Christine Lakatos is a mother concerned about her government.

Are you concerned about this, “In fact, the report released last month by the Committee on Oversight and Government Reform (led by CA Representative, Darrell Issa) “painted a startling picture of mismanagement at the Department of Energy.” The most damaging is that of the 27 loan guarantees under the 1705 program, of which the DOE doled out in excess of $16 billion, “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.” According to Issa’s Team, the DOE’s 1705 loan portfolio overall average was BB-.” Now, I’m no financial guru, but I wouldn’t want that grade on my report card.

So why did the DOE back so many high-risk investments, particularly at a time when we are drowning in atsunami of debt?”

If a bank loaned money to these obviously bad risks the executives would be fired and criminal investigations would be started.  Since it is government, they are hiding the facts and stonewalling.

Why is America running a trillion a year deficit?  Incompetent and corrupt officials giving your money away.

The California Political news and Views will republish more of the Lakatos reports.  Watch for them.

 

Green Corruption: Department of Energy “Junk Loans” and Cronyism, Part One

By Christine Lakatos, Intellectual Conservative,   4/29/12

The most outrageous part of the House Oversight’s investigation: Obama energy officials funded solar firms despite ‘junk bond’ ratings from S&P and Fitch.

While the media was “tripping out” over Energy Secretary Chu giving himself “an A grade on controlling the cost of gasoline at the pump” during his testimony before a House panel last month, they missed the real scandal!

As insulting as that seems (especially since gas prices have significantly increased under Chu’s watch), Gene Koprowski of The Daily Caller unleashed the most outrageous part of the House Oversight’s investigation –– “Obama energy officials funded solar firms despite ‘junk bond’ ratings from S&P and Fitch.” Koprowski detailed the Department of Energy’s (DOE) lack of caution in backing hundreds of millions of dollars in loans for “tainted solar power projects.” Also documented are “other dramatic abuses at the green energy firms,” the most egregious being those firms which, received DOE funding, went bankrupt, “but not before paying their executives bonuses.”

In fact, the report released last month by the Committee on Oversight and Government Reform (led by CA Representative, Darrell Issa) “painted a startling picture of mismanagement at the Department of Energy.” The most damaging is that of the 27 loan guarantees under the 1705 program, of which the DOE doled out in excess of $16 billion, “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.” According to Issa’s Team, the DOE’s 1705 loan portfolio overall average was BB-.” Now, I’m no financial guru, but I wouldn’t want that grade on my report card.

So why did the DOE back so many high-risk investments, particularly at a time when we are drowning in atsunami of debt?

In a gripping line of questioning, Ohio Representative Jim Jordan confronted this issue head on during that same hearing where he pressed Secretary Chu on nine of the firms that received loans, revealing their political connections. Chu countered that the loans were based on merit. Yet Jordan was perplexed, “so if you weren’t helping your buddies, and you were basing your decisions on the merits of the loan, how do you explain the fact that 23 of 27 recipients of the loan guarantees were rated as junk status investments?” Jordan concluded, “If it wasn’t your political buddies, it had to be incompetence.”

Finally, the probe into the DOE and how they “pick winners and losers” for “green ventures” has gone in the right direction, however, Congressman Jordan overlooked the fact that it’s not just nine –– it’s the majority of the 27 projects recorded by Issa’s Team.

Political buddies indeed –– 21 energy firms are behind the 27 projects found in the House Oversight investigation, and 18 of them are politically connected to President Obama (15 alone) and the Democratic Party, that’s over 85%! 13 were bundlers, donors, and supporters for Obama’s 2008 campaign, and two are members of the president’s Job Council, while three are allied to Senator Harry Reid –– all with ample other Democrat links in the mix.

Nevertheless, before Congress caught on, Peter Schweizer’s New York Times bestseller, Throw Them All Out –– released last November and featured on 60 Minutes, exposing the “permanent political class” and the insidious practice of “Congressional insider trading” perpetrated from both sides of the political isle –– devotes an entire chapter to alternative-energy, “Spreading the Wealth… to Billionaires!” Whereas, others players in this clean-energy scheme are uncovered by Schweizer, this chapter digs into a few of the major DOE programs operating under the stimulus, including the tens of billions of dollars that was dished out through the 1705 Loan Guarantee Program.

