they know to other solar companies, the IP is going to be sold — and it should be part of the conditions that it be sold to an American company. So while Solyndra’s for-profit investors lost money, America’s larger effort to nurture a solar-power industry continues toward its goal with assets enabled by this loan guarantee.

Facts:

The loan program started under President Bush (note – see above, Walton family.) From the San Jose Mercury News, October, 2008:

In late 2007, Solyndra was one of 16 clean-tech companies deemed eligible for $4 billion worth of loan guarantees from the U.S. Department of Energy. Tesla Motors, the Silicon Valley electric carmaker, and Oakland’s BrightSource Energy, a builder of solar-thermal plants, also made that list.

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