Thursday, November 17, 2011

Five questions for Energy Secretary Stephen Chu

The Enterprise Blog

The New York Times reports this morning:

An unrepentant energy secretary [Stephen Chu] will square off on Thursday with a Republican-led committee that has spent months arguing that his department showed political favoritism and incompetence when it approved a $535 million loan guarantee for Solyndra.

As I pointed out in the Washington Post this week, Peter Schweizer blows the lid off of the Obama-Chu loan guarantee and grant programs in his new book, Throw Them All Out: How Politicians and Their Friends Get Rich off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison. Here are five questions House members may want to pose to Secretary Chu today, based on Schweizer's research:

1.       "$16.4 billion of the $20.5 billion in loans granted went to companies either run by or primarily owned by Obama financial backers—individuals who were bundlers, members of Obama's National Finance Committee, or large donors to the Democratic Party." How is it that 71 percent of the loan money went to President Obama's political cronies?

2.       Please explain your decision to approve more than $2.4 billion for Leucadia Energy, a company that Schweizer writes "had one employee and $120,000 in annual revenue." Schweizer notes that "The company is a subsidiary of Leucadia National, whose chairman and CEO is Ian Cumming. Cumming served as a member of President Obama's 2008 National Finance Committee and was on the 2008 Democratic National Convention Committee. Curiously, Ian Cumming wrote three rather large checks to Democratic Party committees just weeks before his funds were approved. He wrote a total of $69,900 in checks in April 2009." Is this a coincidence, Mr. Secretary? Moreover, according to a government audit, as of December 2010, eighteen months after the loans were made, the Leucadia projects had resulted in a grand total of three jobs. Do you consider this an example of success, Mr. Secretary?

3.       Please explain your decision to provide $1.4 billion in loan guarantees to a company called Brightsource to build the Ivanpah Solar Electrical System on federal land in California. According to Schweizer, at the time the company had debt obligations of $1.8 billion and in 2010 lost $71.6 million on revenue of just $13.5 million—and had informed the Securities and Exchange Commission, "Our ability to complete Ivanpah and the planning, development, and construction of all three phases are subject to significant risk and uncertainty." Is it a mere coincidence that the single largest shareholder (25 percent) in Brightsource is VantagePoint Partners, whose principals included Sanjay Wagle, the managing co-chairman of Cleantech and Green Business Leaders for Obama, which raised millions for Obama's campaign?

4.       After the 2008 election, Schweizer writes, Sanjay Wagle joined the Obama administration as a "renewable energy grants adviser" at the Department of Energy. Please explain Mr. Wagle's role, if any, in loans and grants made to VantagePoint-backed companies.

5.       Please explain how it is that ten members of President Obama's finance committee collectively raised $457,834 for his presidential campaign, and were in turn approved by your department for grants or loans of nearly $11.4 billion? Is this a mere coincidence? Would you consider that a good return on investment?

There is enough material in Schweizer's book to grill Chu for weeks—but answering these five questions would be a good start.

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