That’s right –– millionaires and billionaires got their fare share of green funds! Interesting enough, Schweizer’s book divulged over half of the energy firms listed in the Houses Oversight’s investigation, and what’s astounding is that once again, the majority, 80% of the DOE loans, grants and special tax credits, reviewed by Schweizer, “went to companies with Obama-campaign connections or large donors to the Democratic Party,” and that was as of September 2011!

As the president doubles down on clean energy –– all the way from his 2012 State of the Union address, to his2013 budget, and off to “algae pushing” –– many of the “green lottery winners” are bundling and campaigning for Obama again, including Secretary Chu, albeit with Hatch Act restrictions.  And you can bet your bottom dollar that these large donors are banking on President Obama’s 2012 reelection victory, counting on more government subsidies.

Within the pages of the House Oversight report, are disturbing charges –– backed up with corroboration –– that range from poor to disastrous management, to bias and favoritism, as well as wasteful spending, in some cases a series of DOE violations, and how the DOE touted “misleading job creation statistics.”

Even so, the DOE has come under fire by other federal watchdog agencies, especially since their loan programs have significantly expanded under the American Recovery and Reinvestment Act of 2009, which was meant to stimulate the economy and create jobs. But now it has become clear that it’s stimulating the pockets and securing jobs for those that have significant ties to the Democratic Party and the White House –– “green cronies.”

Political buddies indeed –– 21 energy firms are behind the 27 projects found in the House Oversight investigation, and 18 of them are politically connected to President Obama (15 alone) and the Democratic Party, that’s over 85%! 13 were bundlers, donors, and supporters for Obama’s 2008 campaign, and two are members of the president’s Job Council, while three are allied to Senator Harry Reid –– all with ample other Democrat links in the mix.

Nevertheless, before Congress caught on, Peter Schweizer’s New York Times bestseller, Throw Them All Out –– released last November and featured on 60 Minutes, exposing the “permanent political class” and the insidious practice of “Congressional insider trading” perpetrated from both sides of the political isle –– devotes an entire chapter to alternative-energy, “Spreading the Wealth… to Billionaires!” Whereas, others players in this clean-energy scheme are uncovered by Schweizer, this chapter digs into a few of the major DOE programs operating under the stimulus, including the tens of billions of dollars that was dished out through the 1705 Loan Guarantee Program.

That’s right –– millionaires and billionaires got their fare share of green funds! Interesting enough, Schweizer’s book divulged over half of the energy firms listed in the Houses Oversight’s investigation, and what’s astounding is that once again, the majority, 80% of the DOE loans, grants and special tax credits, reviewed by Schweizer, “went to companies with Obama-campaign connections or large donors to the Democratic Party,” and that was as of September 2011!

As the president doubles down on clean energy –– all the way from his 2012 State of the Union address, to his 2013 budget, and off to “algae pushing” –– many of the “green lottery winners” are bundling and campaigning for Obama again, including Secretary Chu, albeit with Hatch Act restrictions.  And you can bet your bottom dollar that these large donors are bankingon President Obama’s 2012 reelection victory, counting on more government subsidies.

Within the pages of the House Oversight report, are disturbing charges –– backed up with corroboration –– that range from poor to disastrous management, to bias and favoritism, as well as wasteful spending, in some cases a series of DOE violations, and how the DOE touted “misleading job creation statistics.”

Even so, the DOE has come under fire by other federal watchdog agencies, especially since their loan programs have significantly expanded under the American Recovery and Reinvestment Act of 2009, which was meant to stimulate the economy and create jobs. But now it has become clear that it’s stimulating the pockets and securing jobs for those that havesignificant ties to the Democratic Party and the White House –– “green cronies.”

