No matter how much the White House might wish it so, Solyndra is not going away. It is a disaster that will haunt the President all the way down the campaign trail next fall. On Friday, Treasury officials testifying before a congressional committee acknowledged that the company's taxpayer-backed loan was restructured so that some private investors would be put in front of taxpayers as creditors if the company were to fail, including an investment fund headed by major Obama fundraiser, George Kaiser.

 

To be clear, Kaiser's Argonaut Ventures was already a major investor prior to the solar panel producer securing the government loan. The preferred position given to them and another investor only applied to additional investments in the form of emergency loans made after the government loan. One could make a fair argument that if the public already stood likely to lose its investment, putting the emergency loans in a sort of first lien position made sense, if they could save the company, which was on life support at the time. Loans and investments weren't coming from anywhere else at that point, and the public stood to lose anyway, absent such a roll of the dice.

 

But the disclosure nonetheless smacks of Wall Street-type pay for play, eerily reminiscent of the way Goldman Sachs (another friend of the President) received 100 cents on the dollar off the top of the AIG bailout – and on a project that already stunk to high heaven with either corruption or incompetence, one not much better than the other.

 

Every bit of evidence suggests that the Solyndra deal, in which the government guaranteed over half a billion dollars in loans for a solar energy company to build a commercial-scale plant, was rushed through with much more concern over appearance than substance. The White House seemed intent to have the press conference and make the announcement, even as a White House budget analyst was calling the deal, “not ready for prime time.” The irresponsible nature of such a choice is much deeper than the public investment, because it erodes public trust in government.

 

Developing alternative energies is a crucial component of any chance we have to meet future energy demands as fossil fuel supplies dwindle and population (along with consumption) continues to increase at a frightening pace. Like fossil fuels did, alternatives like solar, wind and geo-thermal will need public investment to become a part of our energy menu. Ramming through ambitious projects that may not be viable, threatens the future ability to involve public money in such ventures, which could be devastating.

 

Not that Solyndra was received as a wake-up call. Billions more were shipped out just ahead of the close of the fiscal year, including $1.2 billion to another company, SunPower, whose financials had raised eyebrows. Over $700 million made its way to a company in which former House Speaker Nancy Pelosi's brother has a stake in. Ronald Pelosi seems to be the number two at PCG Clean Energy & Technology Fund (East) LLC, a major stakeholder in SolarReserve, a company that plans to build a giant geo-thermal plant in Nevada.

 

Unfortunately for the White house, the bad news doesn't end there. Steve Mitchell and Argonaut Private Equity are also listed as partners in SolarReserve, giving the impression that the government investment might be a way to help them recoup some of their Solyndra losses. Now, is this abnormal? Of course not. Green energy investors are likely to be Democratic donors. Who else are they going to support – Republicans? And yes, I'd much rather see public money going toward green energy projects than subsidies to oil companies, whom are already very profitable. That's the problem.

 

The political term is optics. And in these cases, they don't look so good. Someone undoubtedly knew that Pelosi had a relative involved on some level. He should have got out, or they should have looked elsewhere. If a city commissioner gives a contract to his brother, he's in deep trouble. The tangled web of venture capital makes such distinction much more complicated at a higher level. Jeb Bush's brother Neal was involved with a company that profited on the FCAT test that his brother implemented while Governor of Florida. Democrats made an uproar. They should be equally outraged now. It's getting a bit farcical how often both parties get caught with their hand in the cookie jar, only to feign such profound offense when their counterparts do the same. The only cure for such a lark, is some good and honest self policing. Don't hold your breath. 

 

But like I said, the real disaster here is what it will do for future projects. Energy is perhaps the single greatest challenge facing the human race. A third-grader could look at a chart showing trends in population growth and consumption patterns that are not only impacted by more people, but compounded by growing economies in third-world nations, as well as the continued growth of new energy-thirsty technologies, and see the obvious problem. No matter what our current crop of GOP presidential hopefuls preach, there is clearly NOT a simple solution via deregulation and increased use of fossil fuels. But every failed public project in the area of alternatives makes it easier to bang that drum.

 

The fact that these results seem to have more to do with failed execution than flawed premise is what lays the blame so squarely at the feet of our leadership. There was simply too much at stake for politics to drive policy. Not only was the perception of such projects on the line, but the President was spending money from a green-job fund in the stimulus on technologies that were labor unintensive and investment heavy. Best case scenario, the results were going to be vague for years to come. On that big of a gamble, you need to bring your A-game. That didn't happen. Consequently, every government can't do anything right argument just grew stronger. As a result, the next administration that tries to do something bold and visonary will have this one to thank when the public laughs in their face.

 

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