The fiasco of Solyndra, the apparently politically favored Bay Area solar panel maker that went bankrupt after consuming nearly a half-billion dollars in taxpayer loan guarantees, is but a glimpse into a larger, more problematic condition rampant in Washington.
While Solyndra is under investigation by the FBI and Congress, it is symptomatic of more costly disgraces squandering billions of taxpayer dollars to reward well-connected corporations, including some of the nation's largest conglomerates and utilities.
Questions remain about whether Solyndra's $535 million loan guarantee resulted from political favoritism. But later the Obama Energy Department pressured the company to delay announcing layoffs until after the November 2010 elections, the Washington Post reported.
Layoffs occurred the day after the election. Six months prior, the president visited Solyndra to praise its operation even though outside auditors already had questioned whether the company would collapse in debt, as it eventually did.
Even Solyndra executives believed the Energy Department "thinks politically before it thinks economically," a company board member wrote to George Kaiser, an Obama fundraiser whose family owned a third of the company. The Solyndra loan was renegotiated in February, months before the firm declared bankruptcy, to give private shareholders superior claims over taxpayers in the event of liquidation.
But Solyndra is only one of many recipients of upfront grants of taxpayer money, tax credits spread over many years, government loan guarantees and even subsidies requiring consumers to purchase power at inflated rates for decades.
The Washington Post detailed $171 billion in energy schemes since 1961 with little to show. "Not a single one of these much-ballyhooed initiatives is producing or saving a drop or a watt or a whiff of energy," the Post reported, "but they have managed to burn through far more taxpayer money than the ill-fated Solyndra."
Nearly 90 percent of $16 billion in clean-energy loans guaranteed by the federal government since 2009 subsidize lower-risk power plants, many backed by huge corporations with vast resources, not struggling startups like Solyndra.
When it's not outright political favoritism, this crony capitalism in the name of clean energy is nothing more than welfare for corporations that don't need it. Congress could improve Washington's integrity and substantially reduce government spending by ending these tax giveaways.