Saturday, August 25, 2012

House Committee Finds No Smoking Fun in Abound Solar Hearing

In a hearing more about bashing Obama than oversight, The House Committee on Oversight and Government Reform Wednesday found no smoking gun after testimony from former executives of Abound Solar.

Executives of the defunct Loveland-based company and U.S. Department of Energy officials appeared before the House Committee on Oversight and Reform. Abound, received a $400 million DOE loan guarantee but filed for bankruptcy July 2.

The “hearing” was actually only a handful of committee members who drifted in and out of the hearing room, taking turns making remarks from prepared talking points. The “hearing” came just two weeks after Abound filed for bankruptcy. Normally, “investigations come months later when information has been filed and reviewed by the court and creditors.

In this case the committee wanted to insure it was held before the August recess. This is about bashing Obama and creating an excuse to eliminate renewable energy programs this year.

Abound had received a $400 million loan guarantee, but the government in September cut off the company’s drawdown on the money at $70 million, when the D.O.E. became concerned over the company’s finances. After liquidation, taxpayers may be left with a $40 million to $60 million bill, according to the DOE.

“With over $30 billion in reported government subsidies, Chinese panel makers were able to sell below cost and put Abound out of business before we were big enough to pose a real competitive threat to China’s rapidly growing market share,” Abound’s former chief executive, Craig Witsoe said.

“Abound’s technology and business made solid progress until the second half of 2011 when panel prices dropped by 50 percent in a year due to aggressive price-cutting from Chinese competitors using older crystalline-silicon technology,” Witsoe added.

The company’s chairman Tom Tiller testified “Abound raised $150 million in private investment before the loan guarantee was awarded, and another $150 million after. But even with $300 million and $70 million in federal funds Abound succumbed to a severe market change. Not only were hundreds of millions lost but 400 jobs were eliminated in Colorado.”

Republicans were out to makes another case. "The amount of dollars lost can't all be blamed on the Chinese," said Rep. Darrell Issa (R-CA) the committee chairman. Rep Jim Jordan (R-OH) asked Jonathan Silver, the former executive director of the DOE loan program, if he knew Pat Stryker, an Abound investor and Obama contributor. Silver said that he did not personally know Stryker.

Republicans also tried to tie their critique of the loan program to the Romney campaign’s claim that President Obama’s 2009 stimulus ended up boosting job growth in China. Rep, Mike Kelly (R-PA) cited the Mesquite Solar I utility-scale solar PV project in Arizona. Kelly said the Suntech panels are manufactured in China. “How many jobs did we create in China using taxpayer money?” the congressman asked rhetorically.

According to Suntech, the panels are made at the “Goodyear plant in Arizona running three shifts around the clock, five days a week, and it employs more than 100 Arizonans.” In addition, some 450 workers have been at work on the Mesquite job site, according to plant owner Sempra Generation, installing 4,500 panels a day.

What did this have to do with Abound?

It is somewhat odd to charge that Abound received the loan guarantee because an investor contributed to Obama. Two of the main investors including BP Alternative Energy and the Invus Group are big contributor to Republicans and the Invus Group is a large contributor to Chairman Issa. Looks like 3 to 1 in favor of the GOP.

Democrats had a different perspective. Rep. Elijah Cummings (D-MD.) and Dennis Kucinich (D-Ohio), responded that the Loan Guarantee Program was rigorously run and was proving to be highly successful, with a failure rate thus far that is far smaller than Congress had expected in its budgeting. Rep Kucinich said the dumping of Chinese PV in the U.S. was the thing that Congress really ought to be spending its time and energy on.

“There’s a real scandal that has been underneath this and that we need to address,” Kucinich said. “That is the systematic, illegal dumping of subsidized, Chinese solar panels in the U.S. We’re attacking our own businesses here, and meanwhile the Chinese are eating our lunch in this market as we’re fighting with each other.”

At the end of the day, no evidence surfaced of any scandal. Meanwhile, the panel was not working on creating jobs.


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