Energy Department’s crony capitalism puts taxpayers on the hook for billions

| March 31 2012
Christopher Cook

Like many of Obama’s operatives in the administration and bureaucracy, Energy Secretary Steven Chu seems to think that we’re not very smart, or suffering from catastrophic memory loss.

Chu, 2008:

In 2008, Obama’s Energy Secretary Steven Chu told the Wall Street Journal (WSJ) that he wanted to ramp up gasoline taxes over the next 15 years until they eventually were consistent with Europe’s rates.  “Somehow, we have to figure out how to boost the price of gasoline to the levels in Europe,” he stated clearly.

Chu, 2012, when his boss is facing a national vote on his job performance:

Energy Secretary Steven Chu on Tuesday retracted his now-infamous quote from 2008: “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.”

“I no longer share that view,” Chu said in response to questioning from Sen. Mike Lee, R-Utah, at a Senate Energy and Natural Resources Committee hearing on another topic related to DOE’s loan-guarantee program.

In typical “progressive” fashion, he has to hide his true agenda when the people are really paying attention. (What does that tell you about his true agenda?)

Also, typically, he has little to know sense of self-reflection:

Nobel Laureate Energy Secretary Steven Chu is bringing home a very bad report card. It’s a whole lot worse than he expected. When asked by Chairman Darrell Issa at a March 21 House Oversight and Government Reform Committee if he would give himself an “A minus” on “controlling the cost of gasoline at the pump”, he responded: “The tools we have at our disposal are limited, but I would I say I would give myself a little higher in that. Since I became Secretary of Energy, I’ve been doing everything I can to get long-term solutions.”

Judging from a March 20 committee staff report, Secretary Chu’s self-assessment would seem a bit too lenient. Titled “The Department of Energy’s Disastrous Management of Loan Guarantee Programs”, it details many reasons for lowering that grade by several letters. The document cites “numerous examples of dysfunction, negligence and mismanagement by DOE officials, raising troubling questions about the leadership at DOE and how it has administered its loan guarantee programs.”

Grade inflation has become all-too-common in American schools; perhaps it has trickled up to the halls of power.

Just how bad is bad?

By the conclusion of DOE’s 1705 program in September 2011, 27 project loans totaling more than $14.5 billion had been approved. A large number of these (including Solyndra) “exposed taxpayers to excessive risk” that were glaringly apparent, yet ignored, from the time of the program’s inception. In doing so, DOE violated responsible lending standards and eligibility requirements. It also amassed a highly speculative and undiversified loan portfolio that may ultimately result in substantial taxpayer losses.

A disproportionate number of these transactions (80% of funds… more than $13 billion) involved solar projects. As reported, this overemphasis on one type of technology leaves taxpayers vulnerable to changes in the market for solar energy. DOE also permitted “double dipping,” where a company received multiple federal grants and loans to cover the cost of a single project and reduced its “skin in the game.” In addition, DOE allowed large and financially sound parent entities to undercapitalize their loan guarantee projects, enabling them to shift risk away from the company to taxpayers in order to attract otherwise insufficient private investor interest.

 

House Speaker Boehner responded yesterday

Speaker Boehner: Taxpayers Deserve Answers About Obama Administration’s Failed Energy ‘Stimulus’ Loans

Washington (Mar 29) At his weekly press briefing today, House Speaker John Boehner (R-OH) called on the Obama administration to provide information the House Energy & Commerce Committee has requested pertaining to the $10 billion taxpayer dollars that have been spent on the Energy Department’s failed Solyndra-style Section 1603 ‘stimulus’ loan program.  The Speaker has vowed that oversight of the administration’s policies and their impact on job creation will be a major focus for the House this year.  Speaker Boehner also highlighted House Republicans’ continuing focus on addressing rising gas prices and creating a better environment for private-sector job creation with the American Energy Initiative.  Following are video and excerpts of Speaker Boehner’s remarks:

 

ON REPUBLICANS’ EFFORT TO HOLD THE ADMINISTRATION ACCOUNTABLE FOR ITS FAILED DEPARTMENT OF ENERGY ‘STIMULUS’ LOAN PROGRAM: 

“You know, I made clear earlier this year that oversight of the Obama administration’s policies on jobs, on the economy, and its spending taxpayer dollars was going to be a priority.  Two weeks ago, Chairman Upton at the Energy & Commerce Committee began looking into the Department of Energy’s Section 1603 grant program, a Solyndra-style ‘stimulus’ program that offers cash payments to renewable energy companies.  More than $10 billion – that’s with a ‘b’ – $10 billion has been spent on this, and Secretary Chu said it created ‘tens of thousands of jobs,’ except there’s no evidence to support that. 

“The Energy & Commerce Committee set a deadline for today for the Energy Department & Treasury Department to produce documents or information about what taxpayers got for their $10 billion.  The administration thus far has failed to provide the committee with any information to justify this claim.  

“Listen, the American people continue to ask the question ‘Where are the jobs?’  They deserve answers and they deserve the truth.” 

ON THE NEED FOR BIPARTISAN, COMMON-SENSE SOLUTIONS TO EXPAND AMERICAN ENERGY & ADDRESS SOARING GAS PRICES:

“Instead of wasting taxpayer dollars on failed ‘stimulus’ programs, we should be working together on common-sense solutions to expand American energy production and address rising gas prices.  With or without the Democrats’ cooperation, Republicans here on Capitol will continue to work toward this objective.”

ON HOUSE REPUBLICANS TAKING ACTION TO ADDRESS SOARING GAS PRICES WITH THE AMERICA ENERGY INITIATIVE:

“One month ago today, during a conversation at the White House, I was encouraged by the president’s willingness to discuss the possibility of working together on some of the bipartisan, House-passed energy bills.  Many of these bipartisan proposals have received support from the president’s own jobs council.  But gas prices have gotten worse, and the administration has taken absolutely no action.  Republicans aren’t going to wait for the Obama administration to act on behalf of families and small businesses.

“Yesterday, the HEAT team launched the next phase of the American Energy Initiative focusing on rising gas prices.  This phase include bills – for example – to responsibly increase energy production on federal lands and freeze new regulations on refineries that will have a harmful impact on our economy.  Our committee chairmen are hard at work on both additional legislation to address this issue.”

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