Just two years after President Obama touted a $400 million loan to the green energy firm Abound Solar, the company is declaring bankruptcy. The Department of Energy announced the news on Thursday, while the media were focused on the Obamacare Supreme Court decision, C.J. Ciaramella of the Washington Free Beacon reports. A Department of Energy spokesman wrote on the agency’s website that Abound Solar received "less than $70 million” of its $400 million loan from the government. According to the New York Times, Abound Solar only has 125 employees at this time--all of whom will be fired next week. Dividing the $70 million loan by its entire workforce amounts to $560,000 per worker.
The failure of Abound Solar, like that of Solyndra, is particularly embarrassing for President Obama--he touted the $400 million loan to Abound Solar in his July 3, 2010 weekly address and claimed it would create 1,500 "permanent jobs."
"Already, I’ve seen the payoff from these investments," Obama said in his weekly address two years ago. "I’ve seen once-shuttered factories humming with new workers who are building solar panels and wind turbines; rolling up their sleeves to help America win the race for the clean energy economy."
"We’re accelerating the transition to a clean energy economy and doubling our use of renewable energy sources like wind and solar power – steps that have the potential to create whole new industries and hundreds of thousands of new jobs in America," Obama said. "In fact, today, I’m announcing that the Department of Energy is awarding nearly $2 billion in conditional commitments to two solar companies."
After touting a $1.5 billion loan to the Spanish firm Abengoa, Obama said that "the second company is Abound Solar Manufacturing, which will manufacture advanced solar panels at two new plants, creating more than 2,000 construction jobs and 1,500 permanent jobs. A Colorado plant is already underway, and an Indiana plant will be built in what’s now an empty Chrysler factory. When fully operational, these plants will produce millions of state-of-the-art solar panels each year."
"These are just two of the many clean energy investments in the Recovery Act."
Andrew B. Wilson wrote a piece on the loans to Abengoa and Abound Solar in THE WEEKLY STANDARD shortly after Obama announced the $2 billion in loans to the two companies. He warned that the projects could easily fail, leaving taxpayers on the hook. What's worse, as Wilson reported at the time, there is also a crony capitalism angle to the Abound solar loan:
Russell Kanjorski, the vice president for marketing at Abound Solar, was one of the principals in another energy company in northeast Pennsylvania, called Cornerstone Technologies LLC, which attracted $9 million in federal grants before it halted operations in 2003 and later filed for Chapter 7 bankruptcy. As reported by the Wilkes-Barre Times Leader, “Cornerstone reported $14,100 in assets compared with $1.34 million in debt” in its bankruptcy filing. The $9 million in federal grants to Cornerstone were earmarked by Kanjorski’s uncle, Representative Paul Kanjorski of Pennsylvania, chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.