OPINION: Obama’s SolarGate?

President Barack Obama's national industrial policy of betting the American people's tax dollars on risky investments such as green energy solar panels was hit with a huge financial loss with the bankruptcy of Solyndra Inc. The story is quickly turning into a political scandal involving campaign contributions for an expedited approval of a loan guarantee and delaying the disclosure of Solyndra's failure to Congress—Obama's Solargate.

In March 2009, Solyndra became the green energy poster child of successful stimulus spending, securing the first Department of Energy $535 million loan guarantee under the American Recovery and Reinvestment Act of 2009.

Vice President Joe Biden spoke at the groundbreaking for the construction of the plant via satellite and said, "This announcement today is part of the unprecedented investment this administration is making in renewable energy and exactly what the Recovery Act is all about."

Obama made a visit to Solyndra in May 2010 and declared "the engine of economic growth will always be companies like Solyndra."

Solyndra started manufacturing cylindrical panels of thin-film solar cells in Fremont, Calif. in 2007. Solyndra originally applied for the loan guarantee under the Bush Administration in 2006. The loan guarantee application was unanimously turned down on Jan. 12, 2009, by the Department of Energy's credit committee. The application was sent back for additional information and analysis.

 The $535 million loan guarantee was in support of a loan for the construction of a commercial-scale manufacturing plant, called Fab2, for Solyndra's proprietary solar photovoltaic panels.  Solyndra estimated in March 2009 the plant construction would employ about 3,000 employees and plant operation would employ about 1,000 in the U.S.

The U.S. solar panel industry faces stiff competition from imports from Chinese companies that are heavily subsidized by state-owned banks that provide financing with very low interest loans. The price of Solyndra's solar panels could not compete with the much cheaper Chinese imports.

Last month, 30 months after being approved for the loan guarantee Solyndra laid-off nearly all of its 1,100 employees offering no severance package and ceasing all operations.

On Sept. 6, Solyndra filed for protection from creditors under Chapter 11 bankruptcy and is seeking a buyer for the company. The company owes a total of $783.8 million of which $527.8 million is owed to the federal government,  according to documents filed at the U.S. Bankruptcy Court in Delaware. If the company cannot find a buyer, the assets will be sold off to pay its creditors.

The Department of Energy's Office of the Inspector General is investigating Solyndra.On Sept. 8, DOE had the Federal Bureau of Investigation execute multiple search warrants and raid Solyndra's headquarters in Fremont.

 Since February, the Energy and Commerce Committee has been investigating the Solyndra $535  loan guarantee.  On Sept. 14, the committee held hearings on Solyndra and the role of the Obama administration in expediting the approval of the loan-guarantee. Apparently, the DOE also knew in July 2011 that Solyndra could not continue to operate, but it did not inform Congress, which was seeking documents and information on Solyndra.

Solyndra's chief executive officer Brian Harrison and chief financial officer W.G. Stover were scheduled to testify and answer questions before the House Energy and Commerce Committee on Sept. 23. However, they sent letters to the committee that they would not be testify because of the ongoing FBI criminal investigation. The executives will invoke their Fifth Amendment rights by refusing to testify under oath to the congressional committee on the grounds that their testimony could be used as evidence to convict them of a criminal offense.

The Obama Administration picked green energy investments as a "winner" industry and technology.  Obama staffers said investments in green energy projects would promote energy independence, reduce carbon emissions and create jobs.

A major investor in Solyndra was the George Kaiser Family Foundation. Billionaire investor George B. Kaiser is the 89th richest person on the planet, with a net worth of $9.8 billion in 2011, according to Forbes magazine. Kaiser also  just happens to have been a top bundler of campaign contributions to the Obama 2008 Presidential campaign. A bundler collects contributions of many small contributors and bundles them before sending them to candidate's campaign. Kaiser, himself, backed Obama by contributing $53,500 to the Democratic Senatorial Campaign Committee and Obama for America.

Kaiser and Solyndra executives made many visits to the White House during the stimulus loan guarantee approval process. The White House monitored and indicated its interest in Solyndra, prior to the Office of Management and Budget review and Department of Energy's approval of the $535 million loan guarantee.

Simply, it is not the role of the federal government to determine which companies, industries and technologies should be subsidized or given loan guarantees paid for with taxes from Americans.

A national industrial policy that picks winners and losers by subsidizing certain companies, industries and technologies attracts a multitude of economic rent seekers. These rent seekers want a subsidy or loan guarantee for their company or industry. If the politician will give them this subsidy or loan guarantee, the rent seeker will provide the candidate with campaign contributions so that they can be elected or re-elected to public office.