Skip to comments.Green Corruption: Department of Energy “Junk Loans” and Cronyism, Part One
Posted on 04/30/2012 1:59:39 PM PDT by calfit32
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 Chus watch), Gene Koprowski of The Daily Caller unleashed the most outrageous part of the House Oversights 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 a tsunami 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 werent 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 wasnt 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 its not just nine its the majority of the 27 projects recorded by Issa's Team.
Read more: http://blogcritics.org/politics/article/green-corruption-department-of-energy-junk/#ixzz1tXxF1FGy
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