A new book by Hoover Institution fellow Peter Schweizer details the startling extent of the cronyism that has pervaded President Obama’s “green jobs” push. According to Schweizer, 4 out of every 5 renewable energy companies backed by the Energy Department was “run by or primarily owned by Obama financial backers.”
Those companies’ “political largesse is probably the best investment they ever made in alternative energy,” Schweizer explains. “It brought them returns many times over.”
Such is the inevitable consequence of large government interventions in private markets. Leaving aside the losses associated with transfers of funds from self-sustaining industries to ones that rely on government support, such interventions also encourage unproductive business activities by making “subsidy suckling” far more profitable than run-of-the-mill business expansions or product improvements.
Doug Ross spotted the relevant excerpt of Schweizer’s book (h/t Ben Domenech’s Transom):
When President-elect Obama came to Washington in late 2008, he was outspoken about the need for an economic stimulus to revive a struggling economy… After he was sworn in as president, he proclaimed that taxpayer money would assuredly not be doled out to political friends…
…But an examination of grants and guaranteed loans offered by just one stimulus program run by the Department of Energy, for alternative-energy projects, is stunning. The so-called 1705 Loan Guarantee Program and the 1603 Grant Program channeled billions of dollars to all sorts of energy companies…
…In the 1705 government-backed-loan program [alone], for example, $16.4 billion of the $20.5 billion in loans granted as of Sept. 15 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. The grant and guaranteed-loan recipients were early backers of Obama before he ran for president, people who continued to give to his campaigns and exclusively to the Democratic Party in the years leading up to 2008. Their political largesse is probably the best investment they ever made in alternative energy. It brought them returns many times over.
…The Government Accountability Office has been highly critical of the way guaranteed loans and grants were doled out by the Department of Energy, complaining that the process appears “arbitrary” and lacks transparency. In March 2011, for example, the GAO examined the first 18 loans that were approved and found that none were properly documented. It also noted that officials “did not always record the results of analysis” of these applications. A loan program for electric cars, for example, “lacks performance measures.” No notes were kept during the review process, so it is difficult to determine how loan decisions were made. The GAO further declared that the Department of Energy “had treated applicants inconsistently in the application review process, favoring some applicants and disadvantaging others.” The Department of Energy’s inspector general, Gregory Friedman, … has testified that contracts have been steered to “friends and family.”
…These programs might be the greatest—and most expensive—example of crony capitalism in American history. Tens of billions of dollars went to firms controlled or owned by fundraisers, bundlers, and political allies, many of whom—surprise!—are now raising money for Obama again.
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29 commentsplease! why is this made so easy for him? he is thieving America by deception and "his own" rule. Destroying everything that makes America work and where people once gained personal worth at no ones cost!
Americans born here and not deserve integrity from American leaders and shouldn't have to expect less of the president. This guy is working endlessly to bring this country down in favor of many! We don't know what kind of people(law enforcement) he keeps compromising with our safety. now please, take on a duty to diminsh incoherency! Look at the last election as the last time we'll have one and fight!! The leader and those advising him are in total conflict of America(n)'s interests united. Too busy helping this, that and the other one with trillions of everyone elses money!!! Get America back to fairness and respect by restoring the constitution and restoring the rule of laws that equally applies to all.
Why do we never see anything ever done to these Kings and Queens of our political elite? These people steal BILLIONS of dollars from you and I, the American taxpayers yet nothing ever happens to them. You and I would be locked up in prison for hundreds of years with the key thrown away but no these political elite crooks just smile and say "Who me?". The amount of flat out corruption and no media outlets covering it makes me sick.
King Louis XVI I can't wait to see him being escorted into jail as the first president to do hard time. Or send him to the cotton field for pickin'.
outrageous.
In all fairness, they're probably just not all that many evil Republicans involved in profit-losing ventures such as scam "green" energy companies that putatively make unwanted and uneconomical "energy" products. After all, we know that evil Republicans only work for evil PROFIT-MAKING corporations. That and the fact that the Obammunists know that evil Republicans wouldn't kick back anything to Democrat campaign coffers. So, who else would the Obammunists be shoveling borrowed taxpayer money too? Why other Democrats, of course! Democrats who are involved in profit-losing scam "energy" companies and who are quite happy to steal taxpayer dollars shoveled at them by the Obammunists.
THat is hilarious as I just realised why it is so much worse when republicans do the exact same thing. When republicans do their form of crony capitalism it goes to profitable companies, so we are giving money away to companies that are making a profit just so they make more money for free with no work.
