Jul 19, 2012 3:50 AM GMT
President Obama’s record of rewarding political donors with taxpayer dollars and plum administration posts is facing a new round of scrutiny thanks to GOP challenger Mitt Romney’s effort to make it a central issue of the campaign.
“[President Obama] thinks it’s his right to give taxpayer money to those who have supported him financially,” former Gov. John Sununu (R., N.H.) said Tuesday on a conference call hosted by the Romney campaign. “It’s insulting to hard-working entrepreneurs who really do create jobs.”
The most publicized instance of so-called “crony capitalism”—investing taxpayer dollars in firms tied to political donors—is the failed solar panel company Solyndra. The Fremont, Calif., firm was the first to receive a taxpayer-backed loan guarantee from the Department of Energy (DOE) in September 2009, worth more than $530 million. The funding for the loan was allocated in the controversial stimulus package passed earlier that year.
Obama bundler George Kaiser was a major stakeholder in Solyndra through his Kaiser Family Foundation, and made several trips to the White House in March 2009 to meet with senior administration officials. In July 2009, Kaiser bragged about securing face time with “all the key players in the West Wing of the White House,” as well as his “almost unique advantage” when it came to steering taxpayer funds toward his pet causes.
“There’s never been more money shoved out of the government’s door in world history, and probably never will be again, than in the last few months and in the next 18 months,” Kaiser told members of the Tulsa Rotary Club. “And our selfish parochial goal is to get as much as it for Tulsa and Oklahoma as we possibly can.”
Although things did not pan out for Solyndra—the company filed for bankruptcy in September 2011—Kaiser can expect to see a better return on his investment than American taxpayers. As part of an agreement to restructure Solyndra’s loan agreement in 2010, Obama’s DOE granted priority status to private investors like Kaiser with respect to the first $75 million recovered in the event of the firm’s bankruptcy, a move that many suspect violated federal law.
Taxpayers, meanwhile, are unlikely to recover much of the money invested on their behalf.
Emails uncovered by Congressional investigators reveal that Solyndra helped secure its $535 million loan guarantee with the help of Steve Spinner, another prominent Obama donor. After bundling more than $500,000 for Obama in 2008, Spinner was named to the White House transition team and later served as “chief strategic operations officer” of the DOE loan program that funded Solyndra.
Spinner’s wife Allison worked for a law firm that represented Solyndra and several other green energy outfits that applied for taxpayer funding. Records show that her firm, Wilson Sonsini Goodrich & Rosati, received $2.4 million in federal funds in legal fees associated with Solyndra’s loan application.
Spinner left the administration in September 2010 to become a senior fellow at the left-wing Center for American Progress, and has already bundled more than $500,000 for the president’s reelection campaign.
Solyndra is just one of many examples of quid pro quo in the DOE loans program; even the liberal Washington Post editorial board has described it as a “real scandal.”
“You can call it crony capitalism or venture socialism—but by whatever name, the Energy Department’s loan guarantee program privatizes profits and socializes losses,” the paper wrote in November 2011.
More than 70 percent of DOE and loans under Obama went to Democratic donors and bundlers, Peter Schweizer reported in Throw Them All Out.