Criticism ranges from Secretary Chu winning the 2011 Porker of the Year, awarded by Citizens Against Government Waste, to more serious indictments coming from the Government Accountability Office (GAO). While the GAO has addressed many areas of concern within the DOE (and their newfound clean-energy stimulus funds), in 2010, they declared, “[loan] applicants were treated inconsistently,” with favoritism at play. Meanwhile in March of 2011, the Department of Energy’s Inspector General, Gregory Friedman (not a political appointee) ­­rebuked the alternative energy loan and grant programs, even testifying about “investigative matters,” covering a disturbing feature –– contracts and grants were “directed to friends and family.” Just last month, the GAO slammed the DOE’s loan guarantee program and their inability to gather data “required to conduct timely oversight” as well as disapproval with the DOE’s loan applicant process, revealing that the DOE, in some cases, “omitted and or had poorly documented reviews.”

Additionally, under investigation by the Senate Budget Committee are seven solar companies –– severely scrutinized in this House Oversight inquiry –– that in March 2009 “received fast-tracked approval by the Department of Interior (DOI) to lease federal lands in a no-bid process,” a recent story tracked by The Washington Free Beacon. Ironically, these decisions were made with “little scrutiny over environmental damages,” and according to the Los Angeles Times, it has caused strife amongst environmentalists and some “eco-drama,” including news that “Gang Green,” the nation’s big environmental players, “were silent on the projects or actively lobbied for them.” This same “solar seven” also snagged billions of DOE funds under the 1705 loan program, as well as renewable energy grants from the Treasury Department.

Hmmm, favoritism, poor documentation, questionable transparency, special treatment, and so much more to ponder…still, we’ll move on and examine the energy department’s “junk loans” that were funded with tens of billions of taxpayer money.

I will continue to probe and reveal this tangled and damaging web of DOE crony capitalism, starting with Secretary Chu’s $16 billion junk bond portfolio –– each has its own story.

After spending weeks analyzing Issa’s DOE report, cross-referencing it with research that I have gathered since 2009 as well as Schweizer’s findings (plus recent collaboration efforts with Schweizer himself!), it gives credence to Issa’s initial assertion that the $825 billion stimulus package was “walking around money.” More so, it confirms a disturbing theory that I had presented in 2010 –– Obama’s Political Payback: Green Corruption, calling for a special prosecutor  –– Part OnePart Two, and The Plot Thickens.

Still, as I stressed to TheDC –– and anyone else that would listen, “Issa has one-third of the story” (on the record anyway), and it has become extremely clear to me that this scandal is much deeper and more explosive than I had anticipated.

Later we’ll go back to the Department of Energy, exposing more “clean-energy dirt.” Although in 2010, I was one of a few ringing the “conflict of interest flag” surrounding Obama’s Green Team –– left-wing radical czars included. Even as it remains to be seen Secretary Chu’s actual participation in this green-energy scheme, it’s apparent that Chu is cut from the same “left-wing cloth” as the rest of the energy and environmental leaders the president chose back in 2009. Radicals aside, the red flag was waved in reference to the DOE staff and the venture capitalists that had joined the DOE early in the Obama administration. Now it doesn’t take a rocket scientist to realize that those who occupy, in many cases occupied, key DOE positions were capable (and willing) of exerting influence as to where the green-government subsidies would be funneled.

In the case of the $525 million Solyndra federal loan –– labeled as a junk investment that went bust –– we have the proof. Equally, there are “chains of influence” that have the power to push a deal through. Apparently this may have occurred with the $529 million Fisker Automotive loan (via the DOE’s Advanced Technology Vehicle Manufacturing program –– ATVM) thatsomewhat incriminates both Secretary Chu and Vice-President Joe Biden, as hinted in 2009 by The Wall Street Journal. And it doesn’t hurt to have the former Vice President Al Gore and his billion-dollar buddy, John Doerr –– both major 2008 Obama supporters –– in the forefront.

It’s no wonder that the White House stalled in turning over internal emails to the House Oversight Committee in regards to Solyndra, and refused to release details on the Fisker Auto bailout to Judicial Watch –– so much for transparency, a platform candidate Obama ran on!

These are just two examples, plus additional cases can be found in the House Oversight report. Yet, we’re in the dark as to the probable backroom deals that were cut in hidden emails, at White House visits and “coffee shop meetings” –– or if perhaps, early on, this “energy agenda” was set up as a “pay to play” scam –– albeit under the guise of “saving the planet.”

