Solyndra’s Bankruptcy: Another Watergate — Or Another Whitewater?
When the Republicans regained control of the House of Representatives last year, they vowed to launch dozens, perhaps hundreds, of shocking investigations of the Obama administration. So far their Congressional probing powers haven’t produced much in the way of shock, let alone awe. In the failure of Solyndra — a solar energy company subsidized with American Recovery and Reinvestment Act funds — they think they have finally uncovered a scandal that will prove the administration’s mismanagement and corruption.
According to their version of the Solyndra story, its bankruptcy shows not only that the White House misused stimulus money, but that solar energy doesn’t work and that all public investment (and especially the Obama stimulus) is synonymous with waste and fraud.
But as followers of wayward Washington know from long experience, some scandals are serious and troubling, while others are overblown and misleading. Watergate was a real scandal with vast implications; Whitewater was a fake, despite much huffing and puffing from the Beltway media. Which will Solyndra turn out to be? The initial indications suggest that it should do little damage, if any, to the Obama presidency — and that its meaning for the solar industry and public investment is the opposite of what conservative critics are claiming.
On Wednesday, the Republican-led House Energy and Commerce Committee released a report whose whose most damning conclusion after seven months of investigation is that White House eagerness to publicize progress on “green jobs” unduly influenced the decision to provide a $500-million loan guarantee to Solyndra. They leaked emails to the Washington Post suggesting that pressure to schedule a Solyndra photo op with Vice President Biden overrode concerns about the company’s solvency.
Those findings have been accompanied by much speculation — so far lacking any foundation — that political pressure on behalf of some Solyndra investors influenced the loan decision. One of the Solyndra investors bundled large sums for the Obama campaigns. But as other media have reported, the company’s second-largest investor is a fund backed by the Republican family that founded Wal-mart — and Solyndra’s CEO is a registered Republican, too.
Apart from all the noise and innuendo, there is a Justice Department investigation of the Solyndra management, some of whom are reportedly suspected of misleading federal officials in order to obtain the loan guarantee. And so far, that appears to be the limit of any plausibly alleged wrongdoing. It isn’t much — but there could be much bigger issues at stake here.
As for solar — and government’s green investments — the Solyndra case illustrates how mistaken we would be to abandon a vital future industry over one bad loan. The Solyndra loan guarantee represents just over one percent of what government spends on energy loan guarantees, and an even tinier fraction of the $10 billion or so spent every single year on average to subsidize oil, gas, and nuclear plants. You will never hear the Republican leadership complaining about those “market distortions.”
Solyndra went under because its technology was too costly to compete with the silicon-based panels produced by its competitors, both here and abroad, as the price of silicon fell drastically. Other factors contributed to Solyndra’s fall, including cheaper panels produced in China, where the state is heavily subsidizing renewable energy because the Chinese hope to dominate the world’s economic future.
Does government have an interest in promoting science and technology that benefit the public? The answer is yes, and in this country it has always done so, stimulating knowledge, commerce, environmental improvement, and gainful employment. Like so many other key technologies, from integrated circuits to the Internet, solar has become a viable alternative thanks to government support — in a world that desperately needs safe energy and clean jobs.
If there was criminal misconduct at Solyndra, it should be prosecuted — and apparently will be pursued by the Obama Justice Department. But there is no “scandal” here that justifies abandoning public investment or solar power.