The company facing scrutiny is Abound Solar, based in Longmont, Colo. Colorado’s Weld County has launched a securities fraud investigation following allegations that Abound may have misled investors and a bank before securing funds.
If you’re keeping a running tally, Abound’s federally (taxpayer) secured loan was $400 million. This puts it near the Solyndrasphere of spectacular failures ($500 million). Ultimately, it ended up wasting “only” $70 million of our money, should you be looking for a silver lining here.
As with Solyndra, the Obama administration used its green energy version of “Blame Bush” and immediately blamed China for Abound’s inability to compete. However, there is evidence that the company knew it was manufacturing defective solar panels and sold them anyway in order to secure the financial favor of the Department of Energy.
The problem with the panels? Quite a significant one in the solar business:
“We heard from one employee, a whistleblower employee, who made the statement; the solar panels worked fine as long as you didn’t put them in the sun,”
The question now becomes one of just how widespread the knowledge of the defects was.
Todd Shepherd, who works as an investigative reporter for the Independence Institute, a Libertarian think tank, has interviewed several former employees and concludes it was clear by the fall of 2010 that the panels had catastrophic defects, such as a tendency to catch fire and much lower output than promised.
“Either people at Abound knew they couldn’t produce a good product and they misled the DOE,” said Shepherd, “or the DOE knew how bad the product was and they were willing to overlook it simply because the politics of green energy is such a feel good political movement.”
Either way, the political class in Washington are forever telling us that federal oversight is supposed to protect us from all ills. If Abound misled the DOE, the department’s scrutinization of companies to which it doles out our money comes into question. If, however, you count yourself among the skeptics, the second conclusion is not really difficult to believe. And I’ll leave you with a little fuel for your skepticism:
But Shepherd suggests political payback may be partially why Abound secured the federal loan in the first place. One of the company’s early and significant investors was Bohemian Companies, based in Fort Collins. Bohemian Companies is chaired by Pat Stryker, a major Democratic donor. According to the Center for Responsive Politics, Stryker has donated $500,000 to Democrats over the last five years including $50,000 to President Obama’s inaugural fund and $35,800 to his victory fund in 2008.