The more the government looks into Solyndra, the failed solar panel company that received stimulus money, the worse it looks for the Obama administration. Criminal charges should be forthcoming.
Prior to leaving office President Bush turned down Solyndra’s application for federal loans. Company records from 2009 reveal the wisdom of his decision; Solyndra was a bad investment risk with operating costs nearly doubling income in 2009.
President Obama, within six days of taking office, placed Solyndra on a fast track to receive the loan guarantees. The principles of the company were heavy Obama campaign contributors who made numerous visits to the White House.
The above paints an all too familiar shady picture; a picture that we’ve gotten used to as observers of Washington DC. It doesn’t outline or highlight the legal problems that are emerging as this story unfolds, however. Andrew McCarthy of National Review fills in the details of the workings of fraud:
The criminal law, by contrast, is not content to assume the good faith of government officials. It targets anyone — from low-level swindlers to top elective officeholders — who attempts to influence the issuance of government loans by making false statements; who engages in schemes to defraud the United States; or who conspires “to defraud the United States, or any agency thereof, in any manner or for any purpose.” The penalties are steep: Fraud in connection with government loans, for example, can be punished by up to 30 years in the slammer.
Although Solyndra was a private company, moreover, it was using its government loans as a springboard to go public. When the sale of securities is involved, federal law criminalizes fraudulent schemes, false statements of material fact, and statements that omit any “material fact necessary in order to make the statements made . . . not misleading.” And we’re not just talking about statements made in required SEC filings. Any statement made to deceive the market can be actionable. In 2003, for example, the Justice Department famously charged Martha Stewart with securities fraud. Among other allegations, prosecutors cited public statements she had made in press releases and at a conference for securities analysts — statements in which she withheld damaging information in an effort to inflate the value of her corporation and its stock.
That’s exactly what President Obama did on May 26, 2010, with his Solyndra friends about to launch their initial public offering of stock. The solar-panel company’s California factory was selected as the fitting site for a presidential speech on the virtues of confiscating taxpayer billions to prop up pie-in-the-sky clean-energy businesses.
Our readers may remember seeing the President on television as he toured the new Solyndra plant in Fremont. It was the perfect photo op for the green president who, channeling Reagan, insisted this company would have a “ripple effect” that would “generate business for companies throughout our country who will create jobs supplying this factory with parts and materials.” Not once did he mention that the company was in financial trouble despite the half million dollar investment of the American people.
The IPO failed…that’s because investors are smarter than Obama appears to be. They looked beyond the president’s rosy rhetoric and gave a smirking no thanks to the public offering. The president’s campaign cash friends, cronies who were also invested in Solyndra, could see the writing on the wall. If something wasn’t done they were going to lose a lot of money. It was at this time that the President stepped in to see that the loan was restructured to give those investors the first position to recoup money when the company was liquidated.
I highly recommend Mr. McCarthy’s article…stay tuned Pilgrims, this bumpy ride has only just begun.