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Solyndra Redux: Another DOE Loan Recipient Files for Bankruptcy – 14 (Failed) Jobs for $43 Million

Morgen on October 31, 2011 at 6:34 am

Well add another loser to the Obama Administration’s green energy portfolio. From Reuters:

Beacon Power Corp filed for bankruptcy on Sunday, just a year after the energy storage company received a $43 million loan guarantee from a controversial Department of Energy program.

The bankruptcy comes about two months after Solyndra — a solar panel maker with a $535 million loan guarantee — also filed for Chapter 11, creating a political embarrassment for the administration of President Barack Obama, which has championed the loans as a way to create “green energy” jobs.

Oh lighten up Reuters. The Administration created 14 jobs with that $43 million. At $3 million and change per job, it’s a wonder they lasted almost 2 years.

Yes, another “embarrassment” for the remarkably scandal-free Obama Administration. Well at least in this case there doesn’t seem to be any indication that cronyism played in role in the awarding of these funds. Oh wait (from 2009):

Beacon is using the money to develop a 20 MW regulation plant at a site in Stephenton, NY. The site will use several 1 MW flywheels to store energy as well as electrical and technological equipment.

Company spokesman Gene Hunt said Beacon didn’t have financial advisors per se, just its outside law firm of Edwards, Angell, Palmer & Dodge. “We also used our in-house expertise and we have good relationships with our congressional members.

I bet they do. For the record, Senator Kristen Gillibrand (Democrat, pictured second from right) and former congressman Scott Murphy (D) from New York were both on hand when Energy Secretary Steven Chu announced the loan award.

It looks like the Administration will also have some questions to answer about their evaluation of Beacon’s credit-worthiness. Because just weeks before before the DOE granted final approval of the loan, they were on the verge of being de-listed.

In mid-September [2009], Beacon received word from NASDAQ that it was out of compliance with the exchange’s minimum trading-price of $1 per share. Beacon Power closed at 72 cents a share the day NASDAQ sent its notice. Beacon said it believes it meets applicable standards, other than the minimum bid price requirement.

Something tells me there will be more to this story. Exit question: will Steven Chu or Eric Holder be the first to go?

Surprise, surprise. Walter Reed, the managing partner of the law firm representing Beacon Power in the acquisition of this loan, was an Obama donor in 2008, and also donated $10,000 to the Democratic Senatorial Campaign Committee in 2010.

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Category: Energy & Economy |

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