We’ll eventually steer back the ATVM loans, another DOE program where cronyism reigned. Yes, Gore and Doerr too. Both partners in the venture capital firm Kleiner Perkins Caufield & Byers that were a main focus of my 2010 research –– with snippets of Goldman Sachs and their deep ties to the Democratic Party, plus a few early renewable energy investments that snagged DOE funds. Back then, I calculated that over fifty percent of Kleiner Perkins’ green investments were winners of green government subsidies –– yet they have since tripled their cleantech portfolio, thus more taxpayer cash. We’ll also return to Goldman Sachs, who tapped the number two spot on Obama’s 2008 top contributors list, disclosing more large 2008 “Obama financiers” and discovering Goldman Sachs’ DNA all over “green.”

Even more corrupt is that DOE officials and so-called advisors (along with friends, family, and cohorts) have received sizable shares of green funds, or are associated to companies that soared as a result of the stimulus –– at least ten confirmed thus far, with others on my radar.

Business as usual? Perhaps. But when you connect the “green dots,” eventually a picture emerges. Throw Them All Out exposes “at least ten members of Obama’s 2008 finance committee and more than a dozen Obama bundlers.” With the DOE in mind, let’s throw in those individuals and groups that helped craft the stimulus package, more specifically the clean-energy section and its over $80 billion earmark, then add in at least five members of the president’s Jobs Council (a panel stacked with Democratic donors) ––  all making bank off of taxpayer money, and you’ve got yourself a “racket.”

Moreover, it is one thing when just a handful of green firms enter the “favored category,” but percentages present a much dire picture, as presented in Schweizer’s book and now Issa’s investigation. Worse, is when well-connected investors –– 2008 Obama bundlers, large donors and supporters –– secure government loans, grants and special tax breaks for sizeable portions of their entire alternative-energy portfolios. Those companies that receive multiple green government subsidies are suspect as well. So eventually, we’ll venture off to visit Wall StreetSilicon Valley, Big Energy, Big Oil, and others –– giving homage to our BIG winners in this taxpayer-funded “rigged green” lottery!

On the other hand, I have to chuckle at Schweizer’s statement, “it would take an entire book [and a team of investigators] to analyze every single grant and government-backed loan doled out since Barack Obama became president.”  Most likely an encyclopedia, nevertheless, I will attempt to unravel this massive scandal in an on-going Green Corruption series.

However, the fact alone that the DOE spent in excess of $16 billion of taxpayer money on a clean-energy portfolio where the vast majority were junk grade investments with over 85% carrying meaningful political connections, is more evidence that cronyism is the driving force behind the DOE as well as other government agencies that are dishing out alternative-energy contracts. While I am perfectly aware that “political paybacks,” infiltrated our government long ago, and that cronyism and corruption runs deep in both political parties, I believe that there is something more sinister happening on the “green-energy front” –– this time it’s linked to the left and their political buddies, chiefly to President Obama.

Following the “green money” and tracking the energy polices coming down the radical pipeline –– under the Obama administration –– will at least expose that we are witnessing the largest, most expensive and deceptive case of crony capitalism in American history.

Our first look into the 21 firms listed from the DOE’s junk loan portfolio will be General Electric (GE) –– another generous Obama donor, giving his 2008 campaign $529,855 –– whose CEO Jeffrey Immelt, sits as Chair of President Obama’s Job Council. GE is major player on the clean-energy scene as well as in this green-energy scheme. Other than the two projects documented in the  House Oversight investigation, GE was the recipient of government subsidies for a multitude of green projects, programs, and through some of their “green alliances.” From what I have gathered thus far, GE’s “green tab” is over 1.5 billion in taxpayer cash, and counting. In the meantime, I will leave you will this “not-so shovel ready” commercial break.

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July 30, 2012 at 8:46 am

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July 19, 2012 at 10:54 am

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Christine

This is one of the biggest scandals of the Obama presidency! Thanks for posting Steve…

May 5, 2012 at 2:11 pm

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