Oh and by the way this lovely thing we are sitting on the internet yeah it was coddled by he government for a long time before it made profits as well. VOte the dems and the reps, out of office, vote for any one without a single corporate backer.
You operate a political website, and yet you express shock — shock! — that an administration would dare favor those companies which had previously provided financial support to its political party. It's something that's been going on ever since money was first introduced into the American political process, which is what — almost 200 years now? Every administration has done this, and every Congressman has played the same game as well. If the game is new to you, then you should consider taking a crash course on political financing, or you might offer some suggestions on how to prevent political favoritism in the future. But all the silly finger-pointing is, at the very least, counterproductive.
it's a shock to me that not one democrat stands in favor of what's honest and dignified. show no direction in what's appropriately right for this country and her people united…as if!
Howard, The claim that 'everyone's doing it' is absolute sophistry! No other administration has taken graft and corruption to the heights and breadth that this administration has. No one's ever come close. No other administration has even approached the level of damage done to this country.
No Howard, everybody's not doing it.
Everybody's doing it is a standard socialist/Marxist comment.
Howard, corruption may be found anywhere. But is that any reason to condone it when we find it? And even if we were to assume that "everyone is doing it," this President rode into office on promises of having a transparent, "lobbyist-free" Administration. He lied. He promised change, yet now he hypocritically delivers more of the same.
Is this so hard to imagine? Right leaning people do not support green energy efforts to the same extent of Democrats. Of course those that promote renewable energy would be more likely to support Obama over any Republican candidate. What percentage of the Anti-abortion lobby or Christian fundamentalist organizations donated to Obama? I'm sure it wasn't 80%.
right leaning people do not support ignorance nor foreseeable crisis. have all the green energy you want at your expense. keep the force of tax paid subsidies off the table as should be in reflection of honest business and in respect of your personal choice.
Do what?
Right-leaning people support green energy. The difference is we don't force unviable methods down people's throats. We don't use taxpayer dollars for venture capital, and use the back of the taxpayers for the brunt of the risk. (If you don't know what risk i'm talking about, then i suggest you do some financial/business investment research) We are looking for a renewable energy source/technology that will yield the same BTU content as gasoline or diesel, and viable to produce on a mass production scale. Another reason we press for nuclear energy too.
The CORRUPTION of Obama is MASSIVE!!
Here is to hoping that a Bird killing windmill crashes down onto Obama at one of his Photo Ops!!
I am surprised at how often I am surprised by news just like this.
I think that it is probable that most green energy companies would have backed Obama and Democrats in general. Suppose 90% backed Obama and 10% backed McCain. Then if the McCain supporters gathered 20% of the grants, it would mean that they got a disproportionate share of the grants. I haven't seen any figures, but it is possible.
Deflection will get you nowhere. This isn't supposition. This is real and it is fact. Moreover, more shoes will fall before this Marxist is out of office. You can what-if all you want, such is not the case.
Sarah, No Obama No Green Energy. This thing we call green energy has doubled the cost of energy. At this time Obama has spent over $900 BILLION DOLLARS on green & plan"s to spend even more. Do you not know that the U.S.A. has a vast supply of coal, natural gas & oil, this industry is already in place and the resource at hand. I could go on but I think you get the point.
Imagine that!!
This is understandable and probably pretty common depending on the industry, but, what is wrong is the amount of money these companies pour back into the Democratic Party or into the Democratic social agenda, like Acorn, OWS, etc. I suspect that if the historians do their jobs correctly they will tag this administration aas the most corrupt ever.
This Markay report / column is interesting .. but superficial. Until the name / rank / $ amount received is listed, for each of the "80% members" there's not much value to this column
"These programs might be the greatest—and most expensive—example of crony capitalism in American history. Tens of billions of dollars went to firms controlled or owned by fundraisers, bundlers, and political allies, many of whom—surprise!—are now raising money for Obama again." … last paragraph of the article below… so great and so true that my own comments need not be said!
I am no longer surprised about anything this corrupt administration does any more.
Think King Louis XVI
$10,000 profit for every $1 donate is a very good return on investment. Only in America !
Let me guess…..most of you work for FOX news…right? Be honest.
[…] Color us unimpressed. The Obama campaign still routinely thinks that it plays by different rules than everyone else. Especially when it comes to issues of disclosure, asking others to do that which it would not. From blocking the release of White House visitors to delaying Freedom Of Information Act requests for conservative groups, the Obama camp makes a mockery of the “most open and ethical administration in history” promise. That’s without getting into Solyndra, hookers for the Secret Service, Fast and Furious, and lots of Crony Capitalism. […]
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